Best Efforts Underwriting/Offering

A best efforts underwriting is an arrangement where the underwriter agrees to market and sell securities on behalf of the issuer (such as a company or supplier) but does not guarantee the sale of all the securities. The underwriter's role is to sell as much of the offering as possible to investors, but they only purchase securities from the issuer that their clients are willing to buy. In this type of offering, the underwriter does not take on the full financial risk, unlike a firm commitment underwriting, where the underwriter buys all the securities and assumes the risk of unsold portions.