Characteristics of venture capital
1, the investment targets are mostly small and medium-sized enterprises in the initial stage.
And most of them are high-tech enterprises;
2. The investment period is at least 3-5 years, and the investment method is generally equity investment, which usually accounts for about 30% of the equity of the invested enterprise, and it does not need a controlling stake or any guarantee or mortgage; 3,
Investment decision-making is based on high specialization and procedure;
4. venture capitalist generally actively participate in the operation and management of the invested enterprises.
, providing value-added services; In addition to seed financing, venture capitalists generally meet the financing needs of the invested enterprises in the future development stage;
5. Because the purpose of investment is to pursue excess returns, when the invested enterprise adds value, venture capitalists will withdraw their capital through listing, mergers and acquisitions or other equity transfer to realize value-added.
From private enterprises to public listed companies.
Your enterprise still has many restrictions on corporate governance. Before this, private small and medium-sized enterprises involved in financing were more like falling in love with you. The first step is to test your business model. Past success means that you made money by choosing the right business opportunities. But that doesn't mean you will have a better development in the future. It is very likely that the current model will be the reason for your failure in the future. Therefore, in this love, private placement will explore and summarize the replicable and sustainable models accumulated in the past business development process, and find out what can be expected in a specific business cycle. The so-called business model is what your company is based on, what valuable products or services you can provide to customers, and then whose money you earn from this product or service. Business was successful in the past, but it didn't work well. This needs to be summarized, especially in traditional industries. According to your shortcomings and the development trend of the industry, it is necessary to make a good future development strategy or plan before listing. If you have diversified businesses, some businesses have no future in the long run, but from a realistic point of view, they support the enterprise, then you need to make a plan to manage resources. Your resource management is limited. How to allocate management, capital and other resources, and gradually invest in your future key development business, which is the management model between different businesses. We have a lot of experience about the problems faced by our enterprises in different stages of development and how a private enterprise finally becomes a listed company and is a healthy listed company. Many entrepreneurs will find it too late to contact private investors, because they didn't understand it in the past and didn't clarify the company structure as soon as possible. When it comes to the market, the price will be very expensive.
Besides money, we can also bring you a lot of value, which is the so-called value-added service. Investors are your mirrors. Your business is in the process of rapid development, so it may be difficult to fully understand your business, including your team. It is said that investors are very picky, yes! In your opinion, what you are used to, we will ask you why you do this. What is the reason for you to do this? Your first reaction is that the effect is very good, you don't need to invest too much, and the gross profit is very good. Then we have to ask you, can this gross profit be maintained? If you increase more investment in market channels, will you better consolidate your competitive advantage? What we want to see is the value of your enterprise in three to five years. Is it worth investing? Instead of just looking at the present. However, entrepreneurs from these angles are often hard to see so deeply. We are not here to trouble you, but some entrepreneurs don't quite understand our way of working, and some entrepreneurs are very welcome. I don't care if this relationship between you and me will lead to marriage, but it will be very helpful to the enterprise. You take our money, my money is used to establish our long-term strategic cooperative relationship with you, and our relationship becomes the same interest. Once a private investor enters your enterprise, it will take three years at the earliest to quit, and five or six years at the latest. In the meantime, we must work with you to make the enterprise healthy and release the value, so that we can get good returns. There are some private equity funds to see if you can go public next year, or at the latest the year after, he will come in and make some quick money. This situation will be of limited help to you. The choice depends on what you want. When you choose private investors, you must first find out what you need most besides money, and then go back to visit us, just like we visited you.
Why don't venture capitalists look for you? Many companies take the initiative to find venture capital, and venture capital is really not interested. I feel it impossible to talk to you for ten minutes. On the other hand, venture capitalists invite other business owners to dinner all day, hoping that the other party can accept the money from venture capital. There is an angle problem here. Many enterprises don't understand that their own enterprises are so good, why don't venture capitalists respond after listening to them? We regard the enterprise as our product, and this product will become more valuable in the future, so that we can sell it and gain value. One of the factors we are interested in is the management team, the so-called human factor. Especially in some emerging industries, consumer industries, IT or technology industries and other economic fields, these teams basically determine the success rate of 80%. Some companies that have been established for a short time also have very good industry experience and have created many miracles in three to five years, which many entrepreneurs can't do in twenty or thirty years. You have seen many small and medium-sized enterprises successfully raise funds. The enterprise is very small and does not make money. The background of the team is beautiful. With an investment of hundreds of millions of dollars, they really became the industry leader within three to five years. It is often the ability of the core team, and the scores of others are very high, which is impossible to satisfy. In traditional industries, the style of entrepreneurs is relatively conservative and steady, and the development law of traditional industries itself is also a steady process. There are some hard rules in this process, which are difficult to surpass quickly, which determines that we should look at it with a more pragmatic eye and compare it with our peers. Just as we look at agriculture, the quality and business maturity of employees in this industry are relatively weak, but as long as you are the leader in this industry, the opportunities in this industry will be more grasped by you, and you will have more opportunities to be valued by venture capitalists.
Business model has always been an important topic. If the business model changes frequently, it means that your business is immature and you are often impossible to grow up. You should stick to your things. When you encounter difficulties, it is also important to learn to choose flexible avoidance and adjustment. In different sub-sectors, especially the electronics industry, the competition is fierce, and it is difficult to succeed without sufficient determination. You always learn from others, change one this year and another next year, and then you will find that you are the victim of following the trend. If you want to make a long-term profit, strive for a higher profit level among your peers, and continue to grow at a higher level, then you must have a secret weapon, which is often reflected in technology. However, most domestic companies only develop some technical applications, which are easy to be imitated and copied. Even so, if you can skillfully combine your own products with the channel model, join a specific industry at a specific stage, and often keep the initiative, and then strengthen your competitiveness through three to five years of development and solidification, then it will be difficult for your opponents to beat you! The so-called competitiveness means that you have a strong ability to attract talents, and the top people in the industry are willing to cooperate with you. In terms of customer channels, you are much ahead of your competitors. The market structure in China is very complicated.
It has caused many problems at a certain node in the industrial chain and has not been solved. Some are technical problems, some are customer service methods. If this problem is solved well, you will often get opportunities. For example, in the past, some industries were resources controlled by state-owned enterprises, which were inefficient and lacked services in the industrial value chain. Later, private enterprises became the mainstream force in this respect, and such opportunities still exist in the future. In the process of rapid economic transformation and growth in China, many markets have been expanded, or the problems to be solved have been solved. From this perspective, you can also find your chance! Some people are complaining, others are seizing the opportunity.
Legal Risks of Enterprises Introducing Venture Capital
Overseas venture capital institutions generally adopt gambling schemes to invest in innovative enterprises, and investors set strict conditions for the investee. Once the investee fails to achieve the set goals agreed in the investment contract, the original shareholders of the investee will face the risk of being diluted or even acquired. In view of this, domestic enterprises generally do not like gambling when introducing venture capital, but require investors to provide part of the funds. The two sides agreed to distribute the company's profits according to a certain proportion, and at the same time give venture capital institutions a certain equity as a consideration.