Cloud World Congress Cloud Learning Link: How to communicate with capital in the second game

Moderator: Hello! Thank you for participating in the whole cloud World Congress today. This link is to do a two-way communication, free discussion of the model, we have questions to ask, is how we deal with capital, and capital communication. The more I look at these things from an investor's point of view, the more people have their own feelings to say. Briefly introduce myself, I am the Liu Yan of broadband capital, we are focused on TMT investment, is a fund of telecom media technology investment. The Fund's main investment direction is also in cloud computing. Because our main founder, Dr. Tian, also has a lot of enthusiasm in cloud computing, including a strategy to promote the development of China's cloud computing.

Sequoia Capital Partners: I am the Sequoia Capital, Sequoia Capital in the whole IT industry investment is still very much. From Silicon Valley, in the 1972, Sequoia was founded in Silicon Valley in the United States. Basically every call it revolution Evolution, Sequoia has played a relatively important role. For example, it is the first wave of the original Apple, is now the heyday, but also the first of Sequoia funds to provide them. To the back of the Internet's development, Cisco to Google and the next cloud computing. Currently in the United States is very alive Drobox (transliteration) and so on, Youtube (transliteration) is also the cloud service way, is the Sequoia Capital investment in the first round.

Broadband Capital Partner Liu Yan: Today is a relaxed way, we have any questions to ask, we can first ask questions, if there are any problems, we can carry out further exchanges.

Question: We are learning cloud computing students, I would like to ask, after graduation, if you want to start a business, in addition to have good ideas and technology, but also what quality, in order to get the favor of investors?

Broadband Capital Partner Liu Yan: Just two days ago, I was in Dalian to participate in a college student entrepreneurship competition. At that time with some students in communication, from my personal understanding, entrepreneurship, thinking to be prepared. And I'm not particularly suggesting that we rush into entrepreneurship when we're not prepared for it. Because of entrepreneurship, the middle will experience a lot of difficult process. Not only is the so-called technical reserve, including personal life experience, whether to make money, spend money, this is more important. So, this is my personal idea, is to start a business, relatively speaking, students in school still need to be cautious.

Sequoia Capital Partners: I hold a similar view. I feel that entrepreneurship is a very frustrating thing, but also for the physical and mental aspects of people are a great challenge. To start a company from the early to success, even if you see the successful company, the scenery of the entrepreneurs, behind are difficult process. Only to see success accounted for 1% of the entrepreneurial. The entrepreneurial team may have invested a great deal of energy and money, and may have never heard of it at all. This is a great exercise for the human mind. For a new student, I feel not particularly fit. In particular, there was no such experience in the past. What product to make, what time point to make, how to do test. The bigger challenge is to sell the product. And then, to be able to take the company from two people, or one person's team, and finally bring the possible 100 people, as a threshold, next 500 people a threshold.

Such a process, I think, that is not yet entered the community, do not know how to face this problem. We have dropped out of school in the United States, but not as a model of encouragement in China. These are special cases in particular, the history of these people, or some of the experiences of these people in the past, which I don't think are very isolated people. Often in the past, there have been relatively many social contacts, or the past self-entrepreneurship, or to do some business, they have experience. He has had some temper in the process.

If it is said that before graduating from the university, there may be no such experience, may have never earned money, or in this respect, and did not do this business, directly to the business, it may be more difficult. Have no experience to manage 50 people, it is not easy to be a monitor in university, not to mention being a CEO of a company, this is a big challenge. I suggest that if there is no such experience, after graduation, find the relevant companies, find relevant experience, and then start a business, may be a better model.

Question: I am in this industry for more than 10 years, now I opened a company, I would like to ask two people in the industry, we do the company, at what stage is suitable for venture capital? The second question is, what kind of work do we need to prepare ourselves before we introduce venture capital? Thank you!

Broadband Capital Partner Liu Yan: Which stage can carry out venture capital, venture capital, there are different stages of investment, there are relatively early, Android, and so on, from early to growth period to Preipo can do investment. The core is that investors have their own perspective, if the investment in the early days, to vote A, B, C round, see the content is different. If you want to find these investments, you have to consider whether you can find the money. Although there is a lot of money on the market, but relatively still have a proportion, so still want to see their own at a certain stage, assuming that in the early stages, whether there may be some places, innovative model, there are some points can impress investors, otherwise, is not to get money.

Sequoia Capital Partners: There is a problem to understand first. Whether or not you really need to get the money for venture capital, this question is more important than what to do later. For example, we may all be driving in this room, but, in fact, I think it is a very small number of people who can actually open F1. I think it is also suitable for entrepreneurs who want to communicate with venture capital in the future. Whether in China or overseas, there are many companies. China, there may be millions of companies, some of these companies live well, some live in general. Real China has been a handful of companies that have been VCs in the past decade.

Therefore, is not to say that the enterprise to get venture capital is a good enterprise, this is not necessarily. Need to know what venture capital can bring, in order to take venture capital, what to prepare. What kind of things fit. An enterprise really needs venture capital, the first, is the market, or relatively large enough market. There are companies, there are so many companies in Europe, from grandparents, even for generations of companies, never outside investors. China must have a considerable number of industries, there will be so many enterprises are such a result.

But I think, not necessarily to go this way, venture capital to get words, where these enterprises market, but the current situation, the need to reach the market share of funds, if not taken, may face a very big challenge, may be very small companies in the industry. This is the 1th, necessary necessity.

2nd, I also need to have a preparation, I can manage this matter. When you start getting ready to talk to venture capital, it basically means that the company will not be your own company in the future. Because took the venture capital money, the basic enterprise must consider withdraws, is merged, or the listing, certainly will become in the future a group of people's company. Even if the company still has a big stake in the future, you are only one shareholder. For the whole company's logic and philosophy, including long-term enterprise survival, all need to have a lot of preparation. Many entrepreneurs, or entrepreneurs do not feel ready to get money, is to judge the standards of enterprises, I think there is no standard. I don't think it's a good company or a bad company to get the money for venture capital. Similarly, listed companies, or unlisted companies, is not a good and bad indicator of a company. You need to think clearly about your plans.

Question: I and Liu should always be a little Yuanyuan, you study in Hangzhou, I come from Hangzhou, our company name Hangzhouwan Cloud Computing, you have the experience of Alcatel, we vice president is also Alcatel out. Is the cloud computing industry, because we do cloud computing is one of the industry, cloud computing industry, it is difficult to see how much the enterprise to achieve market value, at least we think so. I have been plagued with problems, how to find suitable for VCs, understand the market prospects, and know what we are doing, it is very distressed. Every day the local government introduced a lot, I personally referred to as the soil bosses of Jiangsu and Zhejiang More, I have been refused, but not only the question of refusal, for our request a lot. Not only are a lot of them, but let's describe a good market prospect and I'm embarrassed to cheat them. The first question is how to find the VCs of like-minded cloud computing industries.

The second problem is that we do a lot of business in Zhejiang, although we do it in a relatively short time. How does VC companies price and position us? Have a lot of friends casually think of an idea, IDG, spruce cast 30 million, I talked a lot, or 30 million, accounted for 30%, I think it is not fair, after all, our team is still very strong, are the team of Bo.

First, the cloud computing industry, how to have a suitable for our VCs. The second question is, how do we evaluate our High-tech companies? For two, is a relatively low-level problem, for us to do business people, is my more distressed problem. Thank you!

Broadband Capital Partner Liu Yan: I say the first question, how to find the right to work with your VC, or to invest in the cloud of the VC. Well, the market outlook, which includes cloud computing as a major investment direction, is that many funds think cloud computing is the main direction of investment, which is beyond doubt because of the good prospects for development.

Here is a problem, investors and companies to communicate, including investors specific investment patterns and ways are different. Perhaps you are looking for relatively speaking, is biased in the next years of listing, may be a PE multiple. Some investors on the listing is not very urgent, is to see the growth of the market, market prospects, so as to judge. There is a need to give investors the confidence that you can make, of course, in the next few years to make, not sure, but at this point can give you a confidence that we see growth, look at the future development prospects, see expansion capacity. These funds are better for you. Maybe the fund you're in contact with is not exactly a type.

Sequoia Capital Partners: The second question about valuations, GM more vulgar words, is not to marry love is bullying. This is understood in combination with investment and investment. In the end, talking to the investor or the investor, the end is that the two sides meet each other, reach a point of balance, and think that such pricing is a reasonable price for long-term cooperation.

So, I feel that if I say I feel lost, or conversely, the investors feel that the valuation is too high, he felt too deficient, so there is no need to talk about. Certainly is a long time, both sides feel that is a better combination of points, the two sides on this matter is a certain understanding, I think, is the prerequisite for cooperation. Entrepreneurs and investment banks are not the same, such as the market standard five more points, anyway finished this list is over. In terms of investment, it's the first step in the business of getting married, where two people need to work together for a longer period of time.

So I think it's a matter of the mentality of the early two. Once we feel that the other company is too wronged, we feel that there is no need to do it. The matter is based on mutual understanding and common understandings.

Broadband Capital Partner Liu Yan: I totally agree with that, and so do my own investments. Investing, at least, is like a process of making friends. I hope we can become a friend after we have voted. Otherwise, this thing will never do bad, may start sitting opposite the table, if the beginning of the pinch, may be listed, but the probability is relatively small.

Sequoia Capital Partners: You have just the analogy that is, so-and-so's husband more capable, with what your income is not good. Is that both parties feel they can bring value. The early stages of the enterprise, the valuation is meaningless, is the paper wealth, many companies ' IPOs are meaningless, last year the IPO company now listed only 1/3, this is a dynamic process, the value of the enterprise reflected, I think, or long-term many people recognize the value of the enterprise, will be more reasonable.

For example, we at any point in time, invest in Google, Google IPO took a round of investment, how to calculate, that Google never have a reasonable price. Because of how calculate, all think Gu ge is deficient. I think you just have to struggle with this thing, you just talk about the problem, cast a company have met, why other companies to take 100 million of dollars in valuation, why do better than they do, only to give 40 million of the valuation. Finally with them, if feel unsuitable, can find a few more, finally or find the market to give a value, and finally form a buy and sell the price. And this price, I feel, over the past two years, may find that no matter what, are not reasonable prices. This may indeed be a cognitive problem that needs to be overcome.

Broadband Capital Partner Liu Yan: I would like to communicate with you, we have seen more than 10 companies, the specific evaluation of the project, I do not say. Today's topic is to communicate with capital, how to express this thing, I have some feelings. There are many projects, we particularly hope that the overall sound of the formulation, basically will appear a situation, may have said 10 minutes, or even half an hour did not speak clearly, or speak down, there are a lot of content, but finally did not put their real things to speak clearly.

I believe, how to do an effective communication, how do you think, just look at a few projects, I have such feelings. Because to the back of the words, today is more special, is a lot of items together in the look. After all, a project, speaking to investors, may say one hours and two hours without speaking clearly what they are doing, which is very bad communication.

Sequoia Capital Partners: In combination with this, say what we think. This may be the most frequently asked question that can be communicated to an entrepreneur or in many meetings. is how to win an investor's investment, or make a successful contact.

My idea, first of all, when you face an investor, you are the same as facing a potential sales customer. Many times, to join the face of a simple customer, a lot of entrepreneurs of the company, in the first minute may be kicked out, many entrepreneurs write to us, call us, is the next Google, next what? Would you say something like that in front of your client? The client said, it's none of my business. The same is true for investors. Now encountered such a problem, is to go to IDG, we may not look at the next Google.

So, this is the same problem when you face your customer, you sell a product, when you knock into the company door, you must tell him, the current company's business, the current demand inside, there are some pain points, this is the first step, the user's point of view to analyze, the user in the end where there is no good, or what is very painful point , this is to arouse the investor's interest, do the sale, also may attract the potential customer's attention. Customers no matter how famous you are, because they do not bring much value to them.

Second, is how to make a precise product, do not spend time to talk about the sermon, is a waste of time, is very accurate expression, the current market there are some pain point, is who is your customer, what is the pain point, and then intend to provide what kind of products, or the current product out, is not already effective for the user's pain point, What is the feedback of the user, and then what is the plan that the company may follow next? As well as the exact composition of the current team, why is this thing you can do, not Baidu, Tencent can't do, or the other five already in the market potential competitors, they do not do you, or you do better than their place where. With customers to do product recommendations, are such a process, the customer thinks the product is good, will buy your products. Finally do the financial planning.

The forecast for the next 3-5 years of finance may be inaccurate and can be put to the end, more about the current state. In this sense, really as a product potential sales. In other words, the front is not attractive, three minutes was sent away. As investors, if prepared, will achieve better results. or really to do the company recommended a better way.

Broadband Capital Partner Liu Yan: Your project may have some Professor Bo, better talent. is to communicate your own project, even the team, there is a possibility that you will feel that there are a lot of good things, but the future must be with you to do business, product technology, and do things best to have strong relevance. If the correlation is not very strong, it may backfire. There is an inappropriate example, often I will see, there will be teams, these teams become consultants, and actually further find that these people do not have much relevance to the business. May be academician, Bo-guide, professor, what is the help for them? No need to put in, put in, definitely counterproductive effect.

Because when we look at it, we often find that when a business plan is taken, most of the things we do are left out before we look at the substance.

Sequoia Capital Partners: There is also a view that many companies come up with the idea of great innovation, disruptive innovation, and then I think, for now, 99.9% of the manufacturers say, the things that are done, the apple that jobs does, or Facebook, is the early days of entrepreneurship, good things, in just the original stage, Do not think, then can be five years after the plan is very plump. I don't think so. Often a particularly good aspect is that five years after the disruptive behavior of the industry, is often a subtle need to find a clear user needs to start, and then provide a product. Just as Facebook's founders were doing what they did at Harvard Business School, it turned out to be a good time for Apple to go through the earliest stages of development and it was impossible to predict what Apple is doing.

A lot of times, subversive content, five years later look back, is a subversive, the problem is five years ago, is to meet the needs of users, in the cumulative, due to large companies do not value, give five years or years, let you slowly grow up. Then after the critical point, it will be found that looking back, it is a subversive innovation. This is especially true in China. The Sequoia Project, Drobox of cloud computing, was simple in the early days. If the man who wrote Andrew was doing drobox, he found it too troublesome to remember that thing, so he made up a code to store his things and files. Many early startups are very simple, based on the user's direct impulse or direct demand, to produce some even seemingly small applications. And then in the process of giving the opportunity to imagine this opportunity, as customers continue to recognize, slowly will find that there is the ability to stack more things, provide better services, and then lead to industry change. In the early stages, entrepreneurs start with the nuances.

The United States has been encouraging this innovation, all innovations are from the user's usual favorite point to do. The Chinese government has said that to create 100 jobs, I do not think it is encouraging. Instead, the wind into the night, the smooth and silent, in the process of growing slowly, this may also be an angle.

Question: I asked Liu a question, I came in relatively late, I do a start-up company, is the cloud computing start-up company, do enterprise application software, 2009 began to do. The first question is, what kind of company does Broadband capital invest in? The second question, because before, looked at 10 projects, do not know how to select 10 items? Is there a chance to communicate with you later?

Broadband Capital Partner Liu Yan: First, there must be a chance to communicate next, we are looking at the case. Also said that in the project, we also gradually grow and accumulate. When it comes to cloud computing, we can all vote on the bottom or the hardware and software levels. Now a lot of cloud computing cases, relative, are relatively early. Especially to the application level, is relatively not particularly big. We may still be looking at the overall market outlook. In my view, the core is to look at these things, first, the market prospects.

That is, customer demand, customer needs, whether to be able to dig out. The second, in the process, some of the initial technology-driven, team core competitiveness, technical aspects of the accumulation and ability, are more important to me. Business, but also a step-by-step groping, and now do not particularly large domestic. The early days are sure to be seen.

Question: We have some cooperation with the broadband, behind the European software is discussed, that is, in the deployment test process, I would like to ask, there is a chance to contact you later?

Broadband Capital Partner Liu Yan: no problem. We can contact you sometime.

Question: I want to ask, our early contact with investors, will feel a little, business model, products are the second, the most important is the team, as a team, our science and technology enterprises, especially the development of cloud computing, as we in this field, the investor perspective, what kind of team more competitive?

Broadband Capital Partner Liu Yan: The team is based on different situations, in the cloud computing domain, we cast a similar platform software company, is to focus on the past experience of the team. In particular, whether it has been done, because the cloud is deployed on a large scale, whether there is technical experience accumulation. However, if the application and commercial aspects are more biased, it is possible to see whether the previous application of the Internet, or related applications have experience and ability. The team's words are to look at several aspects, one is the ability aspect. Second, the more important is to look at the quality of the team. Because of entrepreneurship, whether to endure, whether to endure, in the communication process, we can see.

Because there are some say, entrepreneurial like a part-time job, very random, do not do today, the big deal will not do, and finally really can not do, but also find other things to do, I will judge whether they stick to insist on, entrepreneurial process has a lot of hardships, both will look.

Sequoia Capital Partners: Speaking of teams, start-up is a bit like the beginning of the first 90 days, the United States film blockbuster The earliest U.S. Marine Corps, when the CEO is the same as the company commander's identity, the early key 30 days or 90 days, the first step how to be able to go up the beach, and then survive, not to say that even the enemy Was shot to death, this is the most critical stage. This time, many enterprises emerge, viability is critical, rapid response capacity is also critical. Looking back, two successful entrepreneurs, the first entrepreneurial failure rate is also high, when the waves, the ability of everyone to survive, not because General Patton, bullets do not hit you, because the earliest time, the least resources, the opportunity and time to face the fastest. This time for the founders of the test, is very strong viability, and can quickly product iterations, which is equivalent to cherish every minute, see a lot of early creation, indeed there is nothing to do, this is a state.

The problem is that in the future, Sequoia Capital investment Enterprises, found to a certain extent is not long. When the discovery of a business grew up, the responsibility and identity is not always a company commander, a commander can not bring an army group in the future. A business in the development process, whether they follow the enterprise or the team itself to grow. We have a strong discovery, the former grass-roots companies, the time point is very good, cut the timing is also very good, into a good market. Early this company grew very beautiful. But at any stage, faced with a strong company, found the face of tough companies, know that enterprises can not avoid regular combat. Like the Communist Party of China to the end, guerrilla warfare to the end of the Yellow Sea campaign. In the course of the big battle, the original small trick is no use. command of an army, the original guerrilla practices do not work at all. Enterprise to a certain stage, inevitable face this result, how can command regular Army combat, not also like the national Army came, throw two grenades, the army did not run, you ran, such enterprises are not long. We found that the team to the back is facing a very strong bottleneck, is how to manage the growth of enterprises, we found that enterprises grow to 100 people, is a very large threshold. It turns out everyone knows, then more than 100 people, their own management everyone is completely impossible, how to put the middle of the structure of the frame up.

If there is no experience in the past, how can we build this team in a short time, in the process, to recruit different people to come in, and these people are very cohesive. Growth process, will inevitably encounter some difficulties, each stage of the development of each enterprise, there will be a certain threshold, everyone laughs faster than you, after two years, will also enter this stage.

Finally, for venture capital, this is also very challenging. A company's early venture, the founder does not have any experience, but how can judge this person to be able to grow, can lead a team of 500 people in the future, or lead a better team by him, to us also is the study, the ceaseless process to the human ponder, as well as to the human potential judgment.

Return to the entrepreneurial word, entrepreneurship, can keep learning, growth speed can keep pace with the development of enterprises, many enterprises do not go, in the final analysis, the market is no problem, a big factor is the growth of entrepreneurs, and finally become a burden of growth, the enterprise may be so big, or other companies up, Become an unknown company in the industry.

Question: I looked at the Sequoia's investment in the United States in favour of Internet technology-type product software companies. Domestically, over the past five years, the Internet has more traditional industries. In the future, there is no plan for the next fund planning for the subdivision industry. For example, for pure software products companies, there is no suggestion or inclination?

Sequoia Capital Partners: Sequoia Capital, in China and the United States to cast a different field, the United States is basically 100%it focus. At present we have voted 160, 170 companies, TMT accounted for about 60%. The rest may also involve consumer-friendly, health-care industries. The whole point of departure, in the high growth of enterprises, venture capital investment is the largest point of growth. is to rely on the so-called difference, into the cheap, sell high, may not be the venture capital.

So, be sure to find the industry, this industry is a high-speed growth process, you invest, this is what we should do. Find the level one or two market, this difference is not what we do. With the development of the enterprise, including the end consumer mobile Internet program, I have been very convinced that software changes the world. Including the current trend in the United States, in China will also appear. Many industries in China, the original industry development to a certain bottleneck, as well as the infrastructure is more and more perfect, now more and more possibilities, is based on software solutions, and then combined with the industry, many industries are changing the rules of the game. In this process, the original for some entrepreneurs have no chance, the next 3-5 years, or ten years, opportunities will be more and more, because the infrastructure in the inside, and the current transmission channels there, the cost of marketing will be reduced a lot. Lead to the software to provide services, or to address the needs of users, the next in many industries have a lot of opportunities, is certainly our next investment is a focus.

Question: We now do cloud computing application this piece, we face two problems. The first, because now do cloud computing industry chain is relatively long, in addition, the application of cloud computing enterprises, small and medium enterprises are relatively few, are generally our partners, or our sales target, are large-scale, very shaped large enterprises. There is a problem here, the enterprise scale has not been injected into the time, network, industry chain and capital may have a certain bottleneck, in the development of large users, the period will appear longer, contracts more vulnerable situation. The first question, how can capital be recognized when communicating with capital? To form a consensus on this aspect? Often the capital thinks, take three joint ventures, such a contract is best. Our dilemma is that if there is no one else to help us, we take a no problem, take two no problem, take three four copies of the size of the time, can not reach the capital requirements.

Second, the broadband capital or Hongshan in the normal assessment of an enterprise process, the general cycle is how long? Now cloud computing a bit clock feeling, occupy the market is also what we want to do, the cycle becomes longer, the market cycle will be longer, there is substitution, or may have similar products appear.

Broadband Capital Partner Liu Yan: Especially for business-to-business, customers are big customers, at least for my point of view, I will be more cautious. I've had this case in my hands, to be a big client, three months is short, six months to a year. Also need to reflect on their own strategy, or the direction of their own strategy needs to find appropriate, I am more cautious. Now do cloud computing applications, I do not think the customer must be to the application level, is a big customer. If we rely entirely on big clients, I think there is trouble. It's possible to change your strategy.

Sequoia Capital Partners: I have always been very disgusted with companies to label themselves, because it is cloud computing companies, investors need to invest. All the starting point is the hope for the enterprise and sales to bring greater value. Anything is to promote your sales if you promote sales, you will be able to get the investment, or investors will be willing to invest in the company. Not because it is a new model, but because the sales are slow, so more investment is needed, and the logic is wrong.

US cloud computing companies, including Drobox (transliteration), so far is the team of more than 30 people, to do 200 million of dollars in sales, this is the benefits of cloud computing, not to bring a slogan, and do not bring the actual effect of sales, in this case, cloud computing does not bring real value and benefits. Such enterprises, from the investment point of view, there will be some problems. Drobox, is very good by virtue of the advantages of cloud computing, rapid dissemination, so that users directly produce a very strong word-of-mouth effect. Lead to such a product that can be sold very quickly. But does not need the enterprise like formerly the traditional domain the company, needs the huge investment and the management marketing process. Or in the original way, the current U.S. market emerging cloud computing companies will not rise.

Broadband Capital Partner Liu Yan: Thank you!

(Responsible editor: Duqing first)