Research on the Risk Management Issues of VAM Agreements in Private Equity Financing
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Keywords

Private equity financing
Gambling agreement
VAM agreement
Risk prevention and control

DOI

10.26689/pbes.v5i1.3729

Abstract

At present, the biggest obstacle that growing enterprises may encounter in their development process is insufficient funds. Private equity financing does not only solve the capital problem of enterprises, but also provide enterprises with professional management concepts and even help growing enterprises to go public in advance. However, high returns must be accompanied by high risks. For example, private equity financing has information asymmetry risks, principal-agent risks, etc., and these risks make it impossible to maximize the advantages of private equity financing. Therefore, in order to reduce the risks brought by financing, investment and financing parties should choose to sign gambling contracts to reduce the risk. In recent years, the use of VAM agreements has become more in China. However, according to incomplete statistics, less than 30% of VAM agreements are successful, and this result is mainly due to the insufficient depth and breadth of research on VAM agreements. Therefore, this article will comprehensively analyze the problems that need to be paid attention to when signing a gambling agreement by introducing the case of Anda Technology, and the issue of targeted risk prevention will also be discussed in this paper.

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