Prevention is the best solution to the crisis.
Editor’s note: This article comes from the WeChat public account “New Retail Business Review” (ID: xinlingshou1001) , author : Tian Qiaoyun Senior Editor of New Retail Business Review.
“Prevention is the best way to resolve the crisis.”
Winter is not necessarily spring.
“After working at home for three months, you will find yourself unemployed.” This is not an online segment, but the real experience of Sang Sang (pseudonym).
She worked for an early investment institution in Beijing and worked in the company’s second-tier department for more than 4 years. She is not the only company in this layoff, and she is also unemployed with another colleague from the investment department.
Sang Sang is not without psychological expectations for being laid off. She said that in the past few days, friends around her working with investment institutions have heard news of layoffs or salary cuts from time to time.
“It ’s not the same as the capital cold winter of the previous two years. At that time, our company just slowed down the investment speed. This time it was like someone was pressing the pause button, and the business stopped.” I experienced 2017 ~ Sang Sang, whose capital was cold in 2018, finally failed to escape this year’s adjustment.
Epidemic Accelerator
According to the company ’s survey data, as of April 1, 2020, the total number of start-up enterprises nationwide (within one year of establishment) is approximately 7.19 million. At present, there are about 160,000 enterprises in the state of “revocation and revocation”. Among them, about 120,000 SMEs with a registered capital of less than 1 million, accounting for about 75%.
From the perspective of the growth laws of enterprises, regardless of size, the growth of most enterprises is usually divided into three major stages, namely, early stage, middle stage, and mature stage.
So, correspondingly, equity investment companies are roughly divided into three types according to these three stages, one is the early angel investment company, the other is the medium-term venture capital company (VC), and the other It is a pre-IPO private equity investment company (PE).
Sang Sang ’s company is an early-stage investment company, and the investment projects are basically entrepreneurial enterprises, and some are still in the seed stage. These start-ups are like babies, usually not large in size. It also means that when the external environment changesAt this time, the anti-risk ability of such enterprises is relatively low.
On the other hand, any major changes in the operating status of these companies will directly affect the equity investment companies that invest in them, and this impact is often multi-dimensional rather than unilateral.
No matter the size of the investment company or the number of employees, there are two departments at the core, one is the investment department and the other is the fund-raising department.
As the name implies, the main responsibility of the investment department is to find good projects for investment, and the main responsibility of the fund raising department is to find funds to provide sufficient “fund ammunition” for the investment projects of the investment department.
“Investment companies are actually attached to the real economy. If the real economy shrinks a lot, it will mean that some investment companies do not have so many good projects to invest on the one hand, and not so much money to invest on the other.” Shanghai Shan Fan Huizhong, founder of Fortune Capital, pointed out.
It ’s easy to understand that there are no projects to vote for, but why is there no money to vote for?
In fact, no matter whether it is an institution or an individual, only when they have money will they take out part of the funds to invest.
Fan Huizhong defines the concept of “wealth” as follows: one is to have money in hand, and the other is to expect to have money. Money in hand refers to liquidity, and money to be expected refers to money that one can earn in the future.
When the macroeconomic environment is challenged, even if some institutions or people have money, but they are expected to have no money, he dare not invest casually. As a result, the fund-raising of investment companies will encounter difficulties.
At present, the layoffs and salary reductions of investment companies are only the beginning. “It is not the peak period now. In the third and fourth quarters of this year, a number of investment companies will go bankrupt.” Fan Huizhong predicted.
However, he emphasized that the “death” of these companies is essentially not related to the epidemic. From a rational perspective, this is actually an industry adjustment process, and the epidemic has at most acted as an accelerator.
The impact of funders
In September 2014, the country began to advocate “public entrepreneurship and innovation”. In 2015, the equity investment market gave a enthusiastic response, and various types of large and small institutions entered the market.
For a time, the investment industry also showed a boom in “mass entrepreneurship.”
In the two years from 2016 to 2017, the equity investment industry became so popular that it entered the process of “spreading money”.
“In the craziest time, some project investment companies decided to invest after two days. Other companies did not follow the valuation logic at all, even if the valuation was surprisingly high, it was correct.” It will take at least two or three months for the project to see clearly his competition, upstream, downstream, customers, executives, race tracks, etc. Dare to vote. “
However