The Study On The Strategy Of TE Company's Equity Financing

The production and operation,capital operation and long-term development of enterprises need funds,which cannot be supported only by their own funds.Therefore,there are bank loans,equity financing and other financing methods.Influenced by the bank policy,private enterprises have limited access to bank loans,and bank loans cannot meet the needs of funds for their development.Moreover,a large number of bank loans will generate a large amount of financial costs,eroding their profits and bringing certain financial risks.Therefore,when the enterprises develop to a certain stage,they need to solve the demand for capital and standard management through equity financing.TE Company is a family-owned enterprise of traditional manufacturing industry,it produces and sells anti-counterfeiting bottle caps to domestic famous liquor enterprises.Unlike the family team management of other private companies,the boss of TE company is the only founding shareholder who participates in the company's operation.Though TE sets up an integrated management system,it was not properly implemented;in fact TE has an authoritarian leadership by the founding shareholder.Influenced by the downturn of liquor industry and decision failure of founding shareholder in the past several years,TE made many long-term project investments by large-scale borrowing,which led to a huge increase in financial costs and imbalance of financial structure.In the past three years,TE grasped the opportunity of Internet technology and transformed to an intelligent packaging company,and it is in urgent need of funds to expand new capacity and explore new market.And now,equity financing has become very necessary.According to the situation of TE company,the author analyzed the necessity and influence of TE company's equity financing by researching domestic and foreign equity financing theories and corporate control theories,formulated the principle and strategy of equity financing for TE company,including financing scale,financing rounds,the focus of investors in different financing stages,protection of the founder's control rights and reasonable withdrawal mechanism etc.,and also made supporting measures for the implementation of equity financing strategy.I hope this article can provide some reference for TE company to implement scientific equity financing strategy,and also to provide some reference for other similar private enterprises.