Boya Century Publishing

Academic
Efficient
Fast
Set Homepage | Favorite
Article Details

GZIFF038.pdf

Article Title : The Practice and Enlightenment of Introducing Value-adjusted Mechanism in Private Equity Financings
Author(s) : Xi Yang, Jiaqi Zhang
Corresponding Author : Xi Yang
Keywords : Value-adjusted Mechanism; Private Equity Financing.
PDF : http://download.BCPub.org/proceedings/2020/GZIFF2020/GZIFF038.pdf
Abstract

PE financing is an important channel for SMEs to financing their funds, and the value-adjusted mechanism (VAM) is normally introduced as constrained conditions in the contract. Failing to meet targets set in the contract would bring great losses to the financing firms. This paper discusses the case of Anda Technology’s adoption of VAM in its private equity financing, and it is found that evaluating the financing project’s profitability rationally, setting multi-stage targets based on the firms’ both financial and non-financial performance, introducing incentive provisions and strengthening the communication and collaboration of two parties, are the vital factors for firms to meet the targets and survive from VAM agreement successfully.

Contact email:contact@bcpub.org
Journals
Proceedings