1. While studying feverishly in the college library, you accidentally stumbled upon the secrets of the worlds first laser can-opener. You would like to develop your idea for the betterment of mankind. You have some ideas about how to produce and market these little beauties. Initial funding for the project has been provided by venture capitalists, and initial market acceptance has been favorable. You would like to crank up production and think that perhaps it is time to go public. (Answer parts a, b, c and d)

1. Explain in detail the role of venture capitalists (who they are, how they provide funds, how they are compensated).

2. Why might entrepreneurs and venture capitalists be eager to go public?

3. What is the role (three functions) of underwriters in an IPO. Fully explain the difference between a firm commitment and best-efforts underwriting and describe how underwriters are compensated.

4. Also fully explain the role of Federal (who, why, how) and state regulatory agencies in the IPO process. (Hint: it looks a little fishy to me.)