Equity transfer financing refers to a financing method in which an enterprise sells part of its equity to obtain the required funds. According to the relationship between the price of the equity transferred and its book price, the financing of equity transfer can be divided into three types, namely, equity transfer at a premium, equity transfer at parity, and equity transfer at a discount. According to the proportion of equity transferred, equity transfer financing can also be divided into three types, namely, the transfer of all the equity of the enterprise, the majority of the equity of the transfer enterprise and the transfer of a small part of the equity of the enterprise.

◆ The main characteristics of equity transfer

The characteristics of equity transfer financing are mainly reflected in four aspects: equity structure, management rights, development strategy, and income mode, as shown in Table 2-1.

To sum up, equity transfer financing may change the control of the enterprise and have a certain impact on the development of the enterprise. In this case, whether to maintain the original development strategy or sell equity to obtain more funds is a major problem for business managers.

◆ Practical operation of equity transfer

In equity transfer financing, how to choose the object of equity transfer is a major problem. If the enterprise and the equity transfer object cannot reach an agreement on the development of the enterprise, the transfer of equity may lead to a change in the development direction of the enterprise, making the financing of the enterprise meaningless. Generally speaking, the objects of equity transfer are mainly large enterprises, governments, individuals, foreign investors, industrial investment funds, etc., as shown in Table 2-2.

From the perspective of enterprises, there are many reasons why enterprises choose to transfer equity for financing, including the desire to introduce new investors, financing needs, the desire to improve the operation and management of enterprises, and the realization of enterprise development strategies. Some government-backed enterprises are easy to find equity transferees because of their better development prospects. However, when an ordinary enterprise or an enterprise in a loss-making state chooses to transfer equity financing, it is necessary to choose an enterprise that is related to its own business and conducive to its own development, and the specific operation process is as follows.

First of all, the enterprise cannot be involved in administrative penalties, lawsuits and other events before the transfer of equity, so as not to cause adverse effects on the equity transaction. Secondly, the enterprise shall accept the audit of the assets and financial status of the enterprise by the accounting firm and asset appraisal company entrusted by the equity transferee, and determine the transaction price according to the audit results. If legal issues are involved, it is necessary to hire a professional lawyer to issue the relevant documents.

After the preliminary preparation work is completed, the two parties shall negotiate to determine the final transaction price based on the asset appraisal results and through comprehensive consideration of factors such as the enterprise's value-added potential. In addition, the equity transfer may involve a large transaction, due to the large transaction amount, the equity transferee may want to extend the payment period, and the transferor wants to shorten the payment cycle, so the two parties need to negotiate the payment of the transfer money.