In The News

Watching the Clock

AVCJ

06 Feb 2018

Thomas Chou, partner and co-head of Morrison & Foerster’s Asia private equity practice, notes in the AVCJ article “Watching the Clock,” that while venture capital investors in the U.S. are strongly against contractual restrictions, the practice in China is more varied.

“With the top-tier companies raising capital in China, management is often successful in imposing some restrictions on an investor’s ability to transfer,” he said. “The most common would be a restriction transferring such shares to a competitor of the company. In a minority of deals where the company enjoys very strong demand, investor transfers may be subject to a right of first refusal or a tag-along right. In extreme cases, the investors may be forced to (reluctantly) agree to a straight lock-up for a fixed period of time.”

Read the full article (subscription required)

Close
Feedback

Disclaimer

Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so.