There are three main sources of equity investment fund projects:
(1) Innovative direct investment opportunities derived from securities investment banking business, M&A business and international business are characterized by being close to the primary investment market, smooth exit channels, short payback period and rich return on investment.
(two) to form a strategic alliance with domestic and foreign equity investment institutions to realize information sharing and joint investment;
(3) Track and study the development trend of new technologies and the dynamics of capital market at home and abroad, and find project information through data research, project library recommendation, and visiting enterprises.
Second, the project preliminary examination
After receiving the project business plan or project introduction, the investment manager makes a preliminary investigation on the project, submits a preliminary investigation report and a project profile, and puts forward preliminary opinions on the investment value of the project enterprise.
The preliminary examination of the project includes two parts: written preliminary examination and on-site preliminary examination. The main way for equity investment funds to conduct written preliminary examination of enterprises is to review the business plan or financing plan of enterprises. After reviewing the business plan of the enterprise, the equity investment fund will ask the enterprise to inspect the actual production and operation of the enterprise on the spot, that is, whether the on-site preliminary examination meets the investment project scope of the equity investment fund.
Third, the project establishment
For a project that has passed the preliminary examination, the project investment manager generally submits the application materials for project establishment, which can be approved by the fund manager's project establishment committee or other procedures, and the approved project can proceed to the next step.
Four. Sign an investment memorandum
After the project is completed, an investment memorandum is usually signed with the project enterprise. Investment memorandum, also known as investment framework agreement or list of investment terms, is usually put forward by investors, which generally includes investment conditions, main investment terms suggested by investors, confidentiality terms and exclusive terms.
The contents of the investment memorandum, except the confidentiality clause and exclusive clause, are mainly used as the basis for the next negotiation between the investment and financing parties, and are not actually binding on both parties.
Verb (short for verb) due diligence
After the project is approved and the investment memorandum is signed, the project investment manager and the risk control team go to the project enterprise to conduct due diligence independently, and complete the due diligence report, financial opinion, audit report and risk control report. And conduct due diligence on enterprises and projects that meet the investment requirements, and the project investment manager prepares a complete investment proposal.
Investment decision of intransitive verbs
The equity investment fund management institution shall set up an investment decision-making committee to exercise investment decision-making power over investment projects. The establishment of the investment decision-making committee should meet the requirements of the related party transaction review system to ensure that there is no conflict of interest. Usually, the investment decision-making committee consists of the principal responsible person of the equity investment management institution, the person in charge of risk control, the person in charge of investment and industry experts.
Seven. Sign an investment agreement
The investment decision-making committee examines the enterprises or projects that agree to invest. After the legal adviser examines the relevant contract agreements, the authorized representative signs investment agreements and related supplementary agreements with the investee, such as capital increase agreement or equity transfer agreement, shareholder agreement or joint venture agreement.
Eight. Post-investment management
After the investment agreement comes into effect, the project investment manager is responsible for the tracking management of the project, including but not limited to the financial status, production and operation status and important contracts of the enterprise, so as to effectively monitor it. Moreover, he should use his business expertise and social network to help enterprises improve their management level and provide value-added services for enterprises, including helping enterprises standardize their operations, improving corporate governance structure, providing refinancing services, listing counseling and mergers and acquisitions integration, so as to make enterprises grow in a standardized and rapid manner in the shortest time.
Nine, the project exit
Project withdrawal refers to the process that equity investment funds recover their invested capital in time when the invested enterprises meet the predetermined conditions. When the equity investment fund establishes a project, it needs to design an exit mode for the project, and then correct it in time with the progress of the project. The specific exit methods include listing transfer or listing transfer exit, equity transfer exit and liquidation exit.