In The News

The Late Show

AVCJ

31 Jul 2018

A private equity firm’s ability to carry out diligence work in order to secure a favorable arrangement is often determined by the popularity of the company, according to Morrison & Foerster partner Thomas T.H. Chou in the AVCJ article “The Late Show.” 

“Founders of these top-tier, in-demand companies are not beholden to traditional conventions of what a standard preferred equity round should look like. They want to preserve, control and dictate economic terms, and they are willing to rewrite the rules of the game to achieve this end.” he said. “Prestigious investors have had to compete viciously for allocation in these companies. Unfortunately, the ability for these investors-in-waiting to hold the line is only as strong as their weakest link. When one investor capitulates to secure their membership in the club, others will inevitably follow.”

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