Private Equity And Financing Innovation Of Small And Middle Enterprises

Under the background of the financial policy of China, the small and middle enterprises (SME) are facing to the financing distress. Firstly, loans from business banks have been more and more difficult to apply than before. Moreover, the initial public offering of both shares and corporate bonds seems like the paths to the peak, that is, SME have to pay much time and money to meet the requirements. These financing distress have been threats to the subsistence and developments of the SME. In this regard, the innovation of financing has been a great urgency.By the development of the Chinese capital market, the international capital has streamed in great amount, among which the private equity gets the most attentions. Since for SME, the private equity can not only be a new way to finance, but also help the SME develop and expand in high speed and get huge return at the mean time. As a result, private equity appeals to the Chinese SME, who are facing to the distress of financing. However, it also brings questions. Is it an opportunity or a challenge for SME to bring in the private equity? Can private equities solve all the financing problems by playing the role of financing innovation? What is more, financed by private equity, the SME has to share both the ownership and control power with the private equity manager. That means it would make effort to the corporate administration. This research is to analyze the capital market systems so as to make sense of the differences and relationships between the private equity and other capital market systems. In this process, case analysis of the financing activities of the MengNiu group has been used to introduce the investment measures of the private equities, as well as the influences to the SME development. In this regard, questions mentioned can be solved.