A Research On Scientific Start-Ups Financing On Growth Enterprise Market

Scientific and technological progress promotes a country’s economicdevelopment. High-growth technology industry has increasingly becomethe focus of national attention. It has largely solved social employmentproblem, while creating enormous social wealth. But venture capitalistsare daunting because of science and technology enterprise with high-risk,failure rate and great uncertainty. Shortage of funds became one of themain bottlenecks of a scientific start-ups’ development, or even thedeterminable factor of science and technology entrepreneurial activity. Toachieve the further development of scientific start-ups and ease itsfinancing problems, listing financing is a viable channel. But for now,China’s stock market has many issues, such as higher threshold, listingmotives lead to moral hazard, uneven geographical distribution of listedcompanies and so on.Oct30,2009, ChiNext officially pushed out with the purpose ofproviding listing financing services for growth start-ups and independentinnovative enterprises. It not only partly eases the problem of a fewscientific start-ups financing, but also plays an active role in theimplementation of national strategy of independent innovation. The purpose of this paper is to combine the listing financing rules of severaltypical Growth Enterprise Market (GEM), researching scientific start-ups’financing strategies on GEM at different stages of development. Thesignificance is expected to enrich the theory of scientific start-ups financeto help scientific start-ups to seek better development, conducive to theadjustment of economic structure, change the way of industrialdevelopment and accelerate our pace of building an innovative country.The research on financing rules of GEM can be a better combination ofChina’s national conditions.Based on the development of the theory on different stages ofscientific start-ups, from the perspective of public financing scientificstart-ups can be divided into start-up period, to be listed and listed period.We can make a few suggestions to scientific start-ups in three differentstages financing on GEM. Scientific start-ups in start-up period withsingle financing channel, is difficult to finance. Its financing strategyshould prepare for the listing under premise of ensuring funds of survival.Scientific start-ups to be listed with good social image, have been out ofsurvive the crisis. It has greatly improved in awareness of products,certainty prospects for the development and tremendous attractiveness ininvestment. The financing strategy of this stage is to be a listed companyof the stock market. Based on the factors analysis of failing in IPOapplication on ChiNext, scientific start-ups to be listed should make efforts to obtain the opportunities of listing, from selecting target market,improving sustainable profitability of core business, appropriatelypackaging the financial, standardizing operation and corporategovernance, scientifically compiling IPO application materials andselecting the correct intermediaries. Listed scientific start-ups have beensuccessful in raiing funds. It is vital important to keep corporate strength,strengthen the brand, establish an effective marketing strategies and astable network of clients, realize sustainable development, get viableprojects to refinance, and achieve the business bigger and stronger. Wehave studied former100listed companies on ChiNext, and empiricalanalysed several typical problems of the market, such as IPO excessivefinancing, substantial shareholders cashing out and high stock dividends.The results show that IPO excessive financing raised enormous pressureon listed companies. Senior executives’ resignation and substantialshareholders cashing out extremely damage the interests of the smallinvestors, and also undermine the play of the stock market to optimizeresource configuration. Listed scientific start-ups should be mainly notethe imformation disclosure and the use of funds raised.