Second, financing has many advantages and is necessary for a startup company.
Modern society is an all-round competitive society, and it is impossible for a startup company to win in its own market without financing.
You don't finance, peers finance, and they compete with capital. And if you only rely on your own capital accumulation, it is almost difficult to win in the competition.
Generally speaking, enterprises want to go public by financing for the following reasons.
The first reason is that there is more money.
Don't think that your business is not short of money. One of the most important assumptions in economics is that resources are scarce, so any enterprise is actually short of money.
No matter how much money you have in your account now, or how good your income and cash flow are, in essence, your business is short of money. Because if you have more money, you can do more things and make more profits.
On the other hand, there is always no harm in preparing more food and grass.
It is easy for entrepreneurs to be optimistic about their future. In fact, the future of almost all enterprises is more pessimistic than entrepreneurs think.
Third, for example, many entrepreneurs may think that their companies are developing smoothly now, and they will be able to solve the battle within three to five years and achieve the first-stage goals, such as going public or becoming a market leader.
But in fact, it may take you longer to do it. I haven't seen a startup become a very good industry leader within ten years.
Any successful company needs more than ten years. Even star startups in recent years, such as Xiaomi Company and Didi Taxi, if I remember correctly, this year should be the seventh year of Xiaomi Company and the fifth year of Didi Taxi Company.
In our memory, all companies have created miracles and developed very smoothly, but they have experienced long-term development.
Therefore, our own enterprises are likely to have a long way to go in the future. At this time, if you have more money in your account, it doesn't hurt to have more food and grass in the company. It can make the company have stronger anti-risk ability and leave more room for its own development.
The second reason is that the founders can be urged to be more enterprising after financing.