In this Industry Focus: Tech podcast clip, find out what investors should keep in mind about the traditional IPO process as it relates to private investors exiting a company, and how that relates to Spotify's plans to go public later this year.

A full transcript follows the video.

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This video was recorded on March 9, 2017.

Dylan Lewis: Knowing that we were going to be chatting Spotify, we asked folks on Twitter if they wanted to hear anything in particular in the discussion, and we have a few listener questions about the company and this issuance. Casey asks where they plan to deploy the money raised from the offering, and is it an exit strategy for initial private investors? And I think this is a good point to address, because there might be some confusion about what's going on with this issuance, Evan.

Evan Niu: Spotify, in this direct listing, are not issuing any shares whatsoever. They will not be receiving any capital, will not be receiving any proceeds. So, they're not even using the proceeds since they're not getting any of it. I would say, generally speaking, remember that, in traditional IPOs -- and this is not a traditional IPO -- in most IPOs, it's kind of a mix of both most of the time. Most of the time, a lot of initial private investors, including insiders, co-founders, etc., it's partially an exit strategy, a way to let them get a payday, but also to raise money for the company itself. That's how most IPOs are structured. In this case, for Spotify and this direct listing, it's primarily an exit strategy for the initial private investors.

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