Chinese Smes Overseas Financing Method Is A Comparative Study

Under the background of global economy and international financial globalization, the main trends are international capital flow to China and domestic company financing through offshore market. It will be an urgent problem that private company fast developing through international capital and choose the right financing market and tools as a main important part of Chinese economy. Private company is the unique conception from China, there is no line between private company and government owned company overseas, therefore, the problem of private company financing just can depend on the research of domestic scholars. There is little research on private company financing through offshore market and the exist problem, this article is from this side, research on the private company financing tools through offshore, and try to find out the way to help private company on the road to the international financing market successfully.What is equity financing from offshore market? Domestic company gain capital through sale their own shares in offshore market, this transferred shares can be exchanged in offshore market. From the financing way, there are private placement and public offering. Private placement market includes venture capital and private equity and industry capital, these capitals all focus on high growth rate pre IPO enterprise. However, public offering market includes IPO /listing by buying shell/ back door listing etc. --RMI reverse merger IPO. All these ways it target on IPO under the help of securities trader and underwriter. The dividing line between private placement and public offering is IPO in the past, the capital from private market can't participate in public market, and also for the public capital. However, public capital can participate in private market and share the high return rate from private placement market in terms of the emerge of SPAC—Special Purpose Acquisition Corporation.This article will begin from the above mentioned financing tools and will introduce emphatically these tools which are popular in domestic financing market, and will get the conclusion from financing cost/ exchange structure and successful rate. The main issues which entrepreneur should consider are financing cost; financing size; timing of financing; capital structure. There are uncertainties and high cost for enterprise, not only private placement but also IPO or indirect overseas IPO. However, SPAC which make capital from public market invest in private placement avoid long term IPO period and uncertainty either provide good choice for low financing cost and capital structure. Firstly, enterprise don't need to pay for the high IPO and buy shell cost, just pay for the league and audit fee; financing twice through warrants; M&A the other company in the industry chain through SPAC financing platform; certainty of IPO; Secondly, obtain value add service through SPAC professional financing team; incentive share system for management team; At least, the founder still own the main shares of the company and operation rights. These evidences show that SPAC is the better way for domestic private medium and small sized enterprises financing in offshore market and building financing platform.