What are investors thinking under the epidemic?

In February 17th, the novel coronavirus epidemic survival and development report released by the International Business School of University of International Business and Economics showed that 69.23% of the 761 enterprises involved in the survey could maintain more than 3 months of cash flow, and 43.83% could maintain for more than six months This means that although enterprises are facing the risk of cash flow disruption, if the epidemic can be controlled as expected, most enterprises will have the opportunity to cross the crisis Indeed, in this process, the expansion of corporate financing channels has become particularly important But there is no contest to the fact that the epidemic has also disrupted the pace of investment institutions According to the data of private placement of Qingke, 171 investment cases occurred in VC / PE market in January, a year-on-year decrease of 80.2%; the total investment amount was 16.863 billion yuan, a year-on-year decrease of 66.4% "Investment institutions are slowing down in tracking, negotiating, and doing their best to track the target projects," relevant investment bankers said in an interview with the media Based on this background, and many investors have begun to return to work through online video, conference call, e-mail and other ways, how will entrepreneurs in the medical industry improve their financing efficiency and survive the impact and impact of the epidemic? On February 17, shell University, together with Sunplus consulting and probe capital, online shared "how to grasp the status quo of investment institutions and improve the efficiency of communication with institutions" with entrepreneurs in the field of health care Now, the core contents are as follows First, to understand the current situation of investment institutions, let's talk about the core topic: what is the status of investment institutions in the current situation of the new crown epidemic? Our questionnaire survey of nearly 300 investment institutions focusing on the field of medical life science and technology: according to the survey results, the new crown epidemic has indeed caused a certain delay in the normal progress of the new year's work, and as many as 55% of the investment institutions have made it clear that the progress of the projects at hand will slow down Secondly, the proportion of those who choose not to do so is 26%, and the proportion of those who are willing to do so is 32% In fact, although institutions prefer to communicate directly on site in the process of due diligence, preliminary communication such as PPT, initial communication and the first round of data list can be completed remotely Happily, the results of the survey also sent out positive signals On the issue of investment intensity in 2020, 57% of investment institutions believe that the investment intensity will remain unchanged, and even 16% believe that the investment intensity will increase Indeed, unlike the systemic problems in the whole market caused by limited funds from the second half of 2018 to 2019, the new crown epidemic is more of a "black swan" event, which should not have a great impact on the institutional investment in 2020 as a whole 2 What is the decision logic of investors? Generally speaking, the decision-making process of investors = the process of judging the project value The project value is further divided into clinical value, commercial value and capital value 01 Whether the clinical value meets the unmet clinical needs is the bottom logic for investors to judge the value of products or services At this time, if there are mature solutions for the clinical needs that the project is trying to meet, or the audience for clinical needs is very limited, investors will lose interest more or less Therefore, especially the founder of technical background, before product development, we must do sufficient clinical research to guide product development with the general needs 02 Business value is actually the income and profit that an enterprise can realize It is certain that products or services without clinical value will not generate sustained growth in revenue and profits Even products or services with more specific clinical value may not achieve the desired revenue and profits due to the complexity of the business environment Therefore, when the product or service of an enterprise is still in the stage of R & D or model pilot, how to establish a large-scale and replicable business model, pricing strategy, customer portrait, sales model, operating cost, etc are all the components of the future business value The founders can provide credible support basis for investors to judge 03 The value of capital is only for investment institutions, their future exit is based on the valuation of the enterprise at that time, rather than income and profit This means that the valuation expectation of the enterprise's products or services at a certain stage in the future will directly or indirectly affect the investor's judgment on their capital value But there is a communication "trap" to be aware of If entrepreneurs overemphasize the value of capital when communicating with investors for the first time, they may be questioned whether they are "telling stories" So the founders still pay more attention to clinical, market, business operation, etc., leaving the judgment of capital to investors In fact, the investment logic and preference of each investment institution are different In order to better match institutions, the following five common types of investment institutions are the characteristics that enterprises need to understand Dollar fund: "pursue unicorn and be willing to take super high risk for super high return on investment" is a typical investment strategy of dollar fund They prefer start-ups with great business prospects and are willing to accompany them for a long time, expecting to achieve very high valuations in the future RMB fund: it is more pragmatic and conservative It will be more cautious for projects with large imagination space but weak financial data It will pay more attention to the current financial indicators, performance growth, listing plan, etc of the enterprise, and take gambling, buyback and series of priorities as the bottom cover Strategic investors: focus on whether the target business has a clear synergy with the main business or newly opened business of the listed company, and whether the industry layout plays a leading role in the market The stage requirements of the project are medium-term and mature, and there are clear requirements for the income and net profit of the enterprise Compared with financial investors, strategic investors have stronger control over business and capital operation Of course, they also have more powerful resources, endorsements, anti risk capabilities, etc entrepreneurs need to make judgments and choices about this In the future, whether they want to IPO independently or like many technological innovation companies in the United States, they will sell them to Johnson & Johnson, Medtronic and other major platforms after the completion of project research and development Government resources: mainly focus on leading enterprises The target company needs to have a certain volume, which can bring employment, tax and other expectations At the same time, the target company is required to have a relatively considerable net profit There is no obvious moral, legal and regulatory risk in the main business, which can withstand strict financial and legal adjustments Of course, the period of coordination and decision-making is relatively long Under the current epidemic situation, more attention can be paid to government guidance funds In recent two years, the government guidance fund is relatively abundant, and the support for the start-up companies in the jurisdiction is also relatively large, especially for the projects with sufficient technological innovation or technical talents reserve Securities companies, banks, insurance funds: mainly based on the background of fund establishment to make a choice, such as special investment in biotechnology will determine the direction at the beginning of the design Banks and insurance funds are relatively conservative, with a shorter duration and more emphasis on investment security Four skills: how to express sincerity in communication? After knowing the types and characteristics of investment institutions, what skills are needed to communicate with investors? 1 Use materials to show sincerity Many enterprises' financing materials are based on internal documents or publicity materials, or take a round of financing plan to change figures and plans In fact, this will weaken the first impression of the enterprise and affect the judgment of investors, so it is necessary to polish a complete business plan for each round of financing 2 Speak with numbers Founders should sort out and quantify business models through financial models Compared with the data reported by "pat the head", the expected revenue, profit and other data obtained by quantification can show investors a clear basis At the same time, from the macro to micro operation of the industry, quantitative thinking can be used to think, which can help founders understand the business model and future opportunities of the enterprise more clearly 3 Prove with facts In the communication process, the company's business model, vision, industry cognition and other information can be communicated orally, but if clinical needs, technical advantages, pricing strategies and other information need to be supported by objective facts and a large number of data, it is necessary to prepare text materials and discuss them in written form 4 Equal dialogue Generally, enterprises have the obligation to present a complete situation in financing to help investors to judge the project, but conversely, founders should also know the type, background, investment strategy, investment target, capital situation and decision-making process of the investment institution, to judge the professional level and cognitive level of the institution, and to know whether the institution has invested in its own competitors, after all, it is not excluded that Institutions collect information for the purpose of financing and then transmit it to the invested enterprises In fact, in the process of communication with investors, listening is often more important than expression It's better to pay attention to the questions raised by investors and understand the company's business data and technical information under what kind of decision-making logic, so as to deliver valuable information more accurately Again, feedback is more important than conclusions In fact, it is normal for negative feedback or even rejection in the financing process At this time, don't worry, but further communicate and understand the reasons for rejection, so as to modify the strategies, scripts and materials of enterprises in the follow-up financing Five three suggestions 01 Plan systematically and set aside 10 months for financing From the current situation, the work of the investment institutions may resume at the end of March or early April However, after the institutions return to normal working conditions, they will definitely follow up or complete the projects started years ago, and the time of new projects will inevitably be squeezed Therefore, a new round of financing can be launched at least 10 months in advance That is to say, if we want to complete the financing in December this year, we must start in February, and only leave enough time to ensure that we do not deviate from the financing expectations 02 Contact as early as possible After the docking with the occupation institution is fully resumed, the institution will surely be invested in a large number of BP, unable to obtain and focus on new financing projects in time Therefore, entrepreneurs can start to contact investors as early as possible at the present time, so that investors can see their own BP first, so the probability of entering the next financing stage will increase 03 Seize the window, when the progress of the enterprise's capitalization in the epidemic period is not as fast as expected, the founders should calm down and really think about the company's strategic direction, polish the financing planning and strategy, and put the thinking into the written financing documents such as the business plan and financial model, so as to make sufficient preparations for the formal financing campaign Finally, it is said that entrepreneurship is a long run, especially in the medical field Although the whole market is affected by the epidemic, it is hoped that entrepreneurs can stick to their original heart and forge ahead through difficulties Penicillin