Equity Crowd Funding Platform Risk And Prevetion

Equity Crowdfunding financing through the Internet platform with an open,small,public and other features.is an emerging Internet financial model.Following P2P,third-party payment,Equity Crowdfunding as an important part of Internet Finance.Equity Crowdfunding plays an important role in perfecting capital market and promoting the development of innovative enterprises..As a product of financial Innovation,Equity Crowdfunding is a double-edged sword since there are many risks in the operation process.How to identify risk,build a sound risk prevention framework,is the key to raise Equity Crowdfunding development,must pay great attention.The purpose of this study was to put forward reasonable proposals to promote the development of Equity Crowdfunding by revealing risk problems that already exists.The reason why this study selects "Renrentou" as a case is taking the following aspects into consideration.First,the first case in Equity Crowdfunding in China has captured enough attention.Second,it is the member among the first eight Equity Crowdfunding platform authorized by Securities Association of China.Third,the success rate of project launch and financing amount ranked the forefront in 2015.Last but not least,the data of the platform is relatively easy to obtain.Based on this,the author chose the case of “Renrentou”,trying to dig through the analysis of this case and its enlightenment to China's Equity Crowdfunding development.This study reviews the risks of Equity Crowdfunding and gets some illumination at the same time.Descriptive statistics and case analysis method were adopted in this study.In the case introduction,the author elucidated the concept of Equity Crowdfunding,the development history,characteristics and operation of “Renrentou”.It analyzed risk problems of the platform From the external environment aspect,there is a lack of Equity Crowdfunding laws and regulations,imperfect credit system and deficiency of Equity Crowdfunding ecosystem.From the perspective of the platform itself,the risk control mechanism is ineffective.In terms of operations,it faces many drawbacks,for instance,fewer high-quality projects,less effective qualified investors,low quality of professional management personnel andthe positioning of the platform is not clear and so on.Through problem-oriented analysis,the paper proposed the introduction of laws and regulations,strengthen the credit system construction,build Equity Crowdfunding ecosystem,establish an effective risk prevention andcontrol mechanism,strengthen information disclosure,investor risk education and other recommendations.Overall,the risk of Equity Crowdfunding Platform is a part in Internet financial innovation.At the time of encouragement and support to the development of Equity Crowdfunding,we should also pay attention to risk prevention.Thus,the stable development of the industry to Equity Crowdfunding is around the corner.