A Direct Public Offering (DPO, Direct-Listing) is an alternative to an Initial Public Offering (IPO) in which a company does not work with an investment bank to underwrite the issuing of stock. While forgoing the safety net of an underwriter provides a company with a quicker, less expensive way to raise capital, the opening stock price will be completely subject to market demand and potential market swings.

In a DPO, instead of raising new outside capital like an IPO, a companys employees and/or investors convert their ownership into stock that is then listed on a stock exchange. Once the stock is listed shares can be purchased by the general public and existing investors can cash out at any time without the lock up period of traditional IPOs.

Spotify [Spotify Technology SA (SPOT US: NYSE), DPO, 04/03/2018] and Slack [Slack Technologies Inc. (WORK US: NYSE) DPO 05/33/2019] are recent examples of companies that have opted to skip the traditional IPO process and instead list their shares directly on an exchange.

What are the pros and cons of a DPO? What makes a successful DPO? Have there been notable failures? How does a Security Firm deal with its clients that want in on the action?