Session 4: Equity Financing for SMEs in Face of the Financial Crisis Workshop on “SMEs Financing in the Asia-Pacific Region: Crisis and Countermeasures” (June 8-12, 2009, Shanghai National Accounting Institute) Session 4: Equity Financing for SMEs in Face of the Financial Crisis 第四节：金融危机下的中小企业权益融资 Dr Chris Hall CEO, Comnami, PECC SME Network Leader Chris.Hall@comnami.com

Framework profile of equity financing for SMES 中小企业权益融资背景介绍 Trends of VC PE as funding sources for SMEs; and the impact of the 2008 Financial Tsunami on VC sources 中小企业基金（风投、私募）的发展趋势；2008金融海啸对风险资本来源的影响 Issues and challenges 问题与挑战

Framework Profile of Equity in SMEs 1. Framework Profile of Equity in SMEs 中小企业权益融资背景介绍

Risk and growth finance requires equity and is important to SMEs 风险和成长型企业需要权益融资，对中小企业非常重要 Fast growth firms need growth finance, which is usually equity (such as VC) 快速成长的公司需要成长资金，通常是权益资金（如风投） Growth oriented SMEs need risk capital as equity 成长型中小企业需要风险资本作为股权 Most small SMEs have equity injected by owners, friends, fools and family 大多数小企业通过所有者、朋友和亲人来注入权益资金

The Equity Pyramid 权益金字塔 Large public listed Large private 大型上市公司、大型私营企业 Listed: Nasdaq, OTC, GEM, Mother 在纳斯达克、场外市场、香港创业板市场上市 Formal equity: VC and PE, funds 正规权益：风险资本、私募资金 Informal equity (angels, nanyangs private investors, etc) 非正规权益（天使资金、私人投资者等） Micro own-equity, boot strap and sweat equity, often mixed with debt (eg owner's credit cards 小额自有权益资金、血汗股权， 通常与债务混合在一起（如企业所有者的信用卡） Sharia banking 伊斯兰银行

The Equity Pyramid 权益金字塔 Large public listed Large private Listed: Nasdaq, OTC, GEM, Mother Formal equity: VC and PE, funds LBO MBO etc Informal equity (angels, nanyangs private investors, etc) Micro own-equity, boot strap and sweat equity, often mixed with debt (eg owner's credit cards It is really this area where improvements are needed in equity funding 红圈范围内的权益融资需要改进 Sharia banking

VC is usually modelled on certain principles... 风险资金的投资原则 VC Investor aims to cap out (exit) within a short period, usually <5 years 风险投资有一个较短的投资期，一般在5年内退出 Most exits are trade sales or to another (mezzanine) VC, not to IPO 大多数退出是通过股票销售，或者转给另一家风投公司，而不是首次公开发行 Raises capital into a fund which locks in ultimate investor for a period 募集到的资金放入一个基金，将最终的投资者锁定一定时期 Aims at 20%+ ror, but actual mean returns are only around 10% 目标是20%以上的投资回报率，但是实际平均回报只有10%左右 Expects 9 out of 10 targets to not achieve expectations 预计90%的目标都达不到预期 So depends on 1 in 100 to be really successful 因此取决于1%的投资目标能获得巨大成功 Invests mostly in people, knowledge and experience 主要投资于人力资源、知识和经验 Does not want or take a majority stake in target, but may take veto rights 不想成为被投公司的大股东，但是可能具有否决权 Active position in management, - the "1 to 3 hour rule“ 积极参与被投公司的管理 VC invests in areas where VC has special experience 风险资金主要投资于VC有特别经验的领域

Benchmark modelling of SME finance needs in APEC 亚太地区中小企业融资需求的基准模型 Based on there being about 75million SMEs in APEC, and that finance is able to flow freely, so is available to all SMEs in APEC 建模基础：亚太地区大约有7500万个中小企业，资金可以自由流动，因此可用于地区内的所有中小企业 10% SMEs at micro $100 each 50% debt 50% equity 10% start up $10,000 each 30% debt 70% equity 60% operating $50,0000 each 50% debt 50% equity 20% growth $100,000 each 30% debt 70% equity .01% VC $1,000,000 each 30% debt 70% equity .0001% IPO $10,000,000 each 10% debt 90% equity the distribution of SMEs by stage is likely to be 中小企业在不同的发展阶段的分布

Benchmark pattern of SME finance needs in APEC 亚太地区中小企业融资需求的基准模式 suggests that there is a demand for a stock of about $4.5 trillion for SME finance in APEC in 2010, about 60% ($ 2.7 t) equity, and 40% ($1.8 t) debt. 模式表明，2010年，APEC中小企业的融资需求在4..5万亿美元左右，其中大约60%（2.7万亿美元）为权益融资，40%（1.8万亿美元）为负债融资。 equity debt VC makes up only about $USD 30 to 50 billion pa 风投仅占约300至500亿美元 The really big demand for better equity funding is at this stage 对权益融资的真正的大量需求是在该阶段

Trends in Venture Capital; the impact of the 2008 Financial Tsunami 2. Trends in Venture Capital; the impact of the 2008 Financial Tsunami 风险投资的发展趋势；2008金融海啸的影响

Growth of early stage and total VC in USA has slowed since 2001 美国早期阶段的风投和总风险资本自2001年以来放缓增长 .......and it has slowed even more in 2008/9 ……2008/9年更是进一步放缓 USA Venture Capital Placements in nominal $US 以名义美元计算的美国的风险资本 Total VC (all stages) Early stage + seed VC Tech wreck 网络泡沫破灭 Asian crisis 亚洲金融危机 2008 Financial Tsunami 2008金融危机

China VC figures are relatively small, but growing 中国的风险资本额相对较小，但是在增长 USD total US VC The bulk of VC is late stage and expansion 大多数风险资金都投资于公司发展的后期和扩张期 US early stage + seed China total VC based on Q1 09 annualised 根据09年一季度以年计的数据

China total VC is only about 3% of US total VC 中国的总风险资本仅占美国总额的3% % of total USA VC mean

average deal size is more volatile in China 中国平均每笔交易规模具有更大的波动性 Deal Size: Total VC in USA and China divided by number of deals 交易规模：美国和中国的总风投数除以交易数 USD$ USA PRC

anecdotal impact of the 2008 Financial Tsunami on equity funds 2008金融海啸对权益资金史无前例的影响 Sharp temporary decline in VC and PE funds for investment (though there are exceptions, eg Chery raised $USD 300m from PE) 风投和私募资金出现临时性的急剧下降（也有例外，如奇瑞汽车从私募基金处募集了3亿美元的资金） Changing expectations on value of USD, RMB 美元和人民币的价值的预期不断变化 Increased investor caution 投资者越来越谨慎了 Drop in deals considered 被考虑的交易数量减少了 Drop in share prices on second boards 主板外的其它板块的股价下跌了 Difficulty exiting or capping out 退出的难度加大了 Injections of liquidity have mostly been through bank capitalisation, and are not channelling into investment funds 流动性的注入主要通过银行注资，且未流向投资基金

3. Issues and Challenges 问题与挑战

Issues and challenges – immediate 近期的问题与挑战 Getting liquidity into markets to continue prospects for fast growing firms to cap out 向市场注入流动性，继续让有成长潜力的公司成长，风投资金退出 Avoiding an extended period of no growth opportunities for SMEs, and so leading to a prolonged inhibition of the Entrepreneurial Engine which generates most net job and wealth growth. 避免延长中小企业增长停滞的期限，从而导致创造就业和财富的创业引擎的作用受到长久抑制

Issues and challenges - longer term 长期的问题和挑战 Development of more sophisticated growth equity markets in the APEC Region, not just at VC PE level, but at the small less formal levels 在亚太地区培育更复杂的成长权益市场，不仅限于风投和私募，还要发展不那么正规的市场。 Regulation, reporting and legal requirements for GEM companies 在创业板上市的公司要加强监管、汇报和合法 Improved levels of management experience, improved investment readiness generally 普遍改进管理水平和投资就绪度 Equity financing stickiness and choke points 权益融资粘度和窒息点 Risk greed and return - limiting the growth of unrealistic bubble expectations 风险贪婪和回报 – 限制不现实的泡沫的增长 Corporate Governance built into stages of SME development 将公司治理嵌入中小企业发展的各个阶段 The localisation of VC into geographic areas (the 3 hour rule) and use of better ICT 将风险资本置于不同的地理位置，并更好地利用信息通信技术