Generally speaking, angel investors will meet entrepreneurs in the office and listen to the entrepreneurial team's statements on their entrepreneurial ideas, project progress, development plans and capital needs. If there is enough time, angel investors also want to hear the work experience and entrepreneurial experience of entrepreneurs and the story of entrepreneurial team cooperation. Some angel investors will arrange the latter to talk in a more relaxed occasion. For example, talk about these light topics when eating together.
Through the meeting with entrepreneurs, investors can learn more information that is not in the business plan, such as whether the entrepreneurs of the enterprise have leadership and innovation ability, and whether they are good at managing the company (market, production, finance and management, etc.). ).
2. Due diligence
After investors meet entrepreneurs, if the two sides reach a preliminary understanding or agreement, and if the enterprise has been established, then investors will generally conduct on-the-spot visits to the enterprise. The contents of the review mainly include the enterprise management team, the product research and development of the enterprise, and the authenticity of the business plan. On-the-spot investigation of enterprises can make investors truly and comprehensively understand the characteristics, management mode and factory environment of enterprises. And you can also communicate with managers and front-line employees on the spot to understand the enterprise from the side.
If the entrepreneur hasn't started a business yet, investors can't make a field trip, but investors will generally know more about the team to ensure that the team has the necessary characteristics of entrepreneurs and enhance investment confidence.
3. Project appraisal
It is a complicated process for angel investors to evaluate the value of investment projects. PE multiples and discount models cannot be used to evaluate newly created enterprises. So in a sense, the project valuation of angel investors is more like an art.
4. Agreement negotiation
The negotiation of angel investment agreement mainly focuses on investment price, benefit distribution, team incentive, management participation and benefit protection. Angel investors hope that their investment can exit smoothly, recover their investment and realize investment income; Entrepreneurs, on the other hand, hope to get the necessary funds, start enterprise projects and finally succeed.
The interests of both parties are the same, but due to information asymmetry, investors can't fully understand the efforts of entrepreneurs. Therefore, it is necessary to set investment terms to encourage and restrain entrepreneurs.
Angel investors and entrepreneurs will determine the final investment amount and equity ratio according to the estimated funds needed for the investment project and the investor's valuation of the project. Angel investment usually adopts the method of installment investment, and will not invest all the money at once. Therefore, it is necessary to further clarify the investment amount, investment time and investment conditions of phased investment. Angel investors usually use three investment tools, namely common stock, convertible preferred stock and convertible bonds.
5. Post investment management
Post-investment management depends on the investment style of angel investors. Some angel investors insist on a board seat, while others are dispensable; Some require more participation, while others do not; Some require weekly work reports, while others only require quarterly or annual reports.
In practice, most angel investors will actively participate in the management of invested enterprises. In their view, if entrepreneurs only want their capital, they are not interested in participating. Only those entrepreneurs who need angel investors' funds and their experiences, experiences and suggestions will get real help from angel investors.
Step 6 withdraw funds
The purpose of angel investors' investment is not to run enterprises for a long time, but to make profits by withdrawing from investment. Once the angel investor withdraws from the invested enterprise, the whole process of angel investment is completed. Professional angel investors can put their capital into a new round of capital appreciation activities.
Compared with IPO, it is more realistic, more common and faster to quit by selling shares. The object of selling shares is often large companies in the industry or related strategic investors. If the transferee of equity transfer is an enterprise or entrepreneur himself, it constitutes a share repurchase.
Financing, English is financing. In a narrow sense, it is the behavior and process of raising funds for enterprises. Broadly speaking, financing is also called finance, that is, the financing of monetary funds and the behavior of the parties to raise or lend funds in the financial market in various ways. "New palgrave Dictionary of Economics" explains financing: financing refers to the monetary transaction means to pay for purchases that exceed cash, or the monetary means to raise funds for the acquisition of assets.
Detailed description of financing:
Business activities of enterprises to raise funds from financial institutions or financial intermediaries by various means;
Secondly, the essence of mining right management is mining right financing and mining development;
Third, it refers to the activities of direct or indirect financing between the holders and demanders of monetary funds;
The adjustment and accommodation of monetary funds is an effective way and means to adjust the surplus and deficiency between social and economic subjects under the condition of socialized mass production;
Financing in a broad sense refers to an economic behavior in which funds flow between holders to make up for the shortage. This is a two-way interactive process of funds, including the integration of funds (source of funds) and the withdrawal of funds (use of funds). Narrow financing only refers to the integration of funds;
Six refers to the flow of funds between the supply side and the demand side, which is a two-way interactive process, including both the integration of funds and the withdrawal of funds.
Seven refers to the activities of enterprises to obtain the funds needed for operation from relevant channels in a certain way.
In a narrow sense, financing is an enterprise's fund-raising behavior and process, that is, according to its own production and operation status, capital ownership status, and the needs of the company's future business development, the company adopts certain methods to raise funds from investors and creditors of the company through certain channels and organize the supply of funds to ensure the company's normal production needs and business activities. The motivation of the company to raise funds should follow certain principles and be carried out through certain channels and ways. Generally speaking, enterprise financing has three purposes: expansion, debt repayment and mixed motives.
Broadly speaking, financing is also called finance, that is, the financing of monetary funds and the behavior of the parties to raise or lend funds in the financial market in various ways. Judging from the development of modern economy, as an enterprise, it is more necessary than ever to have a deeper understanding of financial knowledge, financial institutions and financial markets, because the development of enterprises cannot be separated from financial support, and enterprises must deal with them.