The main difference between a direct listing and an IPO is that a company does not raise capital with a direct listing. When a company decides to go public, there are typically existing shareholders including founders, employees, and various early stage investors who seek liquidity. Both an IPO and a direct listing enable these investors to have the opportunity to sell their shares. In an IPO, there is a lock-up period—typically 180 days—in which shareholders are restricted from selling outside of the initial public offering. In a direct listing, there are no lock-up restrictions.