From the angels to A round of entrepreneurs take the nine big ShengSiGuan

cloud network hunting note: nine hin capital President liu million boat wrote that the vast majority of projects are dead in A round, at the same time, to get the project in A wheel has 74% fell to the climb to B wheel on the way! Alert to A round of death! Entrepreneurship or low for low hit near money, or exalted skyer financing make money out of the distance, the most afraid of is, go one step at a time don’t know to approval in depth, near didn’t earn money, the money earn!

/boat, liu wen starts I black

the way success is not crowded

the market most ethical! Under the laws of the market, the more money you earn, you contribute to the society. This is my adhering to some idea. As a result, entrepreneurs through innovative entrepreneurial pursuit of wealth is a glorious thing.

however, in the dream (magic) think wealth avenue, can walk to the end, after all, just a few. According to the IT orange (as of March 13, 2015), 2014 seed angel round investment company 847, to A round of 861, to get the B round 229, get 82 C wheel, get A D wheel 17, of course IT’s just IT orange collected information publicly, but in A certain degree is also statistically significant. If the data with the graphical representation of any of the above rounds, you will find that it is a very acute Angle “Eiffel Tower”, at the bottom of the bottom is very wide, and low back above part is very steep.

according to the above data, round D: C wheel: B: A chakra: angel round proportion is 1:4. 8:13. 4:50. Right 6:49. 8. Can be simple, into A round of 50 projects only 4.8 into C round, 1 into D round (considering some final project don’t need to enter the D rounds, so some discount off the meaning of this data needs). In fact, the above seed angel rounds of data is very confusing and misleading, because a lot of early projects in the seed round or angel round, due to the needs of the secret and the vast majority choose not made public, at the same time, from the point of the wave of the “national entrepreneurship”, many early projects are powered by the founding team out of their own pockets, this part clearly “angel” completely is beyond the scope of the media statistics, considering the above two factors, the existing angel round number multiplied by 100 times should not too radical.

from this perspective, the vast majority of projects are dead in A round, at the same time, get A round project also has A 74% fall in the climb to B wheel on the way! Compared to the government of the entrepreneurship and peoples innovation, I prefer to tell all start-ups: alert to A round of death! I often speak of a words be: and entrepreneurs start a business or low for low hit near money, or exalted skyer financing make money out of the distance, the most afraid of is, go one step at a time don’t know to approval in depth, near didn’t earn money, the money earn!

business easy, good angels take

today’s entrepreneurial environment compared with a decade ago, it was different, all kinds of incubator, all sorts of business service agencies, all kinds of cloud services are active, close to the entrepreneurs to provide a variety of free services “Internet thinking”, which greatly reduces the entrepreneurial psychological threshold and threshold of reality, entrepreneurs are basically just need to “carry in”. Therefore, for a start of business for many people, is not a big decision.

from the perspective of capital market, due to the traditional industries and the property market, the stock market downturn, makes all the “rich people (local tyrants)” wearing “angel wings” racing to “Internet +” buster paradise. In addition, more is mainly due to early project and judge a book by direction, therefore, if your project loaded “dream drive”, plus the team, to obtain the probability of angel investment is very big.

the investment is to people?

a lot of people believe that the investment is to man.

I have different views on this. Invest in different stages of the project, judgement standard is different. If the angel round project is sold 10% 90% in the past to the future, so A wheel project is sold 20% 80% in the past to the future, B wheel project is to sell 30% 30% sold in the past to the future, C wheel project is sold 40% 60% in the past to the future, obviously, is to late, the need to see the “dry”. Investors decided to vote for a project is not equal to will become, deny a project also is not equal to the project must be failed, but investors decided to vote for a project, must conform to him (her) idea of the investment logic, must want to cross the psychological barriers of investors.

A lot of projects are there the infamous “hump” curve, 0 to 1 round (seed) and 1 to 10 (angel rounds) easier, 10 to 100 round (A) is difficult, from 100 to 1000 and relatively easy to (B), and (C) 1000-10000 is relatively difficult. Easy to die that is to say, most of the entrepreneurs, at two round A and C, which is part of A larger died in the before the mark of A wheel.

“A round off” nine kinds of dead method

why many angel rounds of project in the process of melting A wheel fall? According to our actual contact project, we summed up the “A round off” nine “to die”, to protect entrepreneurs, this paper still not directed at case, create an industry is not easy, because I don’t want there to be entrepreneurial brother was “when” and innocent, everybody just yourself accordingly, it is best to find A seat.

the first, “dead” products.

both the hardware and the App product attributes first (the first scenario) is a tool, is your users what’s the use? How are you able to provide users with the value of width, thickness and strength value, which determines your product is a “gold hooks” or a “hook” (see liu million boat another article “smart hardware: did you find alternative inflection point and the second scenario?” ). Many entrepreneurs often easily self-reinforcing and “rape” the willingness of the market, product doesn’t meet the principle of “common, dominant, just need to”. Some products, although also can satisfy the user’s “universal, dominant, just need to”, but cannot be extended to the second scenario, also can’t do “high frequency”, so also will not be able to produce continuous user viscosity. According to my observation, the better tool properties of products, sometimes platform attributes the weaker (if not effectively design the second scenario), such as lock screen, weather, alarm clocks, many tools such as intelligent switch and dictionary belongs to the class. So, if your product is not in conformity with the “universal, dominant, just need, high frequency” of the “eight” and then A round the death of the probability is very big.

advice: project in the startup phase should want to know what the user oriented, meet the needs of what pain points, what is the trend of the industry, time is in your side? As far as possible in accordance with the “universal, dominant, just need, high-frequency” horoscope “for product design and scene design.

second, die “” equity structure.

start-up financing process is actually a “more water, more water plus side” of the iterative process, founding team is responsible for the dough knead the earliest (sometimes hasn’t begun to knead the dough can also get the money), and bring an angel round with proper valuation. Sometimes, the rhythm of the founding team did not grasp the good financing, financing too early or too much may cause angel investors to share ratio is too high (a lot of time with local tyrants easy to cause the situation), and the founding team of shares is too low, so late is bad for financing (because of subsequent potential investors will think founding team incentive insufficient).

special is worth questioning, sometimes spawned the subproject in a project, the most prone to the problem of equity structure, as a result of the subprojects hatching belongs to “duty achievements”, the original shareholders must be not willing to give up too many shares, which directly lead to actual founding team shares a low percentage (some will be close to 50% or less than 50%).

advice: project in angel stage try not to get money local tyrants (except can bring strategic resources), and should try to introduce the professional angel investors. In the angel round stage have to accept more diluted shares, also suggest set the share buy-back clause in the investment agreement, conversely, the angels can also set the terms of the performance, if performance targets have been achieved, founding team has the right to according to a certain price (of course) to ensure that a certain premium to angel investors buy back shares. The terms of the set, not only can protect the interests of the founding team, also can protect the interests of investors.

third, “death data”.

the products before A round of funding and user data, in the process of project from 1 to 10 is essentially product validation effect in the market of digital expression, this time does not require corporate profits, but the data must show products on the market after the “ganci agni”. If the data is bad, so investors are inevitable to kill off the project.

worth mentioning is that sometimes the project data can also be an absolute value, but not in industry rankings within the first five (except trillion-dollar market), financing process will also been struggling. Here involves a question of investors psychological threshold, to put it bluntly, is to make investors feel for you is a relatively safe, have adequate margin of safety. Because in some of the winner-take-all industries, industry ranking largely determines success factor. So, some investors have made it clear that they are only the top three industry, if you’re just a fourth, fifth, that is sad, low lift and can’t earn money, exalted skyer and don’t have much money, the final approval in tow dead. So, before A round of funding for good data is very important.

: enterprise early capital is “super powers currency”, so be sure to properly with good angel round money, entrepreneurs need to understand that A, melt the purpose of an angel round is A round, melt is the purpose of A wheel B wheel, melt is the purpose of the series B, C… Oriented thinking, with this capital, entrepreneurs product operation to some extent driven track will not deviate from the capital. In the process of products operation can be guided by data as far as possible, focus on competing goods data, and give you A round of funding estimate good data expectations, goal oriented decomposition to the daily operations of the details. Entrepreneurs, of course, also there is no need to completely to do data for financing, thus disrupting its own strategic rhythm.

4, “profit model to death”.

when it comes to business model or profit model, any company can be attributed to a formula, that is: profit=income – cost. Different business model is that the income curve, and the cost curves in different stages of the different. According to my understanding, all companies can be divided into five types: pure product (platform), pure services, strong weak products and services, strong weak strong products, strong product services. Form different products or services have different profit model (CPC, CPA, CPT, CPS, etc.) and the cost structure, also determines the economies of scale and scope economy effect of release, which ultimately determines how far can this project, how to do, which also determines its investment value. The more partial service projects, the offline part is heavier, the more vulnerable to “scale, quality, cost,” the challenge of the iron triangle.

when entering an industry, many entrepreneurs don’t want to clear the subsequent business model, when the development to a certain stage, found its profit model facing the ceiling, enterprise although can make money, but in order to realize the expansion of 10 to 100100 to 1000, when facing a great challenge, this industry is usually present the pattern of “big market, small workshops. Such A project in A round when he faced great difficulties.

: after angel rounds of financing, enterprises need to start thinking about the future of business model, and can best use financial prediction model (please professional financing consultant company can assist) show different scale phase change trend of income and cost structure. Although financial prediction model may not be able to accurately forecast the future income and cost, but the systemic tools can help us to simulate the process of enterprise development, to help us identify the key success factors in the process of further development and the key failure factors, so that they can accomplish know fairly well, to avoid “stepped on watermelon skin”.

5, “valuation death”.


it is “much more water, more water to add noodles”. Sometimes, entrepreneurs to the choice of industry is very good, the project has a great deal of intrinsic value (” pit dividend “), but because of the current data and business model has not yet been able to effectively release etc., thus the external value of the dominant temporarily unable to support the high valuations. This can make between founders and investors in the valuation differences on expectations. In fact, a start-up how much should the valuation is reasonable, estimates that all over the world to this problem is no solution. We are more willing to accept the fact is that the price is formed by the market. If the capital market generally unacceptable founder expect valuations, founder is not willing to compromise or accept the terms of the bet, so financing is likely to miss the opportunity, and let the competitors took advantage, such cases, the entrepreneur is easy to put their own project suffocated.

in fact, in the industry far from integrated adjustment stage, the competition between competing goods within such as between the product and the team competition, and explicitly show the financing ability of competition. Who can grasp the initiative in terms of financing, who can more priority to occupy the mind of investors, potential investors to competing goods made greater psychological barriers.

: market most ethical! Entrepreneurial enterprises in the process of A round of funding want to get the ideal value, this is god’s truth, the key is to find for investors in the mainstream capital markets, the rest is formed by the market price. In addition, investment institutions and price negotiation time cannot too long, the entire cycle of financing not more than 5 months, or you too wedded to valuation will cause miss financing window. At this stage, quickly get money to implement the business volume is the best policy. Want to believe, if the project is done, the capital market in the later will help you to find the lost, on the contrary, if the project do not rise, then the value is “what”.

is worth questioning, valuation adjustment clause (bet) is essentially solve between the investor and the founder of the “information asymmetry” and “asymmetric” confidence and take a solution set of mechanism, you can understand to give investors a valuation adjustment options, can also be understood as to the founder of an opportunity to improve the valuation. Fair and unfair is the key to a performance goals, and based on the given target valuation is reasonable in itself. nullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnull