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Chinese Venture Capitalists Force Failed Founders On To Debtor Blacklist
An anonymous reader shares a report: Chinese venture capitalists are hounding failed founders [non-paywalled source], pursuing personal assets and adding the individuals to a national debtor blacklist when they fail to pay up, in moves that are throwing the country's startup funding ecosystem into c...
An anonymous reader shares a report: Chinese venture capitalists are hounding failed founders[ non-paywalled source], pursuing personal assets and adding the individuals to a national debtor blacklist when they fail to pay up, in moves that are throwing the country's startup funding ecosystem into crisis. The hard-nosed tactics by risk capital providers have been facilitated by clauses known as redemption rights, included in nearly all the financing deals struck during China's boom times. They typically require companies, and often their founders as well, to buy back investors' shares plus interest if certain targets such as an initial public offering timeline, valuation goals or revenue metrics are not met.
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