What kind of project or company to choose for investment is the most concerned thing for venture capitalists, and it is also an important indicator to measure the investor's vision and quality. At present, although various scientific research institutions in my country can obtain thousands of scientific and technological achievements every year, there are not many technological achievements that are really favored by venture capitalists. Therefore, the current stage of venture capital investment needs to strengthen scientific evaluation in the evaluation and selection of investment projects. and management.
The key to identifying the development potential of the project
Venture capitalists consider three factors when analyzing whether an investment proposal is feasible: the feasibility of technological innovation, the economic evaluation of the project, and the professional quality of business leaders. The order of its analysis is generally people, market, technology, management. For some key factors in project evaluation, venture capitalists need to pay special attention.
1. The quality of the entrepreneur. Usually, venture capitalists examine from all angles whether the entrepreneur or team of entrepreneurs has keen insight in the field he is engaged in; whether he has a grasp of the market panorama and how to develop the market; whether he knows how to use various channels to finance funds; Whether you have the ability to turn your own technical ideas into reality; whether you have a strong comprehensive ability, etc. Judging from the current situation in my country, entrepreneurs generally have technology preferences and are keen to act as technology leaders in enterprises. However, there is no clear idea for market development, financing channels and other business operations, or no idea where to start. Therefore, venture capitalists should focus on examining the potential of entrepreneurs in this regard.
2. Market prospects. If any technology or product does not have a broad market as a foundation, its potential value-added capacity will be limited, and it is difficult to achieve the goal pursued by venture capitalists: to cultivate and grow new companies from small to large, to strong, and through venture capital investment. The ability to profit from the transfer of shares is extremely limited, and may even lead to failure. The market mentioned here may be a completely new market, that is, there is no similar product to compare and compete with. Entrepreneurs need to gradually open up the market from scratch to make it acceptable to the majority of users. It may also be to find a gap in an existing product market. Venture capitalists judge whether the investment product has broad market prospects according to their own experience and understanding of the market. How big will the market share be? How competitive the product is in the market.
3. Product technology. Does the product technology vision have advanced consciousness? Is it possible? Does it take a lot of research to turn into a product? Is the product inherently technical? Do you need to rely on other manufacturers for product production? Whether there is know-how or patent protection, whether it is easy to lose advanced. These issues require extensive and careful consideration and investigation by venture capitalists.
4. Company management. Company management is a very important indicator, first-class management plus second-class products has more advantages than second-class management plus first-class products. Entrepreneurs often have multiple roles in the early stage, not only engaged in research and development, but also engaged in market development, but also responsible for company management. In the modern society where the division of labor is becoming more and more meticulous, it is not desirable, so when a person applies for a project and says that he is omnipotent and will be fully responsible, it is often a dangerous signal. Venture capitalists should persuade them to attract other experts to join them and form a management team with a reasonable knowledge structure to jointly improve the enterprise.
Grasp the opportunity of venture capital intervention
The valuation of a business determines whether venture capital is an early-stage investment or a late-stage investment. The industrialization of a high-tech is usually divided into four stages: technology brewing and invention stage, technology innovation stage, technology diffusion stage and industrialized mass production stage. The completion of each stage and the transition to the next stage require the cooperation of funds, and the nature and scale of the funds required for each stage are different.
1. Venture capital has different interventions at different stages.
(1) Seed investment period: The seed period refers to the brewing and invention stage of technology. The investment of venture capitalists in the seed stage is very small, generally not more than 10%, but they bear a lot of risk. One of these risks is that there are many uncertain factors and it is not easy to evaluate, and the other is that it is a long time away from the harvest season, so there is a need for higher returns.
(2) Introduction investment period: The introduction period refers to the stage of technological innovation and product test marketing. Risks at this stage are still mainly technical risk, market risk and management risk, and technical risk and market risk begin to emerge. This stage requires a large amount of capital and is the main stage of venture capital. The lead-in period is a very sensitive stage. Once the technical risk that the risk of venture capital cannot overcome, or the market risk exceeds the acceptable level, investors may withdraw from the investment.
(3) Growth investment period: The growth period refers to the stage of technological development and production expansion. This is the main stage of venture capital, the risk in this stage is not mainly technical risk, but the market risk and management risk have increased. To this end, venture capital companies should actively assess risks, send personnel to participate in the board of directors, participate in decision-making of major events, provide management consulting, select and replace managers, etc., and use these means to eliminate and diversify risks.
(4) Mature investment period. The mature stage refers to the stage of mature technology and products entering into large-scale industrial production, and the funds in this stage are called mature capital. Funds are in great demand at this stage, but venture capital has rarely increased investment. The mature stage is the harvest season of venture capital and the exit stage of venture capital.
Among the four stages of venture capital, the seed stage and the lead-in stage belong to the early stage investment, which is characterized by personnel-intensive rather than capital-intensive. Venture companies in the early stage of investment can achieve their goals with less capital, but they need more venture capital to help them build a management team and conduct management consulting, while later stage investment is mainly capital-intensive.