Hi all,

I've been invited as one of the investor (known as angel investor) in a local company. The company target to be listed in KLSE on 2023. This is first time for me.

Anyone has any experience with pre-ipo/angel investor before? Can share some insights on the return/risk?

To know more about this pre-ipo phase, check out this site: https://www.crunchbase.com/

HIGH risk, high return IF really go listed.. VERY BIG IF.

Well..
If u believe the company can go far... Have good prospects... Then go for it...
Just that your holding power really needed to be powerful.... Because it's take few years to see the results @ IPO... As what u say...

So the $$$ invested, cannot be redeem simply...
But after IPO.. u really make killings 🤑💰💵

indeed. i believe the company will be listed..but yeah, anything can happen in between

exactly. Target is 2023 but it's not guaranteed. Might take few years..i believe in the company. but external factors that I'm worried more. E.g: covid, economy, market, politic etc

So u can withstand the risk or not?
Can lose the $$$? Without effecting u financially?

That's the question u need to ask yourself...
High risk high $$$ involved later...

The company targets to be listed in 2023, they already need to start the listing process latest by 2022. How much is heir net profit in the past few years? The net profit has to be at least 3-4m for year 2020, 2021 and 2022.

share share what company bro

Next few realistic questions:

1. If the IPO cannot take off, what's their next plan? What is the exit strategy?

2. Can you ask for a put option? Let's say target IPO date 2023, but if can't take off, say by 2024, you can put it back to them, but the million dollar question is, at what value or price?

Maybe they will tell you IPO is quite certain and they are very upbeat about it, so that's their plan A. What about plan B? would a trade sale be forthcoming? if they don't allow you to have the put option right.

you're assuming if they are to get listed on Bursa right.

if going on "profit test" route:

The "net profit attributable to shareholder" should be at least RM20m on cumulative basis for the past 3-5 financial years with RM6m min for the most recent financial year.

has it highly profitable for the last few years?
has there been sustained/high profit growth over the same above periods?
what are the projections and are they meeting them on month by month or quarter by quarter basis now?

to get listed, the company needs to show strong profit growth over 3 years, minimum
depending on which market they are targeting to list, there are certain minimum profit amounts that is listed as minimum requirements to get listed

will you get a seat on the board? maybe i am overestimating your shares but if you do then you should be able to get the above info with no issue at all

also one of the most important aspect in the business is.........

is the cash flow from operation "positive"?

if negative, then you can likely forget about the IPO already.

Yup, I was referring to listing in ACE market. Usually companies without strong PAT like you mentioned would go for ACE. There's no written rule for PAT requirement for those companies who want to list on ACE, but minimum for the past 3 years cumulatively should be PAT RM10 - 15m, for eg. REVENUE GROUP, SECUREMETRIC etc.

But if they are able to generate such profits, may not be necessary to go for fund raising for now oredi. Might as well wait for IPO fund raising, or get bank borrowings first for now.

yup, there is no written profit test requirement for ACE listing, BUT there is unwritten rule on this from the SC. We were all told by the authority, if your client do not meet those unwritten requirements, don't bother to put in an application. Nobody likes getting scolding from the SC.