Research On The Motivation And Effect Of Private Equity Financing Of Company Y

In the 1980 s,private equity financing in China sprouted with government support and became a new financing channel for SMEs,which could effectively solve the problems of limited financing channels and financing difficulties for SMEs.However,some companies have vigorously developed and successfully listed after introducing private equity financing,and some companies have finally failed due to blind expansion and management confusion.Not all companies can achieve good financing results by introducing private equity financing.What impact can it have? Through literature review,it is found that most of the research on private equity financing is based on empirical research,and there are relatively few case studies on a single company.This paper focuses on the reasons and effects of private equity financing through case studies,and hopes that the case company can provide other similar the company provides a valuable reference for private equity financing.This article takes company Y as the research object,expounds the company Y’s profile and the process of private equity financing with a case study method,analyzes the motivation of the company’s private equity financing,explores the effects of company Y’s private equity financing based on the motivation analysis,and finally draws conclusions and makes recommendations.It is concluded through research: company Y seized the timing of financing to obtain several rounds of private equity financing;the important motivation for the company’s private equity financing is the need for strategic development.The combination of private equity financing and strategy can provide capital resources and value-added services for its strategic development,reduce the company’s operating costs,while the shareholding structure is optimized;the solvency is rapidly improved,the upstream and downstream relationship management capabilities are improved,but the profitability is poor,the cost is high,and the hematopoietic capacity is insufficient.Suggestions for the insufficient improvement of operating efficiency after financing by company Y: private equity investors can help company Y find senior managers and experts to improve the quality of company management decisions to improve company efficiency,help establish and improve employee incentive mechanisms,and mobilize employee enthusiasm;company Y should be good at using private equity investment the resources provided by the developer expand the business scale,stabilize the business core,enhance the core competitiveness,strengthen the cost control management,and should also prevent the risk of capital withdrawal.