Lead: From the perspective of investment behavior, venture capital is an investment process in which capital is invested in the research and development of high-tech and its products with failure risk, aiming at promoting the commercialization and industrialization of high-tech achievements as soon as possible, so as to obtain high capital gains. From the perspective of operation mode, it refers to the process that investment intermediaries invest risks in high-tech enterprises with special potential under the management of professional talents, and it is also an investment mode that coordinates the relationship between venture capitalists, technical experts and investors, enjoys benefits and bears risks.

Characteristics of venture capital

First, it is long-term, transitional and regular.

To transform a scientific research achievement into a new technical product, we must go through the stages of research and development, product trial production, formal production, expanding production to reach a profitable scale, and further expanding production and sales. Only when the company's stock goes public and the stock price rises can investors recover venture capital and gain investment profits. This process will take at least 3-5 years and at most 7- 10 years. Therefore, the long-term nature of venture capital is relative. It means that venture capitalists do not require venture enterprises to make any repayment or dividends in a short period of time (such as two or three years), so that venture enterprises can act for a long time, which is an important difference between venture capital and borrowing and other financing methods. Transition and periodicity mean that venture capital is only the capital to help venture enterprises grow. Generally speaking, it has planned the exit time at the beginning of investment, usually 3 to 7 years. After withdrawing funds, they will invest the principal and interest obtained in cash in a new round of venture capital.

Second, the capital investment is mainly in the form of equity capital, and there is no guarantee.

The valuable property owned by venture enterprises is usually wisdom and technology, and there are usually not enough physical assets to guarantee it. Because loan financing needs to repay the principal and interest, and listed financing risk enterprises are too young, it is difficult to use traditional financing methods. And venture capital just makes up for this funding gap. It injects capital in the form of equity capital or quasi-equity capital, so that venture enterprises can develop with peace of mind for a long time.

Third, capital investment is phased.

Venture capitalists usually divide the growth process of venture enterprises into several stages, and accordingly divide the total investment funds into several times. The realization of the goal of the previous development stage becomes the premise of capital investment in the next stage. This is an important way for venture capitalists to reduce investment risks.

Fourth, realize profit through capital appreciation.

Venture capitalists generally do not require venture enterprises to distribute dividends or repay interest long enough in advance. On the contrary, they adopt the method of zero profit rate, focus on the long-term value-added of enterprises, recover their investment by selling their shares in venture enterprises at an appropriate time, and realize profits through capital appreciation.

The success rate of single investment is low, the return rate of single investment is high, and the return rate of comprehensive investment is high. The success rate of venture capital projects is very low. Generally speaking, two out of every 65,438+00 investments are completely failed, and all investments are at a loss. Three are partial losses, three are no wins and no losses, and only two can succeed. But once successful, the investment will bring rich returns to venture capitalists. It is not only enough to make up for the losses of other failed projects, but also has a rich comprehensive return on investment. Compared with stock, fund and national debt, the long-term return rate of venture capital can reach about 20%, but this high return rate is based on high risk. Therefore, we must have the ability to control risks, need a team of high-quality venture capitalists who are good at evaluating and controlling risks, and then combine financiers, venture capitalists, entrepreneurs and scientific and technological experts according to market rules. Because high-tech industries and products are based on brand-new scientific research achievements and new technology applications, they are unprecedented undertakings with great uncertainty; In addition, the transformation of a new scientific research achievement into a new product has to go through many links, such as process research, product trial production, intermediate test, expanded production and marketing, and each link has the risk of failure. Like America? Silicon Valley? Many enterprises died halfway because of poor management and insufficient funds, affected by the economic situation. So we say that venture capital has the characteristics of high risk. The high-tech enterprises established by venture capital have low cost, high benefit, good performance, high added value and strong market competitiveness. Once an enterprise is successful, its investment profit rate is much higher than that of traditional industries and products. The average capital profit rate of American venture enterprises is above 30%, and the capital profit rate of Apple Computer Company once exceeded 200 times of the original investment. It can be seen that venture capital has high risk and high return. The high-yield characteristic of venture capital is an important reason to promote the development of venture capital.

V. Venture capital is characterized by high risk and high return.

There are high risks in venture capital, because: (l) the main investment targets of venture capital are small and medium-sized high-tech enterprises in the early stage of development (including seed stage, introduction stage and growth stage), and these enterprises have many risk factors. For example, enterprises in the seed stage, from technical brewing to laboratory samples and then to rough samples, have all been completed and need further investment to form products. At this time, there are still many technical uncertainties, the products have not yet been put on the market, and the enterprise has just been established. The technical risk, market risk and management risk of investment are very prominent. Enterprises in the lead-in period need to solve technical problems on the one hand, especially eliminate technical risks through pilot production (small batch trial production), on the other hand, they need to manufacture some products for market trial sale. Technical risk, market risk and management risk of investment also exist at the same time. On the one hand, growing enterprises need to expand production, on the other hand, they need to increase marketing investment and open up product markets. At this time, although the technical risk has been solved, the market risk and management risk have increased. Although the company has raised some funds at this time, due to the large demand for funds, the company's original assets are limited and the investment risk is still relatively high. (2) Venture capital is a long-term investment, with a payback period of 4-7 years and poor liquidity. (3) Venture capital is a kind of continuous investment, and the capital demand may be very large, so it is difficult to accurately estimate it at the initial stage of investment.

Venture capital will get a high return, because: (1) The investment projects of venture capital companies are all obtained by very professional venture capitalists through strict scheme screening. The selected investment targets are some new ventures or investment plans with large potential market scale, high risk, high growth and high income. Among them, the investment targets of venture capital are mostly high-tech enterprises in high-growth fields such as information technology and bioengineering. Once these enterprises are successful, they will bring investors several times to hundreds or even thousands of times of return on investment. (2) Because it is difficult for small enterprises in the early stage of development to obtain funds from traditional financial institutions such as banks, the funds invested by venture capitalists are very important to them, so venture capitalists can also obtain more shares. (3) The rich management experience of venture capitalists makes up for the lack of management experience of some entrepreneurs, enabling enterprises to succeed quickly. (4) Venture capital will withdraw from the successful investment through the listing of enterprises, thus obtaining excess capital gains.

Sixth, pay attention to the use of incentive and restraint mechanisms.

Investors and venture capitalists attach great importance to the use of incentive and restraint mechanisms. In the former case, in order to effectively ensure that venture capitalists use investors' funds faithfully and efficiently as agents, venture capitalists are generally required to become investors in venture funds and give them high management fees and generous profit sharing. In the latter case, in order to restrain and encourage managers to work hard for the growth of entrepreneurial enterprises, investment tools such as preferred shares with conversion rights are generally used, and managers are given a certain share of company shares or purchase options and corresponding compulsory redemption clauses.

Characteristics of venture capital

Venture capital is an investment activity consisting of capital, technology, management, professionals and market opportunities. It has the following six characteristics:

First, actively participate in the investment of emerging enterprises in the form of equity investment;

The second is to assist the enterprise management and participate in major decision-making activities of the enterprise;

Third, the investment risk is high and the return is high; And professionals carry out various venture capital cycles;

Fourth, the pursuit of early recovery of investment is not aimed at controlling the ownership of the invested company;

5. The relationship between venture capital companies and entrepreneurs is based on mutual trust and cooperation;

Six, the investment target is generally high-tech, high growth potential enterprises.

In the process of commercializing potential technological innovation and product creativity through specific business activities, technology owners also need to have two resource conditions: capital and management, which are often lacking by technology owners. In particular, high-tech investment has the characteristics of high risk in essence, so it will be very difficult to raise funds in the normal financing market. Before technology is transformed into benefits, it is difficult to obtain loans from banks and issue stocks or bonds, so many high-tech product ideas are often stillborn, and venture capital just solves this problem.

;