Research On Legal Risk And Supervision Legal System Of Equity-based Crowd-funding

The traditional financing methods can not meet the financing needs of star-ups which are the main force of economic market,there is virtually no way to invest for people who are not that rich but still have extra money,Internet Finance is growing rapidly,equity-based crowd-funding emerges at the moment.It means issuers publish creative projects on funding portals with pictures and words stating the profit and risk of the projects,investors choose the one that they can accept both the risk degree and the interest to exchange capital for equity.Equity-based crowd-funding expands quickly in recent years,the number of funding portals and financing projects is increasing,the record of total amount is breaking,more and more people are involved.However,equity-based crowd-funding exposes a number of legal risks during processing under the cover of the flame war.It is necessary and urgent to conduct researches on equity-based crowd-funding because it is of great significance to boom capital market and improve financial market.Based on the supervision status quo and troubles of China's equity-based crowd-funding,refer to the investigation of other countries' s supervision legal system and synthesize the views of scholars,we can analyze the whole operation process,including the earlier stage the process and the later stage,and legal risk in equity-based crowd-funding,try to put forward good proposals to make supervision system perfect,so that the healthy development of the whole equity-based crowd-funding industry could play a greater role in the process of economic development in China.This paper is divided into five parts besides the foreword.The foreword describes the research significance,the research summary and the innovations and shortcomings of this paper.The first part is the basic theory of equity-based crowd-funding,specifically elaborated the definition,development,characteristics,patterns and the comparison between equity-based crowd-funding and other financing methods.The second part is analysis of operation process and legal risk in equity-based crowd-funding and dissecting the legal relation between different main participant bodies.The third part is the supervision status quo and troubles of China's equity-based crowd-funding.The fourth part is the investigation of other countries' s supervision legal system.The fifth part are suggestions on how to perfect the supervision system of equity-based crowd-funding in China,in terms of the whole operation process of equity as well.We could confirm funding portal' s qualifications and business scope,enhance the education of investors and set a system of investors in the earlier stage;complete credit reporting system,set investment ceiling and classification,strictly monitor capital trusteeship,establish exemption system,strengthen management of information disclosure in the process;set "Two Round Vote" to make investors participate in corporate governance,improve exit mechanism,compensate investors in later stage of equity-based crowd-funding.Set collective litigation system and combine insurance with equity-based crowd-funding into "Equity-based crowd-funding Insurance" are two ways to compensate investors if their investment is failed.Equity-based crowd-funding is so fresh that it needs space to develop as seeds need space to grow into trees,and "fresh" means there are industry chaos need to be solved.The balance between supervision and space is the key to perfect the supervision legal system of equity-based crowd-funding and it is the difficulty and the emphasis of the writing.