Investment bank

An investment bank is a financial institution that helps companies and governments raise capital, advises on mergers and acquisitions, and often provides trading and research services to institutional clients. It is a different business from a regular retail bank that takes deposits and makes consumer loans.

When a company goes public through an IPO, an investment bank typically underwrites the offering, meaning it helps price the shares, buys them from the company, and resells them to investors, taking on some of the risk of the sale in exchange for a fee.