An initial public offering—also known as an IPO—is the process by which a privately-owned/privately-held company begins selling stock to outside investors, and transforms the company from a private company to a public company. Shares of public companies (also called publicly-traded companies) are usually traded on one of two stock exchanges—the New York Stock Exchange or the Nasdaq. A public company can raise money (capital) it needs by issuing and selling shares of its stock on the stock exchange on which it is listed. But public companies must comply with significant reporting and disclosure requirements established by the U.S. Securities and Exchange Commission that private companies do not have to comply with.

In Texas, as in all states, an initial public offering (IPO) is governed primarily by federal law, specifically the rules and regulations enforced by the U.S. Securities and Exchange Commission (SEC). The SEC requires companies going public to file a registration statement, typically using Form S-1, which includes the prospectus, detailing the company's financials, management, and any material risks to investors. Once the SEC reviews and approves the registration statement, the company can proceed with the IPO. After going public, the company must adhere to ongoing reporting obligations such as annual (10-K), quarterly (10-Q), and current reports (8-K), along with proxy solicitations and various other disclosures. While Texas state law does not directly regulate the IPO process, the Texas Securities Act does require the registration of securities offered in the state unless an exemption applies. Additionally, the Texas State Securities Board has the authority to enforce state securities laws and protect investors from fraud. Public companies in Texas must also comply with state corporate governance laws and regulations.