Financing in the U.S. with Chinese Investors
Financing in the U.S. with Chinese Investors
Flush with money from serving as the “factory of the world” and the real estate boom in Shanghai, Beijing and Guangzhou, many Chinese businessmen and entrepreneurs are ready, willing and capable of investing in overseas projects. And many have done so – in multi-million dollar projects ranging from biotechnology, medical devices, and food production to energy, mining and real estate. The appetite for investment overseas is further fueled and incentivized by the prospect of receiving a foreign residency card (“green card”) as a qualified investor which affords greater travel flexibility and grants the eligible investor a sought after status symbol of success and internationalism.
Your Bridge to Chinese Investors
However, to tap this tremendous resource, the capital seeker must convey their message of opportunity in a way that arouses the interest of investors, that bridges the “trust gap,” that demonstrates your enthusiasm and integrity, aligns with investors’ cultural values, and assures them of the potential success of the project. It is not an easy task for any entrepreneur, particularly before an audience that is naturally suspicious, universally considered astute, and labored with material differences in language, culture, practice and customs. IPO Pang has had a superb record of success over the last 20 years in China in assisting capital seekers with financing their projects through our vast network of clients, contacts and connections. We not only seek financial investment for businesses in need of capital, we seek “partners” who will stay with the invested business long term, developing value and multiplying its potential.
Accessing Chinese Money through EB-5 Regional Centers
The U.S. EB-5 visa program creates a win-win situation for Chinese investors and U.S. businesses. Chinese investors are increasingly interested in investing in U.S. business development at relatively low interest rates in return for favorable U.S. “green card” and residency options. Read more here about our extensive work with EB-5 Regional Centers, including connecting high net worth individuals and angel investors with developers of U.S. projects that otherwise might be overlooked.
Chinese Investment and “Grant Backs”
While there are many ways of investing in a business, IPO Pang has been a pioneer in facilitating Chinese investments in foreign enterprises through “grant backs.” This type of investment has been popular with technology companies as well as startups that are, as yet, unable to show a track record of substantial sales, but otherwise have patented or proprietary technologies. In a typical case, the capital seeker would seek an investment of $3 to $5 million; in return, the Chinese investor or investor groups would receive shares of stock at the prevalent valuation plus the right to distribute, license or manufacture the products in China (pursuant to a distribution or license agreement or a requirements contract). This model has worked exceedingly well because it is a win-win for both sides. The foreign capital seeker receives a truncated due diligence process, is able to capitalize his business on short order, and maintains control of his business. The Chinese side receives company shares at competitive rates and valuation while it is given the right to develop the business in its home country when the business or technology proves successful.
IPO Pang can facilitate your business in matching you with Chinese investors. Contact one of our associates for further details on prerequisites and requirements.
Financing In The U.S.
Practice Areas
- China Business Ventures
- China Business Distress Management
- Cross Border Joint Ventures
- Corporate and Business Law
- Licenses, Permits and Government Lobbying
- Foreign Direct Investments
- Franchise and Distribution
- Mergers & Acquisitions
- Intellectual Property Law and Counterfeit Enforcement
- Unfair Competition Law
- Litigation and Arbitration
- Local Regulatory Compliance and Audits
- Advertising and Marketing
- Environmental Law and Permitting
- Labor Law and Employment
- Real Estate
- Tax Compliance and Strategy
- Outbound Foreign Investment
- Financing in the U.S. with Chinese Investors