(1) Summary of financing business plan
The outline of financing business plan is the first thing that private fund managers see, so it must be the core of the main content of financing business plan and the essence of financing business plan. It must be attractive to make investors interested and hope to get more information about the enterprise. The brief content is the basic feature of the summary, so it is necessary to write the summary in concise and accurate language, and when making the summary, we must try to control the writing of the summary to about 2000 words. The summary mainly includes the following contents:
1. Basic information and contact information of the enterprise;
2. Commercial operation;
3. Enterprise summary;
4. Management team and management organization;
5. Industry status and market of products;
6. Description of financing;
7. Financial planning and analysis (including capital use and profit forecast);
8. Exit mechanism.
(b) Enterprises and their future
This branch covers most of the business scope of the enterprise. The core content that private equity funds want to know is the uniqueness of enterprise business and its dynamic influence on the future profit prospects of enterprises, that is, private equity fund managers can determine the key factors for enterprises to win in the competition of the whole industry through their unique understanding of enterprises. The content of enterprise and its future covers a wide range, mainly including the following contents:
1. Enterprise profile: refers to the name, establishment time, registered capital, actually paid-in capital, proportion of cash and intangible assets in shares, place of registration, nature of the enterprise, main business, historical evolution, development stage, ownership structure, etc.
2. Business nature: briefly introduce the main business of the enterprise, and briefly describe the corresponding products or services, so that the private equity fund manager can know the products or services of the enterprise as much as possible.
3. History of enterprise development: including the time of producing products or providing services, the important stages of enterprise development and major events in the development process.
4. Enterprise prospect: It can describe the future business development plan of the enterprise in chronological order and point out the key development stages. In this part, investors such as private equity funds generally need to know the business development direction of the enterprise in the next few years and the reasons for its changes. If an enterprise expects that its future business will be tested by many changing factors, it should explain the necessary conditions for its development success.
5. Originality of products or services: The uniqueness of an enterprise can be manifested in the management team, products or services, financing structure and arrangement. In short, an enterprise can have a good profit prospect only if it is unique in its products or services.
6. Product or service price: a description of the pricing strategy of the enterprise's products or services, including product price, price formation basis, cost, profit and profit composition, etc. Private equity funds need to know whether the product pricing has fully considered all the influencing factors, including the composition of the price, whether it is logically accepted by the market, whether the product pricing reflects the price trend under competitive conditions, whether the price can resist the pressure of price reduction from the market, and so on.
7. Customer group characteristics: including customer characteristics description, purchase motivation, main buyers of products and their purchase amount, and single batch purchase amount.
8. Product market description: mainly describe the product market. Including the total sales to the industry, growth rate, market share and so on. Private equity funds can grasp the market share of enterprises accordingly.
9. Competitors or substitute products: mainly describe and analyze all competitors and manufacturers, especially analyze their market share, annual sales and financial strength. In addition, we need to analyze the advantages of our products. Some enterprises may have no competitors temporarily because they have certain patent rights or franchise rights, but stronger competitors or substitute products may appear in the future investment period. Therefore, private equity funds must know about potential competitors and choose the time and way to enter the market. If companies don't know much about competitors, private equity foundations carefully evaluate the sustainability and reliability of their growth.
10. marketing strategy: describe the product sales process and distribution channels, and the basic links include: enterprise sales model, advertising strategy, market penetration strategy, sales obstacles, sales personnel composition, etc. Based on this, private equity funds analyze and evaluate the marketing strategy of enterprises to understand the whole process of products from the production site to the hands of users.
1 1. production technology: the manufacturing process of products and its influencing factors, focusing on the production capacity, key production links, quality control and production process of enterprises, and on this basis, confirming the production cost and sales cost of enterprises.
12. Composition of human resources: including the labor resources and present situation of the enterprise, and the forms of employees required for producing and selling products. The main contents include: theater geographical distribution, employee education, employee training plan, salary cost, allowance and year-end bonus, employee-management relationship, trade union situation, working time arrangement, proportion of technicians, confidentiality contract and non-competition contract, employee incentive mechanism, etc.
13. Supplier: the supply status of raw materials and necessary parts of the enterprise, including the suppliers of raw materials, the supply channels of raw materials and whether the supply of special external parts is timely and reliable. A list of some suppliers should also be provided, including their names, addresses, telephone numbers, main contacts, largest suppliers and supply balances, as well as information on key suppliers and sole raw material suppliers.
14. Equipment: the basic conditions of equipment necessary for the production of an enterprise, including the main equipment that the enterprise has or plans to purchase, the total amount of fixed assets and its realized value, the output and output value realized by using the existing equipment, the procurement cycle of equipment, the difficulty of equipment procurement, the difficulty of equipment installation and the special technical requirements arising from operation, the specificity and mortgage value of equipment, the maintenance cost of equipment, the depreciation speed of equipment, the speed of equipment technical update and so on.
15. asset composition and capital: including existing fixed assets types and future fixed assets investment demand, asset mortgage status, fixed assets depreciation, existing production capacity and income, fixed assets related to financial leasing and lease agreement documents.
16. Intellectual property rights such as patents and trademarks: information such as patents and trademarks held or to be applied by an enterprise, so as to judge whether the enterprise is truly unique.
17. research and development: including research and development expenditure, funds invested and planned in the future, and the enterprise's explanation of the purpose and effect of investing these R&D funds.
18. Disputes involved: Does the enterprise involve or may involve various disputes, such as commercial debt relations, user litigation, patent disputes, etc.
19. government control: in some special industries, government control may have a significant impact on the future development of enterprises, such as the production of drugs or special import and export products, and it is necessary to disclose relevant laws and regulations on government control.
(3) Enterprise management team
The status of the enterprise management team, including directors, supervisors, managers and other key personnel (such as core technicians).
1. management resume: the list of senior management personnel and key personnel such as the general manager, deputy general manager and chief financial officer, including their names, ages, positions, experiences and education levels.
2. Professional ethics of managers: Enterprises need to provide materials on lawsuits and disputes involving managers in the past, especially whether the management, directors, supervisors and major shareholders have bankruptcy or bad credit records.
3. Salary expenses of managers, that is, the income of directors, supervisors and senior managers, as well as directors' fees, consulting fees, commissions, bonuses, wages and other expenses.
4. Equity arrangement: whether the enterprise arranges stock options for the internal managers of the enterprise. For the management members who have enjoyed stock options, the number of options, the average exercise price, the exercised number and the unexercised number shall be listed, and the reasons for the unexercised number shall be explained.
5. Employment contract: labor contract involving key employees, reasons and years of employment, and various welfare arrangements for employees.
6. Conflict of interest: fully disclose whether there are conflicts of interest such as kinship and family management between senior management personnel and shareholders.
7. Consultants, accountants, lawyers and loan banks: a list of consultants, including the names, addresses, contact numbers and fees of accounting firms, law firms, loan banks and related personnel who provide services for enterprises.
8. Enterprise management organization, departmental functions and corporate governance structure.
9. Information about the construction of corporate culture system.
(4) Financing needs and relevant explanations.
1. Suggested financing method: The enterprise's intention to choose investment tools and the details of the corresponding conditions should provide targeted solutions to provide a basis for subsequent financial arrangements and structural design. If ordinary shares are sold, it should be clear: the type of ordinary shares, whether dividends are distributed, whether dividends can be accumulated, whether shares can be redeemed, the price of shares and the attached voting rights. If the preferred shares are sold, it is necessary to explain: the payment method of dividends, whether there are repurchase arrangements, whether they can be converted into common shares and the corresponding conversion price, the rights of preferred shareholders, etc. Where convertible bonds are sold, the term of creditor's rights, interest rate, conversion price and proportion shall be specified; If it is a stock option, list: purchase price, exercise price of the option, number of shares purchased and limited term of the option, etc.
2. Capital structure: the change of capital structure after the enterprise obtains the private equity fund.
3. Financing mortgage and guarantee: whether the enterprise is willing to provide corresponding collateral for obtaining private equity funds; Whether the enterprise provides personal or company guarantee for financing: if it is personal guarantee, provide personal property certificate; If it is an enterprise guarantee, provide the capital verification report of the enterprise.
4. Operating report: It mainly introduces the ways in which an enterprise intends to report its operation and management to private equity funds after obtaining investment from private equity funds, such as providing monthly income statement, balance sheet or annual audited financial statements.
5. Capital utilization plan: the detailed plan of the enterprise for the funds needed in the next few years and the use of these funds.
6. Ownership: The financing business plan shall list the number of shares held by existing shareholders and the number of shares held by private equity funds after investment, and give the price for obtaining ownership; The equity ratio of each shareholder; If land, buildings, machinery and equipment or venture shares are considered, the current market value of these markets should also be stated.
7. Payment of expenses: the amount and payment method of consulting fees, attorney fees and other expenses incurred in the investment process.
8. The involvement of private equity funds in enterprise management: Private equity funds generally require a certain seat on the board of directors of enterprises. If enterprises want private equity funds to participate more in enterprise management, they can explain again what value-added services enterprises need and the fees paid for providing these value-added services.
(5) Risk factors
Explain the main risks faced by enterprises. Although private equity funds will doubt the objectivity of enterprises and make independent judgments based on their own evaluation experience, the questions raised by enterprises are helpful to the evaluation of private equity funds. Generally speaking, risks include:
1. Short operating cycle. If the enterprise has just been established, short operating history will be the main risk content discussed by both parties.
2. Management experience, which may lead to inexperience if the management is young or just entering this field.
3. Market uncertainty, market uncertainty related to sales.
4. Production uncertainty, any production uncertainty should be explained.
5. Debt risk, the enterprise should analyze the debt situation of the enterprise, whether it has sufficient solvency, and let the private equity fund confirm how much investment it can recover if the enterprise is in trouble and has to go bankrupt.
6. For the dependence on the core figures, the enterprise should explain to the private equity fund that if any core figure of the enterprise leaves or dies, it will bring negative impact to the enterprise; Who can replace this person; Who will lead this enterprise?
(VI) Return on investment and withdrawal
Private equity funds don't invest for investment's sake, but to get the return on investment, so enterprises should describe to private equity funds the way to finally withdraw from investment. For private equity funds to withdraw from investment enterprises, enterprises should also look at the issue of investment withdrawal from their own point of view, especially the possible impact of the non-stop choice of withdrawal methods on enterprises.
1. Stock issuance and listing: Stock issuance and listing is undoubtedly the most desirable result for investors and financiers, but it is also the most difficult. After the company went public, the socialization of share capital enabled some or all of the shares held by private equity funds to be cashed out. A financing enterprise shall formulate a plan for issuing shares for listing, such as listing time, listing place and listing method.
2.M&A: M&A is also an important way for private equity funds to withdraw from the target enterprises, especially when the capital market is depressed and it is difficult for enterprises to go public through public offering in a short time.
3. Repurchase: It means that after the private equity fund has invested in the target enterprise for several years, the invested enterprise repurchases the shares owned by the private equity fund in the enterprise at the price agreed in advance or calculated by the pricing method, so as to realize the withdrawal of the private equity fund.
4. Liquidation: After the private equity fund invests in the target enterprise, under what circumstances can the private equity fund recover its investment through enterprise liquidation, nor can it conduct mergers and acquisitions between enterprises and repurchase the target enterprise.
(VII) Business analysis and forecast
An enterprise should comprehensively analyze its current operating conditions and project prospects, that is, according to its financial data, describe its financial conditions in recent years, including net income, sales costs, operating expenses, interest expenses and interest income, and classify these data, so that private equity funds can clearly understand its operating conditions and future development prospects.
(8) Financial statements
For growing and mature enterprises, it is very important for private equity funds to provide a complete set of financial statements, especially the financial statements have not been audited by independent audit institutions. Usually, financial statements include consolidated balance sheet, consolidated income statement, cash flow statement and off-balance sheet items. Through financial statements, private equity funds can grasp the financial ratio, operating results, solvency, accounts receivable and payable, liabilities and other contents of the enterprise.
(9) Explain the financial forecast of the enterprise in the next five years and the detailed monthly cash flow statement for the next year, so that private equity funds can roughly grasp the cash flow trend of the enterprise and lay the foundation for the next prudent investigation of enterprise value evaluation.
(ten) the basic situation and financial content of the relevant enterprises.
In order to let the private equity fund know the basic situation of the enterprise more intuitively, the documents mentioned in the financing business plan are attached to the plan in the form of attachments.
Source: Prospective Industry Research Institute.