The law problems in the valuation process
First is the problem of the low valuations. On this condition, experts in Business law firms said that there will be some changes between the target companies and investors, in other word, the investors are in the stronger position. Thus, although the operation sales of the company is good, if the target companies keep on investing it, investors still give the low valuations. Second is the high valuation, which is totally benefited for the target companies. Because the purpose and intension of the investors is to get profits through the investment, if so, the target Business law firms faces the high bet conditions. According to the above crisis, in the Pre-IPO Private Equity Investment period, investors should figure out the industry and conditions of the invested companies so that they can get a reasonable result during the valuation negotiations. And they’d better come to the Business law firms for further help. No matter it is the Immigration law firm or business law firm, before they officially come into the market, they have to experience and deal with the private equity investment period, during this process, there are some potential risks for the investors and target enterprises. First is the risk of investors. Even though the private investors will do the detail investigation when they are in the process of investment, no matter hard detail and how hard they are, they can’t dig out all questions, especially the driving elements and competition advantages aiming to the company valuations, Business law firms can’t make sure that the management teams or scientific and research performances can maintain the continuously profits of the company. On this condition, there are unbalance information between the private investors and creators toward the operation of companies, then of course there are risks toward the company valuation, especially on condition that the ideals and profits modes of Immigration law firm are good and investors are fond of this industries, the valuation may higher than the current financial positions. The over-valuation of the company in fact is the relative reduction of the shares of the investors, in some degree; it may hurt and damage the profits and rights of the investors.