Many entrepreneurs are too confident after getting round B and C financing, thinking that round C financing is also easy to obtain. However, the amount of financing in the C round is larger than that in the B round and A round. At this time, the business model of entrepreneurs is not mature enough, and investors will not invest in projects because they cannot see the actual income data.
In order to achieve the purpose of financing, many entrepreneurs spend money to buy users in the early stage and get a lot of traffic in a short time. However, this method is not a long-term solution after all. Once the funds are insufficient, there will be problems in the capital chain and the enterprise will eventually end in failure.
Behind financing
Many markets will have room for the old three and the old four to survive, but not all the old three and the old four have the opportunity to get the C round. Although those funds that voted in the C round are also very concerned about cost performance, in general, they are more concerned about whether the company will have a big enough opportunity to lead the industry.
In most market segments with obvious scale effect and network effect, if the second child wants to get the C round financing of first-line funds, besides the original market must be large enough.
In addition, there are two preconditions: first, the market share gap with the first place should not be too big, preferably within 50%; Second, if the first place has been invested by one of BAT, it would be better to have another BAT later. If the third child wants to get the C round of financing, these two conditions are changed to: the gap with the second place is within 20%; Not all the top two are invested by BAT.