8 Tips For Success In Finding Capital

In the process of venture capital financing, we should pay attention to the following aspects in order to ensure the success rate of financing.

It's not enough to have good ideas. You also need to have a unique competitive advantage. This advantage ensures that even if the whole world knows you have such an idea, you will win.

Apart from having good ideas or competitive advantages, everyone can build a company, but do you manage it?

If you can use a few sentences to illustrate the above problems and raise the interest of investors, then you can tell him how much money you need and what you want to achieve.

Two, regarding the advantages of first entry, it is important to note that first entrant does not guarantee long-term advantages. If you emphasize the advantages of first entry, you must be able to explain why first entry is an advantage, whether the entrant can effectively obstruct the new entrants, or the users are not easy to replace suppliers.

Three, pay attention to market rather than technological level. Many emerging enterprises, especially high-tech entrepreneurs, are engineers or scientists.

Because of their professional background and work experience, they are very interested in high technology, high precision and sharp points, but investors are concerned about the profitability of your technology or products, and your products must be what the market needs.

The advanced nature of technology is of course important, but only if you can explain to investors that your technology has great market potential or great market potential, then he will invest.

Many creative products are not promoted because inventors do not fully examine what customers really need, do not choose the target market or do marketing.

Investors are businessmen. They invest in you not because your products are advanced, but because your business can make money.

Four, why do you say that you can achieve such a large scale? A common mistake is that the description of the market scale is too vague, or there is no basis to say that it will occupy a large percentage of the market share, which can not convince people that your business can be very large.

Five, why not mention competitors? In order to emphasize the uniqueness and dominance of enterprises, some entrepreneurs deliberately do not mention famous competitors or emphasize few or weak competitors.

In fact, the existence of successful competitors indicates the market potential of products, and for venture capital firms, strong peers are the potential opportunities to be acquired in the future.

Six, according to market demand or according to sales ability, a common mistake in forecasting sales forecasts is to estimate the entire market capacity first, then to say how many shares the enterprise will get, and to calculate the expected sales volume accordingly.

Another questionable method is to estimate the growth rate of annual sales and calculate the sales volume in the next few years.

Too optimistic optimism is ridiculous.

For example, some people estimate the turnover: I invented a new insole, assuming that the people of the whole country buy two pairs each year, so the market capacity has 2 billion 600 million pairs. We only need half of the market.

The more credible method of planning is to plan how much resources to invest, how many potential customers the market has, what competitive products it has, and then according to the probability of potential customers becoming the real users and the amount of sales that can be generated from the unit resources input, and finally calculate the sales forecast of the enterprises.

Seven, elevator pitch is very important. Maybe you will meet an investor in public. Maybe investors do not want to see long business plans. You only have a few seconds to attract the attention of investors.

When his interest is aroused by you, ask about your company's management team, technology, market share, competitors, financial situation and other issues, you have prepared concise answers.

Eight, the price quoted by investors is similar to that of a price rise auction. If investors really value the company, he will raise the price of the business and reach agreement between the two parties.

On the other hand, the quotation behavior of venture capital in financing is similar to that of price reduction auction. At the beginning, it thought highly of itself and expected unrealistic high prices. As time went on, enterprise funds became tighter and tighter, investment intentions were never determined, and the spirit was gradually blunted, and the result was that they accepted the real price at the very end (though sometimes not so willingly).