Entrepreneur: Hands To Improve Cash Flow!

The discussion about the financing difficulty of Chinese venture capital has been common.

The problem is objective and does not shift in time and space: the same problem exists in American start-ups. Last year, there was a problem of financing difficulties, which continued this year.

The key is to solve the problem.

The number of small and medium-sized enterprises in China has exceeded 8 million, some data show that 13 million, while the number of Chinese venture capital companies is about 365 (Zero2ipo Qing Ke company statistics by the end of 2002), the ratio between SMEs and venture capital companies is about 20000:1.

It is really hard for investors to find their "money making machine".

In the past two years, there are only more than 200 start-ups in China in the past two years, with an average financing amount of US $2 million.

This brutal proportion has really chilled most of the start-ups.

But "beautiful women do not worry about getting married", excellent high growth venture enterprises will get the favor of capital.

Before complaining about the investment and financing environment, entrepreneurs should strive to improve their own financing environment, constantly improve their financial statements, and improve their viability and development potential.

With the slowdown of global economic growth, the listed companies and unlisted companies (entrepreneurial enterprises) have all been tested, and bankruptcy is likely to happen at any time.

There are two ways for entrepreneurs to survive and develop.

One is to create income continuously, one is to continuously seek support from outside funds, especially venture capital support and continuous financing.

The first way to reduce business risk and increase investor confidence is also the development goal of the company, because the purpose of entrepreneurship is to make profits instead of using investors' money.

However, if there is only one way to ignore the second way, the growth and expansion of the company will be limited, and at the same time, the time will be lost for the industry to become the leader of the industry.

The trend technology, founded by the Zhang Mingzheng and Chen Yizhen couples in Taiwan, took the lead in the first 12 years. After gaining the investment of Softbank in 1997, it decided to take the lead in the global anti-virus and anti-virus software. It has successfully listed on NASDAQ and Tokyo stock exchange in Japan, and its market value has reached $10 billion.

The second way is a bit like "growth agent". Eating one or two meals may not be effective. If you overly rely on growth agents and ignore the "staple food", the company may die premature.

Over the past two years, a large number of previously heavily capitalized companies have closed their doors or their share prices have dropped sharply. Some companies that focus on innovation in company operation mode, such as NetEase, have risen in adversity. Their total revenue has increased by 600% compared with 2001, and their share price has increased by 1600%, exceeding 14 dollars, which has been sought after by investors. However, the valuation of Yaxin, which has declined in recent two years, is down all the way, and its current price is less than 4 dollars.

These two enterprises are domestic enterprises supported by venture capital.

In 2002, venture capital is at a low ebb around the world.

According to VentureOne, a famous research institution of venture capital, as of the third quarter of 2002, the global venture investment decreased by 60% compared with the same period last year. According to the statistics of Zero2ipo, the investment volume of venture capital institutions in China in 2002 was 420 million yuan, down 19% from 520 million dollars in 2001.

In the United States, as of the third quarter of 2002, a total of 2032 start-ups received 16 billion 920 million dollars in investment, while 3757 start-ups received 33 billion 660 million dollars in investment in the same period last year. In Europe, as of the third quarter of 2002, investment indicators in European venture capital declined by 50% compared with 2001.

This shows that the difficulty of venture capital financing is further increasing worldwide.

At the same time, start-ups should increase revenue and reduce expenditure and concentrate on generating income.

The annual research report of China Venture Capital in 2002, released by the Qing Ke venture capital research center, shows that in 2002, the more than 220 start-ups who were successful financing were mainly concentrated in the growth and expansion periods, while most of the enterprises in the past two years maintained good business performance.

For the sustainable development of enterprises, venture enterprises should comprehensively improve their cash flow from two aspects: income generation and financing.

Among them, the company's own revenue priority.