Introduction: As the country vigorously promotes "mass innovation and mass entrepreneurship", various incubators and industrial parks have sprung up. Incubators and industrial parks have provided a variety of support for entrepreneurial teams to promote entrepreneurship and support Entrepreneurship has contributed.
Business incubators are also called high-tech entrepreneurship service centers in China. They provide physical space and infrastructure for newly established technology-based small and medium-sized enterprises, and provide a series of service support, thereby reducing the entrepreneurial risks of entrepreneurs. and entrepreneurial costs, improve the success rate of entrepreneurship, promote the transformation of scientific and technological achievements, and cultivate successful enterprises and entrepreneurs.
Industrial park refers to a special location environment created by the government or enterprises to achieve industrial development goals. It has many types, including high-tech development zones, economic and technological development zones, science and technology parks, industrial zones, financial backends, cultural and creative industry parks, logistics industry parks, etc., as well as new industrial cities and new technology cities that have been proposed in various places recently.
There is a big difference between incubators and industrial parks: incubators serve start-ups, while industrial parks serve companies that have already reached a certain scale; incubators mostly provide scattered work stations or small spaces, while industrial parks Larger office space is usually provided; incubators usually provide nanny-style services, while industrial parks provide relatively few services. However, from the perspective of attracting entrepreneurial companies to settle in and supporting their operations, the essence of incubators and industrial parks are the same. Therefore, in the following text, unless otherwise specified, the textual meanings of "incubator" and "industrial park" have no meaning. the difference.
Due to work, I maintain close contact with many industrial parks. During the work process, I discovered that there were great difficulties in operating the industrial park, and slowly worked out a set of effective solutions.
1. The Pain of Industrial Parks
In the process of operating industrial parks, we will face many difficulties, such as insufficient funds, insufficient government support, etc. However, based on my visits and exchanges, the biggest The biggest difficulty lies in the shortage of settled teams and the loss of teams after settling in. This phenomenon is particularly prominent in provinces with relatively underdeveloped economies.
Many industrial park operators said that it is difficult for the park occupancy rate to reach 80%, and some are even less than 60%. Since the main economic income of some industrial parks comes from the rent of settled teams, no teams settling in or the team occupancy rate is too low will seriously affect the operating income of the industrial park.
Even if the team successfully settles in, 50% will be lost within 3 years, part of which will be lost to other entrepreneurial parks, and more teams will be lost to Beijing, Guangzhou and other relatively developed economies and entrepreneurial atmosphere. Relatively lively area. Regarding this kind of loss, many managers of entrepreneurial parks expressed helplessness: in order to attract incubation teams, the parks usually provide preferential conditions such as rent reduction and service provision; the incubation teams grow healthily with the support of preferential conditions and can repay the industrial park when they can. But he chose to leave again. This has caused the industrial park to fall into an embarrassing cycle of subsidies - losses - greater subsidies - and continued losses.
2. Analysis of reasons
The reasons for the difficulty in team settlement are caused by many aspects, such as weak entrepreneurial environment, single business method, and excessively high incubation conditions.
First, in many economically backward areas, the entrepreneurial environment is not ideal. Most entrepreneurs lack understanding of entrepreneurship. In many areas, the understanding of entrepreneurship is still limited to opening a small store or joining a certain brand chain store, and there is a lack of truly innovative entrepreneurship. In such an environment, many entrepreneurs who have the urge to start a business are held back due to lack of start-up capital and do not know that they can obtain start-up capital through the capital market. There are few entrepreneurs, and the base of companies that can enter the incubator industrial park is small, so it is naturally difficult to guarantee the occupancy rate.
Second, many incubators play the role of landlords or second landlords. Many industrial park operators position themselves as real estate projects rather than venture capital industry service providers. The business model of industrial parks remains at building houses - -Renting or leasing--the stage of subletting. Compared with directly renting office buildings, this model is not particularly attractive to entrepreneurial teams. Although it is cheaper to enter an incubator industrial park than renting an office building directly, there are also obvious disadvantages: for example, the geographical location of industrial parks is usually relatively remote, the decoration style is relatively uniform, and living facilities are inconvenient.
Therefore, if we want to increase the number of incubation teams, the industrial park must change this rough and primitive business method, truly position itself as a venture capital market service organization, and provide valuable and distinctive venture capital services to the incubation teams.
Finally, many incubators blindly pursue "high-end" entrepreneurial projects. Some industrial parks often require entrepreneurs to have a doctorate, returnee background, patented technology, etc.; while the number of local entrepreneurial teams is insufficient and can possess the necessary skills. There are even fewer teams with such high-end conditions, so many incubators have set their sights on entrepreneurial teams in economically developed areas of Beijing, Shanghai and Guangzhou.
Interestingly, there is a subtle connection between insufficient onboarding teams and team attrition. The industrial park is doing everything possible to introduce high-end teams from Beijing, Shanghai and Guangzhou, offering generous conditions to the teams, and does not hesitate to provide high subsidies. However, the industrial park has never thought that the local environment is often not suitable for the development of these teams, resulting in the teams not being able to stay for a long time.
For example, in order to promote the upgrading of local industries, a certain central province vigorously introduced advanced foreign companies and provided favorable policy conditions. Many companies were attracted by the policy and set up factories or settled in industrial parks in the city. However, after operating for a period of time, they found that the local market was too small: taking the high-end sports facilities industry as an example, the annual scale of the local market is only about 100 million yuan, which can only support a few dollars. It is a medium-sized enterprise, but in order to promote industrial upgrading, the city introduced three large enterprises at one time, with a total production capacity of about 1 billion yuan. After production, these companies found that the purchasing power of the local and surrounding areas was seriously insufficient, and the transportation costs of transporting products to further provinces for sale exceeded the cost of opening a new factory. Under such circumstances, the vigorous industrial parks gradually became deserted. Many companies just set up a small office or shut down the factory in order to receive government subsidies, and sent the workers home.
For another example, I helped a large incubator in Changsha introduce a Beijing team. The incubator hopes to introduce about 10 startup companies from Beijing and provide favorable conditions. All the teams that agreed to join the incubation valued the preferential conditions, but felt that the market in Changsha and even Hunan could not support the development of the company, so they all adopted a compromise approach of setting up a nominal head office. The so-called nominal head office means registering a head office in Changsha and a branch office in Beijing. Nominally, the Changsha headquarters has jurisdiction over the Beijing branch, but in fact, all the company's core members and core business are in Beijing. There are only 1 or 2 employees in Changsha to put on a show. Only when the leaders inspect, the core members will fly there collectively. Changsha.
On the other hand, in order to attract teams to settle in, industrial parks often have to solve financing problems for the teams. Since most domestic investment institutions are concentrated in the Beijing, Shanghai, Guangzhou and Shenzhen regions, the industrial park is keen to invite investors from Beijing and Shanghai to review incubated projects through entrepreneurial competitions and roadshows, hoping to help the incubated teams obtain financing in this way. .
However, after our long-term follow-up visits, we found that most of the companies that received this kind of financing eventually chose to leave local incubators and go to developed areas such as Beijing and Shanghai. The reasons are: 1. These areas have a better entrepreneurial atmosphere and opportunities. In the past, the team lacked relevant understanding. Once they obtained the funds, they actually had an additional information channel and approach, and they were easily attracted by the better atmosphere. 2. There are many entrepreneurial teams in Beijing, and it is easy to find partners and upstream and downstream industry chains. Many investors even invest to form an upstream and downstream industry chain. The company doesn't even need to go to the market. It can solve the problem of purchase channels and sales targets by sending the CEO to the investor's home and having a meal. Of course, it is willing to move closer to the investor. 3. There are many investors in Beijing, Shanghai and Guangzhou, especially Beijing, where 70% of the country’s investment events occur. When a company moves to Beijing, it will have the opportunity to contact more investors, which will be beneficial to the next round of financing.
For example, I helped an incubator in Luoyang organize a large-scale roadshow event and invited five well-known institutional investors from Beijing to screen projects. As a result, most local projects cannot meet the investment standards of investors, and a very small number of truly excellent projects are lobbied by investors to be developed in Beijing during the due diligence stage.
3. Use local funds to invest in local teams
From the above analysis, we can summarize the mistakes in the current two directions of incubator operations.
1. Not paying attention to creating a local entrepreneurial atmosphere.
Incubators have strong geographical attributes, and the first thing they attract must be local teams. If there are few local entrepreneurial teams and the market base is too small, then blindly launching new parks will definitely lead to a situation where there will be too many people and too little food, and the business incubation rate will definitely decrease. Therefore, the fundamental measure to solve the incubation rate is to focus on the local area, change its positioning from a real estate project operator to a venture capital market service provider, and provide more venture capital services to local teams, such as entrepreneurship training lectures and analysis of entrepreneurial ideas. , entrepreneurial capital support, business management guidance, formalities agency, tax exemption and a series of services are provided.
2. Blindly superstitious about the capital of Beijing, Shanghai and Guangzhou. Many incubators believe that without investment from Beijing, Shanghai, Guangzhou and front-line investors, speaking out would be unpleasant, unyielding, and lose face, so they do everything possible to introduce investment from Beijing, Shanghai and Guangzhou. As everyone knows, in these areas, there are a huge number of entrepreneurial teams, and investors have a lot of room to choose, resulting in very high investment standards. Some institutions have even reached the target market size of less than 100 billion and do not invest. The expected future exit profit is less than 100 times. There is an extremely strict standard that the invested companies cannot become industry giants. This standard cannot be achieved by most start-up companies. If there is such a project in an incubator, it should be held tightly like a treasure.
On the one hand, local teams urgently need hundreds of thousands, one or two million in funds to start projects but cannot get them; on the other hand, they hand over the best projects in their region to Beijing, Shanghai and Guangzhou. This kind of distorted business thinking will definitely bring obstacles to business behavior.
After years of observation and thinking and long-term communication and practice with the incubator management, we have summarized the solution of "investing in local teams with local funds".
Specifically speaking, it no longer focuses on funds from investment institutions in Beijing, Shanghai and Guangzhou, but organizes local private capital to form investment funds specifically for investing in local enterprises. The advantages of this are:
1. The investment standards are lowered. Since local funds are not professional investment institutions, the profit pressure is not that great. The screening criteria for invested projects do not need to be as strict as those of Beijing, Shanghai and Guangzhou investment institutions. Even if the market size is smaller, the exit profitability is lower, and the business model has some flaws, it is still acceptable. of. This greatly increases the possibility for entrepreneurial enterprises to obtain investment funds and activates the local entrepreneurial market.
2. Start-ups are more likely to succeed. Since local funds invest in local companies, the investors have extensive local resources and connections, and even the investors' own companies may be upstream and downstream of the industrial chain of start-up companies, which provides a good environment for start-up companies to survive. On the other hand, since all resources and markets are local, startups are less likely to be lost.
3. Upgrade local industries and solve employment problems. Local companies start businesses locally and receive local investment. Since the investors and founders are all locals and the business is carried out locally, most of the employees will of course come from the local area, which solves the local employment problem. By deliberately guiding entrepreneurial enterprises in their entrepreneurial direction, the purpose of upgrading local industries can naturally be achieved. Moreover, this upgrade method is stable and stable. All core technologies, production capacities, concepts, and models are controlled by local companies. There is no need to worry about the sudden withdrawal of companies and the collapse of the industry.
4. Promote local social harmony and stability. When high-net-worth individuals and the new wealthy class use their funds to invest in entrepreneurship, they need to devote a certain amount of time and energy to learning new technologies, new trends, and understanding new situations. They often visit the companies they invest in and communicate with government authorities. Participating in industry conferences and forums can virtually create an atmosphere of learning and progress. While participating in a symposium organized by an incubator in Shanxi, a local official told the author privately: Since the launch of the investor class, there have been far fewer cases of gambling and spending money to compare. Rich people spend their time and money. The right path has come. ?
4. Where to find local funds
After exploration, we can raise local funds through a four-step method to realize the "local money invested in local teams" plan.
The first step: start an investor training camp.
If you want to organize local entrepreneurs to invest, you must first tell them what venture capital is and how to screen projects.
To this end, I have held many investor training camps and invited investors from well-known investment institutions to give lectures to local entrepreneurs and high-net-worth individuals, starting from the basic knowledge of venture capital, to how to screen industries, how to screen projects, and how to A series of knowledge such as signing agreements, how to manage post-investment, how to exit, etc., coupled with practical case explanations, real team road shows, etc., help local entrepreneurs and high-net-worth individuals understand and become familiar with venture capital in an all-round way from theory to practice.
The second step is to organize a road show for local companies and invite training camp students to participate. After participating in the course, students will have a certain amount of knowledge and understanding and will be eager to give it a try. At this time, you may wish to organize more local start-up companies to meet with students to introduce projects and discuss investment. For projects at this time, attention should be paid to selecting projects with simple business models, small capital scale, and relatively small risks, so as to reduce the investment risks of students as much as possible.
The third step is to provide government guidance and organize investment funds. After students have made one or two small-scale, low-risk investments, they can organize an investment fund and concentrate on investing in larger-scale, higher-risk projects. Investing in the form of an investment company should also be the normal state of venture capital. At this stage, the government needs to provide guidance and establish a guidance fund. The amount of the guidance fund can be 30-50% of the amount of funds raised. At the same time, external professional investors should be hired as investment decision-makers to provide more accurate judgments.
The fourth step is to cultivate local investment decision-makers and achieve complete localization. After 3-5 years of investment training, some local investors have grown into excellent investors, and new investment funds can be established with them as the core to achieve complete localization of investment. Some of the former invested companies have grown vigorously and have the strength to invest in new start-ups. From then on, a training camp--individual small venture capital investment--raising funds to form a fund--invested companies became a virtuous cycle of investors, helping the local economy. Development, entrepreneurial business growth, and incubator industrial park operations are on the fast track