In recent days, friends have circulated several articles about entrepreneurial difficulties and financing difficulties, reflecting the entrepreneurs' anxiety about financing.
Looking at the reaction of people around them to the closure of the startup company seems to have been stunned, and some have even anticipated it. According to media reports, only four start-up companies that broke into Round B this year have closed down:
Looking to the other side of the ocean, the cold winter in the United States may be more serious than in China. The key is that they also come to “grab†the money of our investors.
The public number "silicon release" published an article "I saw a bombing: A secret list of US unicorns looking for funds in China (value can be used for a discount of 20%)", giving a copy Contains 26 items of Excel. These 26 are all American star startup companies. There are many such "unicorns" like Lyft and Cloudera. This is not a list of technology media, but a list of FAs. These projects all want to come to China for funding, and most of them have a minimum investment of 100-500 million US dollars, which is within the investment limit of most domestic funds. In the past two months, the silicon release has repeatedly reported on the death of U.S. startups due to the breakup of the "capital chain."
At the same time, some of the remarks made by investors on the Capital Winter in the past two months were reported by a large number of science and technology media and spread in the investment circle. These words seem to formally characterize the financing environment, leaving many people to return to the cold reality.
According to the micro-linked financing database, a total of 1,268 projects were invested in the first half of 2016, compared with 2,570 projects that were invested in the first half of 2015 in the same period last year. The number of projects that were financed in the same period in the first half of 2016 was less than half of 2015.
This huge data contrast, coupled with project closure news and media interpretations, are signs for every entrepreneur: you are in the middle of the winter.
No subsidies, no money, no live
"You have to admit that the world is completely different now. What investors want to know is how you break even. Stop telling me too much growth and GMV."
This is a sentence from Jing Wei’s founder Zhang Ying’s internal sharing at the end of June. From another point of view, it also shows that the direction of the entire investment in previous years is to talk about growth and GMV.
With rapid growth of users and rapid growth of GMV, as long as rapid growth is achieved, the next round of investment can be obtained; with investment, rapid growth, it will be possible to regain the next round of investment... One round after another, as long as it grows to the top three in the industry. Name, there is a chance to succeed. Coupled with the relatively successful cases of Jingdong, Xiaomi, Midea, and Didi, the first two years of entrepreneurship and investment are very keen on this kind of entrepreneurial path.
With the closure of various on-site services, people find that this path is not suitable for all industries. Because the funds needed for industry monopolies through subsidies are not calculated, it is impossible to make profits, and most industries are unlikely to achieve monopoly, or through subsidies to change user habits. It can also be understood that it is impossible to absorb so much money for subsidies.
No subsidies, no money, but also how to start a business? Many entrepreneurs do not understand.
The number of projects that Micro-Chain had invested in for the entire year of 2013 was 1,263, which was previously mentioned as a total of 1,268 in the first half of 2016. The projects that were voted in the first half of 2016 were equal to the total number for the entire year of 2013. In 2016, venture capital financing did not seem to be so pessimistic. All our feelings and emotions may come from contrasts, and the environment we are accustomed to changes.
Entrepreneurs sometimes think that the project in hand really needs so much money? Many projects that can make money themselves are trapped in the black hole of subsidies and rapid growth because of the temptation of the capital market. Once you do not have enough funds, you will find that you have not had time to cultivate your ability to make money. Think that as long as there is growth you can make money, but you forget that profitability also needs to be polished and explored like a product. Of course, another habit of users has been quietly cultivated by us - the Internet model must be cheaper and have subsidies, or who should use it?
Of course, if enough money can support it, it is a pity that you have to admit that "the world is completely different now."
Now just come out alone, there is no complete team, no product, only idea, valuations are basically 2000-3000 million. It may be forgotten that it was possible to invest 200,000 yuan three or four years ago in an angel round project. The value of a venture with a product, a user, and a complete team is only 10-20 million.
Some people say that this was a situation a few years ago. Now that the fundamentals of entrepreneurship have been different, the cost of starting a business has risen dramatically. This is not a difference in valuation but a difference in mindset. In 2013, entrepreneurs will look at financing more objectively. Every day they want more cash flow and survival. Unlike most entrepreneurs today, they only pursue development. It seems that with the growth, there will be the next round of financing. This kind of financing mentality means that once the financing fails, it means that the business fails.
Entrepreneurship, whether it is financed or not, should seek development in survival. Growth cannot forget its survival.
Investors are also in winter
“I’ve been reminding you here almost every few days because I’ve seen too many failed cases. There are too many real-time data on hand and I know which companies are facing huge cash problems. Why would a good hand hit the present? In this way, it will be cheeky here twice at a time to remind everyone not to mind early valuation, small step run to get financing."
"I have seen many late-middle-age fund leaders, and various domestic gold owners have strongly felt that the market is getting colder and financing is becoming more and more difficult. Whether it is funds or companies, many will have financial problems."
In the above two paragraphs, we can see the investor’s basic idea: On the one hand, the investor’s own investment case is faced with difficulties in financing. The more samples the investment case has, the greater the sense of coldness. On the other hand, investors have more cooperation and exchanges with each other. Everyone feels that the market has become cold and investment strategies have become more cautious.
Investor is not money? Institutional fundraising is not as easy as it used to be, and many institutions’ new funds cannot be raised. However, the difficulty of fundraising by brand agencies in the market is relatively small, and the original fund of the institution has not yet been invested. However, the investment rhythm has slowed down when the market has cooled.
Another point is that everyone is not sure where the new wave of opportunity lies.
Everyone can feel the opportunity of mobile internet. Various tools APP, mobile games, mobile communities, and some of the original PC model, get more prominent mobile. Typical, such as the public comment, began in 12 years. With the rapid development of the U.S. group and the rapid development of the capital, and the entry of large amounts of capital, everyone has seen the O2O opportunity.
This opportunity is not the same as the previous PC Internet opportunity. The business model in the PC Internet era cannot be perceived by the general public. It does not have much impact on Baidu, QQ, or Taobao, and the threshold for using them is relatively high. However, O2O allows everyone to feel the charm of the mobile Internet.
In 2014, Prof. Ye also launched an entrepreneurial upsurge of “home†and “home†services. All of these Internet entrepreneurial projects can experience and everyone can participate and understand the new model and business value. This has brought about a boom in business and investment in 2014 and 2015. However, when people enter it, they will find that the result is different from what they had thought before. There is very little that can be done in each area. Some of them did not even come out.
Investors are puzzled again. Where are the new opportunities? There seem to be opportunities for VR, live streaming, consumer upgrades, and content entrepreneurship. But looking deeper or thinking about it more, it's hard to find success.
Therefore, investors are more willing to tighten their pockets and wait for opportunities. After all, money is safer in their pockets and they have the opportunity to invest in good projects. They can spend more time on the project. Â
How to "open" investors correctly
There is a popular saying in the venture capital circle that, on average, every entrepreneur must see 50 investors before he can get investment. We have calculated for you: 50 investors are interested in the project and are willing to meet you, but the probability of getting financing is 20%. Then according to this ratio, it means that you want to deliver BP to 250 investments. people.
Not many 250 investors? Most people’s WeChat friends are also hundreds of people, and investors’ friends add up to even two or even a single digit. So for entrepreneurs, the first thing to be solved is where the investor is and how to find the investor.
Finding more accurate investors is more important than finding more investors. Investors are relatively averse to "mass BP." By default, the quality of such projects is not high, and most of them do not look at them. Therefore, in addition to finding investors, it is necessary to do some homework properly to know whether the investor's preferences, investment cases, and whether or not he has been active recently. In the delivery can be targeted, there is a scene to write a paragraph, so that investors have the motivation to open your BP. Financing is an important job for entrepreneurs. They must do their homework and add data skills. For example, if you deliver the BP, whether the investor has looked at the length of time the investor spent per page. In addition, investors now prefer to exchange projects for joint ventures, and BPs who deliver them can best know how many people are seen and who are watching. It's best to find some tools to help.
Last week, an entrepreneur contacted me and asked me to recommend investors. I said that we could deliver it to the micro-chain. The brother said he would go directly to the partner. Say that a certain platform can directly see the partners for all settlement projects. This idea is normal, but reality is impossible. Partners in general agencies are looking at projects screened by investment managers and projects that people have endorsed, and these projects have occupied their time. Most of the team or operational data is not out of the ordinary, can not directly reach the partners. At this time, some boutique FAs can play a role. They will select a number of high-quality projects and recommend them to corporate partners. Note that these fine FAs have a selection of projects and are tutored, so the recommendation of these FAs for organizations is itself a quality endorsement.
Last week, another entrepreneur found me through friends and gave advice on financing. A few people in the project just started to start preparing for a valuation of 50 million yuan and 10 million yuan. Asked about the situation, the original valuation of 20 million in the first round, but only melted 500,000. Everyone feels that it is very important to correctly handle the financing rhythm and valuation, and to control the money is good for burning money.
In response to the above-mentioned problems faced by entrepreneurs and investors, on July 28th, the startup social platform micro-chain launched a full-scene financing solution, and for the first time in the industry, an automatic closed loop of BP was formed based on the behavior data of investors. The entrepreneur's BP delivery path is safe, controllable, visual, and accurate. GET investors' minds, help entrepreneurs improve their own BP, and at the same time, greatly improve the investor's work efficiency and achieve more accurate investment judgments.
Every entrepreneur is unwilling to be mediocre and expects a wonderful life. So, take your project and financing seriously. Of course, occasionally looking at a circle of friends, like “If you don’t even think about starting a startup companyâ€, find out about the resonance and feel like moving about. But do not be self-inflicted, right up and down, why do you go tomorrow?