Legal Regulation Of Private Equity Crowdfunding

The rise of the Internet financial has become an irreversible trend of The Times, as a typical form of Internet financial about investment and financing,Private Equity Crowdfunding also gradually walk into the view of public. Private Equity Crowdfunding refers to the issuer take equity financing activities In the non-public way through the Internet platform. This financing model has been appeared and rised in many countries in the world, after entering China its scale and influence has been expanding in short time.Study on Private Equity Crowdfunding needs to understand the concept of Crowdfunding. Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet, and then based on their investment the funders will get kind, equity or other rewards. Private Equity crowdfunding is one sort of crowdfunding modes, in which the project initiators raise funds via the Internet by providing their backers finance in the form of equity.As one typical mode of Internet financial, Private Equity Crowdfunding gets rapid development in China. We cast a large number of well-known Private Equity Crowdfunding platform such as ‘ Angelcrunch ’、‘Dajiatou’, many companies successfully get financing on the platforms. It has benn a new form of financing market. Private Equity crowdfunding is innovative, it combines the financing and the Internet, Private Equity Crowdfunding not only enriches people’s investment channels, but also promote capital formation of small and micro enterprises, so as to promote the economic development. The largest financing market is in United States, US Confirm the legitimacy of Equity Crowdfunding by legislation, there are special rules about Equity Crowdfunding, the rules brought enlightenment for Private Equity Crowdfunding in our country.In China based on the related theory research and the law are still in the initial exploration period, lead to the Private Equity crowdfunding wandering in the edge of the law, probably the carelessly action will touch legal red line;incomplete Development of Private Equity crowdfunding also affects the development of this new financing model. The social public are confused by the different meaning, it’s a serious obstacle to the continued development of the Private Equity Crowdfunding. In addition, The rights and obligations of platform is not clear, inadequate disclosure ofinformation, Exit mechanisms are inadequate and so on, are seriously hinder the development of Private Equity Crowdfunding. It brings negative influence on private equity crowdfunding due to the lack of laws and regulations.On this basis, In order to guide the Private Equity crowdfunding healthily and Continuously develop, it’s necessary to produce concrete proposals about Legal regulation of Private Equity crowdfunding in our country. Based on the above-mentioned content,Combined with the current situation and supervision situationof China’s private equity crowdfunding,at the same time draw on the experience of America latest regulations about private equity crowdfunding,giving the recommendations in several aspects like the legal system, crowdfunding platform,issuers and investors and so on.