Section 1: Key Terms Comparison

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Section 2: Global Map with Key Takeaways

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Key Contacts

Global Contributors

[1] Mainland China’s VC practices primarily adopt two structures: (a) the onshore structure and (b) the offshore structure (or a 'red chip' structure), based on the jurisdiction of the holding company receiving financing. Under an onshore structure, the holding company is incorporated in Mainland China. Under an offshore structure, the holding company is incorporated outside Mainland China, often in the Cayman Islands. For the purpose of this comparison, the Mainland China section summarizes common features of both onshore and offshore structures, with major differences in treatment between the onshore structure and offshore structure specifically noted.

[2] Even where redemption rights are off-market, certain investors request a put option with a nominal strike price in order to facilitate a quick exit from the company triggered by regulatory or legal requirements.

[3] Generally across the markets, the liquidation preference is paid at the greater of the preferred stock’s original issue price multiplied by the specified multiple, or the amount that would have been received if the preferred stock had been converted into common stock prior to any distribution.

* Based on terms observed from the Hong Kong/Mainland China VC markets without regard to whether or not the company is being incorporated in Hong Kong/Mainland China.