financing, it looks like a process of profound and disorganized, but actually just four key steps. To be successful financing, you’ll have to clear these four steps. These four steps: screening, socialization, in-depth investigation and final decision.
under what circumstances, this process from VC financing, always seems to be strange and unpredictable, and no organization. Now, I will from the Angle of the entrepreneurs themselves to illustrate the process.
in the financing, the entrepreneurs will observe, to oneself are interested investors will experience four stages to decide whether investment: screening, socialization, in-depth investigation, the final decision. According to my own investment channels, the four phases will be developed in accordance with the order.
1. The screen: this is the first round of meetings between investors and entrepreneurs. Screening stage, usually as an assistant, the head of the legal representative and one or two partners. At this stage, investors on the investment risk, measured the size of the market and industry, and then consider whether these meet their funds and investment goals. According to experience, about 15% of the entrepreneurs can smoothly through this one pass, into the next phase.
2. Social: if in the first meeting, a partner or investment team impression of the startup and prospects are interested, they will return to his company and colleagues to share their information. VC in the socialization process typically requires and entrepreneurial companies to meet again. The next round of interview, the founder will repeat the previous process, but this time they will be more geared to the needs of the number of, of course in general is not all the partners. If investors and entrepreneurs to reach a consensus, and from the other party see possibilities and opportunities, trading team will start the further investigation of the startup. As the first round, 15% of the startups will enter the stage of investigation.
3. Further investigation: trading team (investors) began to study on the development of the startup opportunities, and from the rest of the team more partners to share their research and understanding. This includes every aspect of startup considerations: entrepreneurial team itself, its market, product development blueprint and sales channels. At the same time, the VC will contact to refine their point of view of the industry professional. VC in investigation, often to the startup ask, demand an explanation. In general, VC questions at this stage will have a lot of focus on sex, such as the size of the market, the company of a moat, regulatory risk and competitive, and so on. At this stage, investors and entrepreneurs to negotiate a deal structure will be more draw up the terms of the deal. At the end of the study, about 10% of the startups will enter the final round of “partner meeting”, the venture capital firm all the partners or all the members will attend the VC investment committee.
4: this is the so-called “partner meeting”. International team in advance to do a briefing, partner account investigation results, the key problem and the terms of the deal. This time, entrepreneurs need to cast their business planning to venture capital firm all the partners. After the meeting, all partners can listen to the report, understand the company’s business opportunities. Some startups will all entrust trading team, let them make their own decisions; More companies will implement rigid voting process, let vc firms allow investment. When VC after approval of the investment, risk investment agreement to draw up, they will have to convince entrepreneurs to sign the agreement, and work together with them. 6% of entrepreneurs will pass the final round.
well, 0.2% of the outstanding person of all entrepreneurs will eventually have a investment.
founder also need time and investors, and to understand their situation. This is mainly for two reasons: first, to avoid due to run out of money early in the process or in the early stage of thought success, thus misjudged the end; Secondly, putting pressure on the economic front, good as a negotiating trade project chips. Moment and VC synchronization is one of the strategy of achieving goals.
to be successful, one of the premise is to clear the road signs along the way. But at the end of the financing process, is the ideal of the entrepreneurial team has been established between the investors and the relationship between the strong and mutual benefit, and can support each other, to support the company all the way through the ups and downs.
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