2.5.1 Key nodes of equity financing

With the faster and faster product updates, new models and new species emerge in an endless stream, people's lifestyles have also begun to change rapidly, and products that focus on iterative updates and customer experience are enthusiastically pursued, followed by the active layout of capital in these fields. With the dual role of consumers and investment institutions, a unicorn company can be built in just a few months.

If the entrepreneurial behavior is reduced to different models, then the entrepreneurial activities in the past were mainly based on imitating the innovation model and rolling development model, and in recent years, it has gradually developed into an entrepreneurial model with the triple integration of policy, capital and technology. In the start-up stage, start-ups generally carry out scientific and technological innovation, create some new products, new models and new species, take advantage of policy advantages, seek capital support, quickly seize the minds of customers, and subvert the original market pattern of the industry.

Under the rolling development model, start-ups can grow slowly on their own, even if they do not raise capital. However, with the continuous changes in the economic environment and the iterative upgrading of entrepreneurial models, many large enterprises that should have stood out from the fierce market competition should enjoy the fruits of victory, but they have been abandoned by the times, such as Nokia, Sony, RT-Mart, etc. To a certain extent, the current start-up market is a capital-led market, and which field the capital invests in, which field will quickly change the world and present a new development pattern.

In the context of the era of "mass entrepreneurship and innovation", with reference to the unicorn models created by various investment institutions, start-ups have chosen a different entrepreneurial model from the past at the beginning of their establishment. On the one hand, these companies focus on product innovation, polish high-quality products, and connect with the consumer market; On the other hand, these enterprises are actively connecting with investment institutions and seeking capital support. There are many ways for start-ups to connect with investment institutions, such as acquaintance referrals, financial advisors, roadshows, media, venture capital, etc. After contacting the person in charge of the investment institution, the next step is to improve the success rate of financing, which tests the quality and negotiation ability of the enterprise.

In order to ensure the success of financing, financing enterprises must scientifically select the negotiation time, grasp the rhythm of the transaction, understand the negotiation style of the counterparty, agree on the scale of advance and retreat in advance, and master certain financing negotiation strategies. You know, "negotiation is the art of compromise", the following is a detailed exploration of equity financing negotiation strategies.

Generally speaking, the best time for equity financing is March ~ November every year. During this period of time, almost all the pre-investment and post-investment departments of investment institutions will be dispatched to search for high-quality projects in the market. After entering December, the senior executives of investment institutions will leave the first-tier market one after another and shuttle through major forums, annual meetings, summits, etc. During this period, the managers of investment institutions need to report to fund investors on the projects they have invested in, the projects under management, and the projects they have exited for nearly a year, and if they involve government funds, they must also cooperate with the work of government departments. Therefore, during this time period, investment institutions will slow down the pace of investment, which is not the best time for companies in need of financing.

Practice has proved that there are three good points for enterprises to negotiate financing: first, the business model has been successful, and there is data to prove that there is more room for future development; second, to become a leading enterprise in the industry, in the stage of staking or sneaking development, is expected to become a "dark horse"; Third, it is only one step away from going public.

In order to successfully raise funds, enterprises should strive to be upstream, strive to become the leading enterprise in the industry, and scientifically evaluate the value of the enterprise. If the company is in the middle and lower reaches of the industry, and its valuation is too high, it is difficult to complete the financing, even if the first stage of financing can be completed, it is easy to cause no follow-up investment institutions to follow up, and gradually forgotten by the capital market.