The way of contact between entrepreneur and VC

Source: Internet
Author: User

Because of the high risk attribute, it is difficult to obtain funds through bank loan, and the venture capital of "high risk and high profit" is in line with the financing characteristics of these enterprises. However, most entrepreneurs lack experience in dealing with venture capitalists and often get shut out after contact with VC. Therefore, how to obtain the favor of VC has become a general concern of entrepreneurs. 

Most entrepreneurs lack the experience of dealing with venture capitalists and often get shut out after contact with them, so how to get the favor of VC has become a common concern for these entrepreneurs.

Recently, in the Asian venture capital Journal Group organized by the Entrepreneur Financing Strategy event, at home and abroad, many well-known VC to the entrepreneur in the process of contact with VC to pay attention to 5 problems.

A business plan is not a vague statement.

Business Plan is the first material that the entrepreneur provides to VC, and also the starting point for the entrepreneur to contact with VC. Capital has a profit-driven nature, so to arouse the interest of VC, the business plan must be able to show that the business model that the enterprise will operate is to make money. Specifically, there are 4 questions to answer: "What does an enterprise do?" How to make money? How much money do you make? Why do you make so much money? "Entrepreneurs should try to answer these questions as thoroughly as possible when writing a business plan, and avoid being vague."

Matrix Partner Shao Yipo that a good business plan should include the following: Who is the Enterprise team, what the company is going to do, how to do it, why others did not do it, who is the consumer of the enterprise product, how the enterprise intends to sell the product and how the profit is realized Whether the product has unique technology or can fill the market blank, the concrete steps of enterprise development.

Of course, the business plan is not too detailed. US President Zhang said: "VC is very busy, they first need to determine whether the project has the investment value, for the specific operation, that is to determine the cooperation to talk about after the matter, therefore, business plans need to summarize the essence of page control in about 10 pages." ”

Examine each other

If the entrepreneur offers a business plan by a number of VC's favor, then in these VC to the entrepreneur team to investigate the time, the entrepreneur also need to study these VC, different VC, not only bids will be different, and the successful financing of the enterprise to provide professional services are also different.

U.S. Red Dot Investment managing director Tom Thompson said that the role of VC not only in Money. Now there are a lot of VC in the Chinese market, all VC said that they are value-added. Entrepreneurs to explore the value-added of VC is mainly to investigate their familiarity with the industry, there is no successful experience, the size of the relationship to the enterprise help, the size of the market to open up, the future will become a board member or observer, enterprises in the formulation of strategies will be the help of VC, how to get help and so on. Each VC has strengths and weaknesses, their value-added is different, entrepreneurs need to choose the most suitable for their own VC.

Grasp the timing of financing

There have been entrepreneurs to issue such a question: "The company did a good job, market share and profits are rising, there is no shortage of money, then whether need to find VC?" "This is actually a question of how entrepreneurs grasp the timing of financing."

"If you have the ability, the entrepreneur can do it for a while, so there will be a variety of feedback back, including from the market and the staff," Tom Thompson said. These feedback information will enable entrepreneurs to better understand the business model and make the business model more perfect. At this time, entrepreneurs can go to find VC, tell them that I am not short of money, 6 months later I need money. "In the process of exposure to VC in this way, entrepreneurs can get some advice, but also to demonstrate their ability to facilitate future investment."

Need to note that, do not think that the more the more VC. Shao Yipo said: "The entrepreneur is best not to find more than 10 VC, if the front of all people do not vote, the next VC will feel that your project has problems, and then want to let VC investment you will pay a lot of costs." Focus on looking for 2-3 VC, not too much. ”

Judging the attitude of VC

Entrepreneurs in the financing process often encounter such a situation, VC told you "this project is good, I think about a period of time, first look, then contact." "At this time, how can the entrepreneur determine whether VC is really interested?"

Zhang Ying said: "Entrepreneurs can not give up, even if only a little chance to fight." In general, VC do not want to have their hands but abandoned the case to someone else's hand into billions of of the project, they will generally be ambiguous to drag you. The VC that is really interested in your project will give you an answer within 1-3 days. No interest will be dragged for 2-3 weeks, the enterprise asked again, he will let you provide some information and information, VC will never say no, if this situation entrepreneurs may wish to change a VC try. ”

Frank Communication

Entrepreneurs get money, in fact, with VC to establish a relatively stable cooperative relationship, at this time, entrepreneurs should actively and VC communication, and in the process of attention to grasp the skills of communication.

Shao Yipo stressed: "Must be honest, to be realistic." Previous financing can be exaggerated, but after getting the money entrepreneurs and VC is already a ship's people, we must be honest with each other. No matter the good or bad, has achieved the goal or did not meet the goal should tell the other party, the bad thing happened can solve together. The questions to be raised on the board should be told in advance to the VC, so that the other party early preparation, in order to jointly solve the problem. Expected to achieve the goal should be early communication, we have a psychological preparation, to find a way to solve the future problems, some problems in person to say, do not say under the table. ”

Of course, entrepreneurs also need to understand that there are problems to find VC communication, listen to their suggestions, but can not rely on them, because VC can not help you solve all the problems of the enterprise.

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