Workplace collaboration and instant messaging company Slack said in a press release on Monday that it plans to go public.

And it’s taking advantage of something called a confidential filing for its initial public offering (IPO).

While that may sound like something from the world of Spy vs. Spy, a confidential IPO is a tactic used by more and more businesses as they go public.

Read on and we’ll explain all about a confidential filing for an IPO.

What’s an IPO? A quick refresher

An IPO is the first time a company lists its shares on a stock exchange such as the Nasdaq or the New York Stock Exchange (NYSE), meaning they are for sale to the general public.

When a company wants to open new stores, build a factory, hire more employees, or expand in some other way, it may need additional resources to pay for those things. Company executives may use an IPO to raise additional capital to invest in and grow their business.

But when a company decides to go public, it must file something called an S-1 with the Securities and Exchange Commission (SEC). An S-1 is a public document that details a lot of previously confidential information about the business, including how much revenue the company actually makes, how much debt it has, and whether the company is profitable.

It also details how much the various company executives earn in salary and other compensation.

The confidential IPO

The confidential IPO was first introduced in 2012,  as part of the Jumpstart Our Business Startups (JOBS) Act, as as a way to support small companies in their efforts to go public.

It allowed any company with revenues of $1 billion or less to file an S-1 with the Securities and Exchange Commission, but confidentially. The paperwork would be available to the public approximately 15 days prior to the actual offering.

In June, 2017, the SEC extended the confidential filing to all companies, regardless of size.

Companies may want information in their S-1 to stay confidential longer because it prevents competitors from having more detailed knowledge of their operations. It also lets companies test the waters with an IPO without lots of media scrutiny, according to experts.

Ride-share companies Lyft and Uber also both filed for confidential IPOs in late 2018.

More about Slack’s IPO

Slack, which launched in 2013, has raised $1.2 billion in venture capital from various investors. It has a valuation of approximately $10 billion, according to reports.

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