We have looked at many different types of courtship and we have seen the different parts that convention plays in each one Essay Example For Students

We have looked at many different types of courtship and we have seen the different parts that convention plays in each one Essay We have looked at many different types of courtship and we have seen the different parts that convention plays in each one. We started off with Trianspotting and looked at the part that convention played when the lead character, Renton is trying to charm Diane. We see that Renton goes against all conventions and complements her on something other than her looks. He says: I was very impressed by the capable and stylish manner in which you dealt with that situation. In this instance Renton is somewhat unconventional in his courtship. His first remarks to Diane are unusually wordy and they fail to mention the one thing that he is struck by, namely, her appearance. His courtship at this stage is insincere. Diane brushes him off, as she is used to men chatting her up. Nevertheless, once Renton gets into the taxi with her, Diane takes the initiative and kisses Renton. In this courtship the messages are ambiguous. First she brushes him off, and then she kisses him. They have sex, and afterwards Renton says, Christ I havent felt that good since Archie Gemmil scored against Holland in 1978. This remark suggests that football and sex with a pretty girl are equally important in his life. I think that this is quite a convincing portrayal of courtship nowadays. We will write a custom essay on We have looked at many different types of courtship and we have seen the different parts that convention plays in each one specifically for you for only $16.38 $13.9/page Order now The next morning Renton is shocked to see Diane wearing her school uniform. He realises that he had sex with an underage girl, and that means that he has committed a criminal act. Diane immediately takes the upper hand as Renton is so frightened off by the prospect of police action, theyd cut my balls off and flush them down the fucking toilet. Diane exploits her dominant position by blackmailing him into seeing her again. This courtship has one striking unconventional feature. Within a short space of time each person reverses his or her role: Diane wasnt keen to start the relationship but she wants to see him again; Renton tried to chat her up in the first place and now he is trying to escape. We also looked at a few extracts from Jane Austens Pride and Prejudice. We first looked at the scene when Mr Bingley and his good friend Mr Darcy come to look at a vacant house near the Bennet house. When the extract starts we see Mrs. Bennet rush into the room where Mr. Bennet is sitting and announces that someone has moved into the vacant house across them. She says that it is a fine thing for our girls! this shows that Mrs. Bennet is not concerned much about the personality about the man but about how big his fortune is. When we meet Mr Bingley we can see that he is a nice man and he has a friend called Mr Darcy who has an even bigger fortune than Mr Bingley so he is now the front-runner for Mr and Mrs Bennets daughters. In this extract the convention of courtship could not be more different to what occurs in Trainspotting. In Pride and Prejudice the young ladies rely on their parents to make all of the introductions. Furthermore, the parents consider which men are considered eligible bachelors and which are not. In those days financial security was considered to be one of the most important factors. In Trainspotting the man and woman introduce themselves and have sex without even knowing each other. In Pride and Prejudice there is no mention whatsoever of sex, which presumably can only take place after marriage. Nevertheless, some conventions never change since Mr Darcy dismisses Elizabeth the moment he sets eyes upon her. Clearly, even in Jane Austens time women were judged in the first instance by their appearance. The relationship between Mr Darcy and Elizabeth at the first stage of their courtship is very restrained. He judges her and he is ascendant Trainspotting he judges her but then the girl quickly gains authority over Renton. Mr Collins proposal follows a textbook convention; as if he is following a manual. First he obtains Mrs Bennets permission to propose to Elizabeth. Then he sets out his reasons for marriage as if he were arranging a business transaction. In order to impress Elizabeth he refers to Lady Catherine de Bourgh a lot which shows his connections to the upper classes. .uc617e7decc4d40ebdc81c4f7c3c26ae7 , .uc617e7decc4d40ebdc81c4f7c3c26ae7 .postImageUrl , .uc617e7decc4d40ebdc81c4f7c3c26ae7 .centered-text-area { min-height: 80px; position: relative; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 , .uc617e7decc4d40ebdc81c4f7c3c26ae7:hover , .uc617e7decc4d40ebdc81c4f7c3c26ae7:visited , .uc617e7decc4d40ebdc81c4f7c3c26ae7:active { border:0!important; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .clearfix:after { content: ""; display: table; clear: both; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uc617e7decc4d40ebdc81c4f7c3c26ae7:active , .uc617e7decc4d40ebdc81c4f7c3c26ae7:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .centered-text-area { width: 100%; position: relative ; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uc617e7decc4d40ebdc81c4f7c3c26ae7:hover .ctaButton { background-color: #34495E!important; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uc617e7decc4d40ebdc81c4f7c3c26ae7 .uc617e7decc4d40ebdc81c4f7c3c26ae7-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uc617e7decc4d40ebdc81c4f7c3c26ae7:after { content: ""; display: block; clear: both; } READ: Frankenstein typical of the gothic genre EssayMr Collins proposal is most unconventional because he never says anything about Elizabeth. Furthermore it seems most unromantic to court a woman by asking her to consider her position when her father and mother die. It is difficult to imagine anything so different to how things develop in Trainspotting. When Elizabeth rejects Mr Collins, he returns to the beginning of his textbook and tries again to propose to Elizabeth but this time with a little more feeling but still as if he were following his manual. Mr Darcys proposal contains no talk of business and has more feeling. In a general sense Mr Darcy uses a more unconventional approach. Mr Darcys courtship is more complex, since on one hand he expresses himself with more feeling than Mr Collins, but on the other hand he addresses Elizabeth as if she were inferior. Furthermore, his courtship is unconventional due to their different social classes Could you expect me to rejoice in the inferiority of your connections? Mr Darcy is actually hypocritical in proposing to Elizabeth, since he had tried his utmost to prevent Mr Bingley from marrying Elizabeths sister on the grounds that Jane was socially inferior to Mr Bingley. It appears that there is one rule for Mr Bingley and another rule for Mr Darcy. I have no wish of denying, I did everything in my power to separate my friend from your sister, or that I rejoice in my success. In Pride and Prejudice it is evident from Mrs Bennets concern over her daughters that a woman who was still unmarried at the age of twenty-four was considered in danger of becoming a spinster. However, in Trainspotting it is clear from the age and status of Rentons friends that twenty-four years of age is still considered young and young and reasonable for an unmarried woman. In this sonnet by Drayton a different type of courtship is desired. Drayton follows the convention of expressing love in the form of a sonnet his purpose is to seduce a woman. He uses language most romantically Me thinks this time becommeth lovers best; He even uses the word ordaind to suggest that religion would not oppose them spending the night together. He talks about romantic subjects and how the night separates them and not about how the woman may not actually want to be with him at night. He has stuck to the convention of putting charming words and phrases in his sonnet such as returns unto his love to ensure that the woman will be seduced by the end of the sonnet. Drayton addresses the lady as Deere and the poem is written as if he is talking directly to his lover, this is just the kind of romantic intimacy that Shakespeare has inverted the usual sensual descriptions of a mistress so that her breasts are dun. Shakespeares rhyming scheme and use of iambic pentameter is the same as Draytons, yet it achieves the opposite effect. The very first line of Shakespeares sonnet is obviously a parody. My mistress eyes are nothing like the sun; It would be more conventional to write that, my mistress eyes are like the Sun. The word nothing in this context is entirely unromantic and unconventional for a sonnet. We then looked at Shakespeares sonnet that is conventional in form but quite unconventional in content, he talks about how the womans hair is as thick as wires and her breath reeks. He has written a parody of a normal sonnet and has turned the content around to demean of women. He has also stuck to the strict form for sonnets, as he wants it to be recognised as such. We also looked at Tony Kytes à ¢Ã¢â€š ¬Ã¢â‚¬Å" The Arch Deceiver this has a big shift in prospective as there is a narrator that is telling the story in first person. Which is different to all of the other pieces of prose that we looked at, in Trainspotting there was a narrator but it was not in first person and the extracts of Pride and Prejudice that we looked at were all in third person. This story is all in first person of the narrator and in third person of Tony. .u69387559288645cb98b36b98a05a613c , .u69387559288645cb98b36b98a05a613c .postImageUrl , .u69387559288645cb98b36b98a05a613c .centered-text-area { min-height: 80px; position: relative; } .u69387559288645cb98b36b98a05a613c , .u69387559288645cb98b36b98a05a613c:hover , .u69387559288645cb98b36b98a05a613c:visited , .u69387559288645cb98b36b98a05a613c:active { border:0!important; } .u69387559288645cb98b36b98a05a613c .clearfix:after { content: ""; display: table; clear: both; } .u69387559288645cb98b36b98a05a613c { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u69387559288645cb98b36b98a05a613c:active , .u69387559288645cb98b36b98a05a613c:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u69387559288645cb98b36b98a05a613c .centered-text-area { width: 100%; position: relative ; } .u69387559288645cb98b36b98a05a613c .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u69387559288645cb98b36b98a05a613c .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u69387559288645cb98b36b98a05a613c .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u69387559288645cb98b36b98a05a613c:hover .ctaButton { background-color: #34495E!important; } .u69387559288645cb98b36b98a05a613c .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u69387559288645cb98b36b98a05a613c .u69387559288645cb98b36b98a05a613c-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u69387559288645cb98b36b98a05a613c:after { content: ""; display: block; clear: both; } READ: Ibsen's "A Doll's House", Act Two Scene 6 EssayThe story is very contradictory, Tony is a serious person but he is very interested in women and they do not take him very seriously we can know this when the narrator says he loved them in shoals. When Tony is finally fixed down he if fixed with Milly, who sound very gullible and naÃÆ' ¯ve, she has been taken in by Tonys promise of marriage. Just as in Pride and Prejudice, all of the women mentioned all look good, it seems that all of the women have been primarily judged by their looks, handsome girl is used to describe Tonys ex girlfriend Unity. When the story journey starts unity is the first girl that we meet and we see that she is quite a nice looking girl and the narrator mentions that Tony used to go out with her and was close to marrying her. When she goes into the carriage she instantly starts questioning Tony about his choice. We can see that Tony is quite affected by Unitys looks, he let his eyes light on her this shows that he may be reconsidering his marriage proposal to Milly. When he sees Milly walking down the road he suddenly asks Unity to get into the back of the carriage and in return he tells her that he may reconsider his proposal to Milly. We then see that one of Tonys first girlfriends is walking down the road and she asks for a lift. The only way that he was able to get Milly in the back of the carriage in the empty sack was to use their marriage and his proposal as a bargaining tool Now, Milly would you do me a favour à ¢Ã¢â€š ¬Ã¢â‚¬Å" my coming wife as I may say? The reason that they accept this is that they will have a husband and for this they will do anything. When he tells Hannah that he may marry her and break things off with Milly. Milly hears this and starts to make noises as if it were to warn Tony that she is there and he should not say anything like that. n the next part Tony starts to wonder why he ever thought of asking Milly or Unity to marry him as Hannah is so attractive. Even now the appearance counts for most of the decision in which woman Tony wants to marry. Tony is very conventional as he knows exactly what the woman wants to hear and he uses this fully to his advantage. This story captures properly the excitement of youth romance and how it is based on looks and not on personality. When we get the first description of Milly it says that she is described as light and small which are not the best descriptions for an attractive woman. Tony is able to juggle with the three women in his wagon quite well as he lasts quite a long time without them even noticing each other with this the reader is always left guessing what will happen next in the minute of the story. We can see that the courtship that has taken place is quite unconventional as the girl that Tony finally marries has accepted him after all of the other girls have declined him and she has no spirit and says yes to him. That was the last piece that we looked at and I can see that convention plays a very big part in courtship as it can be used well to your advantage Tony and it can be used very badly Mr Collins.

La phase dintégration †Une phase clé dacquisition

La phase dintà ©gration – Une phase clà © dacquisition Free Online Research Papers La phase d’intà ©gration – Une phase clà © d’acquisition Avec la globalisation continue des marchà ©s, l’introduction de l’Euro et l’à ©mergence de nouveaux marchà ©s, il n’est pas à ©tonnant que les acquisitions connaissent un succà ¨s pareil. Ils sont un moyen de croissance externe qui permet de rapidement mettre en place des stratà ©gies de spà ©cialisation, d’intà ©gration et de diversification. Mà ªme si le mot  « succà ¨s  » ne peut guà ¨re à ªtre prononcà © dans le mà ªme souffle que le mot  « acquisition  », gardant en tà ªte un taux d’à ©checs de plus de 50%. La problà ©matique des acquisitions se trouve dans le fait que les entreprises s’engagent dans des investissements, mà ªme de fois risquà ©, difficilement rà ©vocable et qui ne vont souvent gà ©rer des bà ©nà ©fices que long terme. La question qu’il faut alors se poser, est la suivante :  « Pourquoi, malgrà © ce taux d’à ©checs impressionnant, les entreprises continuent choisir ce moyen de croissance externe et pourquoi, semble-t-il qu’il n’y a que peu de personnes qui ont appris quelque chose des fautes du passà © ?  » On va certainement vous rà ©pondre que l’acquisition reste le moyen le plus rapide pour la mise en place d’une stratà ©gie, par exemple pour s’installer dans un nouveau marchà ©. Mais ce n’est pas le seul  « atout  », il y a un autre point surtout intà ©ressant pour les  « shareholders  », la possibilità © d’afficher rapidement des bons rà ©sultats lors de la crà ©ation de la valeur. Malgrà © ces avantages justifià ©s et à ©vidents, il reste le problà ¨me du taux d’à ©checs à ©levà ©. La problà ©matique des à ©checs se trouve dans le fait que la valorisation de l’acquisition est en fonction de la rà ©ussite de l’  « Intà ©gration  », mais aussi de la rà ©ussite des deux phases prà ©cà ©dents. Afin de pouvoir dà ©montrer quelques unes de ces sources d’à ©checs, il faut diviser l’acquisition en diffà ©rentes phases – la Prà ©paration, la Nà ©gociation et l’Intà ©gration. La phase de prà ©paration Lors de la phase de la  « Prà ©paration  » la premià ¨re action entreprendre par l’entreprise est l’analyse de sa situation actuelle l’aide du model  « SWOT  » : Ses opportunità ©s, ses menaces, ses forces et ses faiblesses. Cette analyse va à ªtre suivit par la nomination d’un responsable pour l’acquisition en question et l’  « Equipe de projet  ». L’  « Equipe de projet va entre autre analyser les voies de dà ©veloppement les plus approprià ©es aux objectifs et à ©valuer puis sà ©lectionner l’entreprise ciblà ©e. Finalement, la phase de la  « Prà ©paration  » se clà ´ture par l’à ©tablissement d’un agenda qui va identifier les processus et ressources clà ©s de l’acquisition. Les à ©tapes critiques durant cette phase sont surtout : le choix d’une cible qui correspond aux objectifs fixà ©s et l’à ©valuation de la  « vraie  » valeur du marchà © de l’entreprise ciblà ©e. La phase de la  « Nà ©gociation  » Cette phase se clà ´ture avec la signature du contrat d’achat. Mais pour en arriver l, beaucoup de travail est faire. L’entreprise va devoir dà ©finir, lors des nà ©gociations, son positionnement initial (soit hostile soit amical), les modalità ©s de la prise de contrà ´le et la fixation d’un prix d’achat correspondant au potentiel de crà ©ation de valeur estimà ©e. C’est loin d’à ªtre tous, parallà ¨lement l’entreprise va devoir à ©valuer et gà ©rer les risques de l’acquisition, và ©rifier la faisabilità © de l’opà ©ration et valider les scà ©narios d’intà ©gration. Ce sont donc toutes les dà ©cisions qui vont fortement influencer les relations long terme entre les deux entreprises et la crà ©ation de la valeur lors de la phase de l’  « Intà ©gration  ». La phase de l’  « Intà ©gration  » Finalement, on atteint la phase de l’ « Intà ©gration  », c’estdire la phase de la mise en pratique de l’acquisition. Lors de cette phase, l’entreprise doit surtout faire attention deux aspects. La gestion des caractà ©ristiques culturelles et des aspects humains, comme par exemple l’incertitude, les rivalità ©s et le doublage des postes. De mà ªme, l’acquà ©reur doit s’assurer que la structure de la nouvelle entità © est approprià ©e aux objectifs fixà ©s et tient aussi compte des caractà ©ristiques de l’entreprise acquit. 1.2. L’Objectif  « N’importe qui peut acheter une entreprise!  » C’est la phrase qu’un responsable des quelques acquisitions antà ©rieur m’avait dit lors de mon stage. Aprà ¨s avoir nà ©gligà © pendant trop longtemps la phase de l’  « Intà ©gration  », les responsables, de mà ªme que les ouvrages traitant d’acquisitions, se sont finalement rendus compte de l’importance de cette phase. Avant cette prise de conscience, une fois le contrat d’achat signà ©, les entreprises croyaient avoir franchi l’à ©tape la plus difficile de l’acquisition et que l’  « Intà ©gration  » se dà ©roulerait d’une manià ¨re plutà ´t automatique. Seulement, au cours des annà ©es 80 les entreprises et les auteurs des ouvrages traitant les acquisitions se sont rendues compte de l’importance que la phase de l’  « Intà ©gration  » reprà ©sente pour la crà ©ation de valeurs lors d’une acquisition. Ce  « dà ©veloppement  » a à ©tà © soutenu par des recherches qui dà ©montraient l’existence d’un lien entre la phase l’  « Intà ©gration  » et la crà ©ation de la valeur. Aujourd’hui on sait que la phase de l’ « Intà ©gration  » est une phase clà © du processus de l’acquisition. La particularità © de cette phase est, que c’est maintenant que l’entreprise doit finalement valoriser tout processus de l’acquisition. Mais le fait de savoir que cette phase est trà ¨s dà ©licate pour la crà ©ation de valeur ne facilite pas la tà ¢che, bien au contraire. Les responsables qui vont  « devoir  » s’occuper de la phase de l’  « Intà ©gration  », ayant dà ©j une certaine expà ©rience ou pas, ressentiront de toute manià ¨re une certaine pression, car c’est eux d’à ©tablir un plan qui permet de concrà ©tiser les concepts à ©tablit lors de la phase de la  « Prà ©paration  ». Comme l’  « Intà ©gration  » est une phase trà ¨s dà ©licate pour la crà ©ation de la valeur, je me suis dà ©cidà © d’y consacrer mon travail. Je vais  « attaquer  » ce thà ¨me sous deux diffà ©rents angles. D’abord je vais aborder les trois diffà ©rentes politiques de l’intà ©gration : La prà ©servation, la rationalisation et symbiose et ensuite parler des points gà ©nà ©raux, comme entre autre la vision stratà ©gique, le leadership, la communication, auxquels il faut porter une attention particulià ¨re. 1.3. La Mà ©thodologie La premià ¨re partie de mon travail va reprendre les concepts thà ©oriques les plus importants concernant la phase de l’  « Intà ©gration  » qui permettront de valoriser celle-ci. Cette partie va à ªtre composà ©e de deux thà ¨mes principaux : Les conseils gà ©nà ©raux qu’il faut appliquer lors de la phase de l’intà ©gration et les particularità ©s de la politique d’intà ©gration choisies et comment ils vont influencer la gestion du risque interculturelle et le besoin de communication. Pour la partie thà ©orique je vais me baser sur deux ouvrages :  « Fusions/Acquisitions – Stratà ©gie, Financement, Management  » et  « Aprà ¨s la Fusion – 7 clà ©s pour rà ©ussir l’intà ©gration  » et l’enrichir par deux autres ouvrages et articles trouvà ©s sur l’Internet ou dans la  « Business Source Premier  ». Comme la thà ©orie et la pratique sont souvent deux choses totalement diffà ©rentes, j’ai dà ©cidà © d’inclure un cas pratique dans ce travail. Il y a bel et bien de nombreux ouvrages disposition des responsables qui expliquent comment on peut rà ©ussir une  « Intà ©gration  ». Malheureusement, la rà ©alità © est souvent  « diffà ©rents  » et  « instable  ». Il peut y avoir des  « à ©và ©nements  » qui vont forcer les responsables rà ©agir vite et de devoir changer les plans auparavant minutieusement planifià ©s. En examinant le cas :  « The merger of Union Bank of Switzerland and Swiss Bank Corporation – Intà ©gration planning  » on peut comparer les actions entreprises en pratique avec ce que prà ©voit la thà ©orique identifier les à ©là ©ments de la thà ©orie utilisà ©s, souligner les problà ¨mes particuliers rencontrà ©s lors de cette  « Intà ©gration  », identifier les fautes graves commises et finalement faire ressortir ce qui devrait à ªtre amà ©liorà © pour assurer une meilleur  « Intà ©gration  ». Research Papers on La phase d’intà ©gration – Une phase clà © d’acquisitionOpen Architechture a white paperBionic Assembly System: A New Concept of SelfPETSTEL analysis of IndiaDefinition of Export QuotasMind TravelInfluences of Socio-Economic Status of Married MalesResearch Process Part OneEffects of Television Violence on Children19 Century Society: A Deeply Divided EraThe Project Managment Office System

Forms of and Influencing Factors on Informal Entrepreneurship in China Dissertation

Forms of and Influencing Factors on Informal Entrepreneurship in China - Dissertation Example Since the end of Cultural Revolution in China, the informal entrepreneurs occurred before reform and through the 80’s, consisting of very small-scale activities in retail and services such as street vendors. Some of them achieved success beyond their expectations. But for most, business was a means of subsistence. However, with the development of economy in China so far, motivations for many informal entrepreneurs are not only subsistence-related; but also their informal activities are directed at maximizing their business’s profit. Allen (2002) claims that since China officially became a member of the WTO in 2001, and has agreed to undertake additional economic reforms, the market is freer, and the key to the country’s success lies in its fast-growing ‘informal’ sector. Therefore, there has been increasing interest in researching the types of informal entrepreneurship and the factors that have led the people to do it in China. 1.1 What is informal entrepreneurship in China? However, what is the informal entrepreneurship of China? Allen (2002) defines this sector as all firms or individuals not controlled by the government or publicly traded. Informal entrepreneurship is a vast term that includes self-employment, and private enterprises employing the unregistered migrant workers. unlike the formal entrepreneurship that is subject to the regulation and management by the government, and is encouraged, supported and managed by the government (Tsinghua University, 2006). ... What are the main types of informal entrepreneurship in China? 2. Why there are lots of people choosing to do this in China? Both of these questions will be researched by combining the unique contextual conditions of China, as well as the government policies and regulations. for instance, the largest population is one of the most important factors to be concerned as it increases the needs of people to be addressed by the government and encourages people to find alternate means of earning money since the number of jobs is limited.  Additionally, it is very interesting that almost all studying abroad Chinese students have always reflected on the same problem: they are complete strangers to the lifestyle of people in Europe because there are less and less ‘informal stores or street vendors’ in the European countries, especially at night, they miss China so much. Thus, it seems the demand of ‘informal business’ is quite large and sustainable in China since m any businesses are operated 24/7 thus providing the consumers with more flexibility in terms of approaching the informal entrepreneurs. The aim of this research project is to provide a theoretical base within Chinese context and special nation conditions of China in order to help foreign practitioners as well as local entrepreneurs to gain a deeper and more practical insight into Chinese informal entrepreneurship environment. 2.0 Literature Review This section reviews the literature to discuss what numerous authors, scholars and researchers in the past have said about informal entrepreneurship in general and that in China in particular. Topics discussed in this

Seismic action and methods od analysis Dissertation

Seismic action and methods od analysis - Dissertation Example Earthquakes trigger one mode of vibration which is the lowest fundamental mode besides higher modes which take place as a result of tremors. 2.1 Development of Seismic Regulations The Building Seismic Safety Council was put up in 1997 as an affiliate of National Institute of Building Sciences. Its main purpose is to promote safety of the public by providing guidelines to construction, designing, planning, utilization and regulation of buildings. It deals with reduction of risks posed on buildings by earthquakes. The main areas which the Building Seismic Safety Council focuses on are structures, kinds of buildings and related facilities. The Building Seismic Safety Council believes that the level of risks vary and therefore has a versatile approach to seismic safety that considers the risk of each region or community separately. It works together with construction industry, governments, non-governmental organizations and public in general to meet its objectives (Housner, 1990). It adv ocates for earthquake risk reduction measures to be adopted by organizations and institutions. The Building Seismic Safety Council main goals are; to catalyse development of seismic safety, promote use of appropriate seismic voluntary standards, assess implementation of recommendations and find out opportunities for improving regulations on seismic safety. 2.2 Design Seimic Actions Earthquake is a great disaster to lives and economy and there is need for design of buildings and structures which are resistant to seismic actions. The effect of an earthquake can be enormous to the extent that a region may not be able to help itself. Collaboration between architect and engineers in the foundational planning will help bring out an expertise to improve safety. There is lack of structural undertakings to curb seismic hazards in the world. The design of new buildings must be able to significantly counter earthquakes. Most current buildings lack resistance and others even have more vulnerabi lity to earthquakes. 2.2.1 Seismic Zones of Seismicity of Greece Greece experience earthquakes regularly although they are mild and therefore do not cause significant damage. It is an active region with small earthquakes annually. This has made builders in Greece to develop structures that are safe during earthquakes. The neighboring Turkey has less-strict building regulations and small earthquakes normally cause them large damages. Greece faces potential earthquakes from active volcanoes such as Nysiros Volcano. Most of Greece islands also have fault lines align in different directions. Most of Greek earthquakes originate from under seas which shake the surrounding islands. In 1999, the Athens Earthquake affected its outskirts and people killed, others displaced and buildings collapsed. Ancient Greece also faced earthquakes majorly caused by volcanoes (NATO ADVANCED RESEARCH WORKSHOP ON EARTHQUAKE MONITORING AND SEISMIC HAZARD MITIGATION IN BALKAN COUNTRIES & HUSEBYE, 2008). This i ncluded the Eruption of Thira and Earthquake of 365. 2.2.2 Ground Seismic Acceleration Seismic waves move in the ground causing vibration of the crust. This energy causing vibration is continually transmitted anything that is attached to the ground including buildings and structures. The structures are damaged since they resist making sudden change because of their inertial forces. The rate of move of speed of seismic waves on the ground is dependent on some factors. These include; the type

Types of Matrimonial Regimes in Quebec Essay Example | Topics and Well Written Essays - 500 words

Types of Matrimonial Regimes in Quebec - Essay Example Community Property, which is administered by the husband, Private Property, that is, the property bought under an individual's name, is administered by the spouses individually, during and after the marriage and, Wife's Reserved Property which is administered by the wife. Since 1st July 1970, couples who married without a marriage contract fell under the matrimonial regime of Partnership of Acquests. The rules under this regime classify the properties as acquests and private property. An acquest is something which is obtained during the marriage. It includes the property not declared as private property by law. The most commonly chosen matrimonial regime is the Separation as to Property. The properties of the spouses are categorized as private property and joint property. Property bought under the name of both the spouses is termed as joint property and is divided equally at the time of dissolution. The private property, like in every other regime, is retained by the individuals. Marriage is the formal union of a man and a woman, by which they become husband and wife. It can't get any simpler.

Analysis on Current Venture Capital Market in China

Analysis on Current Venture Capital Market in China Introduction The huge consumer market potential and booming economy in China attract enormous foreign direct investments to capitalize this unprecedented opportunity. Foreign venture capital is not exceptional from this trend. They, however, still have to face constant challenges from regulations, market practices and business cultures in China. To be successful in this marketplace totally different from their origin, foreign venture capitals need to adapt their previous strategies and experiences and test it through trial and error. This report is to get overall picture about current venture capital market in China. Then it will focus on the market position of foreign venture capitals. The report is followed by the analyses and summary on investment and exit strategies used by foreign venture capitals. Finally, the report will discuss the potential trend in China venture capital market. Key Objectives To get in-depth analysis on current venture capital market in China and foreign venture capitals market position in China. To analyze and summarize the investment strategies and exit strategies used by foreign venture capital in China. To make prediction on future market trend, especially foreign venture capital. Key Chapters General introduction on venture capital Historical development and current venture capital market in China Detail market position analysis on foreign venture capital in China Investment strategies of foreign venture capital in China Exit strategies of foreign venture capital in China Future trends in China venture capital market Introduction on Venture Capital Venture capital is source of funds to small firms that cannot establish credit relationships with bank or other financial institutions. As Gompers (2001) states: Companies that lack substantial tangible assets and have uncertain prospects are unlikely to receive significant bank loans. These firms face many years of negative earnings and are unable to make interest payments on debt obligations. Start-up high tech firms are exactly the type of firms that banks are least likely to lend to because of poor information availability and lack of tangible assets or assets that can be readily evaluated. Firms developing software or new technology for the communications or biotech industries are largely investing in human capital. In a nutshell, the VC firm is a relative small financial services professional organization that functions primarily to: (a) assess business opportunities; (b) provide capital; and (c) monitor, advise and assist the firms in its portfolio. By investing, the venture capitalists accept substantial tranche of illiquid equity that converts their status to something like partners to the entrepreneur. The goal of the venture capitalist is not only to increase the value of that equity but also to eventually monetize the investment through a liquidity event such as an initial public offering or sale to other investors. The other way of reaping the reward is liquidation due to the firm failure and bankruptcy. In all of these scenarios, the venture capitalist exits their investment to complete the VC process. The venture capital cycle is briefly visualized in below chart. Chart 1 Fund flow of Venture Capital Cycle Source: National Venture Capital Association Yearbook 2008 The National Venture Capital Association in the United States defines venture capital as money provided by professionals who invest alongside management in young, rapidly growing companies that have potential to develop into significant economic contributors. There are a number of key attributes associated with VC that distinguish it from other equity capital investments. Venture capital normally focuses on small firms that have great growth potential. These firms usually are not mature enough to be traded in public equity markets. Compared with public equity investment, venture capital investment has poorer liquidity with more severe information asymmetry and higher investment risks. Venture capital investment is also different from angel capital. Managers of angel capital use their personal money to invest. In contrast, investments professionals who raise money from other investors manage venture capital. Angle capital invests more often in the seed stage of the start up firms than venture capital does. Finally, venture capital is different from non-venture private equity investments (such as buyouts, restructure, and mezzanine funds). Firms backed by venture capital usually have considerable growth potential. For these firms, the cash flow generated from operations is usually insufficient to support finance growth and debt financing is usually not available. In contrast, private equity funds target more mature firms that have stable cash flows and limited growth potential. The Table 1 below summarizes the investment stages and types of funding for different investment styles. Table 1. Types of Funding and Investment Stage Source: A Guild To Venture Capital (3rd edition) by Irish Venture Capital Association There are five stages (BVCAPWC, 1998) in the development of venture-backed companies, which can be defined as: 1. Seed 2. Start-up 3. Other early stages (exploration) 4. Expansion 5. Maturity (exit). The definition of the company stage is different with the definition of the financing round. The negotiation of a VC investment is a time-consuming and economically costly process for all parties. Neither the VCs nor the portfolio firms want to repeat the process very often. Therefore VCs have to balance the cost of negotiation and potential risks from one time investment. Typically, a VC will try to provide sufficient financing for a company to reach some natural milestone, such as the development of a prototype product, the acquisition of a major customer, or a cash flow breakeven. Each financing event is known as a round. So the first time a company receives financing is known as the first round (or Series A), the next time the second round (or Series B), and so on and so forth. With each well-defined milestone, the parties can return to the negotiating table with some new information. These milestones differ across industries and depend on market conditions. A company might receive several rounds of investment at any stage, or it might receive sufficient investment in one round to bypass multiple stages. One special situation is the down round. It is when the company does not meet milestones and the VC still needs to invest but at a lower valuation than prior round of financing. Venture Capital in China Why invest in China? There are four major popular arguments behind for the investment rush to east. Reason 1: High Rate of Economic Growth Chinas impressive economic growth for the past 30 years, averaging between 8% to 10% real growth per year, has been the envy of the developing world. The size of Chinese economy by the end of 2006 reached US$2.62 trillion, 13 times larger than that in 1978 when measured in constant RMB (MasterCard Worldwide Insight, 2007). According to Goldman Sachs China economic research (2003), per capita GDP expect to grow from less than $5,000 at that time to more than $30,000 in 2050 (refer to Chart 2). China will have a middle class of more than 500 million by 2025 larger than the entire population of the United States. It represents a huge emerging demand for everything from integrated circuits to cars. 500M mobile users, 130M Internet users, 104M broadband users and 4.5M college graduates every year could all transfer into huge business opportunity (represented in Chart 3). Based on the estimation (Chart 4) from Mckinsey, there will be sustainable market growth to 2025 in every business that related with peoples life and daily consumption. Huge opportunities for venture capital are Internet (B2B, B2C, C2C, online gaming, website portal and web 2.0), semiconductors, technologies (clean energy, medical, biotech and traditional manufacturing), and consumer businesses (food, clothes, shopping and other entertainments). Chart 2 China GDP Growth Forecast (2000-2050) Source: Goldman Sachs 2003 Chart 3 China Energy/Material supply imbalance (2010) Source: Goldman Sachs 2003 Chart 4 Urban Chinese Consumers Demand Forecast (2004-2025) Source: National Bureau of Statistics of China; Mckinsey Global Institute Analysis Reason 2: Inefficient Capital Market In the United States and Europe, private and public capital markets compete as sources of capital. However, China does not yet have an equity culture despite the adoption of market-oriented policies. In China, the public equity market lists inefficient and unappealing state owned enterprises (SOE) most of the times. And government holds roughly 60-70% of share capital of most listed companies. Few private firms are listed in the stock market due to legal and policy hurdle. Chinas bond market is similarly underdeveloped. Chinese corporate bonds account for less than 2% of corporate financing. Thin trading between banks and investors makes issuing bonds unattractive for fundraising or investing. Insurers and fund managers therefore have few fixed-income securities to hedge against mid- and long-term risks. The corporate bond market just started to function in late 2007 by allowing public listed firms to issue corporate debts. Around 95% of financing for Chinese companies now is still provided by bank loans. The domestic banks, however, have tendency to provide loans to stated owned company rather than private firms, especially small and medium businesses (SMB). With the poor functioning financial markets and policy discrimination, venture capital and private equity become important sources of growth capital for private firms. It is one of the key reasons that venture capital is so popular among private firms in China across different industries even including traditional industries like food, hotel and travel etc. Reason 3: Creative Solutions/Early Adopting Consumers One of the most unexpected attributes of the emerging Chinese market economy is how consumer-savvy its entrepreneurs are. Even after decades of centralized economic planning, the Chinese remain consummate creators and marketers of interesting products. Definitely the creativity and innovations are only limited in certain business for talents availability and their professional capabilities. Online gaming, wireless instant messaging, and wireless value added services are just three markets that the Chinese more or less created out of thin air. Each of these businesses has growing customer bases (and have spawned successful public companies like Shanda, Netease, Tencent, and Linktone). But none of them has significant participants yet in the United States. Different consumer behaviors contribute to this phenomenon as well. In below case study on Tencent, it provides a great example on how to innovate the Internet product offerings to cater the needs of online generation. Case study: QQ of Tencent (Adapted from www.tencent.com) Tencent (listed in HK stock exchange) is the #1 Instant Messaging (IM) service provider in China. Tencents IM community counts over 270 million active accounts and is said to be covering 95% of Chinese Internet users and 70% of Chinas IM market (MSN/Yahoo account for the rest market). QQ is the brand for its IM. Same as other IMs, QQ is a free tool to use. Tencent, however, came up the idea to generate revenue stream by allowing users to buy and exchange virtual items (clothes and background image) online to decorate his or her QQ head icon. Tencent even created its own cyber currency called Q Bi and 1 Q Bi = 1RMB (0.14 USD) to facilitate the transaction and reduce barrier of online purchasing. The estimated revenue generated from those Internet value added services in 2007 is around USD$360M. Reason 4: Risk-taking, Innovative Culture In the last fifteen years, the privatization reform is one of the critical forces in stimulating China economy growth. This privatization wave also generated tens of thousands entrepreneurs. The business culture is naturally comfortable with risks and with developing innovative ways to solve problems and create wealth both for individuals and for society at large. The successful stories of VC backed entrepreneurs further promote the risk taking culture in China and the awareness and popularity of venture capital. The Focus Media case below illustrates the power of business model innovation by its unprecedented expansion speed ever in Chinas business history. There is no doubt that foreign VCs played an important role in this story to make Focus Media successful. Case study: Focus Media China (Adapted from www.focus.com) Founded in 2003, Focus Media is Chinas largest Digital Media Group in China now. The founder, Mr. Jiang Nanchun, came up with an innovative approach in operating out-of-home advertising network using audiovisual digital displays. Basically, the idea was to display the LCD near or in the elevators in commercial centers (like office buildings and shopping malls). While waiting for or in the elevators, people would watch the contents advertised in those LCDs. By selecting and contracting with high quality commercial buildings, Focus Media was able to quickly build up its network scale and attract many advertising contracts. Tow foreign VC firms, Soft Bank and UCI, invested in the first round. And another five VCs, CDH, TDF, DFJ, WI Harper and Milestone, invested in the second round. Two years after operation, Focus Media was listed on Nasdaq with USD$172M IPO and now it is part of Nasdaq 100 index. Historical development Infancy stage: 1984 1995 In 1984, the Research Center of Science and Technology Development of the State Science Technology Commission (SSTC) (now the Ministry of Science Technology or MOST) cooperated with British experts to study how to develop high-tech in China. The British experts proposed that venture capital should be developed if China wanted to foster high technology. In 1985, the Central Commission of the Chinese Communist Party and the State Council pointed out in the Decision of Science-Technology System Reform that venture capital could be set up to support the work of developing high-tech with quick change and high risk. It was the first time that the concept of venture capital appeared in an official Chinese Government document. With the government decision to develop high technology industries, the Central Government and some local governments financed and set-up series of investment institutions that intended to pursue the venture capital business from 1985 to 1995. Examples are China New Technology Venture Capital Company, Shenyang Science-Technology Venture Development Risk Center, Shanxi Head Office of Science-Technology Fund Development, Guangdong Science-Technology Venture Capital Company, Shanghai Science-Technology Venture Capital Company, and the Science-Technology Venture Capita Company of Zhejiang Province. Moreover, venture centers (i.e., high tech incubators) were set-up in the majority of national high-tech parks. Simultaneously, some overseas investment banks, funds and venture capital institutions also started to expand their business into China. For example, the Pacific Technology Venture Capital Fund subordinate to IDG entered China in 1992. It cooperated with science-technology commissions in Beijing, Shanghai and Guangdong, and set-up a number of venture capital companies focused on investing in technology companies. Also, some foreign capital or joint stock investment institutions established venture capital businesses. Asia Venture Capital Journal (AVCJ, 2001) shows that $16 million was raised for venture capital investments in 1991. In 1992, the total funds raised jumped to $583million, a thirty-fold increase compared with the $16 million in 1991. The first wave reached its peak in 1995, with $678 million in investment (AVCJ, 2001).The first wave of venture capital investments was brought by international venture capitalists. The international venture capital firms accounted for more than 95% of the total fund raised in the early and mid 1990s. The absolute dominance of international venture capital funds in China in the early and mid 1990s was mainly due to Chinas strict regulations against fund-raising and the general lack of awareness of venture capital in China. Private fund-raising by individuals or private firms without government approval was strictly prohibited in China. This strict regulation essentially removed the possibility for venture capitalists to raise funds within China. It meant that only international venture capital funds and state owned enterprises (SOE) venture capital funds could operate. International venture capital funds could bypass the regulation because they were incorporated and they raised funds outside of China. SOE funds relied on government appropriation as funding sources and did not have this fund raising problem either. Early Growth: 1996 2001 From the mid-1990s, the perception of venture capital shifted from being a type of government funding to being a commercial activity necessary to support the commercialization of new technology. As there were still no laws or regulations about setting up foreign venture capital institutions in China, many overseas investment institutions established their branches in Hong Kong, aiming to invest in the mainland. They had also located representative offices in some major cities, primarily Beijing and Shanghai. Most of the VCs active in China in the early 90s were American firms. The VC industry in the U.S. had matured and attracted a significant amount of funds. Shortly after 1995 a sharp increase from US$5 billion to US$110 billion in funds raised created the phenomenon of money chases deals (Gompers Lerner, 1999). A cadre of experienced American VCs started searching the world for investment opportunities, attempting to replicate the Silicon Valley model. Since 1998, there had been a discernible recognition of the critical success factors necessary to create an environment in which venture capital could operate smoothly and flourish. Specifically, the Governments official decision to support the development of venture capital was the key factor that had allowed Chinas venture capital industry to come into being in a new and more positive environment. In Beijing, alone, there were about 30 independent venture capital institutions, whose capital amounted to an estimated $450 million. In Shenzhen, there were at least 20 independent venture capital institutions with capital amounted to over $500 million. After 2000, China also experienced hard landing in its young VC industry due to dotcom bubble burst and came with huge casualties. It took the VC community 3 years to recover. Fast Growth: 2002 present Although initial government-backed investment operations generally failed, there has been resurgence in venture capital activity since Chinas admission to the WTO (Kenny, Han and Tanaka 2002). Capital available for investment in Mainland China keeps a steady growth trend from 2002. The capital size was increased to US$21.32B by 2007 from US$10.50B in 2002. The average compound annual growth rate (CAGR) reaches 15.2%. Venture capital investment grew rapidly from $480 million in 2002 to more than $3,247 million in 2007, invested in 440 China mainland or mainland-related enterprises (Zero2IPO 2007). According to Zero2IPO report, USD$4B VC funds were raised each year in 2005 and 2006 for China investment. But Chinas annual consumption was no more than $2B. The money chasing deal phenomenon started to emerge in China. Many foreign VC funds, especially first-time funds raised after 2005, had the pressure to pour out investment quickly to avoid US dollar depreciation against RMB and to get better deals under fierce competition. While the funding supply multiplied, quality deal flows did not increase at the same pace. Under the simple supply and demand mechanism, valuations of the China deal kept at relative high level. However, considering the fact that a big portion of funding was focusing on local value-add service segments (i.e. internet, web2.0 and broadband etc.), the issue of funds over-supply was sector specific. To get higher return under the competition, VC firms started to invest in traditional business models such as hotels, travels and fast food chains beyond their core activities such as TMT (Technology, Media and Telecom) or Internet related businesses. It was the special phenomenon happened in China now that VCs were more like PE. Legal and Regulations According to Megginson (2004), the differences in the design and the degree of development of the PE/VC industry are due to institutional factors, with the countrys legal system being paramount. Two major factors are paramount in evaluating legal system: contract law enforcement and protection of shareholder rights through effective corporate governance. Cumming and Macintosh (2002) observed that PE/VC managers in high enforcement countries had a greater tendency to invest in high-tech SMBs, exit through IPOs rather than buybacks and obtain higher returns. Cumming et al. (2004) further examined legal system effects on governance structure. Under better legal systems: the faster the origination and screening of deals; the higher the probability of syndication; less frequently funds of the same organization used to invest in a given company; the easier the board representation of investors; the lower the probability that investors required periodic cash flows prior to exit; and the higher the probability of investment in high-tech companies. Lerner and Schoar (2005) show that in a bad legal environment, PE/VC managers tend to buy controlling stakes, leaving the entrepreneurial team with weaker incentives. Interestingly, valuations tend be positively correlated with the quality of the legal environment. Kaplan et al. (2003) go deeper into the contractual aspects and found that rights over cash flows, liquidation and control, as well as board participation vary according to the quality of the legal system, the accounting standards and investor protection across countries. However, more sophisticated PE/VC managers tend to operate in the U.S. style irrespective of local institutional concerns. The authors show that managers operating with convertible preferred stocks are less prone to failure (as measured by survivorship rate). The results suggest that the U.S. contractual style can be efficient in different institutional environments. Bottazzi et al. (2005) corroborate some of the previous results and obtain further evidence on the home-country effect (PE/VC managers operating abroad tend to maintain the investment style used at home). This is observed in managers based in both good and bad legal environments. The Chinese regulations governing foreign venture capital investment are chaotic and rapidly changing. In 2005, Chinese authorities issued new guidelines (effective in 2006) intending to foster domestic venture capital firms. There is no specific regulation to monitor and stimulate the VC activities in China. The new guidelines recommended that local governments provide financing assistance, favorable tax treatment, and direct investment in Chinese venture capital firms. They also provide less stringent capitalization, investment amount, investor qualification and regulatory requirements than those applicable to FICVEs (Guerrera, Yee and Yeh, 2005). FIVCEs instead are governed by 2003 regulations that include high investment and qualification thresholds, government approval requirements, and strict foreign exchange limitations on the ability to remit profits and dividends back to the investor (Hoo, et al 2005a). Substantial legal and de facto restraints on the ability of FIVCEs to access the stock markets in China and overseas for IPO listings make exit strategies extremely difficult. For these reasons, foreign venture capital firms investing in China usually do not use FIVCEs but rely on offshore holding companies created to receive their investments. Foreign venture capital firms (most of which are U.S. based) investing in China generally have done so through the restructuring of Chinese companies into offshore investment vehicles. These enable an easier exit from investments either by selling shares on international stock markets or through a trade sale to another foreign buyer. In January of 2005, Chinese authorities brought these transactions to a virtual standstill, however, with the issuance of new regulations preventing any onshore resident from establishing, controlling or owning shares in an offshore company without the approval of the Government, either directly or indirectly. The regulations were intended to stop managers of SOEs receiving venture capital investments from stripping state assets and selling them cheaply to overseas companies, and to preclude domestic companies from using the overseas vehicles to gain foreign investor tax exemption status. However, they choked off legitimate transactions as well. There were no government approvals of offshore investment transactions in 2005. With only limited exceptions for transactions in process, foreign venture capital financing through offshore investment vehicles screeched to a halt in 2005 (Borrell and Jerry, 2005). Then, in November of 2005, the Chinese authorities issued superseding regulations. These require registration of offshore investment vehicles with the State Administration of Foreign Exchange (SAFE), but do not require the agencys approval of the transaction. They also require repatriation of all distributions of income from the investment within a fixed time frame. Like the previous regulations, the new ones do not describe specifically the registration process, the procedures involved, the scope of review nor the time required for completion, creating substantial uncertainty for foreign venture capital investors (Hoo, et al 2005b). Despite this changing regulatory landscape, many U.S. based venture capital firms have active plans for substantial investments in 2006 spurred by Chinas high growth potential, the success of recent venture-backed startups on the NASDAQ including Baidu.com and China Medical Technologies and by pent up demand after the 2005 halt in new investments (Borrell, Jerry and Aragon 2005). Hidden risk and solutions Lagging legislation and inexplicit policies in China created many uncertainties and entry barriers for foreign VCs. Below are summary of the critical problems: Chinas lawmaking on VC investment remains stagnant Existing laws such as Corporation Law, Joint Venture Law, Patent Law, etc., in many aspects even contradict VC investment. Does VC investment count as foreign investment? What status and treatment should it enjoy? The concerned authorities cannot provide clear answers to these questions. Its not clear that the amount of shares that foreign venture capital is allowed to hold when partnering with Chinese enterprises, and the way foreigners to remit in/out of foreign exchange are poorly defined. There are three available approaches for foreign venture capital firms to enter China venture capital market legally. Establishing offshore venture capital fund focusing on China Establishing a foreign invested VC firm in China (Joint VC with local player/Wholly Owned Foreign firm) as a legal person entity Establishing a foreign invested VC firm in China (Joint VC with local player/Wholly Owned Foreign firm) as a non-legal person entity To avoid the legal and regulation barriers, foreign venture capital funds usually takes the offshore investment route. Foreign VCs will use offshore USD fund to invest into China deals offshore holding entities with all equity activities happening outside of Chinese jurisdiction. The distinction of USD offshore holding investment and RMB local entity investment is a particular phenomenon in China. Offshore holding arrangement is a preferred structure for Chinese entrepreneurs and VCs as it provides a feasible and practical route for funding, divestment and all equity events. Its advantage and attractiveness to Chinese entrepreneurs and VC communities: Go away from laws and regulations in China. Many of them are not friendly to venture activities, such as lack of preferred shares, stock options limitation, double tax etc. Bypassing capital account control on foreign exchange. More flexible and usually profitable divestment options by overseas IPO, MA or trade sales. Offshore route investment involves the following steps: The Chinese founders set up an offshore holding company in Cayman Island or BVI with the shareholding structure and management control mirroring those of their local company in China. With kind of swap scheme, transferring the equity they hold in the Chinese local company to the offshore holding. This will typically convert the local company into a WFOE (Wholly Foreign Owned Enterprise). The offshore holding company will then be the vehicle seeking VC investment, future funding as well as for listing or be merged. All equity events happen in offshore. Companies funding and IPO proceeds will be kept offshore, and remit into China as and when operation required. Chinese founders assets, rights and proceeds stay offshore. The whole exercise is carried out essentially with an IPO at an overseas stock exchange, such as NASTAQ or Hong Kong Stock Exchange in vision. (The concept and process is visualized in chart 5.) Chart 5 Foreign VC Offshore Investment Process Source: A legal perspective on Chinas venture capital rush, Mar 2006 Restrictions in Chinas corporate regulations and limitations at the domestic capital markets explain foreign VCs preference in taking offshore route to organize their China investment. VC investors rely normally on preferred stocks or convertible preferred stock to secure a preferential return. Chinese corporate regulations allow only one class of common stock for a FIVCE with investment in a Chinese portfolio company. Notably, local VC firms would have the possibility to arrange preferred stock scheme with their investee company according to a newly issued charter regulation applicable to domestic VC firms. This gives rise to concern on the principle of national treatment under WTO law. Moreover, China domestic stock market does not provide a ready access for venture-backed companies. The conditions for listing at Shanghai or Shenzhen main-board market are too stringent for high-tech start-up companies. Even if listing conditions could be met, the queue in the pipeline waiting for a listing window is at the moment frustrating. In fact, the two domestic stock exchanges have halted the IPO since two years in the call for addressing the notorious overhang of nontransferable legal person shares. The undergoing endeavor is focusing on floating all stock legal person shares. Since the value of stock legal person shares is roughly twice of those trading in the stock exchange, full floating of legal person shares at stock is imposing acute challenge on the market place. This would mean that the suspension on IPO of new shares would be expected for a rather extended term. By leveraging on an offshore holding structure, foreign VCs could take advantage of the corporate governance in a jurisdiction where they feel most comfortable and bypass the restrictions under Chinese corporate law. VCs could take the Analysis on Current Venture Capital Market in China Analysis on Current Venture Capital Market in China Introduction The huge consumer market potential and booming economy in China attract enormous foreign direct investments to capitalize this unprecedented opportunity. Foreign venture capital is not exceptional from this trend. They, however, still have to face constant challenges from regulations, market practices and business cultures in China. To be successful in this marketplace totally different from their origin, foreign venture capitals need to adapt their previous strategies and experiences and test it through trial and error. This report is to get overall picture about current venture capital market in China. Then it will focus on the market position of foreign venture capitals. The report is followed by the analyses and summary on investment and exit strategies used by foreign venture capitals. Finally, the report will discuss the potential trend in China venture capital market. Key Objectives To get in-depth analysis on current venture capital market in China and foreign venture capitals market position in China. To analyze and summarize the investment strategies and exit strategies used by foreign venture capital in China. To make prediction on future market trend, especially foreign venture capital. Key Chapters General introduction on venture capital Historical development and current venture capital market in China Detail market position analysis on foreign venture capital in China Investment strategies of foreign venture capital in China Exit strategies of foreign venture capital in China Future trends in China venture capital market Introduction on Venture Capital Venture capital is source of funds to small firms that cannot establish credit relationships with bank or other financial institutions. As Gompers (2001) states: Companies that lack substantial tangible assets and have uncertain prospects are unlikely to receive significant bank loans. These firms face many years of negative earnings and are unable to make interest payments on debt obligations. Start-up high tech firms are exactly the type of firms that banks are least likely to lend to because of poor information availability and lack of tangible assets or assets that can be readily evaluated. Firms developing software or new technology for the communications or biotech industries are largely investing in human capital. In a nutshell, the VC firm is a relative small financial services professional organization that functions primarily to: (a) assess business opportunities; (b) provide capital; and (c) monitor, advise and assist the firms in its portfolio. By investing, the venture capitalists accept substantial tranche of illiquid equity that converts their status to something like partners to the entrepreneur. The goal of the venture capitalist is not only to increase the value of that equity but also to eventually monetize the investment through a liquidity event such as an initial public offering or sale to other investors. The other way of reaping the reward is liquidation due to the firm failure and bankruptcy. In all of these scenarios, the venture capitalist exits their investment to complete the VC process. The venture capital cycle is briefly visualized in below chart. Chart 1 Fund flow of Venture Capital Cycle Source: National Venture Capital Association Yearbook 2008 The National Venture Capital Association in the United States defines venture capital as money provided by professionals who invest alongside management in young, rapidly growing companies that have potential to develop into significant economic contributors. There are a number of key attributes associated with VC that distinguish it from other equity capital investments. Venture capital normally focuses on small firms that have great growth potential. These firms usually are not mature enough to be traded in public equity markets. Compared with public equity investment, venture capital investment has poorer liquidity with more severe information asymmetry and higher investment risks. Venture capital investment is also different from angel capital. Managers of angel capital use their personal money to invest. In contrast, investments professionals who raise money from other investors manage venture capital. Angle capital invests more often in the seed stage of the start up firms than venture capital does. Finally, venture capital is different from non-venture private equity investments (such as buyouts, restructure, and mezzanine funds). Firms backed by venture capital usually have considerable growth potential. For these firms, the cash flow generated from operations is usually insufficient to support finance growth and debt financing is usually not available. In contrast, private equity funds target more mature firms that have stable cash flows and limited growth potential. The Table 1 below summarizes the investment stages and types of funding for different investment styles. Table 1. Types of Funding and Investment Stage Source: A Guild To Venture Capital (3rd edition) by Irish Venture Capital Association There are five stages (BVCAPWC, 1998) in the development of venture-backed companies, which can be defined as: 1. Seed 2. Start-up 3. Other early stages (exploration) 4. Expansion 5. Maturity (exit). The definition of the company stage is different with the definition of the financing round. The negotiation of a VC investment is a time-consuming and economically costly process for all parties. Neither the VCs nor the portfolio firms want to repeat the process very often. Therefore VCs have to balance the cost of negotiation and potential risks from one time investment. Typically, a VC will try to provide sufficient financing for a company to reach some natural milestone, such as the development of a prototype product, the acquisition of a major customer, or a cash flow breakeven. Each financing event is known as a round. So the first time a company receives financing is known as the first round (or Series A), the next time the second round (or Series B), and so on and so forth. With each well-defined milestone, the parties can return to the negotiating table with some new information. These milestones differ across industries and depend on market conditions. A company might receive several rounds of investment at any stage, or it might receive sufficient investment in one round to bypass multiple stages. One special situation is the down round. It is when the company does not meet milestones and the VC still needs to invest but at a lower valuation than prior round of financing. Venture Capital in China Why invest in China? There are four major popular arguments behind for the investment rush to east. Reason 1: High Rate of Economic Growth Chinas impressive economic growth for the past 30 years, averaging between 8% to 10% real growth per year, has been the envy of the developing world. The size of Chinese economy by the end of 2006 reached US$2.62 trillion, 13 times larger than that in 1978 when measured in constant RMB (MasterCard Worldwide Insight, 2007). According to Goldman Sachs China economic research (2003), per capita GDP expect to grow from less than $5,000 at that time to more than $30,000 in 2050 (refer to Chart 2). China will have a middle class of more than 500 million by 2025 larger than the entire population of the United States. It represents a huge emerging demand for everything from integrated circuits to cars. 500M mobile users, 130M Internet users, 104M broadband users and 4.5M college graduates every year could all transfer into huge business opportunity (represented in Chart 3). Based on the estimation (Chart 4) from Mckinsey, there will be sustainable market growth to 2025 in every business that related with peoples life and daily consumption. Huge opportunities for venture capital are Internet (B2B, B2C, C2C, online gaming, website portal and web 2.0), semiconductors, technologies (clean energy, medical, biotech and traditional manufacturing), and consumer businesses (food, clothes, shopping and other entertainments). Chart 2 China GDP Growth Forecast (2000-2050) Source: Goldman Sachs 2003 Chart 3 China Energy/Material supply imbalance (2010) Source: Goldman Sachs 2003 Chart 4 Urban Chinese Consumers Demand Forecast (2004-2025) Source: National Bureau of Statistics of China; Mckinsey Global Institute Analysis Reason 2: Inefficient Capital Market In the United States and Europe, private and public capital markets compete as sources of capital. However, China does not yet have an equity culture despite the adoption of market-oriented policies. In China, the public equity market lists inefficient and unappealing state owned enterprises (SOE) most of the times. And government holds roughly 60-70% of share capital of most listed companies. Few private firms are listed in the stock market due to legal and policy hurdle. Chinas bond market is similarly underdeveloped. Chinese corporate bonds account for less than 2% of corporate financing. Thin trading between banks and investors makes issuing bonds unattractive for fundraising or investing. Insurers and fund managers therefore have few fixed-income securities to hedge against mid- and long-term risks. The corporate bond market just started to function in late 2007 by allowing public listed firms to issue corporate debts. Around 95% of financing for Chinese companies now is still provided by bank loans. The domestic banks, however, have tendency to provide loans to stated owned company rather than private firms, especially small and medium businesses (SMB). With the poor functioning financial markets and policy discrimination, venture capital and private equity become important sources of growth capital for private firms. It is one of the key reasons that venture capital is so popular among private firms in China across different industries even including traditional industries like food, hotel and travel etc. Reason 3: Creative Solutions/Early Adopting Consumers One of the most unexpected attributes of the emerging Chinese market economy is how consumer-savvy its entrepreneurs are. Even after decades of centralized economic planning, the Chinese remain consummate creators and marketers of interesting products. Definitely the creativity and innovations are only limited in certain business for talents availability and their professional capabilities. Online gaming, wireless instant messaging, and wireless value added services are just three markets that the Chinese more or less created out of thin air. Each of these businesses has growing customer bases (and have spawned successful public companies like Shanda, Netease, Tencent, and Linktone). But none of them has significant participants yet in the United States. Different consumer behaviors contribute to this phenomenon as well. In below case study on Tencent, it provides a great example on how to innovate the Internet product offerings to cater the needs of online generation. Case study: QQ of Tencent (Adapted from www.tencent.com) Tencent (listed in HK stock exchange) is the #1 Instant Messaging (IM) service provider in China. Tencents IM community counts over 270 million active accounts and is said to be covering 95% of Chinese Internet users and 70% of Chinas IM market (MSN/Yahoo account for the rest market). QQ is the brand for its IM. Same as other IMs, QQ is a free tool to use. Tencent, however, came up the idea to generate revenue stream by allowing users to buy and exchange virtual items (clothes and background image) online to decorate his or her QQ head icon. Tencent even created its own cyber currency called Q Bi and 1 Q Bi = 1RMB (0.14 USD) to facilitate the transaction and reduce barrier of online purchasing. The estimated revenue generated from those Internet value added services in 2007 is around USD$360M. Reason 4: Risk-taking, Innovative Culture In the last fifteen years, the privatization reform is one of the critical forces in stimulating China economy growth. This privatization wave also generated tens of thousands entrepreneurs. The business culture is naturally comfortable with risks and with developing innovative ways to solve problems and create wealth both for individuals and for society at large. The successful stories of VC backed entrepreneurs further promote the risk taking culture in China and the awareness and popularity of venture capital. The Focus Media case below illustrates the power of business model innovation by its unprecedented expansion speed ever in Chinas business history. There is no doubt that foreign VCs played an important role in this story to make Focus Media successful. Case study: Focus Media China (Adapted from www.focus.com) Founded in 2003, Focus Media is Chinas largest Digital Media Group in China now. The founder, Mr. Jiang Nanchun, came up with an innovative approach in operating out-of-home advertising network using audiovisual digital displays. Basically, the idea was to display the LCD near or in the elevators in commercial centers (like office buildings and shopping malls). While waiting for or in the elevators, people would watch the contents advertised in those LCDs. By selecting and contracting with high quality commercial buildings, Focus Media was able to quickly build up its network scale and attract many advertising contracts. Tow foreign VC firms, Soft Bank and UCI, invested in the first round. And another five VCs, CDH, TDF, DFJ, WI Harper and Milestone, invested in the second round. Two years after operation, Focus Media was listed on Nasdaq with USD$172M IPO and now it is part of Nasdaq 100 index. Historical development Infancy stage: 1984 1995 In 1984, the Research Center of Science and Technology Development of the State Science Technology Commission (SSTC) (now the Ministry of Science Technology or MOST) cooperated with British experts to study how to develop high-tech in China. The British experts proposed that venture capital should be developed if China wanted to foster high technology. In 1985, the Central Commission of the Chinese Communist Party and the State Council pointed out in the Decision of Science-Technology System Reform that venture capital could be set up to support the work of developing high-tech with quick change and high risk. It was the first time that the concept of venture capital appeared in an official Chinese Government document. With the government decision to develop high technology industries, the Central Government and some local governments financed and set-up series of investment institutions that intended to pursue the venture capital business from 1985 to 1995. Examples are China New Technology Venture Capital Company, Shenyang Science-Technology Venture Development Risk Center, Shanxi Head Office of Science-Technology Fund Development, Guangdong Science-Technology Venture Capital Company, Shanghai Science-Technology Venture Capital Company, and the Science-Technology Venture Capita Company of Zhejiang Province. Moreover, venture centers (i.e., high tech incubators) were set-up in the majority of national high-tech parks. Simultaneously, some overseas investment banks, funds and venture capital institutions also started to expand their business into China. For example, the Pacific Technology Venture Capital Fund subordinate to IDG entered China in 1992. It cooperated with science-technology commissions in Beijing, Shanghai and Guangdong, and set-up a number of venture capital companies focused on investing in technology companies. Also, some foreign capital or joint stock investment institutions established venture capital businesses. Asia Venture Capital Journal (AVCJ, 2001) shows that $16 million was raised for venture capital investments in 1991. In 1992, the total funds raised jumped to $583million, a thirty-fold increase compared with the $16 million in 1991. The first wave reached its peak in 1995, with $678 million in investment (AVCJ, 2001).The first wave of venture capital investments was brought by international venture capitalists. The international venture capital firms accounted for more than 95% of the total fund raised in the early and mid 1990s. The absolute dominance of international venture capital funds in China in the early and mid 1990s was mainly due to Chinas strict regulations against fund-raising and the general lack of awareness of venture capital in China. Private fund-raising by individuals or private firms without government approval was strictly prohibited in China. This strict regulation essentially removed the possibility for venture capitalists to raise funds within China. It meant that only international venture capital funds and state owned enterprises (SOE) venture capital funds could operate. International venture capital funds could bypass the regulation because they were incorporated and they raised funds outside of China. SOE funds relied on government appropriation as funding sources and did not have this fund raising problem either. Early Growth: 1996 2001 From the mid-1990s, the perception of venture capital shifted from being a type of government funding to being a commercial activity necessary to support the commercialization of new technology. As there were still no laws or regulations about setting up foreign venture capital institutions in China, many overseas investment institutions established their branches in Hong Kong, aiming to invest in the mainland. They had also located representative offices in some major cities, primarily Beijing and Shanghai. Most of the VCs active in China in the early 90s were American firms. The VC industry in the U.S. had matured and attracted a significant amount of funds. Shortly after 1995 a sharp increase from US$5 billion to US$110 billion in funds raised created the phenomenon of money chases deals (Gompers Lerner, 1999). A cadre of experienced American VCs started searching the world for investment opportunities, attempting to replicate the Silicon Valley model. Since 1998, there had been a discernible recognition of the critical success factors necessary to create an environment in which venture capital could operate smoothly and flourish. Specifically, the Governments official decision to support the development of venture capital was the key factor that had allowed Chinas venture capital industry to come into being in a new and more positive environment. In Beijing, alone, there were about 30 independent venture capital institutions, whose capital amounted to an estimated $450 million. In Shenzhen, there were at least 20 independent venture capital institutions with capital amounted to over $500 million. After 2000, China also experienced hard landing in its young VC industry due to dotcom bubble burst and came with huge casualties. It took the VC community 3 years to recover. Fast Growth: 2002 present Although initial government-backed investment operations generally failed, there has been resurgence in venture capital activity since Chinas admission to the WTO (Kenny, Han and Tanaka 2002). Capital available for investment in Mainland China keeps a steady growth trend from 2002. The capital size was increased to US$21.32B by 2007 from US$10.50B in 2002. The average compound annual growth rate (CAGR) reaches 15.2%. Venture capital investment grew rapidly from $480 million in 2002 to more than $3,247 million in 2007, invested in 440 China mainland or mainland-related enterprises (Zero2IPO 2007). According to Zero2IPO report, USD$4B VC funds were raised each year in 2005 and 2006 for China investment. But Chinas annual consumption was no more than $2B. The money chasing deal phenomenon started to emerge in China. Many foreign VC funds, especially first-time funds raised after 2005, had the pressure to pour out investment quickly to avoid US dollar depreciation against RMB and to get better deals under fierce competition. While the funding supply multiplied, quality deal flows did not increase at the same pace. Under the simple supply and demand mechanism, valuations of the China deal kept at relative high level. However, considering the fact that a big portion of funding was focusing on local value-add service segments (i.e. internet, web2.0 and broadband etc.), the issue of funds over-supply was sector specific. To get higher return under the competition, VC firms started to invest in traditional business models such as hotels, travels and fast food chains beyond their core activities such as TMT (Technology, Media and Telecom) or Internet related businesses. It was the special phenomenon happened in China now that VCs were more like PE. Legal and Regulations According to Megginson (2004), the differences in the design and the degree of development of the PE/VC industry are due to institutional factors, with the countrys legal system being paramount. Two major factors are paramount in evaluating legal system: contract law enforcement and protection of shareholder rights through effective corporate governance. Cumming and Macintosh (2002) observed that PE/VC managers in high enforcement countries had a greater tendency to invest in high-tech SMBs, exit through IPOs rather than buybacks and obtain higher returns. Cumming et al. (2004) further examined legal system effects on governance structure. Under better legal systems: the faster the origination and screening of deals; the higher the probability of syndication; less frequently funds of the same organization used to invest in a given company; the easier the board representation of investors; the lower the probability that investors required periodic cash flows prior to exit; and the higher the probability of investment in high-tech companies. Lerner and Schoar (2005) show that in a bad legal environment, PE/VC managers tend to buy controlling stakes, leaving the entrepreneurial team with weaker incentives. Interestingly, valuations tend be positively correlated with the quality of the legal environment. Kaplan et al. (2003) go deeper into the contractual aspects and found that rights over cash flows, liquidation and control, as well as board participation vary according to the quality of the legal system, the accounting standards and investor protection across countries. However, more sophisticated PE/VC managers tend to operate in the U.S. style irrespective of local institutional concerns. The authors show that managers operating with convertible preferred stocks are less prone to failure (as measured by survivorship rate). The results suggest that the U.S. contractual style can be efficient in different institutional environments. Bottazzi et al. (2005) corroborate some of the previous results and obtain further evidence on the home-country effect (PE/VC managers operating abroad tend to maintain the investment style used at home). This is observed in managers based in both good and bad legal environments. The Chinese regulations governing foreign venture capital investment are chaotic and rapidly changing. In 2005, Chinese authorities issued new guidelines (effective in 2006) intending to foster domestic venture capital firms. There is no specific regulation to monitor and stimulate the VC activities in China. The new guidelines recommended that local governments provide financing assistance, favorable tax treatment, and direct investment in Chinese venture capital firms. They also provide less stringent capitalization, investment amount, investor qualification and regulatory requirements than those applicable to FICVEs (Guerrera, Yee and Yeh, 2005). FIVCEs instead are governed by 2003 regulations that include high investment and qualification thresholds, government approval requirements, and strict foreign exchange limitations on the ability to remit profits and dividends back to the investor (Hoo, et al 2005a). Substantial legal and de facto restraints on the ability of FIVCEs to access the stock markets in China and overseas for IPO listings make exit strategies extremely difficult. For these reasons, foreign venture capital firms investing in China usually do not use FIVCEs but rely on offshore holding companies created to receive their investments. Foreign venture capital firms (most of which are U.S. based) investing in China generally have done so through the restructuring of Chinese companies into offshore investment vehicles. These enable an easier exit from investments either by selling shares on international stock markets or through a trade sale to another foreign buyer. In January of 2005, Chinese authorities brought these transactions to a virtual standstill, however, with the issuance of new regulations preventing any onshore resident from establishing, controlling or owning shares in an offshore company without the approval of the Government, either directly or indirectly. The regulations were intended to stop managers of SOEs receiving venture capital investments from stripping state assets and selling them cheaply to overseas companies, and to preclude domestic companies from using the overseas vehicles to gain foreign investor tax exemption status. However, they choked off legitimate transactions as well. There were no government approvals of offshore investment transactions in 2005. With only limited exceptions for transactions in process, foreign venture capital financing through offshore investment vehicles screeched to a halt in 2005 (Borrell and Jerry, 2005). Then, in November of 2005, the Chinese authorities issued superseding regulations. These require registration of offshore investment vehicles with the State Administration of Foreign Exchange (SAFE), but do not require the agencys approval of the transaction. They also require repatriation of all distributions of income from the investment within a fixed time frame. Like the previous regulations, the new ones do not describe specifically the registration process, the procedures involved, the scope of review nor the time required for completion, creating substantial uncertainty for foreign venture capital investors (Hoo, et al 2005b). Despite this changing regulatory landscape, many U.S. based venture capital firms have active plans for substantial investments in 2006 spurred by Chinas high growth potential, the success of recent venture-backed startups on the NASDAQ including Baidu.com and China Medical Technologies and by pent up demand after the 2005 halt in new investments (Borrell, Jerry and Aragon 2005). Hidden risk and solutions Lagging legislation and inexplicit policies in China created many uncertainties and entry barriers for foreign VCs. Below are summary of the critical problems: Chinas lawmaking on VC investment remains stagnant Existing laws such as Corporation Law, Joint Venture Law, Patent Law, etc., in many aspects even contradict VC investment. Does VC investment count as foreign investment? What status and treatment should it enjoy? The concerned authorities cannot provide clear answers to these questions. Its not clear that the amount of shares that foreign venture capital is allowed to hold when partnering with Chinese enterprises, and the way foreigners to remit in/out of foreign exchange are poorly defined. There are three available approaches for foreign venture capital firms to enter China venture capital market legally. Establishing offshore venture capital fund focusing on China Establishing a foreign invested VC firm in China (Joint VC with local player/Wholly Owned Foreign firm) as a legal person entity Establishing a foreign invested VC firm in China (Joint VC with local player/Wholly Owned Foreign firm) as a non-legal person entity To avoid the legal and regulation barriers, foreign venture capital funds usually takes the offshore investment route. Foreign VCs will use offshore USD fund to invest into China deals offshore holding entities with all equity activities happening outside of Chinese jurisdiction. The distinction of USD offshore holding investment and RMB local entity investment is a particular phenomenon in China. Offshore holding arrangement is a preferred structure for Chinese entrepreneurs and VCs as it provides a feasible and practical route for funding, divestment and all equity events. Its advantage and attractiveness to Chinese entrepreneurs and VC communities: Go away from laws and regulations in China. Many of them are not friendly to venture activities, such as lack of preferred shares, stock options limitation, double tax etc. Bypassing capital account control on foreign exchange. More flexible and usually profitable divestment options by overseas IPO, MA or trade sales. Offshore route investment involves the following steps: The Chinese founders set up an offshore holding company in Cayman Island or BVI with the shareholding structure and management control mirroring those of their local company in China. With kind of swap scheme, transferring the equity they hold in the Chinese local company to the offshore holding. This will typically convert the local company into a WFOE (Wholly Foreign Owned Enterprise). The offshore holding company will then be the vehicle seeking VC investment, future funding as well as for listing or be merged. All equity events happen in offshore. Companies funding and IPO proceeds will be kept offshore, and remit into China as and when operation required. Chinese founders assets, rights and proceeds stay offshore. The whole exercise is carried out essentially with an IPO at an overseas stock exchange, such as NASTAQ or Hong Kong Stock Exchange in vision. (The concept and process is visualized in chart 5.) Chart 5 Foreign VC Offshore Investment Process Source: A legal perspective on Chinas venture capital rush, Mar 2006 Restrictions in Chinas corporate regulations and limitations at the domestic capital markets explain foreign VCs preference in taking offshore route to organize their China investment. VC investors rely normally on preferred stocks or convertible preferred stock to secure a preferential return. Chinese corporate regulations allow only one class of common stock for a FIVCE with investment in a Chinese portfolio company. Notably, local VC firms would have the possibility to arrange preferred stock scheme with their investee company according to a newly issued charter regulation applicable to domestic VC firms. This gives rise to concern on the principle of national treatment under WTO law. Moreover, China domestic stock market does not provide a ready access for venture-backed companies. The conditions for listing at Shanghai or Shenzhen main-board market are too stringent for high-tech start-up companies. Even if listing conditions could be met, the queue in the pipeline waiting for a listing window is at the moment frustrating. In fact, the two domestic stock exchanges have halted the IPO since two years in the call for addressing the notorious overhang of nontransferable legal person shares. The undergoing endeavor is focusing on floating all stock legal person shares. Since the value of stock legal person shares is roughly twice of those trading in the stock exchange, full floating of legal person shares at stock is imposing acute challenge on the market place. This would mean that the suspension on IPO of new shares would be expected for a rather extended term. By leveraging on an offshore holding structure, foreign VCs could take advantage of the corporate governance in a jurisdiction where they feel most comfortable and bypass the restrictions under Chinese corporate law. VCs could take the

Dworkins Wishful-Thinkers Constitution Essay -- Argumentative Persuas

Dworkin's Wishful-Thinkers Constitution ABSTRACT: Developing ideas first put forth in my Abortion Rights as Religious Freedom, I argue against Ronald Dworkin's liberal view of constitutional interpretation while rejecting the originalism of Justices Scalia and Bork. I champion the view that Justice Black presents in his dissent in Griswold v. Connecticut. INTRODUCTION In Life's Dominion Ronald Dworkin uses a liberal interpretation of the Constitution to defend constitutional rights to abortion and euthanasia. (1) According to Dworkin, the Constitution "lays down general, comprehensive moral standards that government must respect but ... leaves it to ... judges to decide what these standards mean in concrete circumstances" (p. 119). Any right can become constitutionally protected if five Supreme Court justices declare it so. As with Peter Pan, so with rights protected by the Constitution, believing makes it so. In this paper I explain and reject Dworkin's arguments for his view of constitutional interpretation. But with Dworkin, I reject the "originalism" of Justice Scalia and Robert Bork. I champion, instead, the moderate view that Justice Hugo Black presents in his dissent in Griswold v. Connecticut. (2) DWORKIN'S ARGUMENTS Dworkin notes that the Constitution's language, especially in several clauses of the Bill of Rights, is very abstract. The First Amendment says that Congress shall not infringe freedom of speech, shall not restrict freedom of religion, and shall not establish any religion. But it says nothing to help judges decide whether specific laws against pornography or flag burning offend freedom of speech [or] whether laws that ... forbid Native Americans to ingest peyote ... invade freedom of re... ...381 U.S. 479 (1965). (3) Lochner v. New York 198 U.S. 45 (1905). (4) Pierce v. Society of Sisters 268 U.S. 510 (1925). (5) Griswold v. Connecticut 381 U.S. 479, Harlan's concurring opinion at 500. (6) Casey v. Planned Parenthood 60 LW 4795 (June 30, 1992). (7) Griswold, at 522. (notes omitted) (8) Griswold, at 513. (9) Griswold, footnote 6 at 514. (10) Griswold, at 519. (11) Adamson v. California, 332 U.S. 46, 90-92 (1947)(Black dissenting). The inserted quote is from Federal Power Commission v Pipeline Co., 315 U. S. 575, 599, 601, n. 4. The entire passage is quoted in Griswold, at 525. (12) Peter S. Wenz, Abortion Rights as Religious Freedom (Philadelphia: Temple University Press, 1992). (13) See Wenz, pp. 163-167. (14) Calder v. Bull, 3 Dal. 386, 399; quoted in Griswold, at 525. (15) Griswold, at 519. (16) Griswold, at 501.