PE/VC Post War Epidemic: Finding Money And Finding A Way

"If we look forward to 2020 at the end of last year, we will say," next year will be very difficult. " Yi Kai capital CEO Wang Ran wrote.

Since the resumption of the Chinese New Year in 2020, the official numbers of investment institutions have locked their contents in the knowledge of epidemic prevention and control, remote office guidance and crisis response guidelines, and partners of major organizations have provided "war epidemic" proposals for the invested enterprises through online mode.

"Due diligence is definitely not done now, and other tasks are being carried out step by step. We are also used to mobile office. Things are not delayed. " One interviewee said.

According to the twenty-first Century business reporter, it was found that the epidemic tracking of the invested enterprises was one of the core tasks of VC investment institutions in February 3rd. The contents include what contribution the enterprise has made to the epidemic prevention work, and the extent to which it is affected by the epidemic. It includes the dimensions of reemployment time and personnel arrangement, business impact, cash flow of the company, whether there is new capital channel, and which business has the possibility of transformation hematopoiesis.

Some respondents added that LP also had more communication on the epidemic response and investment institutions. In addition to understanding the impact of the invested enterprises, they would also pay attention to whether the investment strategy of the investment institutions would be adjusted.

Joint "epidemic prevention"

Many investment institutions' post war "epidemic" has started before New Year's Eve.

Late in January 20th, Mr Mao, the founding partner of Yun Qi capital, learned the information about the aggravation of the new coronavirus pneumonia, and promptly called the Yan Jian, the founder of the company's industrial products exchange, to coordinate the protection materials for the fund member enterprises. At that time, it was 11 o'clock in the evening of Beijing time, and Liu Fangyi, head of Ying Ke medical CEO and Yun Qi capital post, Li Na quickly joined in the coordination and communication of procurement.

"This year is too meaningful. Although people are overseas, they haven't gone anywhere. Countless phone calls, countless times of communication, confirmation, and repeated confirmation are just to help. Remembering the 48 hours of the race before the Spring Festival, Li Na, a responsible person, wrote in his circle of friends.

The horn of PE/VC post war "epidemic" has been fully launched before and after new year's Eve. On the one hand, it has arranged communication with internal and external donors. On the other hand, it has established an epidemic communication mechanism with the project side to achieve rapid docking of resources and information for the invested enterprises.

In the past half a month, the communication between investment institutions and the enterprises being invested was mostly centered on "epidemic prevention". First, we determined the safety protection of the enterprises being invested, and then the joint support for the epidemic prevention. Now we discuss how to minimize the negative impact of the epidemic.

"Throughout the Spring Festival, we are continuing to communicate with the core invested enterprises, talking about cash flow, business pressure, new business possibilities, and resumption arrangements. Communicate with the invested enterprises every week, the core enterprises touch every two or three days. Li Na told reporters that the team will also invite investors, entrepreneurs and external experts to share with the management of the invested enterprises in view of the common problems of the start-up companies.

Sheng Dao investment CEO Xue Yuning believes that the epidemic will have a major impact on the offline businesses in the short term and medium term. Start-ups must ensure that there is ample cash flow and make all the projects based on the Internet more profitable.

He said that the fund's post investment team is trying to help the online business based enterprises to invest, expand upstream and downstream business matching, and cross boundary all industry resources to ensure their advantages. Meanwhile, helping the offline invested enterprises is mainly carried out in government relations dredging, policy support and so on.

Find the money and find the way.

In VC investment institutions, post investment support is not only the post investment team's work, but every investor is the core responsibility of their project. Even if some investors were forced to postpone the return time due to the cancellation of the flight, their communication with the project was not affected.

Speaking of the impact of the new crown pneumonia epidemic on the financing market, Hu Xubo, chief executive of Qiming venture capital, believes that the epidemic will bring short-term fluctuations to the venture capital investment and financing market, but it will not have any essential influence on the startups focusing on long-term customer value.

Hu Xubo suggested that the company need to redevelop its development plan and budget immediately. "We need to consider the worst case, for example, the next 5 months' income is the 10%-50% of the budget, to see your cash flow. At the same time, we need to re evaluate our business models and business models. Maybe you don't need to change, maybe you need to change. The core is whether you need innovation.

For the venture capital industry, the new crown outbreak has disrupted the fund-raising and investment rhythm and plans of investment institutions. Cash flow is the most important issue for start-ups outside safety, especially those with offline businesses, which have to face the problem of insufficient cash reserves.

"We are communicating with many banks to help enterprises to support banks. The new financing is difficult to achieve. It is difficult to get money from the primary market, and we need to solve the cash flow problem in other ways. " One interviewee told reporters that in the fund's investment projects, it is urgent to find the money to solve the cash flow.

A number of respondents said they were closely communicating with the projects they had invested to help finance the landing and loan of project financing. In addition to finding money, another major task of VC at this stage is to discuss the business side response to the epidemic during discussions with the invested enterprises. Especially for many enterprises with offline business as the main business, is there any possibility of transformation of new business services?