Means an initial public offering by the company of a size and price specified in the corporate charter. An IPO with $20 million in gross proceeds to the company and a price per share three times the price the investor paid for its stock is fairly typical for a Qualified IPO, but this varies from one deal to another.

Also known as a qualified public offering. A term of art used in private equity and venture capital financing transaction documents to describe the future initial public offering (IPO) of the company. The occurrence of the qualified IPO typically triggers the mandatory conversion of the company's convertible equity securities into common equity immediately prior to the closing of the sale of securities in the IPO. It is also used to trigger the termination of many of the stock transfer rights of investors found in the investment documents (such as a stockholders' agreement).

A qualified IPO is commonly defined to include some or all of these terms:

• The IPO is a firm commitment offering of common equity.
• The company receives a minimum specified amount of proceeds in the offering.
• The company is valued at a minimum specified amount, either expressed on an aggregate valuation basis or a per share offering price basis.
• The offering is conducted on Form S-1 or its equivalent.
• A minimum percentage public float of the company's common stock in the offering.

The requirements that an offering must meet to be deemed a qualified IPO are normally defined as part of the provisions describing the conversion rights or obligations of the relevant security as well as in the provisions setting out the stock transfer rights of the investors. For convertible notes, the definition is typically set out in the note itself or in a note purchase agreement, if one is used. For equity securities, the definition is set out in the organizing document of the company or in the certificate of designation if one is used to create a series of convertible preferred stock. It is also set out in the relevant investors' rights agreement or stockholders' agreement.