How To Get Venture Capital

The acquisition of venture capital depends on the quality of entrepreneurial enterprises, but also requires a certain amount of financing skills.

That is to say, the process of obtaining venture capital support is the process of showing the value of venture capital and developing the financing skills of entrepreneurs.

First of all, before preparing and starting an investor to discuss financing matters, four main documents should be prepared, the business plan should be submitted ahead of time, and the recommendation of the extension network (Network) of venture capital investors will be sought. This is usually an important step to seriously consider the business plan of the enterprise.

In most cases, lawyers or accountants or other members of the network may be able to undertake such a recommendation task, because venture capitalists are most likely to trust these people in judging their business.

These four documents are: (1) the investment proposal (Business Proposal) gives a brief description of the management status, profit situation and strategic position of the venture enterprise; (2) the Business Plan (Business), which describes the business development strategy, the market promotion plan, the financial status and the competitive position of the venture enterprise in detail; and (3) the due diligence report, that is, the written document formed after the intensive investigation of the background and financial stability of the venture enterprise, the management team and the industry; and (4) "marketing material", which is any direct or indirect document material related to the sale of the products or services of the venture enterprise.

Before the formal contact with venture capitalists, it is usually necessary to submit business plan and Executive Summary to venture capitalists ahead of time.

Secondly, entrepreneurs and entrepreneurs need to prepare for psychological preparation in four aspects before they formally discuss investment plans with venture capitalists.

1, we are prepared to deal with a lot of questions to examine the potential benefits and risks of investment projects.

Generally speaking, most of the questions raised by venture capitalists should be answered in a detailed and well prepared business plan.

It is worth reminding us that.

Some small owners usually think they are very clear about their business and think that their qualifications are very good. Such mistakes must be avoided, otherwise they will make you very disappointed.

Entrepreneurs can ask a professional consultant who doesn't need to worry about hurting himself to simulate this questioning process. Although the cost of such a consultant is not low, it is usually worth paying a little price compared with the amount of investment that may attract. After all, there is only one chance to leave a good first impression on the venture investor.

The 2 is ready to deal with the management of venture investors.

Entrepreneurs should never consider such a test an insult to management or individuals.

For example, although you are proud of your achievements in the past 10 years, the manager of the venture capital fund may still ask you: you have never entered a business school, nor are you a lawyer or an accountant or have a diploma. Why do you think you can carry out this business in line with the objectives we envisage? Most people may be very angry and overreact to such questions. As a business entrepreneur, such questions are indeed likely to happen when facing entrepreneurial investors, because this constitutes a part of the inspection of the management of venture enterprises by venture capitalists, so it is necessary to prepare ahead of time.

The company is ready to give up some of its business. (3)

In some cases, venture capitalists may ask entrepreneurs to give up part of their original business so that their investment objectives can be realized.

Giving up part of the business is very realistic and necessary for those businesses whose risk is dispersed. Because with limited investment capital, enterprises can concentrate on resources only in order to remain invincible in the competition.

The 4 is ready to compromise.

From the very beginning, entrepreneurs should understand that your goals and entrepreneurial investors' goals can not be exactly the same.

Therefore, before the formal negotiations, the first and most important decision for entrepreneurs is to make big concessions to meet the requirements of entrepreneurs.

In general, it is not realistic to expect venture capitalists to make such a compromise because venture capital is not anxious to find projects to invest.

Third entrepreneurs should also master the necessary coping skills.

Investment negotiations usually require several meetings to complete.

At most meetings, venture capitalists and entrepreneurs discuss, verify and analyze the business plan previously submitted by entrepreneurs.

There are two points to note: first, let entrepreneurs know and understand their products or services as far as possible.

If you can provide samples or finished products of a product, this understanding and understanding will become more intuitive and impressive; two, always focus on the business plan.

Sometimes meetings will last for hours, when entrepreneurs may become very talkative, so they can consciously and unconsciously talk about some ambitious plans for the future, and mention some products that are not mentioned in the business plan.

This must be avoided because such a conversation will make venture investors think you are a visionary or a person who is eager for success.

Therefore, prior understanding of the six types of codes of conduct of the so-called "six essential" and "six not" is conducive to the successful negotiation of investment between enterprises and enterprises.

Give up the talks; (3) remember to establish a long-term cooperative relationship with investors; (4) to negotiate and bargain with the acceptable pactions; (5) to make some advance understanding of how to deal with the venture investor's work; (6) to understand the projects previously invested by venture capital investors and the composition of their current portfolios; (six) not to evade the questions of venture capitalists; (2) to answer the questions of venture investors without ambiguity; (3) not to hide important problems from venture capitalists; (E) don't expect or require venture investors to decide immediately whether to invest or not; six principles: (1) we must be positive and enthusiastic about the products and services of our enterprises and enterprises; (2) we must understand our trading bottom, and if necessary, we can.

Finally, the typical questions of venture investors are listed as follows: products, competition, marketing, production, supply, personnel and finance.

Before appointing a manager of venture capital fund, it is better for entrepreneurs to prepare for the list of problems ahead of time, so that they can understand the situation clearly.

Typical examples of venture capital investors: 1, products: how can products meet customer specific needs and adapt to the sensitivity and nuance of this demand?

Do customers have a brand awareness of their products?

Does the product have reusable value?

Is it a product of high quality or low quality?

Is the customer of the product the ultimate consumer of the product?

Is the product a widely attractive product or only a small number of bulk buyers?

2, competition: who is the main competitor of the company?

What competitive advantages do they have relative to your company?

What competitive advantages do your enterprises have relative to these competitors?

In the face of these competitors, how should enterprises respond to price, service, sales channels, promotion measures and product quality assurance?

Is there a substitute for your product?

How do you think competitors will react to the rise of your company?

3, market: if you want to get a certain share of the market, what will you do?

What are the key points in the marketing plan of an enterprise?

Does the marketing plan mainly follow a retail marketing strategy or a product marketing strategy?

What is the importance of advertising in your marketing plan?

How will the marketing strategy change when the product or service reaches maturity?

Is direct marketing important to your products?

4, sales: how big is the customer base of products or services?

Who are the most typical customers among all the customers?

How long is the lag between the initial contact with the customer and the actual sales?

5, production: how big is the production capacity of the products?

When the scale develops to what extent will there be production bottlenecks?

What is the importance of product quality control?

What is the current backlog of orders?

Is the product pipelined or customized?

Will the production process affect the health and safety of employees?

What are the main ones?

6, supply: how many suppliers are there in your company?

How long have these suppliers been working with your company?

What suppliers can we find at the moment?

What parts or raw materials are in short supply?

7, staff: how many employees are there in your company?

What is the expected demand for labour in the near future?

What are the main sources of supply of these labour?

What is the composition of employees?

What is the total number of full-time and part-time employees?

How many employees are engaged in management?

How many employees are engaged in logistics?

How many employees are there in the production or service front-line?

How high is the cost of trainers?

Are all the employees made up of skilled or unskilled workers?

Is there a trade union in enterprises? If so, what is the relationship between trade unions and enterprises?

8, finance: how old is the main production equipment of your company?

How much is the annual maintenance cost of these equipments?

What will be the demand for capital in five years?

Do your competitors have advantages in terms of equipment?

Are the equipment, buildings and buildings of the enterprise rented or owned?

If it is a lease, how long is the lease?

How many mortgage loans are there?

Can the existing production facilities of enterprises meet the expansion needs based on the business plan in the future?

Do we need to re build this expansion?

What licensing arrangements are there?

What is the current research and development capability of enterprises?

What is the annual research and development expenditure?

To what extent does research and development affect the future sales of enterprises?