Operation process of private equity investment fund (I) Project selection and feasibility verification Due to the long-term and low liquidity of private equity investment, investors usually put forward the following requirements for investment objects in order to control risks: High-quality management is particularly important for financial investors who do not participate in enterprise management. At least 2 to 3 years of business record, huge potential market and potential growth, and convincing development strategy planning. Industry and enterprise scale (such as sales) requirements. Investors pay attention to different industries and scales, and financial investors will examine the significance of an investment to their portfolio from the perspective of portfolio diversification risk. Requirements for valuation and expected return on investment. Because it is not so easy to withdraw from the open market, private equity investors demand a higher expected return on investment, at least higher than that of listed companies in the same industry. The possibility of listing after 3-7 years is the main exit mechanism. In addition, investors should also conduct legal investigations to find out whether the enterprise is involved in disputes or lawsuits, whether the property rights of land and real estate are complete, and the duration of trademark patent rights. Many foreign-funded enterprises are emerging enterprises, and there are often some legal problems. Both parties will gradually clean up and solve these problems in the project inspection. (two) the investment plan design, after reaching an agreement to sign legal documents. Investment plan design includes valuation and pricing, board seats, veto power and other corporate governance issues, exit strategy, determination of contract terms list and submission to the Investment Committee for approval. Due to the different starting points, interests and tax considerations of investors and investors, differences often arise in the negotiation of valuation and contract terms list. Solving these differences requires high technical requirements, not only negotiation skills, but also the assistance of accountants and lawyers. Exit strategy is a factor that investors are very concerned about when they start to screen enterprises, including listing, selling, stock repurchase, selling options and so on. Among them, listing is the exit mode with the highest return on investment, and the income source of listing is the profits and capital gains of enterprises. Because the domestic stock market is small, the listing cycle is long and it is difficult, many foreign foundations register a company overseas to control the joint venture company, so as to list overseas with overseas registered companies as the main body in the future. (3) Regulatory investors generally don't inject all the investment at one time, but invest in stages, and each investment is based on the premise that the enterprise reaches the preset goal. Implementing active and effective supervision is a necessary means to reduce investment risk, but it requires the investment of human and financial resources and will increase the cost of investors. Therefore, different foundations decide the appropriate degree of supervision, including adopting effective reporting system and monitoring system, participating in major decisions and giving strategic guidance. Investors will also use their networks and channels to help joint ventures enter new markets, find strategic partners to exert synergies, reduce costs and increase profits in other ways. In addition, in order to meet the requirements of future public listing or international mergers and acquisitions of foreign-funded enterprises, investors will help them establish appropriate management systems and legal frameworks. The investment cycle of private equity investment fund is very long, so its source of funds is mainly long-term investors. Generally speaking, private equity investment funds will be funded by institutional investors in their main investment fields. The way of raising private equity investment funds is different from ordinary funds, and usually adopts the way of investment commitment. When a fund management company is established, it does not necessarily require all partners to invest a predetermined amount of capital, but requires investors to make commitments. When managers find suitable investment opportunities, they only need to inform investors a certain amount of time in advance. There are certain risks. If investors fail to invest in time, they will be fined as agreed. Therefore, the amount of capital raised by the Fund is only the promised amount of capital, not the actual amount of investment or the amount of funds held. In actual fundraising activities, the fund has a certain fundraising period. When the deadline expires, the Foundation announces the subscription deadline. The same fund can have multiple subscription deadlines, but generally not more than three times. In practice, the fund can hire an institution to raise funds.