Stock Market

Investing in an IPO can be both exciting and risky. Before buying into a newly public company, it’s essential to review its prospectus—officially known as the S-1 filing in the United States. This legal document, filed with the Securities and Exchange Commission (SEC), contains everything an investor needs to make an informed decision. But with dozens (sometimes hundreds) of pages filled with jargon, where do you start?

In this guide, we’ll break down how to read an IPO prospectus like a pro, helping you identify critical sections, assess financials, and spot red flags.

Initial Public Offerings (IPOs) can offer exciting opportunities to invest early in companies transitioning to public markets. However, evaluating an IPO requires a disciplined and strategic approach. With companies often presenting a best-case scenario in their prospectus, investors need to know what to look for — and what to question. This guide explores the key factors to evaluate before investing in any IPO.

Understand the Company’s Business Model

Before investing, ask: What does the company do? How does it make money? Is the business model scalable? A company with a clear, understandable, and proven business model is generally a safer investment than one relying on unproven concepts or future technologies that are still in development.

When private companies decide to go public, they typically choose between two primary options: an Initial Public Offering (IPO) or a Direct Listing. While both methods achieve the same end goal—making shares available for public trading—they differ significantly in terms of process, costs, regulatory obligations, and strategic implications. Understanding these differences is key for investors and founders alike.

What is an Initial Public Offering (IPO)?

An IPO is the traditional route for a company to go public. It involves issuing new shares to the public to raise fresh capital. In this process, companies work with underwriters (usually large investment banks) to determine pricing, handle regulatory paperwork, and generate investor interest through a roadshow. The company receives proceeds from the newly issued shares, which are typically used to fund operations, pay down debt, or invest in growth.

The biotechnology sector continues to be a focal point for investors seeking groundbreaking innovations and substantial growth opportunities. As we progress through 2025, several biotech companies are preparing to make their debut on the public markets. This article provides an overview of the top biotech IPOs to watch this year, highlighting their key developments, financial health, and potential market impact.

1. Metsera, Inc.

Metsera, founded in 2022 by ARCH Venture Partners and Population Health Partners, has rapidly positioned itself as a notable player in the weight-loss therapeutics arena. The company’s primary focus is on developing both injectable and oral drugs targeting obesity, utilizing the GLP-1 mechanism among other biological pathways. Their lead product candidate, MET-097i, an injectable formulation, demonstrated promising results in mid-stage trials, showing an average weight loss of 11.3% in patients.

The tech IPO landscape in 2024 was dynamic, with multiple high-profile companies going public. As we move into 2025, it is crucial to assess how these IPOs have performed and what insights investors can draw from them. This article examines key metrics, sector-specific trends, and lessons from the most significant tech IPOs of 2024.

A Resurgence in Tech IPOs

After a relatively quiet 2022-2023 due to economic uncertainty and high interest rates, 2024 saw a renewed wave of tech IPOs. Companies in artificial intelligence (AI), cybersecurity, and cloud computing led the charge, fueled by strong investor appetite and improving market conditions.

The technology IPO market is rebounding in 2025 after a period of uncertainty. With improving economic conditions, companies that previously delayed public offerings are now re-entering the market. Recent successful IPOs, such as SailPoint’s return to the stock market, indicate renewed investor confidence and interest in tech firms.

Emerging Technology Sectors Driving IPOs

Several high-growth sectors are expected to dominate tech IPO activity in 2025:

• Artificial Intelligence (AI): AI-driven firms, such as CoreWeave, are preparing to go public, attracting strong investor demand.
• Blockchain and FinTech: Decentralized finance (DeFi) platforms and cryptocurrency-related firms continue to gain traction.
• Cybersecurity: The rising demand for data protection and regulatory compliance solutions makes cybersecurity companies attractive IPO candidates.

Market Sentiment and Valuations

Investor sentiment is a major factor influencing IPO success. Companies with solid revenue models and high growth potential are seeing strong valuations. However, inflated valuations can lead to post-IPO volatility, making it crucial for investors to assess fundamentals before investing.

After a period of market volatility, the technology IPO market is poised for a strong resurgence in 2025. Analysts predict that over 300 companies will go public worldwide this year, with approximately 180 IPOs expected in the U.S. alone. The resurgence is fueled by improving investor confidence, strong stock market performance, and continued advancements in artificial intelligence (AI), cybersecurity, and fintech.

Key Drivers of Tech IPO Growth

1. Stock Market Recovery & Investor Confidence

The stock market has rebounded significantly since 2024, creating a favorable environment for IPOs. The S&P 500 and Nasdaq Composite have reached record highs, bolstering investor optimism. Increased liquidity and demand for high-growth tech stocks are driving companies to go public.