Check if your start-up team has VC standards

Source: Internet
Author: User
Keywords Electrical business

In the field of trend-driven VCs, people's attitude towards E-commerce is simply too fast. A minute ago, the VC also believes that the traditional retail industry has finished, E-commerce is the king; and the next minute, they will feel that e-commerce-related concepts have been fried rotten, such as Flash purchase, custom-made, and so on, there is no room for new business growth. In terms of entrepreneurs, those brands that focus on online development, such as Warby Parker, Bonobos, and JustFab, are now doing the opposite and opening physical stores.

In the face of such a situation, people are puzzled, in the end, which side is true? e-commerce in VC there is no status, they have no interest in investing? Do entrepreneurs today have a chance to create a successful online business? These are questions that people are confused about.

For the latter question, in fact, the opportunity to start a business is always there, so to create a successful electric business enterprise, beyond the Amazon is not impossible. For example, Zulily, the mother and child of a successful IPO in November 2013, has a history of only 4 years, when the IPO price is 22 U.S. dollars, the result of the first trading day ended, the share price rose to 37.30 U.S. dollars, the increase of 71%, their market value also reached 4.7 billion U.S. dollars. In the 3 months since the date of the IPO, the highest price reached $72 trillion, with a recent 61 dollar per share, which means that the market value reached 7.7 billion dollars. Even the troubled Groupon has a market capitalisation of nearly 5.7 billion dollars.

Many of the unlisted companies have been able to generate significant turnover and maintain development in their respective areas, such as Wayfair, one Kings Lane, JustFab, Warby Parker, Bonobos, honest, and so on. Even gilt, which has run into 2.0 bottlenecks, is able to develop and prepare for a long-term IPO. These are just a few examples, and many other businesses are active in the field of E-commerce.

But the question still exists, that is, in the present situation, VC to the level of E-commerce preferences in the end how?

According to the analysis of CB Insights (CBI), VC Research Institute, VCs are concerned about the field of E-commerce. According to the CBI report, E-commerce companies accounted for 16% of the 450 tech start-ups that were listed or bought in 2013, the largest of any type. But the same report, we can also see that in all types of companies, only 1.04% of enterprises in the price of more than 1 billion dollars to complete the transaction, and more than 66% of enterprises do not have access to the financing of investment institutions, so the impact on investors can be understood. That is to say, there are successful landings like zulily, but more of those that are not being noticed.

However, there should be a certain kind of investment preference among institutional investors and the investors in Wah Yip Street. So the key question is how to distinguish between good and bad, from a large number of enterprises to find the one that can bring great rewards.

For that matter, Upfront Ventures's partner, Greg Bettinelli, shared five of his personal standards to differentiate between 5 standards for E-commerce companies:

1, a reliable entrepreneurial team, 2, the early crazy growth, 3, excellent operation, 4, the market gap is big, 5, in a changing industry.

No company can do well in all aspects, but the more you do it, the greater your chances of success. Since there are these standards, then why the recent period of time VC in the field of e-commerce interest is not very high?

The reason is very simple, e-commerce enterprises to do it difficult. To be in this field, you have to have a good operational ability, but to be honest, for many entrepreneurs, operating capacity is indeed the most lack of quality. So the VC did not see the ability of entrepreneurs, nature will choose to wait.

In 2009, Amazon bought Zappos at a price of 1.2 billion dollars, and it was not until 5 years later that a second 1 billion dollar price came ashore. And then there were a lot of startups that got a lot of venture capital, and now it seems like an unwise choice. So in this case, VC for the indifference of E-commerce is not difficult to understand.

Nevertheless, there are still many entrepreneurial and investment opportunities in the field of E-commerce. Not only because of the report above, there are many companies listed or mergers and acquisitions, more because of the sustainable development of the online consumer market. Global online consumption amounted to $262 billion trillion in 2013, up 13.4% from 2012, and is expected to continue into 2017 with an annual growth rate of around 10%, up from $370 billion trillion, according to Forrester, the Research Institute.

In short VC's investment interest always follows the wind direction to change, but in the electronic commerce domain This kind of change is especially obvious.

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