The Research On SMEs Private Equity Financing Risk

As we all know, Small and Medium Enterprises (SMEs) play an important role in economic development. However, because of lag system construction, and the relatively small and medium scale itself, the relatively lack of funding for SMEs in our country, and the difficulty in loading, our SME financing problem is always existing, and has become an important reason for restricting the further development of SMEs.Since the rise of private equity market in China, that market contributes to relieve the SMEs financing constraint problems. SMEs in our country relieve the pressure on its capital and risk by introducing private equity investment. However, because of the complexity of operations, SMEs need to experience from processes, such as, conception, negotiation, signing, exit, and etc. Each part has failure risk, the whole process has significant concerns.In this paper, I combed the relevant theoretical research on the basis of private equity, used the case study method of analysis, analyzed and studied by selecting the Chinese representative in the case of private cases XFY Company, analyzed the company’s private equity financing situation, summed up the case of the private equity firm in the risk management measures; Finally, according to the case of revelation and proposed to reduce private equity financing for SMEs to reduce possible level and at the national government level from two angles of their own suggested the existence of risk behaviors, in order to carry out other domestic private equity financing for SMEs has a guiding role.This paper is divided into five chapters, as follows:The first part is the introduction. Introduces the research background, significance, content and structure of the major research.The second part is about private equity financing overview. This part is to summary the main theory of private equity financing.The third part is about risk analysis of private equity financing for SMEs. Introduing the risk types of private equity financing and private financing measures to control risks.The fourth part is about XFY company specific case studies, analysis of the process XFY private equity firm and risk control in private equity financing process.The fifth part summarizes the conclusions of this paper, draw a revelation, put forward the corresponding policy recommendations from the SME level and at the government level.