Ni Zhengdong, founder and chairman of Zero2IPO Group and founding president of Dune College.
The following contents are arranged according to the notes of Dean Ni of Dune College, and some of them are deleted:
0 1
Twenty years of venture capital, my understanding of "Twenty Articles" of venture capital.
1998, VC in China has just started, Shen Nanpeng and Xin Xu are still in investment banks, Zhang Ying in the United States has just finished graduate school, Zhang zhen and Yicao are still studying in Tsinghua, Zhang Lei, who just graduated from the National People's Congress, is going to Yale to continue his MBA, Liu Zhou is still working in radio and television media, and Xiao Bing is still working in the secondary market ... Only a few people like Xiong Xiaoge and Zhou Quan are exploring this industry. Twenty years have passed, and now they have become all-powerful figures in the venture capital circle.
In these twenty years, we have experienced too many potholes. The big coffees we see today are all people who have worked in this industry for more than fifteen years, at least ten years. Up to now, almost no one has become a Jianghu boss before working for ten years.
As a witness and witness of the venture capital industry, I almost participated from the perspectives of research, activities, FA, LP and angels. So every place where there is pain, where there is laughter, I have a deep understanding, summed up some of my own venture capital insights.
First, we should thank this era for creating heroes. Time is the most important thing. Without time, there can be no such heroes. For example, a group of people are sitting in an elevator. Some people say they jumped up, others said they came up on foot, and some said they came up lying down. Actually, it's not. Finally, the elevator came up. Therefore, the times are the most important foundation for the development of all entrepreneurs and investors today.
Secondly, we should thank China, a big market. China has a population of1300 million, which is a huge market. Only by doing business in China can we achieve great things. Why do some companies still have a small market value after half a day? Because the market is not big when it is made, it is a very narrow ceiling. What we are most afraid of is that the company has a ceiling, and the company has reached its limit, with a valuation of 100 million or 200 million. So before starting a business or investing, you must think about whether your market is big enough.
Third, only those who work hard can succeed. Whether you are an entrepreneur or an investor, if you want to maintain a lasting foundation, you must be diligent, keep pace with the times and stay on the table forever.
Fourth, whether starting a business or investing, we must adhere to the "Do not forget your initiative mind". Your initial heart is how you felt when you set out. We often say, don't forget why you set out because you have gone too far, so this is very important.
Fifth, be a friend of time. Don't care about everything overnight, and don't think that success today will always be success. Entrepreneurship and investment are long-term activities, and time can prove many things.
Sixth, the fifth generation. Post-80s and post-80s are different, post-80s and post-90s are different, and post-90s and post-90s are different. At present, the main force of the whole venture capital circle is gradually changing from 1965 to 1980 to 1965. We must grasp the evolution of the 1950s.
Seventh, "curry favor with" young people and make more friends. When investing, we will often deal with entrepreneurs and users. The entrepreneurs we face are constantly changing, not that they are getting younger, but that they are growing up. Today, people born in 1980 are 38 years old, those born in 1990 are 28 years old, and those born in 2000 are 18 years old. The future investment trend is definitely younger, so it is inevitable to make friends with young people.
Eighth, investment is a river's lake and a circle. Only in the venture capital circle can there be more opportunities. If we compare investment to a game, you can only participate in the game at this table. You have been in this circle for 5 years, 10 years, and your opportunities will be more and more.
Ninth, successful companies today never start with success. Many companies should go from 0 to 1 faster. From 1 to 10 is a challenge, from 10 to 50 is a challenge, and from 50 to 100 is a challenge. It is through countless pits and thunder that they have reached today's success.
Tenth, behind every successful entrepreneur, there are more than 10 losers. You saw the success of group buying. Did you see that all the thousands of regiments in the back died? So behind every successful company, there are 10 or even 50 losers. It is really not easy to start a business.
Eleven, don't be superstitious about the valuation of the book, don't trust the return of VC. Maybe someone told you that if you invest in a company, you will get several times the return before you quit. Just a phased achievement does not mean that this person will definitely be admitted to a first-class university. Even if you are admitted to a first-class university, you are not necessarily an excellent graduate. Even if he is an excellent graduate, it doesn't mean that he is the most successful person in this class in the future, so don't be obsessed with book valuation. Listing a company is not the end of success, but may just be the beginning of failure.
12. Exit is even more important than investment. We can't just look at listed companies. When to quit is also important.
Thirteen, half of unicorns are paper tigers. Many unicorns are paper tigers even if they are listed. We try to be unicorns, but don't be too obsessed with unicorns. Many unicorns can't get off the bus because VC keeps financing and burning money.
Fourteen, whether it is entrepreneurship or investment, you can become famous in World War I, but you can't do it once and for all. You won a battle, and you invested in a particularly powerful project. This doesn't mean that you have always been successful.
Luck is very important, and long-term success does not depend on luck. Playing cards depends on luck, and so does investing. In the venture capital circle, luck is very important, but long-term success depends not on luck, but on real kung fu and real skills.
Sixteen, investors are more important than investing in things, even a hundred times more important. You choose the right person, and you can constantly adjust your business. For example, in the Thousand Regiments War, that thing was right. But if you vote for the wrong person, your money will be wasted. Different people have different results.
Seventeen, as an investor, always have a "bullet" in your hand. Don't say that a wave of opportunities has come, you have no money. There was a lot of money, and suddenly there was no bullet when I was doing it. A wave has come, and there is no money to invest, so I can only watch others invest.
Eighteen, the wave path is important, and the track is more important than the tuyere. For example, the mobile internet is not a vent, not a track, but a big wave. Sometimes chasing the wind is very miserable. Four or five years ago, O2O was a wave of outlets, and a bunch of people invested in a bunch of O2O companies, resulting in heavy losses, but some outlets were untenable. There are other outlets that will take a long time to come. Ten years ago, it was difficult for you to get out of AI. In the last two or three years, when this potential energy is reached, it is possible to get up.
Nineteen, either follow the trend or win by surprise. Follow the trend is a big wave, you follow the trend. China's real estate development was at its best, especially from 2000 to 20 10, when you bought any house, you made money. If we went to real estate again today, there wouldn't be such a big wave and the growth wouldn't be so fast. Another option is to win by surprise, that is, to take another road and surpass others. For example, Taobao, JD.COM and other e-commerce companies are already very strong, while Pinduoduo rushed out by other means.
The next investment is the best investment. In the venture capital circle, there will always be more successful investors, more successful entrepreneurs and more successful startups. Therefore, the next investment is the best investment, and we must believe in the future.
Dune College hopes to bring together people who have money and leisure, people who want to invest now or in the future, so that everyone can understand the venture capital market and find their best way to participate in venture capital. Every day, something new appears in the world. We must embrace this change, and change is opportunity.
We may start our own business, so if we have some spare money and time after starting a business, we can participate in some investments, whether it is the best success or not. You have helped these entrepreneurs, which is also a very good public welfare. If this company is successful, it will be very valuable for you to participate in the development of this company from the beginning.
The difference between investment and entrepreneurship is that entrepreneurship is the most energetic time to do and fight; And investing is something you can do even when you are 60, 70 or 80 years old. Investment is a long-term job.
Therefore, investment is an art, a way of life and a very good way to make friends. I have invested for so many years, and I feel pain and happiness.
02
Question and answer for students
Q: How do new investors get to know and invest in star projects?
A: First of all, you should be able to understand and get in touch with this project. The biggest fear is that you haven't seen this project, so I'm sorry, it has nothing to do with you.
Second, you can judge this project. You saw it, but you didn't judge it accurately. If you don't think this project will work, you may have missed it.
Third, you can still get this project. As you can see, your judgment is correct. If you can't get the quota, you can't do it. Therefore, it is normal for us to invest, and there will always be projects that we regret and missed. This is the charm of investment.
Q: What are the general evaluation criteria for enterprise valuation?
A: Valuation is a very flexible thing. For profitable companies, they will give a PE value by multiplying your profit by 10 times, 15 times and 20 times. For example, this year's profit is 30 million, so the company's valuation is about 300 million to 500 million, which is calculated according to the PE value.
For unprofitable companies, PS valuation method is usually adopted, that is, how many times your PS is. For example, this year's income is 300 million, multiplied by three times, which is probably less than 1000 billion. The enterprising point multiplied by 5 times is the valuation of 65.438+0.5 billion. If your income is not high, it depends on how big your transaction volume is. So there is still logic in this. This is a set of logic.
Another set of logic is to look at your last valuation. For example, the last valuation was 200 million, and now it is 1 year. According to the growth of your users, give an estimate, maybe 400 million, 500 million. Therefore, valuation is flexible, and investors should have their own bottom line and flexibility when talking about prices.
Q: You are both an entrepreneur and an investor. From the perspective of investment, do you prefer stocking management or will you participate in the development of the company? As an entrepreneur, do you want investors to participate in the operation of the enterprise or do you want to operate independently?
A: First of all, I am an entrepreneur in essence. But besides starting a business, just because I am in the investment industry, I can't communicate with more investors and entrepreneurs without making investments, so I will make some investments to let everyone have various relationships with you. People really use money to build relationships, which is definitely different and their understanding is different.
As an investor, I generally don't participate in the management of the invested company. They need me to do something, and I will help them with some ideas. For example, if they need to talk to someone, I will talk to him. If they need me to help them with financing, I will help them with financing and so on.
As for investment, we have also done research, that is, your value-added services are inversely proportional to your performance, or there is no direct relationship. That is, the more you help, the more you appear. In fact, that company is not very helpful for you to make money. If that company needs you especially, it means that the company is not doing very well. Companies that really help you make money don't need special help from investors, because the founders can lead the team to jump over all kinds of pits.
From the perspective of an entrepreneur, I don't want investors to be too wary. I will be responsible for the money you put in, and I will help you make money. Investors can't know the enterprise better than entrepreneurs. If investors know more about enterprises than entrepreneurs, they will start their own businesses. Any fund has an investor who turns the stone into gold, and there are also investors who turn the stone into gold. Once you meet such an investor, you will be in trouble.
Q: For the excellent gp in the venture capital circle 100, they can become the mainstream of the investment circle. Then, are there some special practices and games in raising funds and managing returns, especially in making adjustments or decisions?
A: First of all, the list of 100 excellent GPs is changing. I suggest you look at all the rankings of Zero2IPO from 2006,5438+0 to now, and see which GPs is missing and which ones are still in it. Second, this 100 organization has some characteristics: first, it has money, second, it has people, third, it has brands, and fourth, it has successful cases. They are going well, with a little connection. For example, if some investors are dispersed, the fund may be gone.
In addition, if you want to invest in a well-known fund and do its LP, you must look at its ranking trend. If its ranking has been ranked from the third to the 10, and then to the 15 and the 20th, then this fund is going downhill. If a fund ranks from 50th to 35th, then 20th, 10, 5th and 3rd, 1, then you can consider doing this kind of fund. The fund that must be picked up is relatively stable. If the team is constantly moving, it is also a trouble, you have to be careful.