I. Business Terminology
Pre-IPO (pre-listing financing): Refers to equity targets of unicorns or mid-to-late-stage VC (venture capital) companies that have not yet completed their Initial Public Offering (IPO). The equity interests of such companies cannot be traded directly on the main board market and can only be transferred through over-the-counter channels.
Primary Share Subscription: Refers to primary market activity, i.e., subscribing to newly issued equity of a company or newly issued shares of an institutional fund. This is a source-level investment.
Pre-IPO Trading Market: Refers to trading on a dedicated market that allows free transfer. Users can choose to sell their positions to recover and withdraw their principal. Profits tied to the target company's stock for the period before the post-listing unlock will be locked, and the transaction will incur certain fees. A profit-sharing fee will be charged on excess profits. If the company ultimately fails to go public, or if the target is cancelled due to ROFR or other factors, all profits, losses, and fees will be refunded.
II. Enterprise Fundamental Terms
Transaction Cancellation and Refund: Due to ROFR (Right of First Refusal, under which the company has the right to purchase the equity to be transferred first) and various other factors, the target cannot be delivered after the IPO.
Trigger Consequences: The transaction is voided. Only the investment principal is refunded, and all floating profits and losses recorded on the books during the period are cleared.
Lock-up Period: Refers to the holding period after the equity transfer is completed, during which the equity cannot be freely sold until the official IPO listing (commonly 3-18 years). Liquidity is extremely poor during this period.
Excess Return Sharing (Carried Interest):20% (If there is a premium gain at the time of selling the position or unlocking after the IPO, it is charged on the profit portion; no charge if no gain is generated)
III. Capital, Settlement, and Custody Terms
Fund Lock-up & Exit: Position holders can choose their exit method based on their own investment strategy. Users can choose to sell their positions to recover the principal while continuing to hold the remaining profit portion, thereby continuing to participate in the target company's long-term value growth. The profit portion is expected to be locked for a period ranging from several months to several years, until around the target company's listing or the realization of another exit.
Post-Transaction Asset Re-Trading and Gain Lock-up Rules: After the transaction is completed, the equity share may be transferred again. The seller can withdraw the principal, but the book profit portion will be strictly locked and can only be liquidated upon the target company's IPO or M&A exit; it cannot be withdrawn in the interim.
Tiered Gain Lock-up Mechanism: After selling the equity, the principal can be freely withdrawn, while excess returns are locked. If the transaction is cancelled and refunded, the gains are voided. Upon delivery of the target after the IPO, the Carry (performance fee) portion of the gains will be deducted.
Transaction Void / Original-Path Rollback: If the company exercises the ROFR, or if various other factors prevent the target from being delivered after the IPO, the entire transaction is cancelled. Only the original principal is returned, and all book floating profits generated during the period are cleared to zero.
IV. Risk Disclosure Terms
Lock-up Period Risk: The asset has poor short-term liquidity, and the holding period may last for several years.
Cancellation Risk: If the company exercises the ROFR, or if various other factors prevent the target from being delivered after the IPO, the transaction will be cancelled, and all book floating profits will be cleared to zero.
Valuation Decline Risk: The private trading market lacks continuous public quotations, and there is a possibility of significant declines in secondary market valuations.
Non-Spot Internal Market Characteristics: Unlike spot trading of assets such as cryptocurrencies, the equity settlement cycle is extremely long.
Disclaimer
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