1. What are the legal risks of equity investment? First of all, in the stage of raising private funds: mainly to avoid illegal fund-raising; Pay attention to communication with commercial banks during roadshows and broaden financing channels; In addition, it should be clearly stipulated in the custody agreement with the bank that the funds shall not be transferred without the signature of both investors and managers to ensure the safety of the funds. Secondly, in the capital injection stage of private equity funds, there are mainly three aspects: bad managers default on investors, the target company forges or conceals important facts, the operation after capital injection is not standardized, and it is forbidden to follow suit. Third, in the withdrawal stage of private equity funds: since most investors will choose to withdraw from the market, if the first application is not passed, the second application should still become the focus of the fund; M&A and MBO are restricted by relevant laws and regulations, and capital withdrawal still faces many obstacles. Therefore, in the face of the current objective situation, we should actively explore diversified exit methods. Second, how to take precautions? Private fund raising stage: In the process of fund raising, the number of investors must be strictly controlled, and the provisions of the Company Law and the Interim Measures for the Administration of Venture Capital Enterprises must be followed. Based on the prevention of legal risks and the nature of the fund itself, investors cannot promise the rate of return within a certain period of time when raising funds. Otherwise, if the promise cannot be fulfilled due to unpredictable objective circumstances such as policy adjustment, natural environment and market changes, it will be suspected of false promises and bear unfavorable legal responsibilities. Before custody, a written agreement should be signed with the bank to stipulate their respective rights and obligations to ensure the safety of funds. Private equity fund injection stage: conduct legal and financial due diligence on the target enterprise, and the due diligence stage should be as detailed and complete as possible to avoid blind selection. It is necessary to be good at discovering the correlation between information in order to reflect the true colors of things to the greatest extent. The exit stage of private equity fund: the most common method is to invest in the form of convertible bonds, and the repurchase terms and the proportion of equity held by the fund are linked to the future performance of the target enterprise, that is, in the form of gambling agreement; Gambling agreement is actually a form of option, and the interests of investors can be effectively protected through the design of terms. Guarantee is another common method to reduce risks. In the investment process of private equity funds, guarantee means are often used. This is also divided into two types: investor guarantee and third-party guarantee. No matter what kind of equity investment, it will actually involve some risks. I believe everyone knows that the existence of risks will inevitably cause damage to the interests of the parties. At this time, we need to take active measures to deal with risks and reduce the possibility of damage to our own interests. The risk methods of equity investment include financing stage, capital injection stage and exit stage.