SWITZERLAND Law and Practice Contributed by: Marion Bähler, Ramona Wyss, Florian Gunz Niedermann, Fabienne Limacher and Urs Hofer, Walder Wyss Ltd
6.2 IPO Exits IPOs of Swiss start-ups are rather rare when compared with trade sale exits. After a record of 11 IPOs in 2021, the number of IPOs dropped to four and one in 2022 and 2023, respectively. Whilst Swiss start-ups still frequently seek out US trading venues (NYSE and Nasdaq) for their IPO, SIX Swiss Exchange, including Sparks, its stock market segment for fast-growing small and medium-sized companies newly introduced in 2021, has gained some traction. In case of an IPO, mostly primary shares are being offered and listed, occasionally com - bined with exit (sale) opportunities at the IPO for select investors (secondary tranche). Lock- up undertakings limit quick exits for remaining shareholders affiliated with the issuer (mostly key employees, founders and certain other main shareholders). 6.3 Pre-IPO Liquidity Particularly late-stage start-ups often and regu - larly conduct orchestrated secondary rounds, typically as part of or in connection with financ - ing rounds to accommodate the request for liquidity of early-stage investors and sometimes also founders and other employees. Respective shares are often purchased by new investors at a certain discount to the price applied in the financing round. Occasionally, such shares are also converted into the preferred shares issued in such round.
securities to be admitted to trading on a Swiss trading venue. As a general rule, such prospec - tus needs to be approved by an accredited pro - spectus review body (currently there are two, managed by SIX Swiss Exchange and BX Swiss, respectively). An offering is deemed public (and no longer pri - vate) if it is directed to the general public – ie, not clearly limited to a predetermined, relatively homogeneous group of investors. However, there are various exemptions from the prospec - tus requirement even if an offering qualifies as a public offering. For example, no prospectus requirement applies if: • the offering is limited to persons qualifying as professional clients according to FinSA; • the offering is targeting fewer than 500 poten - tial investors; • the offering is for securities with a minimum denomination of more than CHF100,000 or requires investors to subscribe for securities for at least that amount; • the total value of the offering does not exceed CHF8 million within a rolling 12-month period; and • securities are offered by an employer or affili - ated company to current or former members of the board, executive management or their employees. Crowd financings aside, it is therefore usually possible to structure venture capital financing rounds and secondary transactions in a man - ner that does not trigger the prospectus require - ment. In larger projects with an international investor base, secondary transactions are often made compliant with US securities law.
7. Regulation 7.1 Securities Offerings
The Swiss Financial Services Act (FinSA) pro - vides that a prospectus must be published for a public offering of securities in Switzerland or for
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