The patience of investors is also being consumed.
Editor’s note: This article is from the WeChat public account “investing in the network” ( ID: China-Venture), author Chai Jiayin Ma Mujie.
The applause under the podium, the inexhaustible cooperation, the initiative to send the door to the TS… Lu Fang, who got a lot of financing at the end of 2017, was surrounded by all this, and the scenery was full.
However, the capital feast ended in an instant. In the past two years, from the door to the door to the door, she had no time to adapt, she had to be forced to accept. Since 2019, Lufang’s capital chain has been on the verge of breaking several times, and there have been negative news such as “reductions” and “closings”.
“In the past two years, investors have been keen to discuss more about the possibility of the industry, the market size, the blue ocean market, etc. In 2019, no matter how good the scene is, it means there is no ‘story’ and it is impossible to get the attention of investors. It is very difficult for companies without product value to get the money again.” Lu Fang told the investment network that he has not made any noise in the near future because the service scene he created does not have customers paying for it, and there is no corresponding performance “digital”. Support.
The downstream customers who worked closely with Lufang confirmed to the ChinaNet. “They are very difficult to raise now.”
“The 2019 conference will be a key year, and the story of the startup company must be grounded.” Zhou Wei, founding partner of Chuangshi Partner Capital, confirmed this view on the investment network.
CVSource’s investment data shows that there were 2710 investment and financing transactions in the first half of 2019, involving an amount of approximately 405.537 billion yuan. According to the above data, the number of investment and financing transactions in the domestic primary market in 2019 may fall to the level before 2014, and the annual investment and financing transaction amount may fall to the level before 2015. “Financing difficulties” has become a dilemma that cannot be avoided in the development of various industries.
Investor patience is also being consumed.
“We don’t want to look at other standards. Other things are no longer useful.” Lei Chunran, CEO of the smart investment engine, said to the investment network, “If To B, is there anyone who uses it, is there a large one? The agency signs a partnership with you; if To C, what your customer feedback is, and whether your team can continue to make improvements based on this feedback. These are the most important.”
Finance journey
“Financing is difficult”, AI companies bear the brunt, and have been deeply immersed in the center of the topic vortex.
CB Insights data shows that nearly 20% of AI companies are losing money throughout 2018. Some investors predict that as a long-term financing-driven industry, oneIn the absence of capital injection, the AI industry will face a wave of bankruptcy.
“Different from traditional industry companies, most AI companies do not have real revenues that can at least support the company’s operations. It is difficult for these companies to get enough cash when the market commercialization is not yet mature. Flow as income, and those companies that can’t afford it will go bankrupt.” An AI investor told the investment network.
The unicorn is no exception. Recently, it is reported that an AI unicorn is packing and selling its Singapore overseas business center. The core reason is that the local business expansion has not reached expectations.
The report also said that people familiar with the matter pointed out that in the blueprint of the AI Unicorn, it is hoped that it can be empowered, but the actual situation is that the progress of technology is far from expected.
The dilemma of the industry is also affecting capital confidence.
According to CVSource’s investment data, in the first half of 2019, the number of investment cases in the AI field was 26.7% for the full year of 2018, less than one-third; the financing amount was 25.7% for the full year of 2018. This means that in the first half of 2019, investment activity in the AI sector has fallen sharply.
Data Source: CVSource casts data
“Financing is difficult because of the difficulty of technology landing.” Yu Yue, an investor in Gobi Venture Capital, said to the investment network that although some unicorns have been highly estimated in the first half of artificial intelligence through huge financing. Value, but its landing is not ideal. Nowadays, with the artificial intelligence entering the second half, the investment ideas like the first half are bound to change.
In the second half, investors want to find technologies that really grow out of the scene and customer needs.
“A fund with a period of time is always responsible for the income of LP, so we will not invest in projects that are only AI flag but have no commercial capabilities.” Fang Yimin, a partner of the innovation workshop, even bluntly said that in a few years The name of AI company will die.
“Because the end of technology is still going back to the industry, it is difficult for AI to suddenly open up a new industry or a new track.” Fang Yimin told the investment network.
But from another perspective, the commercial AI project is just the golden age of the up-and-coming.
“We are actually in the stage of choosing an investment institution.” Liu Peng, the founder of an AI company, revealed to the investment network that at this stage, it is more inclined to invest in the resources and strategic layout of the investment institutions. Not just the money itself.
The reason why Liu Peng is so emboldened isBecause the service scene created by the company has achieved good commercialization. “Today, investors are looking for projects that can ‘sell money.’ Because they have already started commercialization, this just gives us the opportunity to run out.”
Try it wrong? Don’t think about it
The AI field is still the most favored by capital compared to other industries.
“Technology projects are good, and other industries are more difficult to finance.” Yu Yue told the investment network.
CVSource’s investment data shows that there were 2710 investment and financing transactions in the first half of 2019, involving an amount of approximately 405.537 billion yuan.
According to the above data, the number of investment and financing transactions in the domestic primary market in 2019 may fall to the level before 2014, and the annual investment and financing transaction amount may fall to the level before 2015. “Financing difficulties” has become a dilemma that cannot be avoided in the development of various industries.
“When the money in the market is tight, we have to do a few things with limited funds. Some are to achieve profitability, some are to achieve the blueprint for the future of the company, but not every investor will support it. Lin Biao, the founder of a cultural entertainment company, told the net. “There is sometimes a feeling of ‘darkness Chen Cang’. After all, if the road is wrong, it is not easy to explain.”
When the market is cold, the biggest disadvantage for companies is that they have a lot less money that can be ‘trial and error’.” Previously, Qi Ziping, the founding partner of Qiming Ventures, told Investment Network.
“Every company will inevitably take some detours in the development process. When the market is good, a company may go through two detours and may still receive capital support; but when the market is cold, the capital pair The tolerance of mistakes will be relatively low, and companies that have made a detour may not be able to melt into the next round.” Zhai Ziping believes.
But the “winter” is not necessarily a bad thing for investment institutions.
Zi Ziping, for example, “When there is enough money in the market, investors will feel that they can’t vote for the industry NO.1, they can choose NO.2, NO.3, and even those who may go to NO.5 are willing to vote. However, in this way, NO.1 companies will face a lot of unnecessary competition or interference. In 2019, this problem will never happen.
So, what kind of business is the “NO.1” worthy of bet in the investor’s mind?
Zhou Wei mentioned to the investment network that for investors to judge the value of a business model or a technology application scenario is not worth investing, just answer two key questions: what value does the enterprise provide to users? ? Are they willing to pay?
He explained, “The value provided can be measured in your own mind: What happens to users when they receive 1 yuan? What happens when they receive 10 yuan? The fees will gradually increase, willFound that a node user ran all, then this is the upper limit of your charges. If this ceiling is very thin, this business model is currently problematic.
“There is no shortcut to go.” As an entrepreneur, Huiling Jinke founder Huang Ling also believes that “it is not to say that the aura of AI will go faster than others, and entrepreneurs must truly solve Party A’s problems.
Last opportunity?
Continuous entrepreneur Feng Jun has claimed to have “walked through shortcuts.”
“I have always stepped on the ‘winds’ business, mobile Internet, big data, AI, I have tried, I have received 5 TSs in one day, and I have not paid the brothers for half a year.” Feng Jun Tell the cast.
But this time, like Lu Fang, Feng Jun’s corporate finance has been open for nearly a year but has not received any response.
Feng Jun, who started his business 20 years ago, is not as worried about Lu Fang’s “funding difficulties”. “I see it relatively lightly, maybe because I have been in anxiety for a long time. This kind of anxiety is not once or twice.” Feng Jun said.
The past experience of Feng Jun also recorded the ups and downs of the venture capital field to some extent.
In 2000, China’s first generation of Internet unicorns experienced a rapid blood loss after being listed on the Nasdaq.
The venture capital institutions far away in China were also affected, quickly and cautiously, and a large number of Internet companies subsequently had difficulty obtaining a new round of financing. At a time when financial deleveraging and liquidity were tight, Internet companies that survived financing were generally caught in anxiety.
The same is true for 2018. On July 12 of that year, there were 8 companies that were going to be listed at 9:30, but the stage was limited and only 4 were put down. As a result, there have been strange pictures in which two companies share one side and eight people.
The high concentration of unicorn listings and the rush of action have laid the groundwork for the unprecedented “financing difficulties” of 2019.
“Insufficient surplus of investment institutions, urging unicorns to go public, this is already an open secret. But how bad their situation in 2019 is, but few people know.” Feng Jun told the investment network.
“Investing in the best team, investing in the best technology, this is the investment strategy of the previous stage.” A TMT field investor told the investment network that in 2019, everyone’s thinking changed. “More It is still based on requirements and applications, focusing on the services provided by enterprises.”
Zhang Wei, co-founder of the collaborative robot Magnesium Gamma Robot, suggests that in the cold winter, “start-ups need to find new application scenarios and find new ones to maintain performance growth. For example, to expand the robot’s Application scenarios and scope of use, not limited to industry or production lines, entrepreneurs can open up some scenes like laboratories, smart retail.”
Under the madness of the unicorn, do start-ups still have the “expansion space” mentioned by Zhang Wei? “The unicorn naturally has a huge natural advantage, but ‘money’ may not be able to penetrate every field. I still believe that the subdivision track will always run out of the faucet, even if it starts in 2019, it does not count Late.” The aforementioned TMT field investors said. However, it is worth mentioning that in 2000, when the last round of unicorns lost blood, profit pressure is also the biggest challenge facing Internet companies. At that time, very few people were able to answer the question of capital throwing: how to make a profit, or even how to earn income. In 2019, this issue still lingers in the middle of investors and entrepreneurs. “To be honest, at the moment, profit is still a good story for me, but I will try to tell the story. After all, I can’t get the money, and everything can’t be done.” Lu Fang told the net. So, has she ever ventured to create a compromise for this story? In the face of this problem, she did not hesitate to say, “There is definitely a compromise. Is capital not a game of mutual compromise?” (At the request of the respondent, Wenzhong Lufang, Liu Peng, Lin Biao, and Feng Jun are all pseudonyms)