PROSPECTUS SECTIONS

See what a company says it will do with the money it raises

The use of proceeds section says how the issuer intends to spend the net money from the offering: repaying debt, funding growth, paying for an acquisition, or simply general corporate purposes. Some plans are detailed, many are broad, and some proceeds go to selling shareholders rather than the company. Ask Search+ "What will the proceeds be used for, and who receives them?" and read the cited section in the issuer's own words.

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Last updated October 2026

How to find the use of proceeds with Search+

Upload the prospectus, including any amendment
Add the prospectus as filed, usually a PDF. The estimated net proceeds depend on the offering price, so a later version may update the amounts; keep each version in the workspace with a clear name.
Ask about each stated use
Ask about debt repayment, then capital spending, then acquisitions, then any amount for general purposes. If the section names a loan to be repaid, ask about its terms as a separate question.
Cross-check against other sections
Proceeds used to repay debt or pay related parties often connect to the capitalization, related party transactions or debt sections. Ask a follow-up so those citations appear next to the use of proceeds excerpt.

Questions to ask about the use of proceeds

The plan

What uses does the prospectus name for the net proceeds, and does it give amounts or proportions for each?

Who receives the money

Will the company receive any proceeds from shares sold by selling shareholders?

Debt repayment

Does the issuer plan to repay any loans, and who are the lenders?

Insider benefit

Will any proceeds go to affiliates, sponsors or underwriters' affiliates, for example to repay a loan they made?

Before deployment

What does the prospectus say about how the proceeds will be held until they are used?

Flexibility

Does the company say it can change the planned uses, and how much discretion does management keep?

What to look for in the use of proceeds

Typical location

The use of proceeds section usually follows the risk factors, near the dividend policy, capitalization and dilution sections, and the offering summary often repeats it in brief.

Net, not gross

The section usually describes net proceeds, after underwriting discounts and offering expenses, often with an estimate based on the midpoint of the price range. The final figure depends on the actual price.

Primary versus secondary shares

Money from new shares goes to the company. Money from shares sold by existing holders goes to those holders. A large secondary portion means less capital for the business itself.

Broad language is common

Many issuers say proceeds will fund general corporate purposes, working capital or possible acquisitions. That gives management wide discretion, and a related risk factor often says so.

Watch for related parties

Repaying a loan from a sponsor, an insider or an underwriter's affiliate means part of the raise flows back to people connected to the deal. The prospectus typically discloses this.

Ask one document or many

Ask about one prospectus alone or across every offering in the workspace, and every answer comes with inline citations to the supporting excerpt.

Use of proceeds wording and what to ask next

Wording you may see	What it usually signals	A follow-up question
"General corporate purposes"	No committed plan for the money	Is there a risk factor about management's broad discretion over proceeds?
"To repay outstanding borrowings under"	Debt reduction	Which facility is being repaid, and who are the lenders?
"We will not receive any proceeds from"	Selling shareholders get that portion	How many shares are being sold by existing holders?
"Affiliates of certain underwriters"	Part of the proceeds may go to underwriters' affiliates	How much, and what conflict of interest is disclosed?
"Pending use, we intend to invest"	Temporary holding of the cash	How will the proceeds be held until they are spent?
"Based on an assumed offering price"	An estimate tied to the price range	How do the estimated proceeds change if the price moves?

What is the use of proceeds in a prospectus?

The use of proceeds is the section of a prospectus that states how the issuer intends to apply the net money raised in the offering, and whether any proceeds go to selling shareholders, lenders or related parties instead.

A pitch deck's use of funds slide makes a similar point for venture or angel investors, but without the disclosure obligations of a prospectus. The capitalization table shows the balance sheet effect of the offering, not the spending plan.

Questions about use of proceeds

Can Search+ find the use of proceeds section quickly?

Ask what the proceeds will be used for. The answer cites the section, and often the matching line in the offering summary, so you can open the issuer's wording right away.

Can it tell me how much the company actually keeps?

Ask about the estimated net proceeds to the company and any portion going to selling shareholders. The prospectus usually states both, and the citations show where; check the final version for the actual price.

Will it flag proceeds going to insiders or lenders tied to the deal?

Ask whether any proceeds go to affiliates, sponsors or underwriters' affiliates. If the prospectus discloses it, the answer cites the passage, often alongside a conflict of interest disclosure.

Can I compare use of proceeds across several offerings?

Yes. Upload the prospectuses to one workspace and ask which issuers give specific uses and which keep it general. Each point cites its prospectus.

Is Search+ telling me whether the plan for the money is sound?

No. It helps you find and read what the issuer says; it is not investment advice and does not evaluate the plan.

Related prospectus sections

Prospectuses

Read the whole offering document

Risk factors

Including management's discretion over proceeds

Lock-up terms

Selling restrictions after the offering

Compare prospectuses