Tuesday, November 24, 2015

Winter is approaching Venture money was not so good

Winter is approaching? Venture money was not so good!

  Autumn, summer, chill first.

  Ancient wisdom to create merged this stuff so people can be moved along, changes clothes, fresh positions and plan ahead. However, the climate of the capital markets to far more traceable, "national business" heat wave hit at a loss, for "capital" temperature perception inevitably lags.

  Other Bank view "fire" you may not have noticed:

  Last year was very hot car this year, the industry has friends close two-consecutive-carpool, love, and this is just the beginning. Similarly, refusing to home networks, looking for fun, walk the dog tourism clusters, jelly sightseeing + travel, the Internet deaths, patronage networks, 36th room, supplementary help Internet + education has fallen, housing network, drive road network, chat.Etang.com and other Internet + home lonely ... ...

  Meanwhile, under the agitation seems to have high potential, is the voice of entrepreneur--

  "Money, did not seem so good!"

  Recently, the Tiger sniff interview several before I got the money or are preparing to take money to entrepreneurs, and listened to what they say:

  One near entrepreneurs get A+ round of financing, scrambling to get these days in Beijing, with a new wave of investors starting. For urgent action, the founder group has its own reasons – last month the stock market dive, hardly can be expected to follow the capital crunch, is the principle of cash is King now, for next winter food grain to ensure the company can achieve a good development in the second half. "Also, similar products, is now busy making money, don't take, how to run it?" He said, "we all have a sense of urgency. "

  Baidu even got e bag $ 100 million b round of financing to wash founders Wing Yiu Cheung will also have feelings; and a stick to dollar fund entrepreneurs have had to let go: "the RMB funds are also welcome, BAT and we are actively engaged. You ask which one is better? which one will do....... "

  But others said calm, on the market after they have been recognized or is confirmed, financing this year to go smoother than last year. But when asked, "why not just into series b, but was released under a constant round of valuations plus", the entrepreneur said: "We hope we can go even better to see some data. "

  If you look at the financial news, you will find, reported in this A+,A++ round of funding this year than last year, and this scattered along the common, is reflected all of the urgent or journey's difficult?

  Therefore, the environment is cool right?

  For temperatures closer capital, the Tiger sniff travelled to several institutional investors. Throw after that call, "overall capital investment has not changed," is almost a consensus among members.

  Indeed, if you look at total number of incidents and the amount of investment hardly seems to come to the conclusions of the investment went cold.

  From financing IT Orange data show that from January 1 to July 31 this year, a total of financing Act 1706, much larger than that in 2014 and 1296, almost flat with the hottest part of the last year.




  But does this mean that market enthusiasm still? Up position! TMT industry investment in the future,

  In this regard, investor: "poor market as a whole. "

  While slightly later than the judge before him-"I expect the second quarter of this year, when heat of the market will come down, but just a-share peak, and lift up the market for a while. "

  As to why the market fell and the low tide, and not on the overall data, he explains:

  "We have done some research, raising average period of 6 months, a round of projects if you need to do VIE, about need such a long time. This also means that today you see these companies in July of Close, probably in January, has signed a term sheet, or a little later, in April or May, they were signed. This is because just two months ago, markets are not so bad, but now we feel it is very obvious. "

  Statistics for ChinaVenture7 months from mid-2015 Internet industries VC/PE scale of financing in the second quarter was 3.789 billion dollars, fell 50.36%; financing case number 222, fell 10.84% (public data only). Seem to March the Prime Minister on "Internet +" remarks, also does not allow lifeline in charge of capital investment became more excited.


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  So cold because of financing?

  In General, is due to insufficient market supply, in particular in two ways –

  "Orgasm sequelae", USD

  In 2014, Alibaba, Jingdong, poly-America, cheetahs are successful overseas IPO, the wave tide of us listings, greatly affecting domestic investment market. In this context, dollar's advantage fund raised amount will increase. According to 2014 China venture capital annual report shows, during which the dollar fund raising completed 30, totalling US $ 8.179 billion, accounted for 43%.

  During the investment boom in the last year, dollar fund did kill a peak and subsequent is the "climax legacy", are as follows:

  First, because last year, overexert, dollar funds finally consciously save money in their pockets to spend, thus the project more seriously. So you are less likely to hear some of the so-called "second vote" project;

  Second, too many investment projects last year, and project management takes time, resulting in reduced project time. In particular has been put into the project in the absence of to before the next round of financing, no new investor involved in management, investment and management after a heavy responsibility;

  Third, the hands have been posted on items found in the process into the next round of not that smooth, leading management to spend more time, at the same time, the next round of investors are not easy, so buyers are more cautious.

  Share cool RMB Fund to combat

  Prior to the stock market crash, the whole market into a large amount of renminbi funds in the first half, even many mutual funds and listed company in a hot market as a whole. But a-shares after rapid cooling, making many investors have lost confidence, many listed companies has signed a term sheet aside. A share capital as a whole has dropped a lot.

  This will have a direct impact is as follows:

  Individual project funding cycle long: Term of two or three weeks to hammer out before, now may take weeks to get 3-4.

  Project initiatives to reduce: items may take four or five Term Sheet before, now may only take two or three.

  Project financing amount is shrinking: in a round, for example, turned out to be between US $ 500 to 10 million, now it's probably only get $ 300 to 6 million looks like.

  Reflected on the entrepreneurs who are deep sleep into money is not easy. Summed up, was the slowdown in the pace of capital market valuations senses gradually. In the view of some investments, everything is just the beginning. "There will be further weakened. "

  However, this "cold" is not a bad thing. A FOF agency partner telling Tiger, and in the past three years, with a number of emerging business models and technologies and the birth of many bubbles, and that bubble has peaked this year. "Everybody needs to calm down and make some decisions, and make really good companies get investment. "Crunch" is just another round of survival of the fittest, natural law. "

  Known cold-heat, who is happy and who worries?

  As someone afraid hot antifreeze, overall decline does not mean that exactly the same part or in individual perceptions, under the premise of cooling the entire capital environment, there are always people who will be more difficult than others, some people realized that was personally excited by lady luck. So, the next day, which one would you be?

  Middle days of tough

  As drops of valuations of billions of non-listed companies, is already too strong to die, they roll the highest quality most of the money in the world, even in cold climates, they can still get a very good investment. Go back to early-stage investing, some with high tech or even black new business models, products and want to get the money, it is not difficult, but failed to further clarify the exact path to think more of their products, trying to win a fistful of money, it is not that simple. So, by contrast, b company seems to be the most stressful. And taking money for company b, investors further to three causes:

  B company are not small. More staff per month invested huge, and b-round majority of TMT companies not very blood-forming capacity, income is not high, looking at the sums of money paid out, stop subsidies once, data is easy with atrophy.

  B market structure is uncertain. Later investors prefer pattern of approved projects, the star project is excellent to take money, c company is pattern is set, the stars are easy to finance, and lower level is basically a wash sleep. B due to patterns of undecided, so entrepreneurs are unwilling to market yet, investors have to decide exactly who, reluctant to hand.

  B round of financing amount is small. Basically, in the past year, series b financing of more than $ 15 million, b company at more than $ 10 million this year, in the financing of such a scale, investors dare not so much to gamble on a team, this value is too expensive, too risky. In contrast, c round it became clear that, under decision easy; a round of corporate financing lower amounts, 3 million American financial to slow down to $ 2 million into a Pre-A can.

  To b in spring?

  When one of our Internet death list appear in public, or when happy or sorry, Enterprise Services entrepreneurs have a sense of thousands of Xin without pain. Some even referred to 2015 is "service first". Therefore, the wind starts blowing into enterprise service?

  In fact, the "Enterprise Services spring has come" the voice appeared as early as four years ago. But if you look, you will find areas of enterprise services is actually a very stable, it is not so obvious for capital market reaction, in other words, capital for the company's development speed is relatively small.

  One investor said: in contrast, red can be used to quickly take the user to the last drop, breeding habits, market and service focus is to train people, giving it the ability to serve a business, this is a matter that requires time. Service enterprises and individual service are not the same, can't say vote for $ 100 million, and the company can improve its service capacity right away several orders of magnitude. Enterprise quality of service for personnel and technical requirements, it is doomed to be a slow process.

  This year will see a large number of enterprise-level service with large amounts of financing? it is because these companies have done a very long time, industry has evolved for a long time, and gradually he was able to come this far. We can imagine to get us three years listed, do the $ 15 billion valuation drops 3.5 years, but inside the enterprise service, find such a case is difficult, because they take a long time to brew.

  Now by means of the Internet can help enterprises expand the scale to a certain extent, but compared with the excellent To c company, it is difficult to have an advantage. However, it is also because the features of enterprise services, causing it to be capital market fluctuations are small. May be seen from the data, now enterprise services easier to get money, but in the long run, corporate services the amount of money a company's data is more gradual. It's "Spring" from a certain standpoint, is the capital of winter contrast.

  Winter is coming, why survive?

  Maybe pour some cold water, but Tiger sniff find investors who talked to corresponding measures, hoping to help you safe for the winter.

  (1) cash subsidies and scalping to be careful of these things, should pay more attention to the long-term healthy development of the enterprise direction. Through baptism of the bubble, investors ' eyes light up more and more, they are not authorized to burn money and acts of scalping, after all, it's not a long-term thing. In contrast, they value the user retention rate and the buy rate, health index of the entire operation. Only healthy growth, effective growth.

  (2) to be able to get the approval of the capital market, most importantly in their own market barriers and status.

  (3) the prices don't get too tangled. Truth is, you don't get the money, someone else is the same. 11 boom in the first half, we all got tens of millions of dollars, are pushed out of the advertising is very expensive, we have money, money. But after market cooling down, only a few have the money, but the competitors have no money, they advertise, and cheaper advertising effect, no similar spelling, and sufficient market effect. So, get the money, quickly run forward and don't let conditions valuation these entanglements, got the one Term two weeks not to sign, maybe investors will mind. Took the money back, don't get bogged down in details.

  Good news is, this can almost see this year's winter capital, and two is not the same as 2009 and 2011, more crazy bubbles after the baptism, investors became calm caution, great projects and there is no lack of investor enthusiasm, so guys, good luck!