What is a sponsor?

A sponsor can be a range of providers and entities supporting the goals and objectives of an individual or company. Sponsors invest in private companies, create demand for publicly traded securities, underwrite mutual fund shares for public offerings, issue exchange-traded funds, offer platforms for benefits, and more.

A sponsor can provide a wide range of services and support within the financial industry.

Startup companies are sponsored through investors. Startups often build a diverse group of investors that can include individuals, venture capital firms, private equity firms, and corporations. 

When a company chooses to go public it also engages the support of a sponsor or sponsors. Sponsors help guide the company through the initial public offering (IPO) process and also provide credibility for new investors considering the IPO investment. 

Underwriting sponsors are also utilized for mutual fund and exchange-traded fund offerings. 

Benefits plan sponsors are also well known in the investment industry. Plan sponsors are companies or employers who create a benefit plan for their employees.