Sponsor A person, group, or company standing behind an offering of shares. Investors can reasonably conclude that the sponsor has performed due diligence and has an economic stake in the company or its shares. In underwritten public offerings, the managing underwriter is usually thought of as a sponsor (and is referred to by that term in England). In a direct public offering there may be a large corporate strategic partner or venture capitalist who purchased shares of the company in an earlier private placement and whose name conveys endorsement or sponsorship. Arrangements can be made for a recognized name to be a sponsor through a standby commitment, by agreeing to buy all shares not purchased by prospects in the offering.
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