The Legal Issues Research Of Preferred Stock System

"In the oak tree on both sides of the path to silicon valley, filled with the peak sexually investors, the risk of any one kick a foot in the tree and shouted:" hey! I have a brilliant idea! “someone will jump down from the tree investment for you.” This is not just a joke with hyperbole, also the myth "silicon valley" of the original one. World class companies such as Microsoft, Intel, HP, apple, from silicon valley and vc funding, literally, venture capital is to lead a new important engine of economic development for the United States for decades. Venture capital in China began in the 1980 s. From 1985, the first venture capital firms in China, the establishment of China’s new technology startups, total capital venture capital in China from the early rapid growth of hundreds of millions of yuan to hundreds of billions of dollars today, risk investment agencies have sprung up, for our country industry upgrading, the progress of science and technology has made a significant contribution.Preferred stock and the combination of risk investment is no accident of history but a realistic option, countless practice proves that it is a pair of impeccable "a match made in heaven". Is adapted by the national venture capital association, the American venture investment model contracts, shows us the venture capital industry on the use of preferred stock and ration. Although our country venture capital industry is developing rapidly, but for a long time national ambiguous attitude towards preferred to venture capitalists uncertain, have to through the outside channels or seek stopgap arrangement under the current legal framework. "Sprung to" 2014 "the pilot measures for the administration of preferred shares the" pious covered face "restrictions and disappointed venture capitalists. But even so, the legal status of preferred shares of the formal establishment of its more extensive use of highly significance. So, what is preferred? It is just a concept or an innovative idea? Before that our country risk investment industry using preferred stock "curve" asssisting path is? U.S. venture capital model contract and how to make specific arrangements to the performance of a preferred stock? What is the exogenous quantitative? Under the background of new venture investment in our country should be how to use the preferred stock? What kind of internal and external conditions? This is the author in this paper, we focus on.Besides preface and conclusion, this paper will be divided into four parts:The first part is the preferred stock system and risk investment prospective study. Respectively in the preferred stock and risk investment, on the basis of the definition on the basis of their connection with startup and development present situation in our country. The use of preferred stock in our country risk investment system for a future.In the second part focuses on interpreting the risk investment system of preferred stock arrangement of internal and external environment and the specific rights and obligations. Risk investment in the United States using preferred stock system technology is very mature, preferred stock can provide the flexibility to accommodate the differences of investment properties in the process of financing and catering to the different types of investors’ appetite for risk. In fact set up different kinds of rules for companies in the United States has broken the limitation of appellation and conceptual, contributed to the company’s maximum flexibility and adaptability. Tashan stone of can offend jade, but complete "to" suffer the reality of "water". This part of the use of preferred shares in full analysis of the risk investment system of the historical origin and cause of mangrove contend, to provide the appropriate use of preferred shares in the venture investment system in China.The third part is mainly about using the value of preferred shares in the venture investment in our country and practical difficulties are analyzed. Using the preferred shares in the venture capital’s greatest value performance in contributing to the combination of venture capital and entrepreneurial companies, and thus a series of good economic and social effect. For a long time in the venture capital in China about the arrangement of the nature of the preferred stock system or seek outside ways, either through the contractual nature of shareholders agreement contract to arrange. And this kind of path on the one hand, by the established legal obstacles, on the other hand also easy in an adverse situation in law enforcement and judicial.The fourth part is mainly aimed at the problem of the third part puts forward reasonable Suggestions in the use of preferred stock system in China. Is divided into two dimensions: theory and practice of the author thinks that should be preferred to the theory of put on the premise of "institutional appearance", will be preferred stock into an innovative idea, rather than a mechanical rigid set, so that the investment and financing parties to create the most suitable preference shares. Practices are divided into two parts, one is under the background of the new legal status(preferred shares after establishment, the red-chip enterprises overseas listing, the gem up venture capital exit, etc.) of the risk investment industry of priority rights and special rights in the process of investment as well as the special mechanism of legal and rational arrangement; Second is the preferred shares in the venture capital development system of supporting the establishment of the support system, including the legal basis for improve the system of preferred stock, enrich the exit path of risk investment institutions, to strengthen the rights and interests safeguard three directions of preferred shareholders.