At the height of the start-up funding boom in 2021, venture capital firms were injecting capital into promising start-ups with valuations that only seemed to move in one direction – up and to the right. Fast forward three years, against the backdrop of a macroeconomic slowdown, the period of fast and loose money was replaced with tempered expectations and a cautious outlook. With venture capital money becoming more selective, issues and problems that may not previously have been apparent have surfaced.

In this article, we set out our observations on three major trends: down-rounds and their implications on anti-dilution rights, pay-to-play provisions and their pitfalls, and fraud and other governance concerns and potential remedies.

This article first appeared here on Singapore Law Watch and was edited for this publication.

If you would like information and/or assistance on the above or any other area of law, you may wish to contact the Partner at WongPartnership whom you normally work with or the following Partner:

Kyle LEE
Co-Head – WPGrow: Start-Up / Venture Capital
Partner – Mergers & Acquisitions
d +65 6517 8738
Click here to view Kyle’s CV.