Where are the opportunities for equity crowdfunding platforms in China?

Investors search for investment companies or projects through the Internet, pay funds or become shareholders of the company directly or indirectly, and the investors are often accompanied by clear financial return requirements. The crowdfunding platform mainly plays the role of online display of projects and offline matchmaking. The transactions are also completed, mainly with the participation of professional investors, sometimes one or two people invest, sometimes three or four people invest. In essence, the link of finding projects at the front end of VC investment has been moved online, but the advantage is that this model solves the problem of information asymmetry between projects and funders, and also eliminates geographical restrictions, so that more entrepreneurs have the opportunity to find venture capital and raise funds. To be precise, angel crowdfunding should be a typical representative of the equity crowdfunding model, which is basically no different from angel investment and VC in real life, except that the fundraising link is completed through the Internet.

However, the Internet provides investment opportunities for many potential funders, and there is almost no threshold for funders, so all of this model is also known as the "angel for all".

Now most of the so-called equity public platforms, what the original venture capital will be, basically only showsThe content of the project, the vision, the team members. Of course, this information is of course what I must know, but it is far from enough.

Especially in the early stage of investment, many seniors in the investment industry have said that early investment is people, that is, if I am an investor, if I take the project seriously, then at least I will talk to my investment face-to-face once or several times a day to see if others are unreliable.

And this thing,I have to do it myself, I need to form my own judgment, and it's impossible to rely solely on third-party platforms to help me.

This platform can do it because the goods are on it, and the goods are much simpler than the people. Therefore,The idea of an e-commerce platform does not apply to equity financing.

This assessed risk platform cannot be deceived into taking on its own.

Secondly, if I want to invest in a team, I need to know what the team is special about, and it has to be related to some sensitive information, for example,Unique technology, strong operational capabilities (reflected in operational data).It is difficult for core competitiveness to imitate product planning and products in future products.

These are the things that the investment team will not be willing to disclose on the Internet, and they have to talk face-to-face with a credible investor, right? Even if these platforms do investor verification now, they are not reliable, because many investors are actually doing their best to get another opportunity, the company's secret, to cultivate their own investment team, so the team should not provide information directly to the public on the platform.

Internet stocksRight crowdfunding platform, I think this is a platform with a lot of traffic, and there are many investors who pay attention to this, then it has value; If it's a platform with little traffic, it's worthless.

Now most of the institutesIt is called an equity crowdfunding platform, and the original meeting of the venture capital circle can basically only show the project content, vision, and team members. Of course, this information is of course what I need to know, but it is far from enough. Especially in early stage investment, countless predecessors in the investment community have said that early investment looks at people, that is, if I am an investor, if I take this project seriously, then I should at least talk to my investment partner face-to-face once or several times to see how others are doing, whether it is reliable.

And this matter must be done by me personally, I need to form my own judgment, and it is impossible to rely solely on a third-party platform to help me push people. The e-commerce platform can be done because the above is a commodity, and the commodity is much simpler than a person, so the idea of the e-commerce platform is not applicable to equity crowdfunding (debt crowdfunding can also be considered).

So it's just a display platform, definitely not. To be an incubator that provides comprehensive entrepreneurial services is too heavy and has no scale effect. Therefore, in the end, we need to find a balance point, on the one hand, it can play a large enough display effect, and there are enough projects and investors to wander around it, just like going to **, Jingdong when you think of online shopping, and going to the venture capital circle when you think of equity investment, the original will or something, so that you can have the right to speak, and it will make others feel that you are not good; On the other hand, it can form a closed loop as lightly as possible, and complete all information communication and services directly through the platform, without involving additional links as much as possible.

Summary: BaseIn view of the above two points, I think that crowdfunding is not realistic in the field of equity investment at present, at least on a large scale. A few days ago, I watched the news, in the first half of the year, 15 equity crowdfunding platforms only raised 100 million, the original will be known as the largest in China, and only 100 million yuan, and the actual demand for equity crowdfunding financing is more than 200 million ......Although more than 2 billion is not big, the huge gap between 100 million and more than 20 billion is still very illustrative.

This model is still too early, and the acceptance is not high.

1.Definition of equity crowdfunding platform.

Equity crowdfunding platform refers to a new type of equity financing, which allows a large number of individuals or institutions to invest in order to obtain equity or income rights by using Internet platforms for investment and financing activities. The equity crowdfunding platform is mainly composed of three main bodies: the platform party, the investor and the project party.

2.Classification of equity crowdfunding platforms.

According to different criteria, equity crowdfunding platforms can be divided into various types, for example, according to the charging method of the platform, it can be divided into free platform and paid platform; According to the business model of the platform, it can be divided into pure P2P platform and e-commerce + P2P platform; According to the main business of the platform, it can be divided into equity financing platform and other financing platform.

3.Advantages of equity crowdfunding platforms.

Compared with traditional equity financing methods, equity crowdfunding platforms have several advantages, such as reducing fundraising costs and risks, improving project transparency, and promoting innovation and entrepreneurship. At the same time, equity crowdfunding platforms can also provide investors with more opportunities and reduce their individual investment risks.

4.Problems with equity crowdfunding platforms.

There are also some problems with equity crowdfunding platforms, such as insufficient supervision of platform parties, the need to improve the credit rating system of the platform, and risk prevention and education for platform investors. In addition, equity crowdfunding is also vulnerable to illegal fundraising activities. Therefore, it is necessary to regulate the development of platforms by formulating better regulations and regulatory mechanisms.

5.The development prospects of equity crowdfunding platforms.

With the development of Internet technology, equity crowdfunding platforms will be adopted by more and more investors and enterprises in the future. At the same time, more equity crowdfunding platforms will emerge, and the functions and services of the platforms will be continuously improved to improve their market competitiveness. However, it should be noted that the development of equity crowdfunding platforms also needs the support and supervision of the best to ensure a healthy and orderly market.

6.What are the equity crowdfunding platforms currently on the market.

At present, the main equity crowdfunding platforms in China include N5Capital Yingzhong, Zhongan Insurance, RESS Lianchuang, Zhenqing Crowdfunding, Equity-based Crowdfunding, etc. These platforms are distinguished from many aspects such as the platform's charging method, business model, project type, etc., and also provide investors with more choices.

7.How to choose the right equity crowdfunding platform.

For investors, it is very important to choose a suitable equity crowdfunding platform and invest in it. When choosing a platform, it is necessary to conduct a comprehensive evaluation of the platform's historical performance, investment process, risk control mechanism, etc. At the same time, choose according to your own risk tolerance and investment needs to reduce risks and improve investment returns.

8.Summary.

As a new type of equity financing, equity crowdfunding platforms have many advantages, but there are also many problems. With the continuous improvement of the first-class policy support and regulatory system, the future equity crowdfunding platform will develop more standardized and orderly, and provide more opportunities and services for investors and enterprises.

Equity crowdfunding is legal in China, but there are restrictions.

** Law of the People's Republic of China":

Article 10 The public offering must meet the conditions stipulated by laws and administrative regulations, and be approved by the ***** supervision and management agency or the department authorized by the public in accordance with the law; Without approval in accordance with the law, no unit or individual may publicly issue **.

In any of the following circumstances, it is a public offering:

1) Issuance to unspecified targets**;

2) Issuance to specific targets with a cumulative total of more than 200 people**;

3) Other issuance acts provided for by laws and administrative regulations. Non-public offerings** shall not use advertising, public solicitation, or disguised disclosure.

** Law of the People's Republic of China":

Article 11 If an issuer applies for a public offering of corporate bonds that can be converted into a public offering of corporate bonds, and adopts the underwriting method in accordance with the law, or publicly issues other bonds that are subject to the sponsorship system as provided for by laws and administrative regulations, it shall hire an institution with sponsorship qualifications as a sponsor.

The sponsor shall abide by the business rules and industry norms, be honest and trustworthy, be diligent and conscientious, prudently verify the issuer's application documents and information disclosure materials, and supervise the issuer's standardized operation.

The qualifications of sponsors and their management measures shall be prescribed by the ***** supervision and administration authority.

Article 12 The establishment of a public offering of shares shall meet the conditions stipulated in the Company Law of the People's Republic of China and other conditions stipulated by the approved ***** regulatory authority, and submit the application for raising shares and the following documents to the ***** regulatory authority:

1) Articles of Association;

b) Promoter Agreement;

3) The name or title of the promoter, the number of shares subscribed by the promoter, the type of capital contribution and the proof of capital verification;

4) a prospectus;

5) The name and address of the bank collecting the shares;

6) The name of the underwriting institution and the relevant agreement. Where a sponsor is hired in accordance with the provisions of this Law, a letter of sponsorship issued by the sponsor shall also be submitted.

Where laws and administrative regulations stipulate that the establishment of a company must be submitted for approval, the corresponding approval documents shall also be submitted.

Domestic equity crowdfunding platforms include: Meiwei, Loanbang.com, Fruit Tree Wealth, and Jingdong Crowdfunding.

Introduction: The first case of equity crowdfunding in China is the sale of equity by Meiwei**, through crowdfunding, 1194 shareholders of crowdfunding were obtained, accounting for 25% of the shares of Meiwei Media, and the overall financing was 5 million. At the beginning, Meiwei obtained a start-up capital of 3.84 million through crowdfunding, and later, it was suggested that the studio in Guangzhou raised funds among the old shareholders again, and successfully raised it within 24 hours.

The first case of secured equity crowdfunding in China is the loan network kangaroo logistics project, which was launched for 16 days, and 79 investors completed an investment quota of 600,000 yuan. The project is guaranteed by a third-party institution for a period of one year, and if the project fails within one year, the guarantor will fully compensate the investor for the investment amount. It is quite attractive to investors.

Debt crowdfunding has turned to equity crowdfunding for itself, and Fruit Tree Wealth itself is a debt crowdfunding platform, which is what everyone calls an online loan platform. Since its establishment, Fruit Tree Wealth has raised more than 5 million yuan from 31 investors through equity crowdfunding. The A round of financing also adopted the method of equity crowdfunding, and the subscription amount of 15 million was completed in 4 hours.

This is the first case in which a domestic debt crowdfunding platform has turned to equity crowdfunding for itself.

JD crowdfunding adopts the model of "leading investment + co-investment". At JD.com's equity crowdfunding internal beta online sharing meeting, a number of star projects of the platform, such as Wukong i8 smart thermostat, KissLink kiss router, and Chengzhi Technology booked scanner, were unveiled, and won the support of many investment institutions.

Although it has only been established for half a year, it has successfully raised more than 100 million yuan, and has become a new army in the industry that should not be underestimated.

As far as I know, there are a few angel remittances, loan help networks, and everyone investment, but in general, there are not many.

is legitimate, but there is a lot of legal risk in the model and implementation.

Legal risks are mainly reflected in the following two aspects: one is the legality of the operation, which may involve the most illegal absorption of public deposits and illegal issuance**; The second is the protection of the interests of investors.

Legitimacy of operations.

The legitimacy of equity crowdfunding operations mainly refers to the fact that the operation of crowdfunding platforms is often accompanied by the risk of illegally absorbing public deposits and illegal issuance, and many practitioners, including relevant legal personnel, have different understandings of this.

Protection of the interests of funders.

In the equity crowdfunding model, the interests of the funder involve the following aspects.

1) Trust.

Due to the current domestic laws, regulations and policy restrictions, in the process of equity crowdfunding operation, investors may adopt the limited partnership model or the share holding model to avoid corresponding risks. However, the problem is that on the crowdfunding platform, the funders basically do not know each other, and the leader plays a leading role in the limited partnership model, and the nominee holder is very important in the share holding model, and how to establish the trust of the leader or nominee holder is very important for a large number of investors.

2) Security.

Judging from the operation of crowdfunding platforms at home and abroad, although the relationship between fundraisers and investors belongs to the relationship between the company and shareholders, between fundraisers and funders, funders are obviously in a position of information weakness, and their rights and interests are easily damaged. Therefore, the return on equity investment is also difficult to define, and there should not be a fixed return, but the expected return should be revealed. If the expected returns are not realized, there will be resistance in practice.

3) The right to information and supervision.

As an investment shareholder, the investor has the right to obtain information on the correct use of the funds raised by the company after the investment, as well as the right to obtain financial information related to the company's operating conditions. Although crowdfunding platforms have regulatory obligations, they still have certain limitations.

4) Transfer or withdrawal of equity.

The exit mechanism is mainly through repurchase and transfer. In principle, the company cannot repurchase by itself, and it is best to repurchase by the founder or actual controller of the company; In principle, the relevant provisions of the Company Law shall be followed when adopting the method of equity transfer.