(1) Angel Investment mainly invests in early-stage startups;
(2)VC invests in high-speed development startups in the medium term;
(3)PE is involved in mature enterprises about to go public or merge.
It can be said that VC is connected with angel investment, PE is connected with VC, and IPO is connected with PE.
Different investment stages determine its different characteristics as follows:
1, investment strategy
(1) angel investment mainly depends on people, and the founder largely determines the quality of the project. Early projects are often just an idea, and it is impossible to test the accuracy of the business model completely through actual operation. Angel investors can only judge by the reliability of the founders and their understanding of the industry. I often hear an angel investment tycoon talk to entrepreneurs for three hours, and finally strike the table and say, "You are reliable, I will vote for this project!" " "Although it is exaggerated," knowing people "is indeed a very important consideration for angel investors when making decisions.
The amount of angel investment generally ranges from hundreds of thousands to millions, and the specific amount needs to be invested in proportion according to the project valuation negotiated by both investors and founders.
(2)VC investment needs to comprehensively consider the founding team and business data of the project. As the VC stage project has been in operation for a period of time after angel investment, the business model can be partially verified through operational data. At this time, VC investors will make the final investment decision on the basis of comprehensive consideration of industry analysis, competitive advantages and barriers, founding team collocation, business data, industry upstream and downstream and other factors.
The investment amount ranges from one million to hundreds of millions of yuan.
(3)PE investment is oriented to mature enterprises and mature markets, which requires higher industry resources for investors. In terms of investment strategy, companies with listing potential or the possibility of being merged are often found according to industry analysis. After the investment is successful, with the help of the resource advantages of PE company, the invested enterprise will be supported to go public or be acquired, and the exit will be realized and high returns will be obtained.
The investment amount ranges from tens of millions to billions.
2. Sources of funds
Angel Investment was originally a group of high net worth people, such as Xu Xiaoping, Lei Jun and Cai Wensheng, who have been active in the industry for a long time. Driven by the atmosphere of "mass entrepreneurship and innovation" in recent years, angel investment funds have sprung up in large numbers and the market is gradually improving. Gradually, there are also large VC and PE funds involved in the angel investment stage.
VC and PE have developed for a long time and have rich sources of funds, such as high net worth individuals, professional venture funds, leveraged M&A funds, strategic investors, pension funds and insurance companies.
The operation mode of domestic universal fund is partnership, which is composed of GP and LP. GP (general partner) is responsible for fund operation and investment decision-making to earn management fees and a small part of income, while LP (limited partner), as the investor, does not participate in fund management decision-making, but enjoys most of the income of the fund.
3. Risks and rewards
Angel investment is undoubtedly the highest "single project return rate". The valuation of early projects is low. Once the project becomes a unicorn, it can realize the return of 100 times and 1000 times. In the case of the first edition, if the project does not have a return of 5 times or 10 times, it is embarrassing to take it out and tell peers. But the corresponding risks are also high. For example, angel investors invest in 10 projects a year, of which 9 projects are wiped out, and only successful projects can make up for the losses of 9 projects. This situation also happens from time to time.
VC and PE investment As the company's valuation continues to rise, the lower the return multiple of a single project, the higher the probability of investment success compared with angel investment.
PS: Let's talk about their similarities. Angel investment, VC and PE in a broad sense belong to private equity investment in a broad sense.
"Private" here has two meanings:
(1) The way of preparing funds must be private. Because the risk of private equity investment is quite large, and the payback period is very long, the requirements for investors' financial strength and risk tolerance are very high, so they cannot be publicly raised for ordinary people.
(2) The underlying assets of the investment are non-public company stocks, and through the rapid growth of the underlying company, high equity appreciation income is earned.
From the whole financial market, private equity investment is only a form of "alternative investment" and can also be understood as non-mainstream investment. According to the data of asset management association of china, by the end of April 2007, there were more than 2 1000 private equity funds in China. Venture capital funds, with a total scale of over 5.5 trillion. Investment data show that in 20 16 years, private equity investment exceeded 680 billion. In fact, the proportion of private equity investment in the whole financial market is still very small.
Extended data:
1, venture capital (VC for short), also translated as venture capital, is mainly a financing method to provide financial support to start-ups and obtain shares in the company. Venture capital is a form of private equity investment. Venture capital company is a professional investment company, which is composed of a group of people with knowledge and experience related to science, technology and finance. By directly investing in the equity of the invested company, it provides funds to those who need funds (the invested company).
Most of the funds of venture capital companies are used to invest in start-ups or unlisted enterprises (although the current laws and regulations have greatly relaxed the use of funds), not for the purpose of operating the invested company, but only to provide funds and professional knowledge and experience to help the invested company obtain greater profits, so it is a high-risk and high-return enterprise that pursues long-term profits.
2. P/E ratio is also called cost-benefit ratio, stock price-earnings ratio or market price-earnings ratio. P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable. Divide the stock price by the annual earnings per share (the market value of a company divided by the annual profits attributable to shareholders can also get the same result).
When calculating, the stock price usually takes the latest closing price, and if EPS is calculated according to the published EPS of the previous year, it is called historical price-earnings ratio; Generally, consensus estimation is used to calculate the estimated P/E ratio, that is, the estimated average or median value obtained by the institutions that track the company's performance after collecting the forecasts of many analysts. What is a reasonable price-earnings ratio, there is no certain standard.
3. Angel investment is a form of equity capital investment. This word originated from Broadway, New York, and was first used in the United States in 1978. Refers to the person who has a certain net wealth and makes early direct investment in high-risk start-ups with great development potential. It is a spontaneous and decentralized way of private investment. These investors are called "investment angels". Capital used for investment is called "angel capital". ?
Angel investment is a form of venture capital, which is based on the investment amount of angel investors and the comprehensive resources that the invested enterprise may provide.
References:
Baidu Encyclopedia-Entries of Venture Capital
References:
Baidu encyclopedia -PE entry
References:
Baidu encyclopedia-angel investment