How to Read an S-1: The IPO Prospectus Sections That Matter
Where to find an IPO prospectus, which sections answer the questions investors and employees ask, and how the S-1/A amendments and final 424B4 fit together, using Figma's 2025 filing as an example.
An S-1 is the registration statement a US company files with the SEC to sell shares in an initial public offering; foreign private issuers file an F-1 instead. Most of it is the prospectus, which describes the business, the risks, the finances and the offering terms. Read the summary, risk factors, use of proceeds, dilution, MD&A and principal stockholders sections first, then the final 424(b) prospectus, which adds the price.
Where do you find an S-1 on EDGAR?
Every public S-1 is free on the SEC’s EDGAR system. Search the company name at sec.gov/edgar/search and filter by form type “S-1.” You will usually see a chain of filings:
| Filing | What it is | What to look for |
|---|---|---|
| S-1 | First public registration statement | Business, risks, financials; no price yet |
| S-1/A | Amendments, often several | Updated financials, then the expected price range and share count |
| Free writing prospectus (FWP) | Offering materials used during the roadshow | Updated range or presentation |
| 424B4 (sometimes 424B1 or 424B3) | Final prospectus after pricing | Final price, number of shares, proceeds |
| CORRESP and UPLOAD | Company letters and SEC staff comment letters | Issues the SEC raised during review |
The SEC’s investor bulletin on investing in an IPO advises checking that you are reading the latest version, since the prospectus can change during review. SEC comment letters are posted only after a delay, no earlier than 20 business days after the registration statement becomes effective.
Which sections of the S-1 matter most?
A prospectus can run hundreds of pages. These sections answer most questions; the table of contents near the front gives page numbers.
- Prospectus summary: the business in a few pages, key numbers, and “The Offering,” which lists shares offered, shares outstanding after the IPO, the ticker and the exchange.
- Risk factors: long, but the first few and any that name specific customers, lawsuits, losses or control by insiders deserve attention.
- Use of proceeds: what the company plans to do with the money it raises. Money from shares sold by existing holders goes to them, not to the company.
- Capitalization: cash, debt and equity before and after the offering.
- Dilution: the gap between the IPO price and net tangible book value per share after the offering.
- Management’s discussion and analysis (MD&A): management’s explanation of revenue, costs, cash flow and key metrics, period by period.
- Principal and selling stockholders: who owns 5% or more, what directors and officers own, and who is selling.
- Description of capital stock: share classes, voting rights and anti-takeover provisions.
- Shares eligible for future sale: lockup terms and when insider shares can be sold.
- Underwriting: the banks, their fee, the option to buy extra shares, and any directed share program.
How do you read the dilution and ownership sections?
Dilution shows how much less book value each new share carries than the price paid, because earlier investors bought for less. Figma’s final prospectus, dated July 30, 2025 (filed under Rule 424(b)(4)), says buyers in the offering would experience “immediate dilution of $30.53” per share compared with pro forma net tangible book value as of March 31, 2025. That figure is a standard accounting calculation and says nothing about where the stock will trade.
The same filing shows how the offering was split: Figma sold 12,472,657 shares of Class A common stock and selling stockholders sold 24,464,423. Only the company’s portion produced new money for Figma.
Dual-class voting
Many tech IPOs sell a class of stock with fewer votes than the founders’ class. In Figma’s case, each Class A share carries one vote and each Class B share 15 votes, according to the prospectus. The principal stockholders table shows each holder’s percentage of total voting power, which can differ sharply from their percentage of shares. A company controlled this way may qualify as a “controlled company” under exchange rules and skip some board independence requirements; the prospectus says so if it does.
How do the S-1/A amendments and the final prospectus fit together?
The first public S-1 usually leaves the price blank. A later S-1/A adds an expected price range and share count, which marks the start of the roadshow. After the SEC declares the registration statement effective and the deal prices, the company files a final prospectus under Rule 424(b). Under Rule 424, a prospectus that adds pricing information omitted at effectiveness must be filed no later than the second business day after the price is set or the prospectus is first used, whichever comes first. On EDGAR it usually appears as a 424B4 or 424B1.
Price ranges can move. Read the cover page of the 424B4 for the final price per share, the underwriting discount and the proceeds to the company. The step-by-step timeline from filing to first trade is in our guide to how an IPO works.
What should employees look for in their company’s S-1?
Employees holding stock options or RSUs often care about different sections than outside investors.
- Executive compensation and equity plans: describe the new plans, including any employee stock purchase plan, and how existing awards are treated.
- Shares eligible for future sale: spells out the lockup, often around 180 days, and any early release terms. See how IPO lockups work.
- Notes on stock-based compensation: explain how RSUs with a liquidity condition will be settled at the IPO and how tax withholding is handled.
- Directed share program: in the underwriting section, if the company reserved shares for employees or friends at the IPO price.
Bottom line
Use EDGAR’s filing index for the company, not a news summary, and open the most recent S-1/A or the 424B4: the numbers in an early S-1 are often months out of date by pricing day. If you compare IPOs, start with three numbers that every prospectus states in the same place: shares offered by the company versus selling stockholders, dilution per share, and insiders’ share of voting power.
FAQ
What is the difference between an S-1 and a prospectus?
The prospectus is the main part of the S-1 registration statement. The S-1 also includes exhibits, such as the underwriting agreement and equity plans, and undertakings that are not in the prospectus delivered to investors.
Why do some companies file an F-1 instead of an S-1?
Form F-1 is the registration form for foreign private issuers. It covers the same ground, with financial statements that may use IFRS instead of US GAAP.
Can a company withdraw an S-1 after filing it?
Yes. Companies sometimes postpone or cancel an IPO and file a request to withdraw the registration statement, which also appears on EDGAR. For alternatives to a traditional IPO, see direct listing vs IPO vs SPAC.
