An Analysis Of The Impact Of Private Equity Financing On Small And Medium Sized Enterprises

Small and medium-sized enterprises in the early stage of development,in order to meet his demand for funds,endogenous financing and bank funds can be realized,but when he develops to a certain extent,some traditional financing methods are just a drop in the bucket for enterprises.Under the background of the continuous development of China's economy,as an innovative financing mode,private equity financing has begun to attract the attention of many small and medium-sized enterprises.Demanders of funds have gradually increased the research on private equity financing,and more small and medium-sized enterprises have begun to see the great advantages of using private equity financing.Private equity financing is different from general debt financing.It can only dilute the owner's rights and interests to a certain extent,but it will not bring pressure on enterprises to pay fixed costs.The development prospects of enterprises are what investors care about.On the other hand,private equity financing can also provide value-added services while injecting funds for SMEs.However,the successful cases of private equity financing in China are limited,and this financing method is unique and novel.Under this background,how to use private equity financing to better promote the development of small and medium-sized enterprises has become the main purpose of this paper.The whole article is divided into five chapters: the first chapter is the introduction,mainly elaborating the background and significance of the topic selection,introducing the relevant literature,then elaborating the ideas and methods of this article,the reasons for case selection,and the innovation and shortcomings of this article;the second chapter is the case introduction of private equity financing of Wuhan Mingde Biotechnology Co.,Ltd.,mainly including Mingde Biology.Chapter 3 is a case study of private equity financing of Wuhan Mingde Biotechnology Co.,Ltd.and the main chapters of this paper.Specifically,it includes the reasons why Mingde Biotechnology can obtain private equity financing,the effect of financing and the existing problems in this financing.Chapter 4 is the case enlightenment part,aiming at the impact of private equity financing of Wuhan Mingde Biotechnology Co.,Ltd.Chapter 5 is the summary of the case study,which mainly includes the summary of the whole paper and the suggestions for SME private equity financing.Through case study,we can explore the impact of SMEs' private equity financing,including the positive impact of market expansion and financial improvement,as well as the strategic risk of dilution of control rights and catering to investors.From the analysis of private equity financing cases,we also get some enlightenment and summarize some policy suggestions.On the one hand,from the perspective of investors,we hope to help them improve their management ability better.On the other hand,we hope to help small and medium-sized enterprises understand private equity investment funds and standardize their operation to attract private equity investment.This paper also hopes to extract some suggestions and enlightenment through case analysis,which can provide limited reference and reference for more small and medium-sized enterprises in the choice of private equity financing.