Preparing the right documents, filing them correctly, or knowing what to look for can be a challenge for most; but we always tell our clients that conducting due diligence is like receiving free legal advice, especially useful for young and emerging start-ups. Consider it a cheap way to learn a little bit more about how to run a company.
There are a number of issues that should be considered when structuring a deal.
- Should it be a simple tiered structure?
- Should you establish an off-shore holding?
- How about investing through an SPV or using an equity or convertible loan investment?
- Are there regulatory restrictions?
Thailand is experiencing a significant increase in investments made by the corporate venture capital (CVC) arms of leading Thai companies. These companies operate in various sectors including financial institutions, telecommunications, real estate and petrochemicals. Many are large conglomerates.
The dominance of CVCs does not mean that there are no pure venture capital (VC) firms in Thailand. The Thai Venture Capital Association was established in 1994 to support the development of the VC ecosystem in Thailand. Currently, there are a handful of VC firms that are very active in the markets and their investments play an important role in growing Thailand’s VC industry. Aside from investment opportunities and market awareness that drive the growth of the sector, legal and regulatory development (or the lack of it) is also a key deal driver.