Analysis Of The Reasons For "Angel Investment" In China'S Development

At present,

Angel investment (Angel Investment) is a form of equity capital investment. It refers to rich individuals who contribute to original projects or small start-ups with special technical or unique concepts for one-time one-time investment.

It is a form of venture capital investment based on the amount of investment of angel investors and the comprehensive resources that may be provided to the invested enterprises.

For China's venture capital investment, foreign venture capital institutions are mostly financial investors. They are familiar with the capital market and are good at investing in the rear end of entrepreneurship. Therefore, there is a gap between foreign venture capital institutions and entrepreneurs who are in the early stages of entrepreneurship.

At this time, a group of local investors, who are more familiar with the local market and the industry, invest in the front end, which is their advantage. This is China's "angel investment".

The development of angel investment in China:

1., there are angels in China but lack professionalism.

In China, with the development of the economy, some of the rich are looking for challenges as they want to become richer and richer.

Some people choose the stock market and others choose to act as angel investors, even though they are not familiar with the term.

Generally speaking, angel investment in our country has not been much improved.

One reason is that traditional saving ideas dominate people's behavior. No matter how much money they have, they always consider it the safest way to add it to a bank, even if its real interest rate is negative.

The economic downturn and the difficulty of bank loans have led to the collapse of small and medium-sized enterprises in China.

If cash flow is insufficient, angel investors can inject money into them, which may bring them a turning point.

At present, there is no professional angel investor in China.

Professional angel investors need rich management experience, strong connections and idle funds. The greater the amount, the better.

Which people in China conform to these conditions? I think it is: retired business executives, executives, administrators (civil servants).

In the current economic downturn and the unprecedented pressure of employment pressure, retirees who leave their jobs can use the identity of "angel investors", effectively utilize their accumulated experience and resources for many years, and seek new challenges and make greater achievements.

2. angels emerge: underground capital turned to above ground capital.

In China, there are not many underground banks, which may be another unique investment method for wealthy people.

No matter what the legitimacy of its existence is, however, at some point, some small and medium enterprises which are on the verge of bankruptcy have come back from the death line.

In many cases, small and medium-sized enterprises will be able to borrow high interest loans from underground banks when they fail to achieve financing.

In the international economic situation is not optimistic today, the survival of SMEs is particularly difficult.

However, the lack of financing channels and high financing requirements caused financing difficulties, and also led to many enterprises in trouble.

Angel investment, as a rare investment and financing method in China, can enter the economic market at this very moment, thus achieving continuous improvement and development.

The reasons for slow development of angel investment in China are:

At present, China's private savings account for more than 1 trillion yuan of savings deposits alone, indicating that there are a large number of potential angel investors in China.

However, these funds have little access to the angel investment field. What factors restrict the development of angel investment? The following four points deserve our consideration.

1., the lack of angel investment culture atmosphere: angel investment is still a very fresh word in our country. Even financial professionals have many strange features and operation modes of angel investment.

Many of the rich potential angel investors in the country also lack the common sense and adventurous spirit of angel investment, which greatly hinders the expansion of angel investment activities.

2. the lack of integrity of Entrepreneurs: in our country, the folk credit mechanism is not perfect enough.

For example, some entrepreneurs are not reasonable to use money after obtaining funds, or concealment profits after profits, and do not give dividends to angel investors. This affects the investment enthusiasm of angel investors to a certain extent.

3. the information between angel investors and enterprise projects is not smooth: in recent years, with the rapid development of Internet technology, there have been some capital projects website providing an information exchange platform for angel investors and enterprise projects.

However, due to the decentralization of angel investors and the limited access to Internet projects, the channel of information pmission between angel investment and projects is not enough, which reduces the efficiency of angel investment choice.

4. the imperfections of angel investment environment: This is mainly due to the lack of exit channels for angel investment and the absence of relevant regulations on angel investment.

The existing securities market in China is inefficient and can not provide effective channels for the withdrawal of angel capital.

At the same time, although the Interim Measures for the management of venture capital enterprises began in March 1, 2010, it did not include individual investors and non professional investment institutions, which constituted the main source of angel investors.

Therefore, legislation on angel investment is still in blank.