"If you can borrow from the bank, you must borrow from the bank, and don't take the money of venture capital." Liu Dui said: Liu, the founder of the company, is no stranger to us. In recent years, JD.COM not only sells more than tens of thousands of brands and 40.2 million kinds of goods in online shopping malls, but also sells offline products in full swing, covering JD.COM household appliances, JD.COM supermarkets, JD.COM distribution and other businesses. So as an experienced entrepreneur, there must be some truth in saying this. Each financing method has its own advantages and disadvantages. Let's analyze the advantages and disadvantages of these two financing methods together to see if what Liu said really makes sense.
Venture capital: the so-called venture capital, that is, venture capital, mainly refers to a financing method in which investment companies provide certain financial support to start-ups in order to obtain shares in enterprises. Investment company, a company jointly established by professional investors, inspects companies that need financial support and decides whether to invest. You don't need any form of mortgage or guarantor when financing, but you need to give equity to the investment company.
As we all know, the company's equity is actually more important than the initial capital. Equity is actually another form of mortgage. Due to the influence of inflation, we can't judge whether the current currency and the future equivalent currency have the same market value. However, owning the company's equity means paying dividends to the investment company at any time when the company is operating and profitable. In this way, it can be said that as long as the invested enterprise continues to operate, the investment company will have equity. The advantage of this financing method is that if the investment fails unfortunately, the company does not need to compensate the original borrowed money.
Bank loan: When looking for a bank loan, the bank definitely doesn't want shares, just interest. Don't be afraid of high principal and interest, and the interest to be repaid is also high. Under this financing method, the bank will not interfere with the company's operation, and the company has the final say. In the later period, it will become bigger and stronger, the beneficiary is itself, and the biggest shareholder is itself. Just pay off the bank loan on time.
However, under this financing method, there must be collateral or guarantor. This guarantor means that if you don't have the money to repay the bank, then this guarantor needs to repay the bank's money, so this guarantor is generally not particularly well-connected, and few people are willing to take this risk, so this is also the biggest problem encountered by entrepreneurs. In addition, if the venture fails, the loan owed to the bank will still be repaid. After all, owing a loan to a bank is just like paying off a debt.
In fact, in real life, what kind of investment model to choose still needs detailed investigation. Venture capital is not interested in interests, but in the company's equity and voice; Bank loans do not interfere with the company's operation, but regardless of the success or failure of the operation, the principal and interest must be returned. Many companies have lost the right to operate because they chose venture capital companies, and enterprises and brands are in a difficult situation.
In reality, after the introduction of venture capital companies, there will be many cases of losing the right to operate and manage enterprises. The well-known case is "South Beauty". In 2000, Zhang Lan founded this popular restaurant brand, and in 2009, Zhang Lan also squeezed into the third place in Hurun's rich list of restaurants. However, South Beauty signed a capital increase agreement with CDH Venture Capital. In the end, Zhang Lan lost control of South Beauty because of its listing failure and gambling failure, and was finally left clean. Not only did it waste the efforts of the founder, but even the brand was not elegant.
Therefore, as an entrepreneur, when deciding which investment method to choose, we must consider it comprehensively and decide according to our actual situation. I also wish every entrepreneur success in starting a business.