An alternative to an underwritten initial public offering (IPO). Like a standard IPO, a direct-listing IPO lets a company raise funds by listing shares on a public stock exchange, with the difference that the company does not create new shares and the existing shares are offered without underwriters. Spotify and Slack are two companies that have used this method to go public. By contrast with a standard IPO, employees in a direct-listing IPO may not be restricted by the standard six-month lockup before they can sell shares.

For more details on this topic, see a commentary from the law firm Gibson Dunn.