June 30, 2021, Han Kun Law Offices issues Han Kun 2020 VC/PE Deal Data Analysis Report (the “Report”). The online version of the Report is available at the Firm’s website. (Link: https://www.hankunlaw.com/downloadfile/newsAndInsights/5381f9ae173d179e242838860af29562.pdf)
The Report uses data collected from over 2000 venture capital and private equity transactions that Han Kun worked on in the past four years (including over 500 in 2020 alone) to recap common features of VC/PE transactions in China and help forecast how they might evolve in the future through the lens of practicing lawyers.
Part I of the Report is an executive summary which highlights trends revealed by the VC/PE transactions in 2020, as follows:
- Transactions driven by financial returns saw an uptick.
- Onshore transactions with built-in JV structures increased. And so did offshore transactions with non-VIE structure.
- Beijing, Shanghai, Shenzhen, Hangzhou, and Guangzhou continued to be favored by investee companies to base their principal operations.
- Top-five VC/PE investment destinations were biomedicine, smart hardware, corporate services, catering services, and e-commerce.
Part II is the central part of the Report. It documents the development of certain key provisions commonly used in VC/PE transactions and tracks changes in their applications over the years. These provisions include liquidation preference, redemption right, preemptive rights, right of first refusal and co-sale right, drag-along right, anti-dilution right, dividend preference, restrictions on founders, protective provision and board composition, information right and inspection right, employee equity incentive plan, survival period of representations and warranties, founders’ personal indemnification liability, investor’s share transfer restrictions, investors’ investment restrictions, most-favored nation, valuation adjustment mechanism, dispute resolution.
The Report, which is published annually, is the fifth issue of its kind. It is the hope of Han Kun Law Offices that this Report, like its predecessors, will offer useful references to the development of China’s VC/PE market.
About Han Kun Law Offices
Han Kun is a full-service law firm in China and a leader in many important practice areas including private equity, mergers and acquisitions, international and domestic capital markets, investment funds/asset management, antitrust/competition, banking and finance, aviation finance, foreign direct investment, compliance, private client/wealth management, intellectual property and dispute resolution. Han Kun has been consistently recognized by the industry as a leading Chinese law firm in the Asia-Pacific region.
For more details, please visit the Han Kun Law Offices official website: https://www.hankunlaw.com/index.html