How to finance your new company?

In English, Vc is the abbreviation of vitamin C. Nowadays, VC has become synonymous with VentureCapital. Almost any new enterprise takes getting VC as the yardstick of starting a business. Before attracting and obtaining venture capital, entrepreneurs can transform their genes by financing "soft capital". How can they attract savvy investors to look at you and finally decide to invest in you? Don't miscalculate to attract venture capital-venture capital is not a free dinner-venture capitalists are not Lei Feng-venture enterprises are not hooligans who burn money. However, venture capital is not a free dinner, venture capitalists are not Lei Feng or Santa Claus, and venture enterprises should not be swindlers who circle money and hooligans who burn money. How to understand venture capital and its financing and investment process? All capital pursues returns and benefits, and venture capital in the form of venture capital is no exception. The difference between venture capital and general investment is that high risk and high return coexist, and it is the instinct of all capital to seek advantages and avoid disadvantages. In order to avoid high risks and get high returns, the owners of venture capital entrust their own capital to institutions specializing in venture capital to operate. Therefore, in the venture capital market, there is a very important venture capital intermediary besides the buyer, the demand-side venture enterprise, and the seller, the supply-side venture capital owner. An important task of venture capital intermediary is to comprehensively select and evaluate venture projects and enterprises, including entrepreneurs, to ensure the safety, scientificity and high return of venture capital. How to attract the attention of savvy investors-credit is the lifeline of entrepreneurs-and standardize the step-by-step operation process. Faced with such a rational capital owner, such a shrewd capital operator and manager, what can entrepreneurs use to attract the attention of venture capital? Is it your idea, development plan and business report, or your business model development prospects and market share ... Objectively speaking, these factors are all very important, but the most important thing is your personality as an entrepreneur. If you don't trust your character, everything is empty talk. Because man is the carrier of all elements. Entrepreneurial projects, including convincing business plans, are all created by people, and the business model can be changed according to the needs of entrepreneurship. It's just that people's quality can't be changed in a short time. The so-called human quality is the intrinsic value of human beings, which mainly includes entrepreneurial spirit, innovative consciousness, professionalism, integrity, cooperation and communication ability, contingency decision-making ability and so on. Among them, the sincerity and credit of entrepreneurs, as soft factors, are also particularly valued by venture capitalists. Among the powerful and talented entrepreneurs, what can attract the attention of venture capitalists at once is the personal charm with honesty as the main tone. Imagine that the original intention and purpose of an entrepreneur to start a business is to "circle money" from venture capitalists, and the way to circle money is to "burn money", not the business itself. Then who will appreciate this "entrepreneurial spirit"? If you are lucky and smart enough to fool the venture capital experts, then you can only benefit for a while. Because in the risk financing and investment market, the most important thing is the principle of risk sharing and benefit sharing based on integrity. Who wants to be cheated and who wants to be cheated for the second time, whether it is the boss of venture capital or the expert of venture capital? However, in the process of cheating, the deceived person has set up the image of a liar for himself. This kind of "liar" will be nailed to the shame column forever in a system with developed credit, and will not be allowed to enter the venture capital market again. Entrepreneurs must remember that credit is the lifeline of entrepreneurs in the venture capital and investment markets. With the foundation of honesty, the next step is the cooperation between venture capital and venture enterprises. The workflow of this cooperation includes: ① reviewing the development plan of the startup company; ② the feeling of fieldwork; ③ Evaluate the survival rate and yield; (4) Negotiating venture capital contracts; ⑤ Capital injection and divestment; 6. Promote listing and other links. Finally, entrepreneurs who want to get the support of venture capital should do their best to show your inner moving characteristics to venture capitalists and work hard step by step according to the above links! Great cause beckons to you! Otherwise, "circling money" means "cheating money" and "burning money", which means "seeking death" for yourself! This is certainly not what entrepreneurs want! The acquisition of venture capital depends not only on the quality of venture enterprises, but also on certain financing skills. In other words, the process of obtaining venture capital support is the process of showing the investment value of venture enterprises and developing the financing skills of venture entrepreneurs. First of all, before preparing to discuss financing with venture capitalists, we should prepare four main documents, submit the business plan in advance, and strive for the recommendation of venture capitalists' network, which is usually an important step to seriously consider our business plan. In most cases, lawyers, accountants or other network members can undertake this recommendation task, because venture capitalists are most likely to trust their judgments on business. These four documents are: (1) BusinessProposal, which briefly describes the operating status, profitability and strategic position of start-ups; (2) BusinessPlan, which describes the business development strategy, marketing plan, financial status and competitive position of the startup company in detail; (3) "Due Diligence Report", that is, a written document formed after in-depth and meticulous investigation on the background, financial stability, management team and industry of the startup; (4) Marketing materials, that is, any documents and materials directly or indirectly related to the sales of products or services of start-ups. Before formal contact with venture capitalists, it is usually necessary to submit the business plan and its executive summary to venture capitalists in advance.

It[FS:PAGE]times Before formally discussing the investment plan with venture capitalists, entrepreneurial entrepreneurs need to make psychological preparations in four aspects. (1) Prepare to deal with a lot of problems to examine the potential benefits and risks of investment projects. Generally speaking, most of the questions raised by venture capitalists should have been answered in a detailed and carefully prepared business plan. It is worth reminding. Some small business owners usually think that they are very clear about their business and think that their qualifications are very good. Such mistakes must be avoided, otherwise you will be disappointed. Entrepreneurs can hire a professional consultant who doesn't have to worry about hurting themselves to simulate this questioning process. Although the cost of hiring such consultants is not low, compared with the amount of investment that may be attracted, it is usually worthwhile to pay a little price. After all, there is only one chance to make a good first impression on venture capitalists. (2) Prepare for the inspection of management by venture capitalists. Entrepreneurs should never think that this kind of inspection is an insult to management or individuals. For example, although you are proud of your achievements since 10, the venture capital fund manager may still ask you: you have never been to a business school, worked as a lawyer, accountant or graduated. What makes you think you can carry out this business according to our envisaged goal? For such problems, most people may be very angry and overreact, but as entrepreneurs in other industries, such problems are really likely to be encountered when facing venture capitalists, because this has formed a part of the venture capitalists' inspection of the management of venture enterprises, so they should be prepared in advance. (3) Ready to give up some business. In some cases, venture capitalists may ask entrepreneurs to give up some of their original businesses in order to achieve their investment goals. For those start-ups with scattered businesses, it is both realistic and necessary to give up some businesses, because in the case of limited investment capital, enterprises can only be invincible in the competition by concentrating resources.

(4) prepare for compromise. Entrepreneurs should understand from the beginning that your own goals and the goals of venture capitalists cannot be exactly the same. Therefore, before formal negotiation, the first and most important decision for entrepreneurs is: how much compromise entrepreneurs can make in order to meet the requirements of venture capitalists. Generally speaking, it is unrealistic to expect venture capitalists to make such a compromise, because venture capitalists are not worried about finding investment projects. Third, entrepreneurs should also master the necessary coping skills. Negotiations to attract foreign investment usually take several meetings to complete. At most meetings, venture capitalists and entrepreneurs discuss, consult and analyze business plans submitted by entrepreneurs. Here we need to pay attention to two points: first, let venture capitalists know and know the products or services of enterprises as much as possible. If you can provide a sample or finished product, this knowledge and understanding will become more intuitive and impressive; The second is to always focus on the business plan. Sometimes meetings often last for hours. At this time, entrepreneurs may become very talkative, so consciously or unconsciously they may talk about some grand plans for the future and mention some products that are not mentioned in the business plan. This must be avoided, because such a dialogue will make venture capitalists think that you are a visionary or a eager person. Therefore, knowing the so-called "six essentials" and "six don 'ts" in advance is conducive to the smooth negotiation of attracting investment. The principle of "six essentials": (1) be enthusiastic about the enterprise and its products or services; (2) Make clear your own trading bottom line, and even give up the talks if you think it is necessary; (3) Remember to establish a long-term cooperative relationship with venture capitalists; (4) Negotiating and bargaining for acceptable transactions; (5) Do some homework in advance and know how to deal with venture capitalists; (6) Understand the projects that venture capitalists have invested in before and the composition of their current investment portfolio; ""six noes "principle; (1) Don't shy away from questions from venture capitalists; (2) Don't be ambiguous in answering the questions of venture capitalists; (3) Don't hide important issues from venture capitalists; (4) Don't expect or require venture capitalists to make a decision on whether to invest immediately; (5) Don't be too rigid on transaction pricing; (6) Don't bring a lawyer to the meeting. Finally, the typical problems of venture capitalists are listed as follows, including products, competition, market, sales, production, supply, personnel and finance. Before meeting with the venture capital fund manager, it is best for entrepreneurs to prepare their answers to the list of questions in advance and be aware of them. Typical problems of venture capitalists: 1. Products: How can products meet the specific needs of customers and adapt to the sensitivity and subtlety of such needs? Does the customer already know the brand of the product? Does the product have reusable value? Is this a high-quality product or a poor-quality product? Is the customer of the product the final consumer of the product? Is this product widely attractive or only a few big buyers? 2. Competition: Who are the main competitors of the enterprise? What are their competitive advantages compared with your company? And what competitive advantages does your company have compared with these competitors? In the face of these competitors, how do enterprises respond in terms of price, service, sales channels, promotion means and product quality assurance? Do you have any substitutes for your products? How do you think your competitors will react to the rise of your enterprise? 3. Market: What would you do if you were going to gain a certain market share? What are the main points of enterprise marketing plan? Does the marketing plan mainly follow the retail marketing strategy or product marketing strategy? How important is advertising in your enterprise's marketing plan? When a product or service comes into maturity, how will the marketing strategy of the enterprise change? Is direct selling important for your product promotion? 4. Sales: How big is the customer base of the product or service? Who is the most typical customer among all customers? How long is the time lag between the initial contact with customers and the actual sales [FS:PAGE]?

5. Production: What is the production capacity of the product? When the scale develops to what extent, will there be production bottlenecks? How important is product quality control? What is the current backlog of orders? Is the product assembly line or customized according to customers? Will the production process affect the health and safety of employees? What does it mainly include? 6. Supply: What are your current suppliers? How long have these suppliers been working with your company? What other suppliers can we find at present? What parts or raw materials are still in short supply? 7. Personnel: How many employees are there in your company at present? What is the expected demand for labor in the near future? What are the main sources of supply of these labors? What is the composition of enterprise employees? How many full-time employees and part-time employees are there respectively? How many employees are engaged in management? How many employees are engaged in logistics? How many employees are there in the front line of production or service? How high is the cost of trainers? Are all employees mainly composed of skilled workers or unskilled workers? Is there a trade union in the enterprise? If so, what is the relationship between trade unions and enterprises? 8. Finance: How old and new are the main production equipment in your enterprise? What is the annual maintenance cost of these equipments? What will be the capital demand of enterprises in five years? Do your competitors have an advantage in equipment? Is the enterprise's equipment, houses and buildings leased or owned? If yes, how long is the lease? How much mortgage does the enterprise bear? Can the existing production facilities of the enterprise meet the expansion demand based on the business plan in the future? Does this expansion require the establishment of a new factory? What patent license agreement? What is the R&D capability of enterprises now? What is the annual R&D expenditure? To what extent does R&D affect the future sales of enterprises? (Date of Issue: February 2009-18)