Research On Equity Financing Of Internet Enterprises

Information Technology have reformed traditional industries, prompting the internet companies a worldwide attention. Several venture‐backed internet companies have achieved rapid and extreme valuation mark‐ups. Well performed internet company have consequently seek their IPO at overseas capital markets, improving business publicity images as well as gathering capital for further development. The success of these internet companies are from their aggressive financing strategy cooperating with investment institutions, which helped them maintained a leading position in competition. Meanwhile, the real economy and the capital market had achieved a win‐win situation, helping the internet industry became the most important economic growth point.This paper focus on the equity finance of internet companies from the perspective of the corporate lifecycle, which is divided into phase start‐up, phase growing and phase prime in general. Firstly, this paper summarizes the characteristics of internet companies and equity finance, along with valuation theory. Secondly, based on the financing casese both for domestic and oversea’s internet companies in2014‐2015, this paper analyzes their valuation, equity arrangement as well as other terms for phase start‐up and phase growing. Thirdly, the paper compares the difference of IPO financial criteria between China capital market and oversea capital markets,（US particularly）, then discusses the necessity of listing abroad from the perspective both of the internet companies and the investment institutions within phase prime. Finally, based on the previous discussion, this paper presents the reflection of internet companies in equity finance, reaches conclusions and recommendations.