About the financing knowledge in the early stage of starting a business, the following are some I collected. Welcome to reading and understanding.
What exactly is venture capital?
Of course, VC does not mean vitamin C, nor does it mean investing wherever there is risk.
Is that how Wikipedia explains it? Venture capital? Objective: Venture capital is a kind of private equity investment, which usually invests in early-stage companies with potential and growth, with a view to obtaining investment returns through IPO or company sale.
Since venture capital is a kind of private equity investment, focusing on investing in early-stage companies, what is private equity?
Wikipedia explains this? Private equity? Objective: Private equity investment is a broad concept, which refers to investing in any assets that cannot be traded freely in the open market in any form of equity. Institutional investors will invest in private equity funds, and private equity investment companies will invest in target companies. Private equity investment includes leveraged buyout, mezzanine investment, growth investment, venture capital and angel investment. Private equity funds usually participate in the management of the invested company and may introduce other management teams to make the company more valuable.
If the above is a folk saying, the official explanation is undoubtedly based on the definition of National Venture Capital Association (NVCA): Venture capital is the equity capital invested by professional investors and their management experience in emerging, rapidly developing enterprises with great economic development potential.
From the above definition, we can find several key genes that constitute venture capital:
▌ First, money is the capital of venture capital investment target, which is provided by specialized investors;
Second, venture capital is a kind of equity investment, which is generally not reflected in the form of debt investment such as loans;
Third, investment behavior is the responsibility of professional venture capitalists;
▌ Fourth, the invested company is still very young, in a period of rapid development, and is likely to succeed in the future.
How exactly does VC work?
Actually, what we often hear and see? VC？ This word can also be used as? Venture capital company? 、? Venture capitalist? 、? Venture capital industry? Short for, etc.
VC is actually similar to the general production enterprise model. They buy at a low price from some high-quality entrepreneurs first? Raw materials? Shares in these startups, and then what? Raw materials? Processing provides some value-added services to enterprises, or simply waits for entrepreneurs to make their own efforts to turn these raw materials into more standardized products and gain value enhancement.
Finally, VC sells these shares to large enterprises, or lets them go public. VC sells its shares to strategic investors or the public at a high price through the securities market, thus completing an investment cycle and realizing investment income.
Venture capital focuses on investing in early-stage, high-potential and high-growth companies, exchanging cash for the equity of the invested company, realizing equity appreciation through the listing or sale of the invested company, and obtaining the realized investment return.
Venture capital fund (hereinafter referred to as? VC fund? ) is a collective investment tool, usually in the form of limited partnership or limited liability company, which gathers the money of third-party investors or investors and invests in many target companies.
Venture capital company (hereinafter referred to as? VC company or? VC？ ) is the manager of VC fund, responsible for financing the fund, just as entrepreneurs finance enterprises, VC companies also need to finance investors. Only by raising enough funds and setting up a venture capital fund can we start investing.
The professionals in charge of investment in VC company are called venture capitalists, which is what we often say? VC？ They are responsible for finding, selecting and evaluating investment targets, and bringing management experience, technical strength, external resources and funds to the invested company.
Funds established in the form of limited liability companies are not much different from ordinary companies, and domestic venture capital companies with a certain number of years basically adopt this organizational form.
The mainstream VC fund organization form is limited partnership, and most VC funds in the United States and some emerging local VC companies in China also adopt this form. The funder of the fund is called Limited Partner (LP), and the venture capital company is called General Partner (GP).
The fund is jointly owned by all partners. As a GP, VC company should not only allocate some funds, but also manage the current VC fund.
LP participates in sharing investment income, but does not participate in the daily decision-making and management of fund operation. The separation of ownership and management rights of VC funds ensures that GP can invest independently without external interference.
In addition, in order to supervise GP's business operation, financial situation and reduce investment risks, VC funds should hire independent financial audit consultants and lawyers, and set up a board of directors or advisory committees, who will participate in the decision-making of each investment, but it is ultimately decided by GP.
Angel investment is essentially an early venture capital. Angel investors (angels) are often rich people: many of them have successfully established companies and have a keen sense of technology. They don't want to work hard to start a business, but want to help others and get benefits indirectly. In short, what are their ideas? Don't want to be a general manager, just a director? .
Master the necessary financing knowledge, and you won't suffer anywhere! What is financing?
Financing is a way for enterprises or individuals to obtain appropriate funds in the form of equity and creditor's rights through banks, financial institutions, foreign-funded institutions, investment companies and other enterprises and individuals in the process of their own development and entrepreneurship, or in the process of product development and marketing, to meet their own development.
There are two main forms of cooperation in enterprise financing:
Equity financing: a form of cooperation in which an enterprise or individual shares in a certain amount of fixed assets, land, plant equipment, patented technology with independent intellectual property rights and a small amount of working capital, and the investor shares in capital. Equity financing is common in high-tech enterprises, agricultural deep processing, breeding and planting projects, and mostly appears in the form of Sino-foreign joint ventures or joint ventures.
The main issues to be determined in equity financing are the shareholding ratio of investors and whether investors participate in enterprise management.
Debt financing: a form of cooperation in which enterprises or individuals raise funds by means of fixed returns and loans, and repay the principal and interest when due. Debt financing is common in individuals, real estate, infrastructure construction, petroleum, chemical industry, transportation, transportation, metallurgy, minerals and other large or comprehensive projects. The main problem to be determined in debt financing is the repayment period of corporate loans, which is usually 3? Five years is appropriate, and some large-scale infrastructure construction and real estate projects can last more than eight years. In addition, debt financing should also ask about the repayment interest rate that enterprises can bear. Generally, the interest rate of private loans is 2-3 percentage points higher than that of bank deposits in the same period.
Personal business loans refer to loans issued by banks to individuals engaged in legal production and operation for directional purchase or lease of commercial houses, machinery and equipment, and for meeting the liquidity needs, production and operation and other reasonable capital needs of individual holding enterprises. Personal business loans are divided into personal business loans, including special loans and working capital loans; The loan elements of personal business loans and personal commercial housing loans, as well as equipment loans and unsecured working capital loans.
According to the different purposes of loans, personal business loans can be divided into personal business special loans and personal business working capital loans.
Special loans refer to loans issued by banks to individuals for directional purchase or lease of commercial houses and machinery and equipment, and the main source of repayment is cash flow generated by operations. Special loans mainly include personal commercial housing loans (hereinafter referred to as commercial housing loans) and personal operating equipment loans (hereinafter referred to as equipment loans). Commercial housing loan refers to the loan provided by banks to individuals for the funds needed for directional purchase or lease of commercial housing. At present, commercial housing loans are mainly used for shops (places where goods are sold or services are provided). Equipment loans refer to loans granted by banks to individuals for purchasing or leasing equipment needed for production and business activities.
Working capital loans refer to loans issued by banks to individuals engaged in legal production and operation to meet the working capital needs of individual holding enterprises (including individual industrial and commercial households). Working capital loans are divided into secured working capital loans and unsecured working capital loans according to the conditions of unsecured loans. Guaranteed working capital loans refer to loans issued by banks to individuals and need guarantees to meet the working capital needs of production and operation. Unsecured working capital loan refers to the credit loan issued by banks to individuals without guarantee to meet the working capital needs of production and operation.
;