Encourage the development of venture capital and high quality services for the real economy

Mondo Finance Updated on 2024-01-29

**Times reporter Zhuo Yong.

Recently, the first economic work conference clearly proposed to encourage the development of venture capital and equity investment. This means that venture capital and equity investment have become important capital forces in the process of "leading the construction of a modern industrial system with scientific and technological innovation". To a certain extent, this has boosted the confidence in the development of the venture capital industry and injected a "shot in the arm" into the market players in the industry.

China has always attached great importance to the development of the private equity industry, and has repeatedly issued policies to further improve the legal system of private placement. For example, a few days ago, the China Securities Regulatory Commission (CSRC) solicited public opinions on the Measures for the Supervision and Administration of Private Investment (Draft for Comments), proposing more detailed normative requirements from various aspects to improve the whole chain of supervision. The content of the entire document is twice that of the previous management measures, which reflects that the regulator is supporting the private equity industry to serve the real economy to improve quality and efficiency, while effectively strictly controlling the risk management threshold and promoting the high-quality development of the private equity industry.

The criteria for identifying qualified investors in the Draft have sparked a lot of discussion in the private equity investment industry. Specifically, the document proposes that the paid-in amount for investors to invest in a single private equity investment** will be increased from no less than 1 million yuan to no less than 3 million yuan. The paid-in scale of a single natural person investor's investment in a single project** shall not be less than 10 million yuan. This is a significant increase in the investment threshold from the previous one. The Draft also enriches the measures for the management of investor suitability, and adds new requirements for investors' investment experience and household financial net assets. The standard of household financial assets has also been raised from 3 million yuan to 5 million yuan.

The above-mentioned measures raise the threshold for investors to enter the high-risk market from multiple dimensions, and can improve the overall risk control level of the market to a certain extent. However, it should also be noted that, compared with private equity investment, private equity investment, especially venture capital, has its particularity, and its main investment in unlisted innovative enterprises is not only an important force to support scientific and technological innovation, but also an important part of the multi-level capital market. The increase in the investment threshold in the industry will, to a certain extent, increase the difficulty of raising funds for small and medium-sized institutions, which mainly invest in start-ups. The industry expects that the regulatory measures can give market players a moderately tolerant development environment, more room for growth and opportunities, so as to build a richer and more diversified market ecology.

For private equity investment institutions, they should also seriously consider how to adjust the current operation model, transform and upgrade, and serve the development of the real economy with higher quality. The market needs responsible, responsible and powerful investment institutions that can truly support and accompany the growth of enterprises and earn investment returns for investors with professional investment capabilities.

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