Background: SenseTime is a Chinese artificial intelligence startup founded back in 2014 in Hong Kong. It creates technologies like facial recognition, image recognition and even autonomous driving.

What happened: This crew planned to raise around $1 billion via an IPO in Hong Kong, and were set to start trading earlier this month. But, the US government put the company on a blacklist - alleging its tech enables human rights abuses against minorities in China.

What else: The blacklist meant US investors were banned from investing in SenseTime, so the company delayed their IPO plans. Now, they're going for round 2, after already securing a large chunk of the capital raise from cornerstone investors.

So what's the key learning?

💡A cornerstone investor is a type of investor that commits to participating in an IPO... in advance of the IPO.

💡There are a few reasons why companies take on cornerstone investors:

1. Having names already committed to the IPO raises the profile of the IPO and incites major FOMO
2. By guaranteeing that a portion of the shares will be sold, investment banks have less to sell on the actual IPO date.

💡Cornerstone investors are becoming increasingly common in Asian IPOs. This may be why SenseTime chose to bring in the big guns early.