Private Equity Financing Under Valuation Adjustment Mechanism

With the rapid development of economic technology,more and more enterprises need to invest much money in products research and development in order to adapt to market demanding and meet long-term development.Private equity as an effective way of financing,with its stable source of funds,high value-added services,low financial costs of high-quality characteristics have been favored by many enterprises.The use of private equity to finance,not only to meet the enterprise to obtain operating funds,but also to enhance the overall value of the enterprise.For financiers,there is unpredictability in the market outlook.From the investor's point of view,because of the lack of understanding of financing enterprises,compared with the financing enterprise management personnel on the control of the financing company is far apart,not conducive to the search for a good investment target.In order to try to improve the asymmetry of information in incremental market and the inconsistency of enterprise value evaluation,both investment and financing choose the way of betting is the most effective choice.The enterprise reasonably sets the betting clause,efficiently reduces the financing risk,accelerates the implementation of the money.To meet the investors ' requirements for financial security,but also to reasonably motivate and restrain the financier to carry out internal management control,so as to achieve win-win situation.Therefore,the betting agreement has been widely concerned and adopted in the domestic financing market.Firstly,the paper summarizes the relevant literatures about private equity financing and the signing of gambling agreements in the process of financing at home and abroad.With Xiaomi Company signed the gambling agreement for private equity financing,the success of the core goal of listing as the starting point,the use of case study method,analysis of Xiaomi company financing to gamble the motivation,the process of financing gambling and the effectiveness of financing to gamble and risk.On the whole,financing is a win-win transaction,Xiaomi company through the signing of the gambling agreement to introduce superior funds,improve its production capacity,ease the performance bottleneck,and finally realize the listing,investors through the signing of the gambling agreement,the successful realization of investment,access to huge gains.Through the research on the gambling process of Xiaomi company financing,the following conclusions are drawn: first,reasonable application of the gambling agreement can broaden the financing channels of enterprises.The 2nd is the success of gambling,is the enterprise to achieve sustainable development,with the core competitiveness of the important factors.The 3rd is that reasonable signing of the betting agreement can minimize the risk and have an incentive effect on the invested enterprise.Xiaomi company financing to gamble success,the application of enterprises on the financing of gambling has a certain reference value.