Equity securities are shares of stock held by investors as reported on a company's balance sheet. A company issues equity securities as a means to raise capital in the financial markets for a major event, such as an expansion or merger or for product development. By purchasing equity, shareholders are obtaining a partial ownership stake in that company. Equity issuance is an alternative to issuing bonds, which are a form of debt, in the public markets. The first time that a company issues equity securities into the financial markets is known as its initial public offering (IPO). A company typically will raise large sums of money in this transaction, because investors often flock to new issues to obtain a piece of a promising opportunity. The number of equity securities issued in an IPO depends on financial documents filed by the company with the regulatory body in a region. A company is permitted to sell a certain number of shares within a particular price range on the day of its IPO. Once shares are issued in the public markets, the equity price will rise and fall depending on investor demand. Typically, a company will not issue the whole of its available shares in one offering. Instead, a number of shares usually are reserved for a subsequent offering at a future date, known as a secondary or follow-on offering. A company's management team does this because they anticipate needing to raise capital again to fund future growth plans. AGM