CHILE Law and Practice Contributed by: Francisco Barreda, Barreda Legal Tech
6.2 IPO Exits In Chile, IPOs are relatively rare as an exit strat - egy for start-ups. The path to an IPO is often a longer-term goal rather than an immediate option for early-stage ventures, particularly in the start-up and venture capital sectors. However, ScaleX (from the Santiago Stock Exchange) allows public offerings that are exempt from the requirement of registration with the Commission for the Financial Market (CMF) of the issuer or securities, in accordance with General Rule No 452. The purpose of this is to facilitate the trading of securities from compa - nies in the expansion stage. This has allowed some start-ups (very few so far) to explore this path, which was previously outright dismissed. 6.3 Pre-IPO Liquidity In the Chilean ecosystem, it is still in its early stages but is starting to emerge. These are sec - ondary or structured transactions that allow cer - tain shareholders to sell their stakes in a high- growth start-up before it goes public. Some Chilean start-ups that are expanding internation - ally (for example, through Delaware structures) may gain access to funds offering secondary liquidity windows. These transactions are gener - ally used to reward early-stage investors, found - ers, and key team members without having to wait for a full exit. They allow for a cap table reor - ganisation, facilitating the entry of new inves - tors and retention of talent by providing partial liquidity while maintaining long-term incentives. Common forms include: • private secondary sales to new investors (such as late-stage funds or family offices); • buybacks by the company itself, funded through large investment rounds (typically Series C and beyond); and
• structured tender offers, where a lead fund allows some existing shareholders to partially liquidate their stake.
7. Regulation 7.1 Securities Offerings
The Securities Market Law (Law No 18.045) dis - tinguishes between public offerings and private offerings of securities. Venture capital invest - ments are typically structured as private offer - ings, which do not require registration with the CMF’s Securities Register, as long as certain conditions are met (eg, being directed to a lim - ited number of investors without mass advertis- ing). In larger transactions, care must be taken not to exceed the thresholds that would trigger a public offering. On the other hand, the Fintech Law opens the possibility for creating alternative transaction systems that could allow a second - ary market for shares, subject to certain restric - tions. The Corporate Law (Law No 18.046) addresses closed joint stock companies, a legal structure that is less common for Chilean start-ups (the most widely used is the SpA), allowing partners to freely agree on terms through shareholder agreements. However, the issuance of new shares must meet certain legal and statutory requirements, including extraordinary meetings and respecting the preemptive rights of exist - ing shareholders unless expressly waived. SpAs (created by Law No 20.190), on the other hand, provide greater flexibility for these and other types of transactions. In any case, the supple - mentary rule for SpAs will be the regulations concerning S.A.
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