What does VC, PE and angel investment mean? What is the difference?

Haizhu Website: Author originating network: Ted Prince 2019-02-03

Part 3

The narrowly defined PE mainly refers to the private equity investment part of mature enterprises that have formed a certain scale and generates stable cash flow, mainly refers to the private equity investment part of the late stage of venture capital investment, and the M&A funds and mezzanine capital are in the scale of funds. The largest part. (M&A funds are funds that focus on mergers and acquisitions of target companies. The investment method is to obtain control over the target companies by acquiring the equity of the target companies, and then carry out certain restructuring and transformation, and then sell them after a certain period of time. The difference between M&A funds and other types of investment is that venture capital mainly invests in entrepreneurial enterprises, and M&A funds are selected as mature enterprises; other private equity investments have no interest in corporate control, and M&A funds are intended to obtain control of target enterprises. Rights. M&A funds often appear in MBO and MBI.)

2) The role of private equity investment Private equity investment funds are the driving force for the sustainable development of the capital market. The rapid development of the private equity fund industry will provide new ways to improve the profitability of the financial industry, and provide an effective way to solve the financial distress of private small enterprises, and open up the demand for industrial demand and financial capital.

What is the difference between VC and angel investment?

VC is the so-called venture capital:

1. It is corporate behavior;

2. The investment amount is more than 10 million RMB, and several VCs have jointly invested hundreds of millions. In the past few years, VC invested more in US dollars. In recent years, RMB investment has gradually increased. VC's source of funds is mostly based on foreign investment funds. China's domestic funds for VC have also begun to increase in recent years;

3. VC-invested enterprises are generally in the growth stage, that is, they will only intervene after they have matured profit models;

4. VC generally does not participate in company management, and has high requirements for the business management team;

5, VC's exit mechanism, the way to sell to private equity funds or listing in China is more, in the United States, the majority of the form of corporate mergers.

Angel investment:

1. Angel investors are generally more successful individuals, so the general angel investment is basically personal behavior, or some small investment company operations;

2. The amount of investment is not limited. It may be only 200,000 or millions. It depends on the strength of investors and the money needed for investment projects. The source of funds for angel investment is personal recruitment or the investor himself. Income at work;

3, angel investment often enters the start-up period of the enterprise, the money is more to encourage entrepreneurs to dare to innovate, and used to create a profit model. At the same time, before the model is immature, it is used to pay the wages of entrepreneurs and promote their persistence;

4. Angel investment generally participates in enterprise management and will be closely monitored. Of course, this is not a bad thing. After all, people who can make angel investments will have more experience and methods on how to set up a company and how to establish a model. ;

5, the exit mechanism of angel investment, generally the model is mature, it is sold to VC or private equity funds, after all, as an investment, it is impossible to accompany you to the end.

What is the node of angel investment, VC, and PE involved in the enterprise? What is the role of each?

Angel investment:

The company has no start-up and start-up period. There are still no mature business plans, teams, and business models. Many things are being explored. Therefore, many angel investments are acquaintances and friends, and they invest based on their trust.

Acquaintances and friends are angel investors. His role is often to help entrepreneurs get start-up funds. The investment of mature angel investors or angel investment institutions will help entrepreneurs find directions and provide guidance in addition to the above functions. (including management, market, product aspects), providing resources and channels.

Please continue to see the fourth part.