Reading an S-1
The S-1 is the most detailed look at a company you will ever get before it goes public. It is long, but a handful of sections tell you most of what you need. Here is where to look and what to look for.
The sections that matter most
| Section | What to look for |
|---|---|
| Prospectus summary | The business in a few pages and key numbers |
| Risk factors | Customer concentration, losses, competition, legal issues |
| Use of proceeds | Is new money for growth, or mostly for selling insiders? |
| Management’s discussion (MD&A) | Growth rates, margins and what drives them |
| Financial statements | Revenue, profit or loss and cash flow for several years |
| Principal stockholders | Who owns what, and how much control founders keep |
| Shares eligible for future sale | Lock-up terms and how many shares could hit the market |
Most S-1s follow this structure.
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