As an early investment, venture capital fund has the characteristics of its investment strategy:
First, investment structure, that is, make full use of various financial instruments to reduce risks and maximize returns. Because of the risks of venture enterprises, venture capital funds often use financial instruments such as preferred shares, convertible bonds and repurchase by venture shareholders to avoid risks, which not only ensures the demand of financiers for funds, but also reduces investment risks as much as possible.
Second, the investment amount is generally small and the shareholding ratio is usually below 30%. On the one hand, give full play to the enthusiasm of entrepreneurial shareholders and avoid usurping the role of moderator; On the other hand, due to the small scale of start-ups, the required capital scale is also limited.
Third, the investment object preference is technology-based start-ups. Technology-based start-ups have the characteristics of great development potential, rapid growth and high income, while the main income of venture capital funds is high capital appreciation when they withdraw, so it is difficult for traditional industry start-ups to meet the income demand of funds. Therefore, the fund will mainly focus on technology-based start-ups
Fourth, the investment strategies of different rounds. Investing in start-ups has a relatively long holding time. Different from common equity funds, venture capital funds adopt the investment strategy of rounds to control risks, that is, according to the development of the financing parties of venture capital funds, they invest in stages, with less initial investment. As enterprises gradually step on the right track, investment funds will continue to follow up. If problems are found, stop investing immediately to minimize investment risks.
Fifth, joint investment. For high-risk and high-input projects, venture capital funds often invest with other investors. Major investors hold the most shares. For start-ups, this can also enjoy more investor resources. But the more investors, the better, because too many investors will inevitably lead to conflict and chaos. 、
Sixth, supporting investment. Matching investment means that when investing in venture capital funds, entrepreneurs or executives of venture enterprises are required to invest corresponding funds according to the situation.