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with the expiration of vc/pe funds and the multiple difficulties of "raising funds, investing, managing and exiting", a large number of startups are facing repurchases or even being sued. although the supreme people's court recently issued a reply to questions to stabilize the business expectations of companies, the repurchase crisis in the primary market is still deepening.

in its q&a, the supreme court stated that “six months is the best” for those without a specified repurchase period, which has attracted great attention from the industry. “the q&a does not require investors to complete the repurchase within six months, but requires investors to exercise the repurchase right within six months.” wei ziwei, a senior lawyer at lifeng law firm, told china business news that investment institutions only need to express their intention to repurchase within six months, such as by express delivery, wechat, email or text message.

there may be intensive exercise

on august 29, the supreme court released the "fada.com selected q&a (9th batch)" on its official wechat platform, which mentioned that if the parties have not agreed on the time limit for the investor to request the other party to repurchase, then the right should be exercised within a reasonable period. in order to stabilize the company's business expectations, the reasonable period should not exceed 6 months in the trial. the statute of limitations starts from the day after the request is made within 6 months.

wei ziwei told reporters that all parties are cautious about agreeing on the exercise period when signing an investment agreement. companies often worry that this clause will prompt investors to exercise their rights as soon as possible within the period, and investors worry that failure to exercise the repurchase right after the deadline may lead to the loss of their rights.

how will investment institutions and companies react to the proposal of a six-month exercise period?