Whether entrepreneurs can successfully raise funds is not directly related to whether they failed in the past, but more importantly, whether you can accurately seize the opportunity of a rapidly growing huge market. Before you seize this opportunity, all your entrepreneurial ideas are nothing more than preparing yourself and your team. Recently, an entrepreneur raised $30 million in Series A, and the business actually started less than half a year. The first entrepreneurial project before was still so-so alive, the second project was dead, and the third one was not completed. This is the fourth one. His own assets are very small, his house may be less than 2 million, and there are some loans. The only advantage is his age. He is still young and has high morale. Every project has been successfully financed before. That's how investors love this kind of small business that can't be killed.
It can be analyzed from two aspects: legal provisions and industry practices. In terms of legal provisions, we should consider:
1 The historical financing agreement contains provisions on the individual joint liability and repurchase obligations of the management;
2. Whether the management has obviously and intentionally violated the obligation of good faith, resulting in obvious damage to the interests of the company, investors and shareholders. If this situation exists, it usually does not apply to the exemption of individual joint and several liability.
From the perspective of industry practice, there are roughly the following situations:
1 If the entrepreneur has fully fulfilled his due diligence obligations and communicated with shareholders in a timely manner, and there are no subjective and intentional behaviors that affect the interests of the company and investors' shareholders (such as excessive executive interests that do not match the development stage of the company, hollowing out the company by using related transactions, etc.). ), and the historical financing agreement does not stipulate that entrepreneurs need to bear unlimited joint liability, and there is no need to repay.
In practice, "entrepreneurial failure" often does not require "the company runs out of cash". In the case that it is obviously impossible to succeed in starting a business, responsible founders generally do not go all the way to the dark, but return the remaining investment funds to investors in proportion after paying taxes, paying employee severance pay and returning foreign debts or arrears.
For entrepreneurs who need to bear obvious subjective responsibility for entrepreneurial failure, but there is no evidence to prove that they maliciously harm the interests of the company and investors, they should especially communicate with investors in advance, settle accounts in advance, and control losses;
For continuous entrepreneurs, if a new project is transformed, part or all of the shares of the old shareholders will be transferred to the new entity without returning the investment funds of the previous project;
Professional investment institutions will not accept investment clauses that maliciously harm the interests of the company and investors' shareholders by means of super-high management incentives, hollowing out the company through related party transactions, and setting up private "small treasury", and a professional team of lawyers will follow up similar behaviors.
6 Drink poison to quench your thirst, never sign, don't say anything, and don't sign anyone who fools you.
A considerable proportion of successful entrepreneurs in the market are not successful for the first time, so excellent entrepreneurs should pay special attention to their own character and reputation, base themselves on the long-term and do things with compound interest, which is the performance of being responsible for others and themselves. For investment institutions, especially professional early-stage investment institutions, entrepreneurial failure is not uncommon or unacceptable, but it does not mean that entrepreneurs can squander their investment funds without guilt, and even evade their fiduciary responsibilities with a clear conscience on the grounds that "investment itself is risky".
It is the professional performance of investment institutions to admit defeat in gambling and not get back the accounts; Diligence, loyalty and courage are the professional performance of entrepreneurs. Entrepreneurs should strengthen the study and accumulation of financing experience and related knowledge, enhance their ability to do their best in the opposite direction with investment institutions, cooperate with institutions that truly understand and apply the rules of modern venture capital games and make professional investments in a professional way, so as to avoid rushing for success because of lack of experience, and choose unscrupulous non-professional investment institutions to cooperate and pay unnecessary tuition fees. Introducing the same shareholders is a kind of happiness, and introducing the shareholders with ulterior motives is the beginning of a nightmare.
The investment circle is very small, and the circle between big bosses is even smaller. It is a common phenomenon that cooperation among investors is greater than competition. For those unscrupulous entrepreneurs who obviously harm the interests of shareholders and investors, the black history you think can be erased is nothing more than making a few phone calls to expose the old things. You want people to know unless you can do it yourself. Today, with the tide of the capital market gradually receding and gradually returning to rationality, the value of good credit and good reputation will only be more prominent than when the fish and dragons are mixed.
If the project fails and enters the liquidation stage, investors usually enjoy the priority of liquidation, with at least 1 time (or more than 1 time) liquidation.
The calculation is correct. Therefore, the liquidation process should be to repay the investor's investment settlement ratio with all the assets of the company. If it is repaid,
After that, there are surplus parts, which are distributed according to the proportion of shares.
So this involves a question of how to define entrepreneurial failure, and whether it is a failure if all the book funds are lost.
Before entering bankruptcy liquidation, if the communication between investors and entrepreneurs is smooth enough, if the project is not well developed, it is impossible to give a little warning.
No, in terms of probability, the proportion of successful enterprises is very small, and many projects are defeated without a fight. If the founder and
Investors have lost confidence in the project, but there may still be money on the books (do you remember the color? ).
Wait a minute, whether to continue wasting time and spend all the money, or a strong man can break his arm and make a comeback, return the money to the investors and liquidate it.
Think about it.
Generally speaking, the interest of the repurchase amount needs to be calculated on the basis of the investment principal, which is usually 8- 12% annualized simple interest, sometimes used.
Compound interest. Once I saw an unkind investor and the founder sign a 12% annualized compound interest repurchase clause, which can be said to be the founder.
Pit into the dead. Even if the project develops well, the project development should not be ideal when it needs to be repurchased, and the equity investors still want to get it back.
Where can I find a project with 12% annualized compound interest and such a good guaranteed rate of return under the ceiling?