July 18, 2022, Beijing, China – Today, Han Kun Law Offices has released the Han Kun 2021 VC/PE Deal Data Analysis Report (English edition, the "Report"). The online version of the Report is available on the firm's website at:
The Report compares and analyzes data compiled from nearly 3,000 venture capital and private equity transactions that Han Kun has advised on over the past five years (including over 650 in 2021 alone) to recap the common features of VC/PE transactions in 2021 and to observe the evolution of key legal provisions used in such transactions through the eyes of practicing lawyers.
Part 1 of the Report highlights emerging trends and features revealed by the VC/PE transactions in 2021:
1. Both the number of completed transactions and total deal value saw a significant increase.
2. The percentage of onshore transactions continued to rise, especially those with built-in FIE structures.
3. Beijing, Shanghai, Shenzhen, Hangzhou, and Guangzhou remained the most favored domiciles for investee companies to base their principal operations.
4. The top five VC/PE investment destinations were biomedicine, smart hardware (artificial intelligence, AR, etc.), corporate services, food catering, and online games.
Part 2 reviews the key provisions commonly used in VC/PE transactions and tracks changes in their application over the years. These provisions include liquidation preference, redemption right, preemptive right, right of first refusal and co-sale right, drag-along right, anti-dilution right, dividend preference, restrictions on founders, founders' share transfer, control rights (protective provisions and board composition), information right and inspection right, employee equity incentive plans, survival period of representations and warranties, indemnification and founders' personal liability, restrictions on investors, most-favored nation, valuation adjustment mechanism, and dispute resolution.
The Report is the sixth edition of Han Kun's annual VC/PE Deal Data Analysis Report. It is our hope that the Report, which provides a professional analysis of data based on our years of practice and observations in the VC/PE industry, will serve as a useful reference for the development of the VC/PE market.