A Study On The VAM Application By Enterprises Of The OTC Market In Private Equity

Small and medium-sized enterprises play a very important role in the process of promoting China’s economic development.However,due to the single financing channel,asymmetric information and other problems,they often fall into a financing difficult situation,which restricts the rapid growth of some small and medium-sized enterprises.With the continuous reform and development of China’s capital market,especially the rapid development of the new third board market,private equity financing,as a new financing mode,has opened up a new way to solve the financing difficulties of small and medium-sized enterprises,and has rapidly become one of the important channels to solve the financing problems of small and medium-sized enterprises.In recent years,more and more new third board enterprises choose to use private equity investment funds for financing.However,due to the asymmetry of market information,the information transparency of new third board market is lower than that of other sectors,which leads to the inaccuracy of enterprise valuation and other issues,which aggravates the investors’ consideration of investment risk.It is precisely because the agreement on gambling can reduce the investment risk caused by information asymmetry and principal-agent relationship to a large extent.In the process of introducing private equity financing,enterprises often consider signing the agreement on gambling.Both sides of the investment and financing agreed in the gambling agreement: when the financing party reaches the established goal,the financing party will get a certain reward at the same time of financing.The agreement on gambling not only effectively reduces the investment risk of investors,but also has a positive effect on the management of the constraint and incentive financing enterprises,so it is widely used in China’s capital market.According to the choice database,565 gaming agreements were signed in the new third board market in 2019,22 of which were related to private investment funds.Although the success of gambling can win investment for enterprises,solve the financing difficulties of enterprises and promote the rapid development of enterprises,but in practice,most enterprises in our country have not achieved success in gambling.Because they fail to achieve the established goal,they are faced with huge cash compensation,transfer of control rights,bankruptcy and other difficulties.The reason is that the short-sighted behavior of the management of financing enterprises,blindly pursuing financing,neglecting the possibility and potential risk of the goal of gambling.If the enterprise carefully considers the actual needs of the company,reasonably sets up the gambling terms and strengthens the management of the company when signing the gambling agreement,it will greatly promote the development of the company.Yisijia is a private high-tech enterprise in the growing period.Under the background of financing difficulties,it has obtained a lot of funds through the gambling agreement to promote the development and growth of the enterprise,and the investors have achieved a win-win situation by increasing the equity value of the enterprise.Through the combination of theory and cases,this paper studies and summarizes the application of gambling agreement by the new third board enterprises in private equity financing,analyzes and evaluates the strategic motivation,contract design,target selection,risk control and other aspects of the agreement signed by Yisijia and Guangfa Xinde,and finally summarizes the successful experience of Yisijia in the gambling for other enterprises Some suggestions for using the counter bet agreement.This paper is divided into five parts.The first part is the introduction,which introduces the background and research significance of this paper.The second part mainly introduces the related concepts and theoretical knowledge involved in this paper,including the meaning and characteristics of private equity financing,as well as the classification of gambling agreements,compensation targets,application scope,etc.The third part briefly introduces the basic situation of the gambling parties in this case,the content of the gambling agreement,the background of signing the gambling agreement and the performance of the agreement.The fourth part is the specific analysis of the case,from the performance of the gambling strategic motivation,contract design,goal selection,risk control and the final effect of several aspects.The last part is the conclusion and summary of this case,that is,the research conclusion and enlightenment.Through the analysis and Research on the case of Yisijia’s performance gambling,it is concluded that the new third board enterprises should take into account the changes of macro environment and the development of the enterprise’s internal when gambling with the investors,and prudently select the gambling targets to strengthen the prevention and control of relevant risks.