What is a prospectus in investing?

In investing, a prospectus is a legal document that describes an investment security to potential investors. Required by the U.S. Securities and Exchange Commission (SEC), a prospectus contains facts about the company or fund issuing the security.

What is a prospectus document?

Prospectus documents are for potential investors to understand the value of the offered public security, including information about the company’s history, financial performance, its management team, and the investment’s growth potential.

What is included in a prospectus?

A prospectus includes all the necessary details about the sale of a company's securities. It contains the company's financial position, the number of shares being offered and the types of securities in the offering.