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 [...]
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Sample liquidation preference clause in a typical venture capital term sheet
I get asked a lot for a sample clause on liquidation preference used in a typical venture capital term sheet. So, I’ve put together an all-in-one sample clause here for your reference. The good thing about this sample clause is that it covers or can be modified to cover the scenarios of
(1) participating preferred with a [...]
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Download pre post ipo global offering stats shareholding cap table spreadsheet template sample xls
This is a spreadsheet used by a major investment bank and law firms showing the IPO offering stats of a company contemplating IPO in a real-live IPO deal (with sensitive and confidential information removed).
It is divided into three parts:
1. Offering stats at IPO (market cap, forecast earning, pe ratio, offer price, IPO proceeds, capitalization issue, [...]
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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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