What Should I Look for in an IPO Prospectus?

Pre-IPO fund refers to the investment before the company is listed, or when the company is expected to be listed in the near future, the exit method is generally: after the company is listed, the company sells shares from the open capital market to exit. Unlike the venture capital investment in the seed stage and the start-up stage, the fund's investment point in time is when the company's scale and earnings have reached the level of listing, and even the company has stood at the door of the stock market. Therefore, the fund's investment has the advantages of low risk and quick recovery, and can obtain a higher return on investment when the company's stock is sought after by investors. In recent years, in the US, Europe, Hong Kong and other capital markets, fund management companies have focused on investing in pre-IPO companies. Larger investment funds, such as Goldman Sachs, Morgan Stanley, etc., Pre-IPO investment is also an important part of their portfolios.

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Generally, shares of listed companies are issued on the basis of

First of all, investors will analyze the multiples of the price-earnings ratio of companies listed in the industry in recent years based on the industry of the target company. Due to the profitability of Pre-IPO funds, with reference to the listing price, usually a certain reduction based on this price-earnings ratio. Domestic Pre-IPO fund bids are reduced by about 30%, and the average standard is about 6 times the price-earnings ratio; now Hong Kong The situation in Singapore and Singapore are about 50% off the listed price. If the listed price-earnings ratio is 8, the PE ratio of private equity financing is 4; a strong investor will raise the price of the company's listing and make up for the loss of the private equity discount. .

Then, based on the target company's net assets and cash flow, a valuation interval is determined for the investment price of the company; after that, investors will, based on these three main indicators, together with some other factors that affect the pricing of PRE-IPO private equity financing Factors, including the company's development stage, investor return requirements, equity ratio, funding cycle, private equity financing costs, intermediary fees, commissions, etc., determine a recommended bid.

Finally, the Pre-IPO investor will negotiate with the target company based on this recommended price, adjust the human resource level, operating status, and account receivable size of the company to determine a final Pre-IPO entry price.