note: risk investment industry, the requirements are higher than any other industry; Because there are all kinds of professional skills, you can not only need a heart to dare to risk more. In fact, if you want to make some achievements in the field of venture capital is not simple, here is a venture capital firm intern with own experience, tell everyone in the vc industry which nine things to note:
in January this year, I entered as an intern at the university of Chicago’s booth school private equity financing and venture investment classes; There, I was lucky enough to venture capital company the Second Century, the work team cooperation, it is a dedicated telecommunications technology venture capital company. In this six months internship time, is a large part of the time in communication and different entrepreneurs, processing trade transactions, do due diligence, see about the investment thesis. Now, I think I should put the things I learned the six months to share with you, especially to share with those who expected to enter the vc industry and people interested in the vc.
I work in a venture capital firm is below after some of the ideas, want you to know what is the need of a real investment team, what can make you success in the field of venture capital.
the first point: in promoting state
project source (deal source) is a very important aspect of venture capital. Venture capital is only one goal, that is to find the best project to invest. Vc firm and its partners are usually selected projects in his social circle, so expand your company’s social circle can often get better source of the project. Rothenberg Ventures (venture capitalists mike? Rosenberg, the establishment of seed money) adopted a less conventional methods, he through the wild and lavish party, entrepreneurs become a best friend at the party. A more traditional way is to attend all kinds of business activity, but the efficiency of this approach is not high; Because your competitors will appear in this occasion. If you could have been going to this project, I suggest that you know about the enterprise will attend this activity in advance, then you are most interested in 10 companies listed, do both targeted can also make the competition by surprise. I think the most practical way is mentioned in peacetime when communicating with others I work in a venture capital firm, unconsciously expand your social circle; A long period of time, if their own work environment in good project will be recommended to you. Looking for project is a technical work, I think you should, as far as possible to try different way until you find the most useful method for you. You should have been in marketing mode, because you never know when and where the next project will appear.
the second point: know your vc firms strengths
in addition to search for the status of the project has been in and you have to make a vc firms to oneself unique like the palm of his hand. The vc industry has declared his business knowledge, operation skill is good, have a variety of vc networks. Enterprises in financing, often a large collection of vc company information, you have to let companies know your company and other vc firms where the difference is. So, understand their vc firm characteristics is not only beneficial to the development of your company, can also help companies in the right direction development, such as your company’s customer base, expert team, professional knowledge and skills in the field of a particular, best terms) to the enterprise. Entrepreneurs always hope from investors and strategic partners to get more benefit, so that only those who really can let enterprise value vc firms can get a good source of the project.
the third point: to understand target enterprise
once the enterprise enters your company deal pipeline (USA) project, you have to call it at the beginning of enterprise portal. This phone is usually know some basic information, equivalent to testing testing; Although only tentative, it is very important but it; Because you have to spend a lot of time to think about these start-ups in the industry, market and their business prospects. Do you want to make sure you first with the industry trend of the development of their understanding, can you some views to the company. When you when it comes to their VCS and entrepreneurs, they certainly will, in turn, ask you “what do you think of our enterprise engaged in the industry?” . If you want to in the first conversation with each other a good impression, you will be enough preparation in advance.
fourth: evaluating the market scale of the enterprise invested
believe many vc firms have encountered such a situation, some start-ups in front of vc firms say that they can occupy the billions of dollars in the market, but their goal is only a small share of the market. In fact, the size of the market means: exactly how many customers to buy products of this enterprise, the enterprise is willing to put up how much money to develop their products and income on the final amount. When a product on the market can attract 1 million users, it has attracted investors; Investors tend to favor more potential clients have 45 million products. Hyde Park Angels do to how to calculate the potential market size is very good explanation, here I am not careful said; But I want to remind start-up time interval is very important to evaluate the size of the market, you have to understand the meaning behind the assessment data you provide, especially when you are in front of the investment committee speech, otherwise VCS won’t take a fancy to your enterprise.
# 5: to distinguish true and false support
vc firms there is an important component in the decision making: support. However, you must first have to investigate the source of these support: paying customers, recommend customers, existing customers, friends, family, beta, etc. Vc do due diligence investigation of the enterprise should be aimed at sales cycle program and sales channels, because you may get unexpected support. Although the “support” said there is no good or bad, but the survey is still imperative; Because this company’s future prospects to the assessment and to estimate the company in the next 16 months and 24 months between the cash is very important.
: in the first six found potential of the target enterprise
the vc company is easy to have a profit of $50 million over the enterprise investment. The real risk investment expert will often for the first time when they see the potential of the enterprise. There is no one can identify the scientific method of enterprise potential, but there are a few strategies can let you see how. First, and the target enterprise in detail about its target market, customer acquisition, product development and so on several aspects of problems; Second, spend a day or two within the target enterprise, and to understand how they are assigned work time, and observe the work the team dynamic. To really understand the potential of an enterprise can’t walk normal procedures; But after talking with enterprise’s management team you can know about the; Since their introduction, can you understand to the efforts of the staff level and the degree of collaboration. Vc firms like to invest in those engaged in the industry to oneself, but also for the development of enterprises to provide a viable grand plan of entrepreneurs. If entrepreneurs to do your own thing without passion, realize enterprise where weaknesses, also can’t solve the problem; Companies such as the vc investment is not sensible decision.
number seven: set up their own social circle
for vc firms, is very important to build your own social network. Whether you’re using your social relationship to find the right project source or use it to help you understand the status of the enterprise, social networks are you a huge asset. As to this article, you have to be before the start of the investment set up their own social circles, who don’t subjective think doesn’t matter, you want to plan how to expand your social circle and how to use these social relations. You also want to strive to become a man who can remember by others, to contact those resourceful and professionals from different backgrounds; In addition, social circles to the company’s recruitment is also very important.
the first eight: pay attention to negotiate investment terms
security type, the liquidation preference, the enterprise valuation is any investment terms list (refers to the investment companies and start-ups exchange of investment cooperation in the future to reach to the principle of contract) on the key part; In addition to these three, vc field there are many complicated investment terms need you take the time to learn, and this is why legal adviser in signing a contract, and cancel the cooperation will be given extra attention to those complicated terms (one thousand inside they rhyme), therefore investment terms of negotiations is very important for both sides. In addition, there is no any terms seems to be the same; But even if they are the same, the understanding of enterprises and investors will also be different. Maybe some entrepreneurs are concerned about the problem of liquidation preference, and some companies are concerned about the company’s shares “jigsaw puzzle” (both stake, will change with the company of financing and expand) and early investors. Risk investment terms negotiation is never been attached great importance to, these provisions are signed after approved by the lawyer; Investment terms, therefore, the success of the sign to spend a certain amount of time, if the two sides to negotiate, it must be about both sides are satisfied.
in the first nine: to understand the company’s power
Apple, Google, Facebook is a technology company, but they all have their own differences. Vc firms, the classification of the lot, there are growing venture firms (fund), there is also a venture capital company with abundant fund (billions). The size of the company also has an effect of your work, you have more sense of responsibility in the fund company work can be less, want to let the company’s rapid development; In the fund more companies you work, you focus more on the investigation and research on investment thesis. Besides, the size of the company and its related fund cycles, a just get investment venture capital companies and agencies limited partners (LPs), share the upfront investment profits; The company that has been set up for a year or two is more focused on how to deploy their cash. These are to show the importance of power for the company development; From my experience, it can let the company produce different value proposition. Ensure that VCS short-term and medium-term goal in accordance with the company’s long-term development goals can double increase investment company and the work efficiency of the enterprise invested.
if you also want to enter the vc industry, you have to remember that the vc industry is a highly demanding field. To succeed, you must try to arm themselves. If you are not only a marketing, production, search experts and technical experts; You must have a high level of communication skills, a problem solver, a fearless salesman, a high level of the negotiators; And most importantly, you must be a man who can shoulder the risk.