Definition of 'Friends and Family Shares'
A company's stock that is offered to preferred individuals, prior to its initial public offering (IPO). Issuers and bankers may offer "friends and family shares" to business associates, family members or friends, prior to the stock's launch to the public, allowing them a stake in the future success of the company. These shares may represent a small percentage of an offering, typically less than 5%, but can create significant gains for the holder.
Also called directed shares.
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