Some companies find that a sale of stock to the public via an IPO is an attractive way to raise equity capital and provide liquidity for major shareholders. A company and its shareholders will benefit from having a comprehensive, independent valuation of the company’s stock prepared prior to approaching the underwriting community. This is particularly important given the tendency of securities underwriters to under price IPOs in order to reduce their own risk. Valuations are also sometimes required to justify to the SEC the price at which stock options were granted to key employees prior to the offering (see “Cheap Stock”).