Dynamic Allocation Of Equity Of Technology-based Entrepreneurial Firm Based On Mezzanine Financing Design

The goal of "mass entrepreneurship and universal innovation" is to encourage original technology achievement holders using 100 billion privately-invested capital to create Technology-based entrepreneurial firm,then incubate and transform scientific and technological research results which rank highest in the world.Ultimately to achieve a steady appreciation of private capital and Entrepreneurship career development win-win goal,to reach the main aim of enhancing the international competitiveness of China's new technology industry.However,the vast majority of original technology holders are unable to independently convert and incubate their original technologies because of lack of capital.Capital holders cannot identify the potential benefits and risks resulting from the conversion of achievements due to the limitations of professional and technical knowledge.So it is difficult for original technology holders and capital holders to form lasting and solid cooperation of "technology & capital".Even with reference to the technical investment guidance document issued and revised for many times by the ministry of state and local government,to promote the technical entrepreneurial team and the initial investor to establish a Technology-based entrepreneurial firm.Since such Technology-based entrepreneurial firm have its own characteristics that is small capital big risk incubation and big capital small risk development,to which lead the following two problems when Technology-based entrepreneurial firm develop to a certain size.On the one hand,the statutory allocation of technology equity shares can not reflect the gradual reduction of capital risk,and the objective fact that contribution of technical entrepreneurial team is more important.It is difficult to induce the technical entrepreneurial team to actively continue to develop product differentiation due to the "unfavorable" mentality.On the other hand,large-scale refinancing in the rapid development stage of Technology-based entrepreneurial firm directly dilutes the shareholding ratio of technical entrepreneurial team based on the static equity allocation of technology shares.As a result,it is difficult to ensure the team's long-term stability because it is hard to accomplish their psychological imbalance of "creating own businesses." Even as the core technical staff turnover lead to business collapse,resulting in technical entrepreneurial team and investorslose-lose situation unbearable.This paper aiming at the problems of capital financing and equity allocation that restrict the establishment and development of Technology-based entrepreneurial firm,while to meet the capital needs of entrepreneurs and the capital appreciation of investors as the target,compared the operating mechanism differences to the equity financing,debt financing,mezzanine contract financing.The paper takes technology entrepreneurial enterprises as the research object,and deeply studies the dynamic allocation of equity and mezzanine financing design from the following four aspects:(1)Based on the financing contract theory and securities design theory,this paper demonstrates the relationship between the design of financing contract and the allocation of corporate equity.Based on the equity allocation needs and return on capital of technical entrepreneurial team and initial investor,we analyze the applicability of different financing instruments for startup capital financing of Technology-based entrepreneurial firm.Based on the characteristics of mezzanine principle that takes into account the shareholders' equity and capital gains,and the law of output of technology entrepreneurial enterprises and the risk of capital changes,the study put forward the design mechanism of mezzanine financing contract for Technology-based entrepreneurial firm.(2)Based on the theory of incomplete contract,this paper introduces concepts such as capital risk assumption,collateralization and specialization and exclusiveness to analyze the premise of equity participation in capital participating enterprises and the basis for the allocation of equity in capital.Then we get the human capital leading enterprises equity allocation analysis framework.From the entrepreneurial needs of the technical entrepreneurial team,the objective need of keeping the technology leader and the psychological expectation of rapid value-added of the capital to analyze the inevitable trend that the technology start-up team will gain the control equity.Combining the equity allocation analysis framework and the inevitable trend of the technical entrepreneurial team obtaining control equity,we build a theoretical system of dynamic allocation of equity for Technology-based entrepreneurial firm.(3)Based on the theoretical system of mezzanine financing contract design and equity dynamic allocation of Technology-based entrepreneurial firm,we defined the distribution of distributable income and residual distributable income to build a time-series dynamic allocation model of Technology-based entrepreneurial firm.Use calculating examples to calculate the distribution proportion of distributable income and residual distributable income,and demonstrate the dynamic trend of equity.Finally deduce the dynamic allocation model of equity that separation quantify income distribution and shareholding proportion while upside down priority distribution and residual distribution proportion.(4)The study defined the innovation needs of non-governmental capital appreciation,thebreakthrough points of successful docking between capital and technology,and analyzed the essential differences between the innovation and entrepreneurship platform needed by large-scale private capital investment in Technology-based entrepreneurial firm and the existing business incubators.We use Grounded Theory Research methods of multi-case comparison,combing the elements of successful operation of domestic and foreign innovation and entrepreneurship platform,design the operation mode of entrepreneurship security platform.Combined with the mezzanine financing contract design,we construct the mezzanine revenue distribution and capital withdrawal way of the entrepreneurship security platform,finally form the entrepreneurship security platform that can promote the dynamic allocation of equity and mezzanine financing contract.The contributions and innovations of this paper are mainly reflected in the following three points.First,based on the close connection between the design of financing contract and the allocation of enterprise equity,the mezzanine financing contract was designed and the operating system of dynamic allocation of equity related to earnings was constructed to meet the initial investor 's expectation of capital appreciation and the entrepreneurial psychological vision of technical entrepreneurial team.The conclusion of the study enriches the theoretical research on the relationship between the financing contract and equity allocation of the start-up enterprises and forms a systematic theoretical analysis framework.This provides a theoretical basis for Technology-based entrepreneurial firm to design the initial financing funds and realize the dynamic allocation of ownership rights through the advance financing contract.Second,this paper constructs the equity dynamic allocation model which is separation quantify income distribution and shareholding proportion while upside down priority distribution and residual distribution proportion,in order to make up many shortcomings in the static allocation mode of equity,such as stable technical entrepreneurial team and the development of entrepreneurial enterprises.The model of dynamic allocation of equity makes the equity allocation of technology-based enterprises in a continuous state with the change of residual distributable income.So as to reflect the change of exclusive contribution of original technologies and founding funds in different stages of development of the enterprise.The conclusions of the study have strong practicality and also can provide practical guidance for dynamic allocation of equity in Technology-based entrepreneurial firm.Thirdly,aiming at the following practical problems are faced: private capital lack of professional identification and information asymmetry;private capital holders have to completely bear the capital risk when the capital and technology are one-to-one docking;private capital appreciation way are confused while original technology holders are difficult to melt the founding funds.This paper puts forward the academic conception of the construction of the entrepreneurship security platform.The results of the research have guiding significance in leading private capital into Technology-based entrepreneurial firm,and help to achieve a steady appreciation of private capital,and promote technological entrepreneurship making contributions to economic development.