If you are looking for investors ......

Wang jizhi [author]

I have neither studied economics nor MBA or finance, but I have created several companies. Every time, I took the project to find investors, but I encountered many problems. Here I want to talk about some of my experiences and lessons. My views are mainly from the perspective of the project owner. In practice, I found that if you have a project in your hand to find investors, you may encounter two types of customers: ordinary investors or venture capitalists. If an ordinary investor is optimistic about your project, he is ready to work with you in the same boat. He gives you the funds, sets up a company with you, and operates with you, and then get a return in the profits produced by your project. That is to say, his return comes from the benefits of your project. For example, if you have developed a software product, you have invested money to complete the product and promote it in the market. Finally, from the profit of the product, you can score the proportion of your shares to what you deserve. Therefore, the company you work with is your son. If a venture capitalist is optimistic about your project, he will also invest in you to set up a company with you to help you start a business. However, from the moment he invested money, he was not prepared to stick to it with you. He finds another person who is interested in your project and sells his shares to that person when he achieves a certain stage of achievement in your project. He helped drive the horse and gave him a ride, and then he went to the next project. Of course, the person who buys his shares may not be others, but you, because when the company develops, you will also benefit from it, you may make money from your own profits and buy his shares. Therefore, he did not regard the company as his son, but became a "work". After the "work" was completed, he made a shot, he gets a return on investment from the person who picks him up. If he invested 0.5 million yuan, and someone else bought his shares from him at a much higher price than 0.5 million yuan, then he made money. No matter which type of investor, he has funds in his hand, and his goal is to make the money in his hand generate money. However, if he wants to pay for you, he must meet the following conditions: first, you must have a good project; second, he must think that you have the ability to do this project, it depends on your qualifications, your leadership team, and your past performance. Third, he wants to feel that he can grasp the situation in cooperation with you. In other words, he will not invest if he is worried about losing control of his cooperation. For example, he may have to send financial personnel or take a job in the company to learn about the company's operations at any time. So the project owner should understand these attitudes of investors, so as to avoid too much disagreement between the two sides during the negotiation. For the second type of investors, as he will sell some or all of his shares in the future, the company's financial statements and other management measures should be very standardized from the very beginning, because later purchasers learned about the company's performance from documents such as reports and accounts. If the investor invests money, it will take shares in the company. I think there are three key proportions. (1) If the investor holds more than 66.7% of the shares, then he has absolute control, because the company generally stipulates in the Articles of Association that the company's major decision should pass more than 2/3 of the shares. (2) If the investor owns more than 50% of the shares, then the investor also has the right to make decisions on general issues, but on major issues, the investor cannot decide on its own. (3) If the investor owns less than 33.3% of the shares, it means that no veto power is available on decision-making issues. In other words, if the remaining shareholders reach an agreement, they will already exceed 66.7%. Therefore, they can make a decision without considering the opinions of investors. Similarly, if the number of shares held on the Project side exceeds 33.4%, then he has the right to decide on a major project. Of course, because the company's shareholders may be more than two parties, and the company's articles of association are also determined by the shareholders' meeting, the specific situation may be somewhat different, however, these factors should be taken into account when considering the proportion of shares. Another issue that needs to be considered is that, at the beginning of a new company, investors will consider injecting funds in batches to improve the efficiency of capital use because they do not need such funds for the moment. The investor's consideration is naturally reasonable, but it is a risk to the project holder. Many new companies are operating after a period of time. it may be that investors lose confidence in the project, or the capital turnover is not open, making the subsequent funds unavailable in time, resulting in difficulties for the company. I have seen too many such examples, so I suggest that, if the funds cannot be all in place at the beginning, investors should make loans to the company for the missing part, the interest should be calculated, and his own shares in the company should be used as collateral. In this case, if the funds cannot be put in place, the proportion of the shares can be adjusted or processed in accordance with the law. In my opinion, the ideal situation for high-tech projects is that project holders account for more than 51% of their shares at the beginning, both original investors and project holders can sell part of their shares as appropriate in exchange for more financial support. However, no matter which type of investors they work with, it is very important to strictly follow the established game rules at any step of the company's operation.