Highlights of the day
Featured Articles
Financial Reporting (Half and Full Year) Disclosure and Reporting Compliance Requirements of Listed Companies on the Hong Kong Stock Exchange (HKEx)
Listed companies on the Hong Kong Stock Exchange (HKEx) are subject to certain financial reporting and disclosure compliance requirements under the Hong Kong Listing Rules. This article sets out briefly what these requirements are.
Distribution of annual report and accounts
Preliminary Announcements of Results – Full Financial Year
LR13.49(1): For annual accounting periods ending on or after 31 [...]
Top 10 IPO Equity Funds Raised on Global Stock Exchanges in 2011
I would like to give you some interesting statistics of 2011 in this article. As most of you know, I specialize in IPO on the Hong Kong Stock Exchange (along with other equity and debt offerings, mergers and acquisitions and private equity transactions). Statistics on capital markets and market conditions are important to me.
Here, I [...]
Christmas ecard and best wishes
It’s the time of year again. On behalf of AskVenture.com, I wish you a merry christmas and happy new year. I made this Christmas ecard so that I could share this festive season with people I know, people I care, and people I miss.
To all entrepreneurs – I hope that you can continue [...]
Listing by introduction vs IPO global offering on the Hong Kong Stock Exchange (HKSE)
This article aims to help you know more about what listing by introduction is, how a company gets listed on the Stock Exchange of Hong Kong (SEHK) by introduction, and what information to look for before buying shares of a company to be listed by introduction.
What is listing by Introduction?
Listing by introduction is one of [...]
Hong Kong IPO main board listing requirements – profit / market / capitalisation / revenue / cash flow test
I have represented underwriters and issuers in initial public offerings (IPO) in Hong Kong on many occasions. In this article, I give an overview of the key financial listing requirements in relation to listing on the main board of the Hong Kong Stock Exchange.
A new listing applicant must satisfy either the profit test or the [...]
Incorporation of a Hong Kong company limited by shares as a special purpose vehicle (spv) or holding company
Some clients I work with require the incorporation of a Hong Kong limited company in the process of their private equity, M&A or capital markets investments. I have helped a lot of clients incorporate such company which is mainly used as a special purpose vehicle (SPV) or a holding company. In this article, I discuss [...]
Confidentiality agreement or NDA – restricted use of confidential information
This is another post on NDA. I wrote a post on return or destruction of confidential information not long ago. This post is on restricted use of confidential information.
I have only a few points to make.
1. Normally, Seller will be disclosing confidential information not just to Buyer, but also to Buyer’s Representatives. Representatives may include [...]
Confidentiality agreement or NDA – return or destruction of confidential information
Let’s talk about confidentiality agreement (aka non-disclosure agreement or NDA) in this post – specifically on the clause relating to return or destruction of confidential information. There may be a confidentiality clause in a term sheet, but in this post, we are focusing on NDAs.
You will almost definitely see a clause relating to return or [...]
Venture capital lawyer or law firm recommendation and referral
I have written a lot of posts on this website about venture capital funding and have received a lot of emails from readers thanking me for such great help – some on the posts I wrote, on advice I gave them through emails, and on the Askventure.com cap table which they can download free from [...]
Venture capital exits – trade sale vs IPO – compared and analyzed
Way before a venture capitalist invests in a company, he is already thinking how and when to exit from the investment. This article tells you why and compares between the two venture capital exits – trade sale and IPO.
Illiquid nature and limited life-span of a VC fund
A well-planned exit is particularly important in a VC investment [...]
Popular Articles
Download Sample Share Cap Table Template of a Venture Capital Term Sheet
About this cap table
This is exactly the kind of cap table that law firms or venture capitalists would use in a venture capital financing transaction.
It shows you:
1. Capitalization of a company at founding (before preferred stock financing – Series A financing)
2. Capitalization of a company after preferred stock financing – Series A financing
3. Capitalization calculated both on [...]
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What is a venture capital term sheet? Is a Series A term sheet binding?
A term sheet is a document that summarizes the key terms of a proposed investment. It is sometimes called a letter of intent.
Typically, a term sheet is not binding, except for confidentiality, exclusivity and expenses (or transaction fees). Exclusivity is sometimes called no-shop no-solicitation clause.
Click here to download your free sample term sheet / letter [...]
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Download Sample Venture Capital Term Sheet / Letter of Intent Free
Download your sample venture capital term sheet / letter of intent now.
Please note that this is a term sheet taken from the National Venture Capital Association. It does not constitute legal advice. If you have any doubt as to this term sheet, please consult your legal adviser or professional consultant.
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How to Calculate Liquidation Preference of Preferred Stock in a Venture Capital Financing?
What is liquidation preference?
Liquidation preference refers to preferred shareholders’ rights to receive a certain amount for the preferred shares they hold in preference to common shareholders in the event that a company goes into liquidation.
The scope of liquidation preference varies between different term sheets. Some may be extremely favorable to investors, some may be less. [...]
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Calculate pre-money valuation of startup company seeking venture capital funding
Pre-money valuation – the basic concept
The calculation of the pre-money valuation of a startup company seeking venture capital financing is as much a science as an art. It is a science because a lot of the calculations are based on scientific methods – the use of equations, formulas, comparators, etc. It is an art because [...]
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What is Employee Stock Option Plan, ESOP, fully diluted shares?
What is Employee Stock Option Plan (ESOP)?
In a typical venture capital investment, the investor and the company will agree to the creation of an option pool before the investor invests in the company. The option pool is also sometimes called an option plan, Employee Stock Option Plan, or ESOP – usually defined as the “Plan” [...]
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Pre-money, Post-money Valuation and Calculation in a Venture Capital Investment
What is pre-money valuation and post-money valuation?
The pre-money valuation of a company refers to the valuation of the company before an investor injects capital into the company. The post-money valuation of a company refers to the valuation of the company after an investor has injected capital into the company. Therefore, the post-money valuation of a [...]
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What is Series A Convertible Preferred Stock Funding and Financing in a Venture Capital Investment?
What is Venture Capital?
Venture capitalists provide venture capital to startup, high growth companies usually with a prospect of achieving an IPO within a number of years (e.g., 3-5 years). Venture capitalists generally invest in the form of funds that are privately held limited partnerships (LP).
What is a Venture Capital Fund?
A venture capital fund is [...]
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Risky but High Potential Return Nature of Venture Capital Investments
Risky nature of venture capital investments
A crucial aspect of venture capital investment is the ability to identify novel technologies at a very early stage that have a potential of generating huge return within just a number of years’ time. This is because when a venture capitalist invests in a startup company, the company is [...]
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From Seed Capital to Angel Investors to Venture Capital Funding – Startup Company Financing Model
This article gives an overview of how a startup company goes from seed capital to angel investors to venture capital funding (Series A round) – the classic startup company financing model.
Seed capital / Seed round / Seed funding
Say, 3 people decide to start a business in biotechnology. They do so by incorporating a company [...]
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