It depends.
Some people I trust to see it first draft ugly: shout to KTC.
Some people can see second draft.
Most people who are reading this novel are reading 3rd which is just red pen edited version of draft #2.
Some people this time around got a hybrid - half red pen edited. To them, I'm sorry.
It really depends on the purpose of the reader and your comfort with the person. I have different people reading for different purposes.
Some people are just reading it for story flow. Just check out the plot, tell me if there are holes, what needs to be clearer, what doesn't make sense, etc.
Some people are reading it with a red pen in their hands. They are circling sentences (or paragraphs) they think may need work.
This is the point where I generate ideas for improvement if it needs any so I can get them in there.
Most people are going to read version 3 or later.
For now though, version 2 with one round of copy edits is what most of the betas have.