Interpretation of the "Interim Measures for the Management of Venture Capital Enterprises"
The relevant person in charge of the National Development and Reform Commission accepted an interview with reporters on issues related to the "Interim Measures for the Management of Venture Capital Enterprises".
Three major restrictive clauses define venture capital
Regarding how to define the two concepts of venture capital and venture capital enterprises, the relevant person in charge pointed out that the "Measures" define venture capital It is an investment method that makes equity investment in entrepreneurial enterprises with the hope of obtaining capital appreciation income mainly through the transfer of equity when the invested entrepreneurial enterprises mature or become relatively mature. Among them, enterprises include growth enterprises in the process of creation and reconstruction such as the seed stage, start-up stage, expansion stage, and transition period before maturity, but they are mainly growing small and medium-sized enterprises, especially technology-based small and medium-sized enterprises.
At the same time, in order to clearly distinguish venture capital enterprises from other enterprises, the "Measures" formulated a series of restrictive clauses in the investment operation link: First, by stipulating the investment of venture capital enterprises in enterprises , is limited to unlisted companies, and other funds can only be deposited in banks, and can only be used to purchase treasury bonds or other fixed-income securities. It prevents venture capital companies from engaging in securities investment, futures investment and other businesses, and guides them to specialize in equity investments in unlisted companies. invest. The second is to stipulate that venture capital companies can only invest in the form of equity or quasi-equity, so that when making investment decisions, in order to adapt to this high-risk investment method, they can only choose startups with high growth potential. invest. Third, by proposing portfolio investment requirements, it is stipulated that the investment of a venture capital enterprise in a single enterprise shall not exceed 20% of the total assets of the venture capital enterprise, so that the investment enterprise must diversify the funds into multiple enterprises, thus distinguishing itself from the investment holding company.
Nine Measures to Build a Protection Mechanism
The "Measures" were formulated to establish the legal basis for the venture capital support mechanism. Therefore, the "Measures" contain nine special laws for venture capital enterprises. Conservation measures are of particular concern. According to the relevant person in charge, the nine aspects of special legal protection are mainly: (1) Provisions on the number of investors and the investment amount of a single investor, providing a legal basis for venture capital companies to raise funds through private placement. (2) It is stipulated that venture capital enterprises established in the form of companies can entrust a management consulting agency to be the manager to be responsible for their investment management business, providing legal protection for the implementation of entrusted management. (3) Provide that venture capital enterprises can implement a committed capital system. If the paid-in capital is promised to be no less than RMB 30 million, the initial capital required is only RMB 10 million, and the remaining capital can be made up within the next five years. (4) It is stipulated that venture capital enterprises can invest in foreign countries with all their assets. (5) Provide that venture capital companies can invest in quasi-equity forms such as equity, preferred shares, and convertible preferred shares. (6) It is stipulated that venture capital enterprises should stipulate in advance the method of accruing management operating expenses or management consulting fees through legal documents such as articles of association and entrusted management agreements, so as to provide a legal basis for establishing a cost restraint mechanism. (7) It is stipulated that venture capital companies can withdraw a certain percentage from the realized investment income as performance remuneration to managers or management consultants, providing a legal basis for establishing a performance incentive mechanism for managers. (8) It is stipulated that venture capital enterprises can set up a limited duration in advance, and they can be liquidated once the duration is up, which is conducive to establishing a risk restraint mechanism for managers. (9) According to the exceptions stipulated by the state in the "General Principles of Loans", investment enterprises can enhance their investment capabilities through debt financing within the scope prescribed by law.
It is particularly noteworthy that in order to support venture capital enterprises, the "Measures" proposed three policies. Relevant state departments should actively promote the construction of a multi-level capital market system and improve the investment exit mechanism for venture capital enterprises. In addition to launching the GEM market in due course, we must also develop regional property rights trading markets. It's one of them. The other two major support policies are: stipulating that the state and local governments can set up venture capital guidance funds to support the establishment and development of investment enterprises through equity participation and providing financing guarantees, and clarifying tax support for venture capital enterprises.
Registration management is not administrative licensing
Some people misunderstand the implementation of registration management for venture capital enterprises in the "Measures" as an administrative licensing system for the establishment of venture capital enterprises. The relevant responsible People explained that in order to standardize the investment operations of venture capital companies, ensure the realization of policy support goals, prevent some institutions that are not really engaged in venture capital from enjoying national policy support in the name of venture capital, and promote the development of venture capital companies into professional venture capital institutions , the "Measures" stipulate that investment enterprises that wish to apply for policy support shall be subject to post-recordation management.
Contents of filing management: First, review the filing conditions in terms of business scope, minimum capital, and management team. The second is to conduct necessary inspections on investing enterprises in accordance with the investment restrictions stipulated in the Measures. Third, those who fail to conduct investment operations in accordance with the provisions of the "Measures" will be ordered to make corrections within 30 working days; if they fail to make corrections, the filing will be cancelled.
The filing stipulated in the "Interim Measures for the Administration of Venture Capital Enterprises" does not affect the investment activities of any citizen, legal person or other organization. Therefore, the filing as stipulated in the Measures does not constitute administrative licensing.
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