How to effectively introduce venture capital: business plans and financing strategies for cross-border micro-e-commerce
In the cross-border micro-e-commerce industry, financial strength is crucial, and companies in this field often go through a phase of burning cash. Even giant companies such as Alibaba and Tencent have attracted support from many venture capital institutions through multiple financings during their development. This shows that the process of development and growth requires the help of external capital. If cross-border micro-commerce wants to become a leader in the market, it becomes particularly important to master the strategy of introducing venture capital.
Develop a business plan
Business plan is an indispensable tool for cross-border micro-e-commerce to attract angel investment. It is the business card and entrepreneurial creed of the enterprise. A high-quality business plan can help companies directly affect the success or failure of financing when talking to angel investors. In order to ensure that the business plan can effectively impress venture capital institutions, the following ten questions must be clarified:
- Who are the customers of the company?
- How do consumers decide whether to use your product (service)?
- Why should consumers choose your product (service)?
- How to price your products (services)?
- What channels will be used to promote products (services) to target consumers?
- What are the production and marketing costs of the product (service)?
- What are the possible business risks that may be encountered?
- How does the company respond to these risks?
- What is the company’s financing plan?
- What returns can investors get?
During the writing process, it is recommended to refer to the business plans of peers who have successfully introduced venture capital to gain a more comprehensive perspective and experience.
Select venture capital targets
In the process of introducing venture capital, cross-border micro-e-commerce companies need to accurately screen venture capital targets. Excellent projects will naturally attract multiple investors, but it is important to not only focus on the size of the funding, but also consider other resources that venture capital can provide. For example, if an investor can provide operational and management support in addition to capital, then such “smart money” will be more beneficial to the long-term development of the company.
Choosing a venture capital institution with industry experience and resource background may help companies build excellent teams, innovate technological ideas, or open up new markets.
Estimating financing amount and setting transaction price
Cross-border micro-commerce businesses need to accurately value their own enterprises and make reasonable estimates of financing amounts and share values. Misestimating the financing amount may give investors the impression of vicious money trapping, which will seriously affect the cooperation intentions of both parties. At the same time, when setting the transaction price, if the share price is too high, it may also lead to the failure of the financing plan, and investors may be psychologically alienated.
Generally speaking, if cross-border micro-e-commerce companies hope to successfully introduce venture capital and inject development momentum into their companies, they need to do more homework on financing preparations to create more favorable conditions for themselves.
By effectively writing business plans, accurately screening venture capital, and reasonably estimating financing amounts, cross-border micro-commerce can effectively increase the success rate of attracting venture capital and lay a solid foundation for the future development of the enterprise.