In the investment process, how are angel rounds, a rounds, b rounds, divided? What are the investment scenarios?
Everyone knows that investments are divided into angels and A, B, C, and even D.
Let me first talk about why investment should be divided, each round is at a different stage, the risk is different. Therefore, after the money invested in the process of investment is put in, the proportion of obtained and the proportion of payment are not the same.
First, investment angels, the proportion is high, the risk is large, the investment funds are small, but the return will be very high. Angel round, you want to do a project, have an idea, have an idea, this time you have this idea, find someone to invest, tell the investor what this money is used for, is to rent an office, do something, what effect can be achieved. It's an angel wheel. In China's angel wheel, only very discerning people dare to vote for the angel wheel, because the failure rate of ideas is relatively high. Kai-Fu Lee, Xu Xiaoping, these are all angel masters, they are often gold digging in the sand, as long as a project is successful, they will win. But Xu Xiaoping's failure rate is higher. Angel wheel can raise 1 million to 10 million, and the proportion of equity is 10 to 40%.
Second, Round A. When you already have a product, this time you need to open up the market, this time you need financing, the A round is often risky, testing market ability, team ability. For example, when Lei Jun launched Xiaomi, he melted 40 million A rounds. A lot of people voted for him. For example, Ant Financial's A round has melted 1.8 billion, and now Ant Financial has a problem. Now the A round tends to be more certain than the angels because there is already something concretely visible. For example, physical products. Financing 10 million to 100 million, the proportion of 10 to 20%.
Third, Round B. The B round is that the business model has matured and can be financed to 100 million to 20 billion. As mentioned earlier, a round can melt 10 million to 100 million, and angels can generally melt 1 million to 10 million.
Generally speaking, the B round should be well designed for equity. Angel round and Series A many people are not involved in equity. To the B round to solve the problem. Because after the B round into the development period.
Now it is more popular to distinguish between voting, voting rights plus equity. Voting rights mean that my shares can be small, but my control over the company will not be bad. In the process of equity design, the most tragic is Wang Zhidong of Sina, because he did not design the equity well, resulting in equity dilution and being driven away.
Fourth, the C round, mainly the business model is already there, and it is already profitable. Series C tends to have a relatively large amount of financing. The proportion of equity is relatively low. But the risk is also relatively small. This is what I talked about with you today, the angel round, the A round, the B round, the C round. Some also have Series D for further financing.
If each stage develops faster, it can be carried out in A+, B+, C+.
To sum up, the angel wheel is an early idea, generally 1 million to 10 million, this time the investment ratio of two percent, thirty or higher. The A round is generally a product, and the financing amount is 10 million to 100 million. The proportion at this time may be around 10%. The C round is that there is already a business model. Know what to do. At this time, the success rate is relatively high. At this time, the financing ratio may be less than 10%, generally higher than 5%. Raise between one hundred million and one billion. This round he has already started to make a profit, and this time he is basically doing scale. The amount of funds is not easy to determine, depending on the specific situation. Continuing to do large scale is the goal.
This is today with you to talk about the financing situation in the investment process.