Do not talk about the macro environment, do not talk about the Sino-US comparison, do not talk about the black swan, do not pick up the data for ten years, and it is only for the reference of front-line partners who are doing financing.

As a long-time loyal partner of a startup company in the capital market, we have conducted a detailed remote office substitution assessment of the specific issues of each step of private equity financing for this particular period of time, and summarized each Attentions and experience summarization during the link formed the “Guidelines for Remote Office of Private Equity Financing Transactions” (hereinafter referred to as the “Guidelines”). For companies that are financing and planning to start financing, by comparing this guide, you can intuitively understand-what we can do about financing now.

The core participants in typical private equity financing transactions include startups, investment institutions, financial advisors, and other third-party service agencies. These companies have now generally resumed work in the form of remote offices. Through evaluation, we believe that the degree of remote office replacement for financing activities is very high, and most of the links can be promoted normally and orderly, but the company needs to be prepared accordingly in terms of IT, finance, and business data statistics.

1. Preparation stage: Telecommuting has a high degree of substitution, and video / teleconference and data synchronization tools can be fully utilized

Company and financial consultants do adequate preparatory work (not subject to remote office restrictions)

  • Given that most of the follow-up discussions and on-site work with investment institutions will be postponed or cancelled, the financial consultant will prepare a comprehensive information list and interview list in advance according to the standard of remote DD.

  • Because most of the subsequent links need to meet remote access, the company needs to deploy effective online solutions in advance, and set up a special working group to ensure orderly preparation and implementation, including virtual database (VDR), core business Data visualization interface (can be opened to investment institutions for remote presentations), financial data and operational data correlation and data presentation, multi-party video / teleconference tools and accounts, business core links remote monitoring video and live video (to meet remote DD), Internal system VPN solution, remote office management system and response mechanism, etc.

    Project launch, data preparation (not subject to remote office restrictions)

    • Through multiple communications with the company, the financial advisory team has completed financing marketing materials, which mainly include project introduction (Teaser), business plan (BP), financial forecast model (Financial Model), and data pack (Data pack) ) And the list of investors to contact

    • In order to effectively assist the remote office scene, all materials must be prepared with the necessary notes and data indexes. If necessary, the contact information of the data interface person can be attached. At the same time, the construction of material synchronization tools and VDR is essential

      It is recommended that companies with financing needs prepare as early as possible, use VDR / data management to collect and distribute data and information, work closely with financial consultants, and do financial, Legal and IT preparations will greatly improve process efficiency in future due diligence, thereby ensuring that financing progress is not delayed by the epidemic.

      2. Implementation phase: Most of the work before the internal project establishment can be carried out normally in the form of remote office work

      Project push, investor pre-communication (not subject to remote office restrictions)

      • The financial advisory team sends project briefings to the proposed investors; discusses with each investor the industry and the proposed investment opportunities, solutions and concerns; Investors who are interested or need information for in-depth communication and docking

        Project roadshow, prospective investors to follow up (restricted by remote office)

        • Financial consultants coordinate and arrange roadshow communication meetings; investors will ask for interviews with the company, which usually includes management and upstream and downstream partners, such as the company’s suppliers, channel providers, important customers, and strategic partners. p>

        • In the form of telephone / video communication, full preparation is very necessary, including the preparation of interview outlines in advance, the opening display of videos and promotional videos, presentation materials such as management statements, and the business system. Data display, etc., in the case of proper use of communication tools, strive to achieve no discounts on results, plus impressions and experience points

          The project roadshow and interviews are an important part of establishing direct contact and two-way communication between investors and the company. The original form of work was generally on-site meetings. The use of remote office will have a certain impact on the effectiveness of this link . Considering the two-way needs of financing and investment, the two parties can conduct in-depth communication through video conferences first, and supplement the on-site meetings as soon as the epidemic has eased.

          Intended investor industry research and project approval (restricted by remote office)

          • Investors with a clear intention generally require the company to provide some additional information, conduct in-depth research on the company through desk research, expert interviews, etc. Achieve project establishment

            The original working form of the internal project meeting was generally on-site meetings, but email, telephone conference communication and other forms also existed. Taking into account the remote office scenario, investment institutions will handle more projects at the same time, all materials need to fit directly to the meeting standards, and put forward higher requirements on content quality, richness, integrity and objectivity. Opinion summary and description should be added in the source, index and QA summary of key information, so that different people who are not present can read the same depth of information and point of view.

            Guidelines for remote office of private equity financing transactions

            TS negotiation and collection, determine the transaction plan (restricted by remote office)

            • The negotiation stage of the letter of intent for investment (TS) will involve the determination of investment status, that is, the investment form (leader, follow-up or buyer group) with the intent organization and the determination of the main investment terms; collection and signing of TS Able to represent the phased results of financing and guide whether to add more investor pushes and roadshows in the future

            • Financial consultants will assist the company to complete the comprehensive comparison and summary of various terms and investment institutions, and highlight items check list for each negotiation progress, to ensure that negotiations and communication are effective and orderly

              During the negotiation and communication of terms, the two parties cannot interact face to face, the effect may be compromised. Unnecessary misunderstanding caused by cold text transmission should be avoided. It is suggested that the discussion of core terms should be by phone / video Mainly, it assists the subsequent text description and document modification, and adds more comments and logical explanations to restore the original intention and logic of the parties at the scene.

              Due diligence of prospective investors and tripartite institutions (restricted by remote office)

              • The transaction structure is initially determined. The intended lead investor will hire a third party to conduct due diligence on the company’s financial and legal affairs. Most of the CDD is conducted by the lead investor. p>

              • Most professional third-party organizations have sufficient remote office experience, but the company needs to provide the necessary convenience and adequate preparation, including the improvement of various systems such as IT, business, finance, office and remote access. Entry methods, electronic documents and VDR arrangements for DD materials, Internet access links for relevant certification information, electronic statistical documents for vouchers and contracts, videos for specific business sites for remote monitoring, etc.

                After the transaction structure is initially determined, the prospective investor or third-party institution will conduct in-depth due diligence on the company’s business, financial, and legal affairs. At this stage, on-site meetings or even on-site office are usually used. To ensure the timeliness, accuracy and completeness of the due diligence report content. Some companies with good IT and financial foundations can conduct remote due diligence by opening up IT ports, back-office logins and video conferences to do some on-site work replacements, reducing the on-site due diligence time to a minimum, so as to quickly after the epidemic eases Advance.

                3. Implementation stage: After the vote is passed, remote office has a higher degree of substitution for subsequent links.

                Internal decision-making of prospective investors (restricted by remote office)

                • Review of due diligence report; follow-up of progress of voting meeting; internal voting meeting

                • Some investment institutions will require the introduction of founders for introduction and QA during the meeting, or members of the investment committee require individual interviews with the founders. The financial consultant will coordinate and prepare the interview list and schedule, and properly plan and Test phone / video tools and related projection / presentation support

                  In order to ensure full communication and discussion, the internal investment decision-making meeting of investment institutions usually takes the form of on-site meetings, so it will be affected by remote office work. In order to ensure the accuracy and effectiveness of the communication of the project establishment meeting, the company, financial consultants and investors need to work together to provide detailed meeting materials and ensure full communication before the investment decision.

                  SPA negotiation and signing (not subject to remote office restrictions)

                  • Determining the transaction structure; negotiating SPA terms; SPA signing