In the first three years before going public, founders must first complete this fate-defining "metamorphosis."

Almost everyone will hand you the same playbook for going public: bring in investment banks, auditors, and law firms, restructure equity, "clean up" historical financials, polish the statements, push revenue to the numbers that meet listing thresholds, and then wait for the glorious moment of ringing the bell.

But very few will tell you the other side of the story: The choices you make over the next two to three years regarding your IPO will fundamentally determine whether, after the bell rings, you end up as an entrepreneur with soaring wealth or a prisoner behind bars.

This is not alarmism. Let's first look at those who have already walked this path.

I. Those Who Went Before: Where Did They End Up After the Bell?

On December 12, 2025, the criminal verdict for Amethyst Storage (紫晶存储), the so-called "first optical storage stock," was handed down. The company's actual controller, Zheng Mu, was sentenced to seven years and six months in prison, while co-controller Luo Tiewei received seven years. All eight other senior executives were convicted—not one escaped.

Just two weeks later, Ji Wei, the former chairman and actual controller of Jintongling (金通灵), a STAR Market company, was sentenced to six years in prison and fined 3 million RMB for securities fraud and illegal disclosure of material information.

In January 2026, Zhang Jun, the actual controller of Zuojang Technology (左江科技)—once dubbed the "8x monster stock"—was formally criminally detained by the Beijing Municipal Public Security Bureau.

These entrepreneurs and founders stood exactly where you stand now when they prepared for their IPOs. They thought they were on the fast track to financial freedom, only to discover within a few short years that the road led to prison.

Let's look at the bigger picture. In 2025 alone, the China Securities Regulatory Commission (CSRC) investigated 97 cases of financial fraud, penalized 65 listed companies and 392 responsible individuals, and imposed total fines of 3 billion RMB. Across the year, 661 penalty decisions were issued, with total confiscations and fines reaching 15.474 billion RMB, and 142 individuals barred from the market. 172 leads on suspected securities and futures crimes were referred to public security authorities. And 16 companies were forcibly delisted for major violations.

Even more lethal is the principle that "delisting does not absolve liability." In 2025, regulators investigated violations by 43 delisted companies, with 31 of them collectively fined 1.5 billion RMB. Even companies that had already left the market were still pursued and penalized.

Now, calmly ask yourself: The moment you begin IPO counseling, which direction is your wheel of fortune already turning?

II. The Quality of Your Performance: The Question Everyone Deliberately Avoids

Let's confront a brutal truth: of your company's rapid growth over the past few years, how much came from your team's genuine capability, and how much was simply a gift from a favorable market tailwind? What is the quality of that growth? How much of it is repeatable in the future? How much of it is profitable growth?

The real growth formula is simple:

Sales Performance = Market Demand × Product Value × Sales Capability

During a market boom, "even pigs can fly." The market demand multiplier is large enough to mask everything. Even if your sales system is as crude as a ragtag militia—relying on a few superstar salespeople, some gray-area relationships, and a handful of mega-deals from key accounts—the numbers on your financial statements still look impressive. But a fatal cognitive error is quietly taking place: you are mistaking the dividends of the era and gray-area revenue for your company's own business capability.

When the tailwind fades and competition intensifies, the first two multipliers decline, and the one factor you can actually control—"sales capability"—finally reveals its true face.

This is why so manyB2B technologycompanies look brilliant before going public, peak right at the IPO, and then collapse shortly after. They follow a strikingly consistent and recurring trajectory:

• Rapid revenue growth for 2–3 years before the IPO

• Revenue and profit peak in the year of the IPO

• Then a clear decline over the next 3–5 years, sometimes a cliff-edge collapse

This phenomenon is not an isolated case—it is a structural problem.

Consider this data. In 2025 alone, 14 of 67 newly listed companies saw their first-half performance "change face"—their 2024 results were still growing, but in the first half of 2025, both revenue and net profit attributable to parent declined, a staggering 21%. As of April 2026, nearly 50 A-share listed companies had issued major earnings forecast revisions, with nearly 80% being downward revisions.

Now let's look at individual cases.

Zhuolang Technology (卓朗科技),a listed company actually controlled by a local State-owned Assets Supervision and Administration Commission (SASAC).Five years of systematic fraud, and a ten-billion-RMB market cap was wiped to zero. From 2019 to 2023, Zhuolang Development, a subsidiary of listed Zhuolang Technology, massively fabricated sales of servers, software, and system integration services. Through fictitious transactions with no actual goods flow and no real delivery or acceptance, coordinated with a closed-loop of funds through related parties, they cumulatively inflated revenue by 1.815 billion RMB and total profit by 1.337 billion RMB. The CSRC determined that "the business had no commercial substance." In early 2025, the company was forcibly delisted and fined 10 million RMB. Zhang Kunyu, the vice chairman who planned and organized the entire fraud, received a lifetime market ban and a 5 million RMB fine, with seven other responsible individuals collectively fined 38 million RMB. After delisting, investor claims continue to advance, and the audit firm has also been held accountable.

Bonree Data (博睿数据), once the "first APM stock," saw its share price surge to 220 RMB/share on its first trading day, with a market cap exceeding 20 billion RMB. Over the following four years, cumulative losses exceeded 350 million RMB, and the stock price fell nearly 90% from its peak. A ten-billion-RMB market cap, gone in a puff of smoke. The listing committee directly pressed the company on "the reasons for the immediate sharp decline in net profit after listing" and demanded an explanation of "whether there is material uncertainty about going concern."

Qingyue Technology (清越科技), a STAR Market company, declared with great confidence at its IPO that its strategic cooperation with its largest customer had "no set term" and maintained a "stable and sustainable" relationship. In the first full fiscal year after listing, revenue plummeted 36.69%, and net profit swung from profit to loss. In November 2025, the company received a "Case Filing Notice" from the CSRC for suspected false records in periodic reports and other financial data.

What is the common cause of death for these companies? They meticulously crafted a perfect financial statement to secure their IPO ticket,but never truly built a sales system capable of sustaining that statement's growth.

III. Who Ultimately Pays for Performance Fraud? Only You

At the moment you're about to enter IPO counseling, take a clear look at the interest map of everyone in this game.

Investment banks and institutions: Their revenue model charges upon successful listing. Underwriting and sponsorship fees are likely already in their pockets the moment the bell rings. If a project blows up, they face fines and reputational risk—but the team that handled your IPO has long since moved on to the next client, earning their next commission.

And you—the founder: Your lock-up period is at least three years, and in reality, major actual controllers have almost no compliant opportunity to reduce holdings and cash out.You want to sell down, take the money, and walk away? You'll have to wait. More importantly, you are the ultimate responsible party for financial fraud and fraudulent issuance. When penetrating regulation tears through the disguise of circular fund flows, when investors launch class-action lawsuits under the "opt-out" mechanism, the one standing in front, bearing all criminal, civil, and administrative liability, is only you.