A company seeking to expand may raise capital by going public, with founders and management choosing to initiate an IPO.
An IPO marks a significant milestone. Before offering shares to the public, a company must disclose its identity, business model, risks, and financial condition to investors.
At this point, the Draft Registration Statement (DRS) becomes central to the process.
DRS: What You Need to Know
A Draft Registration Statement is the first formal version of a registration statement that an eligible company submits to the U.S. Securities and Exchange Commission (SEC) for non-public review before making its filing public.
For a typical IPO, companies generally prepare a DRS on Form S-1.
DRS is where a company’s public-market story first takes shape in a formal filing.
It brings together the company’s business information, financial statements, risks, management details, offering information, and other required disclosures.
The Evolution of Draft Registration Statement
The evolution of the Draft Registration Statement (DRS) dates to 2012, when Congress passed the Jumpstart Our Business Startups (JOBS) Act. This Act changed for a specific group of companies: Emerging Growth Companies (EGCs).
Under new Section 6(e) of the Securities Act, an EGC could submit its draft registration statement to the SEC for confidential, non-public review before publicly filing it.
Five years later, in June 2017, the SEC expanded non-public DRS review beyond EGCs, allowing all companies conducting IPOs to submit draft registration statements for SEC staff review.
The process expanded further in March 2025, when the SEC removed the “first-time registrant” and 12-month restrictions that had limited certain reporting companies’ use of the non-public review process.
The expansion continued in September 2026, when the SEC announced accommodations for certain asset-backed securities issuers using Forms SF-1 and SF-3.
The registration statement began as a targeted mechanism for emerging companies and gradually became a broader tool for issuers seeking to work through SEC review before entering the public phase of an offering.
DRS: Where It Fits in the IPO Process
Once a company decides to go public, the DRS becomes an important step between preparing its registration statement and taking it public.
The journey looks like this:
IPO Decision → Due Diligence & Preparation → DRS Preparation → Non-public SEC Review → SEC Comments & Revisions → Public Filing →15-Day Requirement → Roadshow → IPO
As a company prepares to enter the public markets, it prepares a Draft Registration Statement (DRS) and submits it to the SEC for confidential review. It is called confidential because, at this stage, the filing is being shared with the SEC for review and is not yet available to the public.
The process does not end with the first submission. SEC staff reviews the DRS and sends comments, questions, or requests for additional disclosure. The company responds, makes the necessary changes, and resubmits the document.
This creates a back-and-forth process between the company and the SEC, often involving multiple rounds of comments and revisions. Once the company is ready to move into the public phase, it must publicly file the registration statement, the initial DRS and required amendments at least 15 days before the roadshow or, if there is no roadshow, generally at least 15 days before the requested effective date. The IPO can then move toward the roadshow and subsequent offering stages.
The Strategic Benefits of DRS
The DRS gives companies a private window to identify disclosure, accounting, and compliance gaps before their registration statement reaches the public.
Without this review stage, SEC comments or required revisions could surface after the filing is public, putting the company’s disclosures under investor and market scrutiny. Addressing these issues privately first helps the company enter the public phase with a more refined filing and greater clarity for investors.
It also gives room to the company to back out quietly, if company decides not to go public, as there is no public record of a withdrawn IPO. This protects its reputation and stock price.
The company can have a smoother public debut with SEC comments getting resolved before the public filing and this can lower the printing and disclosure costs.
What Does a DRS Contain?
A DRS brings together the information the SEC needs to understand the company and its proposed offering. Broadly, it covers:
The Business
What the company does, how it generates revenue, its strategy, and the key risks it faces.
The Financial Picture
Financial statements, MD&A, capitalization, and other information that explains the company’s financial position and performance.
The People behind the company
Details about executives, directors, ownership, and related-party transactions.
The IPO itself
Information on the offering, including the use of proceeds, dilution, and the rights attached to the securities being offered
The Supporting disclosures
Legal matters, exhibits, and other information required to support the registration statement
Together, these pieces give the SEC and eventually investors a structured view of the company, its finances, its risks, and what the IPO means for new shareholders.
Who Prepares It?
The owner of the registration statement is the Issuer company, as they are going public.
The company does not prepare it alone; a Deal team is built, consisting of Management, finance teams, securities lawyers, investment bankers, and independent auditors who work together to build and review the document.
Making the Journey to Going Public Simpler
Going public brings continuous drafting, review cycles, SEC requirements, and collaboration across teams. Managing this complexity can be just as challenging as preparing the disclosures themselves.
IRIS CARBON® is an AI-powered disclosure management platform designed to simplify the journey from DRS preparation and SEC review to public filing and beyond.
With Microsoft Office integration, real-time collaboration, connected workflows, and round-the-clock expert assistance, IRIS CARBON® also brings teams, data, and disclosure processes together in one connected platform.
Because the DRS is only the beginning. IRIS CARBON® helps companies navigate the journey to becoming public and manage what comes next with greater simplicity and confidence.
