How Small and Medium-sized Enterprises Get the Favor of Venture Capital (2)

General venture capital companies have certain investment fields. The field here has two meanings: one refers to the technical field. Venture capital companies usually only invest in enterprises that they are familiar with the industry or enterprises that they know in the technical field, so their investment preferences are different. For example, innovative investment groups, high-tech investment and other government-supported investment institutions are rigorous in style and prefer to invest in enterprises with sound internal governance structure and standardized management; Investment institutions such as Guocheng and Tsinghua prefer to invest in early-stage enterprises because they have strong technical and management background. Venture capital institutions with industrial group background, such as China Merchants Technology Group and China Shipping Venture Capital, mainly invest in enterprises in the industrial chain of the group; Venture capital institutions such as Gao Tejia and Dapeng are more inclined to invest in relatively mature enterprises. The second refers to the geographical area. Most of the enterprises funded by venture capital companies are located near the company's location. According to the statistics of Shenzhen Venture Capital Association, by the end of 2002, there were more than 500 venture capital institutions in Shenzhen with an investment of nearly 5 billion yuan, of which 60% were in Shenzhen. The main reason for this is to facilitate communication and control. Generally speaking, investors themselves are not involved in the actual management of the enterprises they invest in, but more like a mentor, constantly providing strategic guidance and business suggestions for enterprises. Most venture capitalists in small companies prefer small companies, first of all, because small companies are more efficient in technological innovation, more dynamic and more adaptable to market changes; Secondly, small companies are small in scale, the amount of funds needed is also small, and the risks undertaken by venture capital companies are limited; On the other hand, small companies are small in scale and have more room for development, and the same investment can get more benefits; In addition, by establishing a company instead of just doing an investment transaction, it can help some venture capitalists realize their ideals. Experience Nowadays, the venture capital industry is increasingly reluctant to cooperate with an inexperienced entrepreneurial leader, even if their ideas or products are very attractive. In general investment projects, investors will require the leaders of start-up enterprises to have working experience or successful experience in this industry. If the leader of a startup company claims that he has an excellent idea, but he has almost no working experience in this industry, investors will doubt the feasibility of this proposal. "You may get your investment back from an inexperienced start-up leader. But maybe just this once, there is a little chance of success, and you have been rewarded. So why don't we try to use our experience to improve our chances of success? " This is the personal experience of a venture capitalist, and it also shows the views of most venture capitalists on experience. In this case, a common mistake made by most young entrepreneurial leaders is that they don't seek enough help or communicate with other entrepreneurial leaders who have achieved successful experience in this industry. Usually, the leader of an entrepreneurial enterprise realizes his lack of experience and will voluntarily give up the position of the top leader of the enterprise. He will hire a manager with successful experience to be the general manager of the entrepreneurial enterprise. Because most inexperienced business leaders are young, this gives them enough time to grow into excellent managers and entrepreneurs. Small and medium-sized venture capital enterprises have many disadvantages, such as small scale, few assets, weak debt capacity, easy to be affected by the operating environment and high risk, which leads to financing difficulties and serious shortage of funds, and even some very good projects are aborted because of insufficient funds. As the saying goes, "Cooking without rice". Therefore, finding rice in the pot has become a top priority for SMEs. As long as it is rice, with or without sand, put it in the pot first. But when the meal was cooked, I found it difficult to swallow. This is a vivid portrayal of the failure of some start-ups that have obtained venture capital funds. Therefore, it is important for small and medium-sized enterprises to obtain venture capital, but it is also important to understand and correctly choose the entry mode and investment mode of venture capital. There are generally two different ways to enter venture capital: the first way is to put venture capital into the invested enterprise in stages, which is more common because venture capital institutions can not only reduce investment risks, but also help accelerate capital turnover; The second is one-time investment, which is generally adopted by venture capitalists and angel investors. Usually after an investment, it is difficult and unwilling to provide follow-up financial support. From the nature of investment, there are three ways of venture capital: first, direct investment; The second is to provide loans or loan guarantees; The third is to provide some loans or guarantee funds, and at the same time invest some venture capital to buy the equity of the invested enterprise. But no matter what kind of investment, venture capitalists generally provide value-added services. Everything has advantages and disadvantages. Many facts have proved that investors and enterprises have the dual possibility of mutual restraint, just like a "double-edged sword". When venture capitalists bring capital into enterprises, they may also bring another kind of risk to enterprises. Don't blindly think that money is a good thing. In order to promote the advantages and eliminate the disadvantages, we first need to select and evaluate venture capitalists to see if they are helpful to our strategic development. If you choose carelessly, you will encounter investors who always point fingers, which will have a bad influence on the strategic development of the enterprise; Secondly, when the investor's investment in the enterprise reaches the holding level, the investor will have the corresponding decision-making power of the enterprise and may intervene in the personnel and other aspects of the enterprise. The uncertain leaders of entrepreneurial enterprises were kicked out by investors before they were happy. Third, venture capitalists invest for three purposes-merger, dismantling and development, all of which exist in the market. At this time, small and medium-sized startup companies must pay attention to those investors who aim at mergers and acquisitions or dismantling, especially some investors with industrial background. It is best to determine the exit mode of venture capitalists in advance in the investment agreement.