Abstract: in the long run, it is not difficult to obtain capital for the venture, and the capital is relatively cheap. The cost of capital so that entrepreneurship has become a trend, the birth of the bubble, which is one of the reasons leading to higher failure rate of entrepreneurship.
a lot of people think, now in the capital of the winter, which caused the collapse of a large start-up companies. The capital can be traced back to the winter of this time last year, however, we believe that the so-called capital is only the result of the winter compared with the previous two years. In the long run, in terms of entrepreneurship, capital is not difficult to obtain, relatively speaking, capital is very cheap. The cost of capital so that entrepreneurship has become a trend, the birth of the bubble, which is one of the reasons leading to higher failure rate of entrepreneurship. In addition, cheap capital to start-up companies lack of innovation, accustomed to using money to solve the problem, rather than more efficient means of operation and more creative marketing methods, which is worthy of vigilance.
1 why capital is getting cheaper
if we know that the FedEx to less than one hundred million dollars in financing to break the Wall Street records, before Google listed financing is only $1 billion 900 million, so now motionless hundreds of millions of dollars in A/B round of financing is too high, even in the case of ignoring inflation. Moreover, business losses of the company have gone up, a quarter of Uber’s losses than the Amazon annual loss after the listing of the most high, the capital competition preparation is rare, but now it is not.
on the Chinese market, the cost of capital is due to the reduction of investment opportunities, so that a large number of capital inflows into the field of venture capital. On the one hand, the property market, the stock market is currently not much investment opportunities, many real estate companies are facing difficulties in transition, in general, the feelings of all walks of life is difficult to do business. This situation has caused a lot of private capital but nowhere to invest in the plight of. The rapid development of Internet banking also reflects this, which is actually an upgrade of private lending, dubbed P2P and other channels of investment in the name of more and more.
at the same time, part of the funds into the risk investment in this high profit industry, for example, star, anchor are to start cross-border investment, which has been fully reflected in the last year, remarkable prosperity. However, the risk of investment not only has a high income, or a high threshold and high risk industries, the layman’s entry is only valued earnings, but underestimated the risk. So we predict that 3 or 5 years later, this wave of venture capital will face the danger of collective withdrawal.
Prosperity and the encouragement of the policy of
venture capital is not divided, partly because of venture capital into real business is not good to do, so many people to entrepreneurship and investment boom is attributed to the overall economic downturn. However, we have put forward different views. The overall economic downturn is mainly reflected in some of the excess industrial capacity and international commodity prices, which is only a small part of the economy. If we go to the streets, we will find that, whether it is a restaurant or hotel, or other physical stores, improve the quality of goods