After an initial public offering (IPO), how long must a private equity investor typically wait before selling shares?

After an initial public offering (IPO), a private equity investor typically must wait six months before selling shares. This waiting period is often referred to as a lock-up period, which is a time frame where shareholders, including private equity investors and company insiders, agree not to sell their shares. The primary purpose of the lock-up period is to prevent the market from being flooded with too many shares immediately after the IPO, which could lead to a significant drop in the stock price due to oversupply.

The six-month lock-up period is a common industry standard, as it allows the market to stabilize and gives the newly public company time to build a track record and establish itself post-IPO. This period also helps maintain investor confidence and can contribute to a more orderly market.

Other options, such as three months, nine months, or one year, would either be shorter than the typical period or longer and are not standard practices. While some companies may impose different strategies regarding lock-up periods, six months is widely recognized in the industry as the norm for private equity investors after an IPO.