Pre-IPO facilities private transactions amongst members. Through our platform, members will be able to view the Pre-IPO companies with securities available for sale, the asking price and the quantity made available by the selling member.
Once a potential buyer logs in, he/she will be able to see various quotes of prices and quantity on a company. Once he indicates his interest to any seller, the conversation and negotiation will be conducted in a private room chat (“Deal Room”) which can only be accessed by the buyer and seller.
In the Deal Room, other than being able to discuss and negotiate on the price and quantity, both buyers and sellers will be able to attach documents (as necessary). Both buyers and sellers can also choose to do due diligence on each other and the Pre-IPO company. Once both parties have agreed on the price and quantity of securities, they can either choose from a list of legal counsels that have made prior arrangements with Pre-IPO or appoint other third parties for the documentation required in the settlement of the transaction.
Once a buyer indicates interest in a particular offer by a seller, both parties will enter into the Deal Room which is only accessible by them. They can make offers and counteroffers until one side accepts the other’s offer. During this process, both buyers and sellers will be able to upload documents to facilitate the discussion. A chat corner is also available for both sides to communicate with each other.
Once one side accepts the other party’s offer, they will move to the next step – Appointment.
For the next step of the transaction, the seller and buyer can appoint a law firm to assist with the settlement of the transaction.
To assist in the execution of the transaction, Pre-IPO will provide a list of referral law firms to draw up the documentation required. We understand that members might have their own preferences and hence you can also choose from law firms outside of the referral list. In that case, to secure the interests of both the buying and selling members, both members will choose an escrow agent from a list of trustees (at no extra cost). Selling members do not have to make any payment to Pre-IPO at this stage but do note that any costs associated with the appointment of the professionals will be borne by the members.
Once the professional(s) have been chosen by both parties, they will move to the next step – Due Diligence.
In this step, members can (at their own expenses) choose to conduct due diligence on each other, the company and the securities that is available for sale. We strongly recommend that transaction parties seek guidance from professionals during the course of the transaction.
Once due diligence by either or both parties has been completed or both parties choose to forgo this step, they will move to the next step – Sales and Purchase Agreement. Once the due diligence process is completed, the law firm(s) appointed for the transaction will be notified and can prepare the Sales and Purchase Agreement accordingly.
Once the Sales and Purchase Agreement (SPA) has been drawn up and agreed upon by both the selling and buying members, the law firm(s)/trustee will be required to store a copy of the SPA with Pre-IPO for record-keeping purposes.
All other relevant documents that have been executed can also be uploaded to Pre-IPO for record-keeping purposes.
Upon the completion of the transaction, Pre-IPO will ask that both parties acknowledge its closing. Alternatively, Pre-IPO will close the transaction within 14 days upon receiving a notice from the escrow agent. This will remove the posting from the list of offers available for the company. If any of the two parties notify Pre-IPO that the transaction was not successfully completed, the offer by the selling member will be made available for other members to view.
Pre-IPO will only deduct an annual membership fee of US$10,000 from the selling member upon a successful transaction. This amount will be deduced from the gross proceeds of the transaction, with the selling member receiving the net proceeds. This membership fee entitles selling members to post securities available for sale with no additional fees payable to the Pre-IPO for the next one year.
At any point during the transaction, members can ask Pre-IPO for help should they encounter any issue.