The vast majority of private equity funds entering companies to be listed can only be regarded as financial investors, and there are very few strategic investors, that is, they rarely participate in actual operation and management, or to hold the company's equity for a long time, basically for the purpose of exiting after listing.

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A considerable number of companies have introduced private equity before going public. There are many reasons: First, companies are short of money. To reach the listing threshold, they need to expand investment, so they rely on private equity money to improve performance and scale; second, shareholders are short of money, and private companies are in the process of operation.

There may be cases where the major shareholders occupy the company's funds or make false capital contributions, etc. In order to go public, the major shareholders must spend real money to fill the holes. It is difficult to handle hundreds or tens of millions of cash, so

Transfer part of the equity to private equity and use private equity money to fill the hole; third, to improve the corporate governance structure.

Private enterprises generally have family-style management or a single controlling shareholder. Introducing external investors will help improve the governance structure and strengthen supervision. This will make the company more like a modern public company and help it pass the listing review.