It used to be that a business was flying into an IPO blind: you couldn't talk to potential investors until after you filed all of your public offering documents with the SEC. So hundreds of thousands of dollars could be wasted before a company could gauge if there was sufficient interest in their stock on the public market.
Companies were forced to circumvent these requirements through "educational meetings" between investment bankers and large investors, but it appears that those days are done. Companies can now legally "test the waters" before they pursue a mini-IPO. Here's what you need to know about new legislation that regulates the pre-IPO process: