Venture companies often have venture capital financing. What is venture capital financing?

I. Definition of venture capital

Venture capital refers to that professional financiers invest venture capital in emerging and fast-growing unlisted companies (mainly high-tech companies) with great competitive potential, provide long-term stock capital and value-added services for financiers on the basis of taking huge risks, cultivate rapid growth of enterprises, and withdraw their investment through listing, acquisition or other stock transfer after a few years. Investment methods to obtain high return on investment.

Second, the basic characteristics of venture capital

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1. Equity investment

Venture capital is not loan capital, but equity capital, and its focus is not on the current profits and losses of investment objects, but on their development prospects and added value of assets. Therefore, through listing or sales, we can achieve the goal of peeling off funds and achieving high returns. Clear property rights relationship is a necessary prerequisite for venture capital intervention.

2. Unsecured and high-risk investment

Venture capital is mainly used to support high-tech enterprises and high-tech products that have just started or have not yet started. On the one hand, there is no fixed assets and funds as collateral and guarantee for loans, so it is impossible to obtain funds from traditional financing channels, but only to open up new channels. On the other hand, there are great risks in technology, management, market and policy. The success rate of high-tech enterprises in developed countries is only 2%~3%. However, due to the high rate of return of successful projects, medium-and long-term investments with speculation

3 and low liquidity < P > Venture capital usually invests funds when venture enterprises start their own businesses, and it usually takes 3~8 years to get profits through divestment, and enterprises with hope of success will continue to increase their capital during this period. The liquidity is low. Known as stranded funds.

4. It is a highly specialized and programmed portfolio investment.

Because venture capital is mainly invested in high-tech industries, the investment risk is high, and venture capital managers are required to have a high professional level. Project selection requires high specialization and programming, careful organization, arrangement and screening, and try to lock in investment risks.

In order to spread risks, venture capital usually invests in project teams including more than 1 projects. Make use of the high returns from successful projects to make up for the losses of failed projects and gain profits.

5. It is the investment that investors actively participate in

Venture capital and high-tech constitute two wheels to advance the venture capital cause, and both of them are essential. While injecting funds into venture enterprises, venture capitalists (companies) are bound to intervene in the management of the enterprises, provide advice and participate in the decision-making on major issues in order to reduce investment risks. If necessary, fire the company manager and take over the company to help the enterprise succeed as much as possible.

6. Financial investment in pursuit of excess returns

Venture capital is an investment behavior with the main purpose of pursuing excess returns. The ultimate goal of investors is not to gain a strong competitive position in a certain industry, but to achieve excess returns. Venture capital has strong financial investment attributes.

Third, the four elements of venture capital.