1、1Reflections on Chinas equity crowd-funding and guard against the risk of problemsAbstract. At present, Chinas equity crowd-funding platform development like a raging fire, its business model is financing online for small and medium-sized enterprises , many investors to participate in the same proje
2、ct, while equity in return for a platform to receive a certain percentage of service charge. However, no related domestic regulatory measures, divorced from a legal gray zone , improper operation may become a pool of funds to engage in illegal fund-raising, illegal securities activities. Therefore,
3、this article is based on two domestic representative platform-“Angercrunch”and “Dajiatou“ to raise public equity, the comparative study of the problem currently facing a series of recommendations, including the introduction of regulation, improve the legal system, conduct investor risk education and
4、 self-education, etc. Keywords: Equity crowd-funding, LED investment, Investment risk 1. Summary Through online equity crowd-funding platform for financing 2is a kind of Internet financial innovation model. At present domestic investment demand is very large, while the bank put a lot of credit lines
5、 to State-Owned Company, the small and medium-sized enterprise restrict by scale, financing owing on the loan conditions, risk control, so it is difficult to achieve banking requirements, making it relatively difficult to finance. Equity crowd-funding platform emerge along with the supply and demand
6、, broaden the financing channels for small and micro enterprises, making it a good entrepreneurial projects people can realize their business dreams, funding process is good publicity process. Some projects also allow civilians to participate in the design, marketing and other aspects of the entire
7、products, the younger generation is now in line with the pursuit of individual innovative new philosophy of life. Meanwhile, the equity crowd-funding platform is truly a universal platform to raise finance. 2. what is the equity crowd-funding? 2.1 Definitions Equity crowd-funding is the enterprise (
8、i.e. project release party) will let own projects (such as product, creativity etc.) financing needs and sell shares issued on the Internet platform, based on the characteristics of Internet 3real-time, efficient, cross regional, cost low, set the registration in a certain period of time to attract
9、a registered member of the congregation raised platform investors, the company sold the shares in return, support the entrepreneurial projects, to achieve a win-win situation. 2.2 China equity raise two representative platform model At present, there are two representative equity financing platform
10、- “Angercrunch” and “Dajiatou”, Angercrunch sinks with angel investor drafted the “China angel crowd-funding led man rule“, take “rapid investment + LED investment mechanism,“ in the financing crowd-funding process, investors from different fields, we can share the risk share investment experience,
11、from different angles, different areas of knowledge, to realize the common growth of investors. Angercrunch exchange platform set a certain threshold, apply to become investors must submit personal material, Angercrunch sinks were strict examination and approval of the securities investment experien
12、ce, if not, will be banned from publishing platform ownership crowd-funding, advocate corporate investors joined. Dajiatou advocates “universal angel“, the investors do not have to set the access threshold, as long as you are interested in participating in the respective project cant implement 4cert
13、ification investors regime closer to the grassroots financial management, but also the implementation of “lead investor + with the vote” system. 2.2.1 Angercrunch exchange platform In the era of Internet finance, equity crowd-funding with favorable conditions can play an even greater advantage: Firs
14、t, the platform on the line model, the project has been submitted, it can be used repeatedly, make the investment and financing information become more open, transparent, relative to solve the financing problem of asymmetric information, improve the entrepreneurs and investors docking efficiency, re
15、duce the communication cost. Business plan projects submitted on the platform, to meet the requirements of investors can views, so, entrepreneurs from the low efficiency mode of the find Angercrunch investors, no need to send mail, large-scale low efficiency on the project, the project can be better
16、 served on the target audience. Second, the Angercrunch exchange platform provides a standard investment agreement, to help the small and medium-sized enterprise financing to reduce VC in terms of unequal terms and trap contract 2; through the “fast and efficient financing investment “, win the mark
17、et opportunity for 5entrepreneurs, improve the efficiency of capital. The third, Angercrunch exchange platform make equity crowd-funding realized O2O type development, online offline combined. Angercrunch sinks create offline activities to exchange the platform: “Demo Day+ private dock, convenient“
18、entrepreneurs and investment institutions, investors and efficient communication, with professional advantage to provide risk assessment, business valuation services, cooperation and mutual assistance between help entrepreneurs to find the ideal business partner, obtain business mentors and contribu
19、ted to the entrepreneurs, at the same time also realize the social attribute in the service at the same time, help improve the investment and financing needs of both venture capital and improve the success rate of financing. Fourth, improve the investment environment, increase investment and financi
20、ng channels. At present, the credit system is not perfect, the lack of incentive mechanism and other practical problems limit the development of Angercrunch investment, based on this, the Angercrunch adopt the real name system, the Angercrunch investment experience qualified led people to evaluate p
21、roject risk, other investors with investment, this small volume, rapid, multiple rounds of financing, spread the investment risks into 6the capital, accelerate the speed, and the accumulation of the user credit. At the same time, Angercrunch established enterprise dynamic valuation model, design a l
22、ayered return on investment mechanism, the incentive for investors. Angercrunch exchange regulations, with investment if the early termination, it need to obey the board of directors of the company and led people arrangement, according to the partnership agreement or exchange for automatically exit,
23、 exit by Angercrunch, or can be transferred in the LP share transfer platform2. Fifth, take the incubator role, Angercrunch have cooperation with many national incubator, and continue to recruit, if the project is in the conceptual phase, can enter the incubator. 2.2.2Everybody investment platform D
24、ajiatou as Zhongbang Angercrunch, is Chinese first “crowd-funding model“ angel investment and private equity financing docking platform. Its business model, which uses “led + with the vote“ mode, led people responsible for analysis, due diligence, valuation and bargaining, and later operation manage
25、ment of the project, to provide the conclusion of investigation and analysis to investors, to help entrepreneurs as soon as possible to achieve the success of the project 7financing. Led people vote after a certain amount, the remaining investors with investment and financing, after full, led the fi
26、nancing amount as registered capital for the establishment of limited partnership, investment agreement, and alteration of capital injection, entrepreneurial enterprises represents the completion of project financing, investors in the investment accounted for the proportion of the total equity share
27、s in Venture Company as. Later hell lead people to help entrepreneurs to maintain good coordination of financing after the success of the investor relations. “Everyone in the equity investment“ crowd-funding industry has two innovations: First, the first use of corporate equity financing business pl
28、atform, greatly reducing the China angel investment threshold, the realization of national finance. Second, introduced the third party supervision mechanism, Dajiatou delegate vote Industrial Bank , Shenzhen Branch Fu Bao, escrow funds, in order to reduce the investment risk, to ensure the safety of
29、 funds, improve the financing efficiency of entrepreneurs. 3. Opportunities and challenges 3.1 phenomena After the study on equity crowd-funding, we find the 8following problems: (1) published the project financing on the platform of almost all the small start-up company, anti market risk and indust
30、ry risk ability is weak, there are reports of investment failure rate as high as 99%, a huge investment risk; (2) investors and raise enterprise information asymmetry, if no line of investigation, it is difficult to judge the company the real operation condition, and the on-the-spot investigation co
31、sts; (3) the investment return time is long, non publicly traded equity market, poor mobility, exit channels rarely 3; (4) the national American, credit system, the development of equity to raise the good environment, system development, and Chinas household credit system is not perfect, the cost of
32、 default is small; (5) the “Securities Law“ clearly defined, issued to non specified objects of securities or object to the specific securities issued a total of more than two hundred people, all constitute a “public issue“. Non public issuance of securities shall not use advertisement, public solic
33、itation or disguised public. At present, the equity crowd-funding grey area is still in the regulation of the legal, regulatory measures have not yet introduced, if improper operation, adopt crowd-funding model to raise funds of enterprises will be 9likely to engage in illegal securities activities,
34、 the risk of illegal fund-raising, and crowd-funding platform has an accomplice risk. 3.2 suggestions and prospects For the orderly and healthy to stake to raise industry development, combining the Chinese situation to put forward the following suggestions: (1)CSRC: strong research, regulation In Ch
35、inese, equity crowd-funding platform at any time may face illegal fund-raising , illegal securities activities and other legal and policy risk, equity crowd-funding are strongly committed to circumvent the law through a variety of measures, and Chinas urgent need to put the appropriate legal measure
36、s to clear the legal blind spots to ensure the healthy and orderly development of the industry. The Commission can draw on our experience of American Jobs Act modifications , introduced to the public to raise equity -related regulatory initiatives, including: explicitly allow public companies to rai
37、se equity financing on the site, but to simplify the regulatory process; Taking the equity crowd-funding platform into the public supervision, prompting the equity crowd-funding platform take risk education and prevent issuers fraud for investors; To 10raise angel round finance from equity crowd-fun
38、ding platform to limit the amount of financing. Jobs bill to $ 1,000,000 for the ceiling; distinguish between certified and non-certified investors and individual investors to restricted angel round of investment ceiling, Jobs bill for the annual income or net assets of less than $ 100,000 in non-ce
39、rtified investors, investment ceiling set for $ 2,000 or annual income 5 % of the net assets of the three whichever is higher. For the annual income or net worth greater than $ 100,000 certified investors, investment limits Jobs Act is set to 10 % of annual income or net assets, but up to more than
40、100,000 U.S. dollars4; Depending on the size of the financing, to disclose the extent of project information to distinguish. Jobs bill for the amount of financing is divided into three zones, namely the following $ 100,000, more than $ 100,000 less $ 500,000, $ 500,000 less than $ 1 million. For the
41、 financing of more than $ 500,000 financing projects, Jobs Act requires public companies to disclose to raise the audited financial statements4; Relaxation of private placement exemption from registration conditions permit general solicitation and advertising activities under certain conditions4. (2) equity crowd-funding platforms: do service work
