Six Major Financing Options For Early Business

For entrepreneurs, the ability to raise funds quickly and efficiently is the key to establishing a firm foothold and is the driving force for the two venture.

It is understood that at present, the financing channels for domestic entrepreneurs are relatively single, mainly relying on banks and other financial institutions.

In fact, venture capital, private capital, venture capital and financing lease are good financing channels for venture capital.

In recent years, the government has fully realized the importance of small and medium enterprises in the national economy, especially local governments in various provinces and municipalities. In order to enhance their competitiveness, the government has constantly adopted various ways to support high technology industries or advantageous industries.

For this reason, governments at all levels have set up some government funds to support them.

This is a good opportunity for many scientists and technicians who have the skills and aspirations to start their own businesses, especially the returned students.

Case study: Dr. Shi Zhengrong, who spent 14 years studying and working in Australia in 2001, returned home to Wuxi with his own 10 years of scientific research.

When the leaders of Wuxi learned that Shi Zhengrong's reputation and his research achievements of solar crystalline silicon cells were still blank in China, they immediately cled to support scientists as bosses.

Under the leadership of the Municipal Economic Commission, the Wuxi municipal government invested 8 million yuan in connection with several large state-owned enterprises, and established the Wuxi Suntech Solar Power Co., Ltd.

With the support of government funds, Suntech has made leaps and bounds, and has sold over 100 million yuan in only 3 years, becoming a star enterprise in the industry.

Innovation Fund: the "nutritious meal" of entrepreneurs has been developing rapidly in recent years, and has become a new important growth point of national economic development.

The government is also paying more and more attention to the development of technology-based SMEs.

Similarly, these enterprises in the early stage of the financing of enterprises faced with the urgent requirements and financing difficulties, also become an important problem that the government is trying to solve.

In view of this, combined with the characteristics of the development of science and technology SMEs in China and the status quo of the capital market, the Ministry of science and technology and the Ministry of Finance jointly established and launched a technological innovation fund supported by the government in order to help SMEs solve their financing difficulties.

The innovation fund has increasingly become a tasty "nutritious meal" for small and medium-sized technology-based enterprises.

Case study: Lanzhou Dacheng Automation Engineering Co., Ltd. has been developing products for nearly a year since its operation. There is almost no income. Although the development of technology has made great progress, the shortage of funds is becoming more and more prominent.

At that time, the technology innovation fund for small and medium-sized enterprises started, and the enterprises were very excited after that. They chose the project of "research and development and pformation of all electronic intelligent control series of railway stations" with the international advanced level to declare the innovation fund.

For this reason, they further accelerated the speed of R & D, and passed the technical review of the Ministry of Railways in December 1999, and achieved some results.

Because of the good technical foundation of the enterprise, it was supported by 1 million yuan of innovation fund in 2000. It not only played the role of sending carbon in the snow, but also played the role of guiding the fund.

In the same year, the project was awarded the 500 thousand yuan major achievement pformation fund of the Gansu science and Technology Department, and the basic research fund of the Ministry of education's "backbone teacher funding scheme for colleges and universities" 120 thousand yuan.

In 2001, in view of the technical demand for the construction of the Qinghai Tibet railway, the project was included in the key research project of Gansu Province, supporting three expenses of science and technology 300 thousand yuan.

Venture capital investment: entrepreneur's "vitamin C" in the English language, the short term of venture capital is VC, which is exactly the same as the Vc of vitamin C.

The generalized venture capital refers to all investments with high risk and Gao Qian's income. The narrow sense of venture capital refers to the production and management of technology intensive products based on high and new technology.

According to the definition of the American Venture Capital Association, venture capital is a kind of equity capital invested by professional financiers into new and rapidly developing enterprises with great competitive potential.

Case study: Chongqing Jiangbei general machinery plant started in 1995 to develop large scale Freon unit new products. It has compatible functions and can be replaced by other refrigerants.

Because banks generally do not lend money to new products.

The Chongqing Vc firm has provided a loan of 1 million yuan.

Two years later, the sales volume of new products of Jiangbei general machinery factory amounted to 70 million yuan.

Small and medium enterprises guarantee loans: Entrepreneurs' "tranquilizing soup" on the one hand, small and medium-sized enterprises financing difficulties, a large number of enterprises crying for food; on the one hand, bank funds lack of way out, attack everywhere, but are unwilling to lend to small and medium-sized enterprises.

The main reason is that banks consider it difficult to guard against loans for SMEs.

However, with the vigorous support of national policies and relevant departments and the surge in the number of guaranteed loans, secured loans for SMEs will become another effective way for SMEs to raise funds.

Case study: a high-tech company in Shanghai belongs to the first class professional lighting and landscape construction enterprise in China, and has developed dozens of products.

With the support of strong R & D capability, the company's business is developing rapidly.

Along with business development, it is capital dilemma.

The industry characteristics of engineering enterprises are slow speed of capital withdrawal and serious occupation of working capital.

However, due to the small size of the company and lack of credit record with banks, it is difficult to get bank financing.

At the end of 2005, the company received 800 thousand yuan of working capital loans guaranteed by the central government, and the company achieved rapid development in the past two years. In 2007 6~7, the company won the 08 Beijing Olympic stadium lighting project contract.

Angel investment: the baby milk powder of entrepreneurs is a free investment or informal venture capital institution, which is a one-time investment for the original project or small start-ups in the conception state.

Angel investment is a kind of venture capital, but there is a big difference between them: angel investment is a form of non organization venture capital. The source of its funds is mostly private capital rather than professional venture capitalist. The threshold of angel investment is low. Sometimes, even if it is a creative idea, if there is development potential, it will be able to obtain capital, and venture capital is generally not interested in those infants who have not yet been born or are crying for food.

In the field of venture capital, the term "angel" refers to the first batch of investors of entrepreneurs who invest funds before the company's products and businesses are formed.

Angel investors are usually friends, relatives or business partners of entrepreneurial entrepreneurs. Because they believe in the entrepreneur's ability and creativity, they are willing to invest a lot of money before the business is far away. A typical angel investment is usually only a few hundred thousand dollars in the area, which is a fraction of the venture capitalist's subsequent investment.

In the case of startups, they can neither eat the "rice" of bank loans, nor touch the light of venture capital "vitamins". In this case, they can only rely on the "baby milk powder" invested by angels to absorb nutrition and thrive.

The case of Niu Gensheng: when he was making a packaged product, he became a good friend with Xie Qiuxu when he was making a package. When he was a self timer, Xie, as a printing dealer, lavishly poured gold into the start-up Mengniu and gave most of his shares "no thanks" to the management, employees and other beneficiaries of the Mengniu company in the form of "shes trust", without participating in any management and development arrangements of Mengniu.

Eventually Xie Qiuxu also won a lot of money, 3 million 800 thousand yuan investment has now turned into 1 billion yuan.

Pawnbroker financing: the "quick noodle" of venture entrepreneurs, although the risk investment is a beautiful thing in the sky, but only a small part of the "elite" of elite entrepreneurs, while the door of the bank is open, but there is a certain threshold.

The most important function of pawns is to save time.

Compared with the bank loans as the mainstream financing channels, pawn financing has played a role in picking up the deficiency and adjusting the surplus demand. But because it can get more funds for the financiers in a short time, it has been likened to "instant noodles", which is gaining more and more attention from the entrepreneurs.

Case study: Mr. Zhou is a communications equipment agent. He has secured a brand new mobile phone agent for some time. But the problem is that he will pay for the goods within three days, and his investment in another commercial project will not be reconciled to losing the agency that is hard to come by.

Mr. Zhou switched his mind to his BMW car, so he immediately drove to the pawn shop.

After knowing the situation, the salesman told him that he could get the pawn money on the same day.

Mr. Zhou was overjoyed. He immediately began to handle the pawn formalities, pay relevant documents, fill in the form, open the car to the designated warehouse, sign the contract, and receive the gold.

After half a day's work, he got the 500 thousand yuan he needed badly, and then redeemed it a month later. This earned him nearly 100 thousand yuan.

Xu Qiyun, editor in chief: