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Lockup agreements prohibit company insiders?including employees, their friends and family, and large shareholders?from selling their shares for a set period of time after an IPO.

To discover if a company has an IPO lockup period, you can contact the company's shareholder relations department. Another option is to get this information online using the SEC's EDGAR database. Some commercial websites also track when companies have their IPO lockup period set to expire.

In the case of an initial public offering (IPO), the underwriters will seek to obtain lock-up agreements from all, or substantially all, the existing securityholders for a period of 180 days, subject to some limited carve-outs.

An IPO lock-up is period of days, typically 90 to 180 days, after an IPO during which time shares cannot be sold by company insiders. Lock-up periods typically apply to insiders such as a company's founders, owners, managers, and employees but may also include early investors such as venture capitalists.

What is the Lock-up Period? A lock-up period, also called a locked-up, lock-in or lock-out period, refers to the predetermined time frame in which corporate insiders, investors, and employees are not allowed to sell or redeem their shares after an initial public offering (IPO).

Typically, lockup periods last between 90 and 180 days. Lockup periods are important for investors to monitor because the supply of stock available in the public market (known as the float) can increase significantly once insiders begin selling.

The lock-in period starts from the date of investment. During the three-year lock-in period, no redemption of units or withdrawal of the invested amount is allowed. After the completion of the lock-in period, investors gain the freedom to redeem the units partially or in full.