Strategy 1: Prepare? Negotiation language? The background of financing communication As a financing enterprise, in the communication and negotiation with the capital side, often encounter two types of situations: First, the enterprise team is not enough to understand the professional knowledge related to financing, the action process of the capital side and the financial laws and regulations, and often even major misunderstandings, resulting in the two sides of the exchange of communication is difficult to reach an agreement, or even disagree, and the second is that some enterprises do not pay attention to the financing plan and the project plan writing, do not pay attention to preparing written information related to financing, resulting in the financing cooperation is difficult to have a great deal of time. Secondly, some enterprises do not pay attention to the writing of financing plans and project plans, and do not pay attention to the preparation of written information related to financing, which makes it difficult to make great progress in financing cooperation. Generally, the reasons for the differences between the financiers and the capitalists are as follows;
1. The focus of the financiers and the capitalists are different. Financers are concerned about the amount of financing, financing costs, financing period and other issues, most hope to minimize the cost (low-cost), the easiest procedures, in the shortest possible time to integrate a large amount of money, and a longer period of time to occupy the funds; while the capital side is concerned about the feasibility of the project, the return on investment, the return on investment period, the control of investment risk, how to successfully exit, and other issues, hope that the project company has a A very good team, the action of the project is not reproducible and have high technical content, have good marketing channels and high market share, as long as the investment of a certain amount of money can be made to the enterprise's project into the industry boss, investment risk, high returns, safe exit, and so on.
2. The language expression level of the financing owner is extremely limited. Due to the financing of the relevant personnel lack of professional knowledge, communication skills, negotiation strategies, etc., the limited level of expression of the project, in the description of the project can not be fully elaborated on its feasibility, often with the first contact with the funding side of the first time was not? Eyeballs? Attracted, the result is obviously a very good project but missed a lot of financing opportunities.
3. Inadequate preparation of materials for financing. Funding in the investment decision-making needs to rely on a complete and standardized set of materials, the need for different decision-making levels to believe that the transmission; and financing project information provided by the financing side are often fragmented, unsystematic and non-standardized, and even the future development of the enterprise's strategy, marketing, capital operations, cost cost control, etc., there is no detailed planning, resulting in the lack of sufficient textual information to understand the enterprise's capital side project, and therefore cannot judge and make decisions and give up investment opportunities. Thus, there is often a language barrier between financiers and capitalists. Language barrier. The language of communication with the capitalists is broader, including the professional knowledge related to financing, including the written information that is conducive to the capitalists to understand the situation of the enterprise and its financing project, and also includes the information to build confidence with the relevant introduction.
Negotiating the need for specialized language
Negotiating the need for specialized funding supply and demand teams are completely different ? Two types of people?
In practice, we have found that the teams of SMEs and the teams of funders (corporations and banks, corporations and venture capitalists, corporations and short-term lending funders, and corporate-type funders) are two completely different types of people. It is precisely because of the differences between these people in terms of system, background, age, education, profession, growth experience, way of thinking and behavior, etc., that all kinds of misunderstandings and disharmony often arise between them in the process of financing, which slow down the process of financing, or even make the process of financing a lost cause. The above differences cause many obstacles in communication. Some business operators need to form financing teams and use the power of financing service organizations.
The supply and demand of funds?
The information asymmetry between the supply and demand of capital?
Information asymmetry is the phenomenon of information loss, information leakage and information misunderstanding due to language barriers, communication styles and communication environments that affect the decision-making of both sides of the communication.
The reasons for information asymmetry are as follows;
1. The team of both supply and demand of funds is ? two types of people? , they are very different in the way of thinking and behavior. In the process of information communication, Wang Tong language, speed of speech, expression, emotion, conveying information is not the same.
2. Due to the limitations of the spatial distance and identity of the two sides, there are few opportunities for real face-to-face communication between the business team and the funding side, and the communication efficiency is low, making it difficult to express the concerns of both sides clearly in a short period of time.
3. Different levels of the project side of the personnel at different times on the project have different understandings and expressions, and sometimes even contradict each other, in the conveyance and description is difficult to give a convincing, complete and scientific impression.
4. "Project Feasibility Study Report" can only be used as an indispensable procedural document when the project is initiated, in which the risk, market and financial considerations in the breadth, depth and credibility of the hard to make the funding side satisfied.
This symmetry of information greatly increases the cost of communication and affects the efficiency of financing.
The project side and the funding side are concerned about different issues
The supply and demand sides of the funding are concerned about different issues, and both sides are trying very hard to express what they want to express. For example, the enterprise said that there is a certain kind of patent, the capital side would like to see whether the patent certificate exists, the value of the patent in the end how much; the enterprise said that the market situation is very good, but the capital side would like to see the orders or sales intention, and see the market survey report, data analysis and competitors. It is like two people debating, both sides are not the same focus, it is difficult to reach agreement. Because of the above, there is a need for a ? language? or a tool that can address the differences between the supply and demand sides of the funds and solve the problem of information asymmetry.
? Negotiation language? s types
? Negotiation language? Specifically divided into, first, the basics of the class; because the supply and demand sides of the funds are almost completely different ` two types of people, in order to improve the efficiency of communication, enterprises must learn to communicate with the funding side of the ? Negotiation language? , from the knowledge level at least need to master the following aspects; First, the category of professional knowledge, including finance, finance, business management, etc.; Second, the category of laws and regulations, mainly including a variety of policies and regulations related to financing; Third, the category of working practices, mainly including various types of financing tools, funding and financing service organizations' working practices and workflow. Second, the category of information list, many funders have their own required information list in order to standardize the workflow and improve work efficiency. All kinds of banks, all kinds of investment companies and all other kinds of financing tools of all kinds of funders have their own information lists. Therefore, enterprises in the preparation of financing information before this, the best through various ways to get these information lists and carefully prepared. For example: the annual review of the business license, business registration information, articles of incorporation, tax registration certificate, organization code certificate, certificate of legal representative, legal representative identity card financial statements, tax returns and tax certificates, bank account statements, related commodity transactions, labor contracts or agreements, basic settlement account opening card, applications generally have a fixed format, some have a fixed format of the form. Some only specify the content framework that must be available.
Strategy 2: clear negotiation content
The important role of financing communication and negotiation
The role of financing communication and negotiation on the role of the financier is now the following:
First, to understand the basic situation of the funding side of the background; the second is to finance the cause of the project and the development of the process of change; the third is related to the project's policy and industry; the project's technology and market conditions; the fifth is the project's technology and market conditions; the project's technology and market conditions; the project's technology and market conditions; the project's technology and market conditions; the project's technology and market conditions. The project's advantages and problems; the enterprise's development plan; and the amount of funds needed and the mode of cooperation. The content of the above framework and content and business plan is basically the same, but because it is oral, based on the occasion of communication, financing the two sides involved in the communication of different identities, can be flexible in the order of communication and detailed changes.
For the capital side to shift, the content of the communication includes: First, the background and strength of the shareholders; Second, the performance and financing cases; Third, the direction of funds and all the way; Fourth, the proposed investment project in the industrial chain and the location of the profit model; Fifth, the relevant policies and regulations; Sixth, the technological advancement of the company's ability to continue to develop; Seventh, the company's competitors; Eighth, the enterprise market order situation; Nine is the amount of financing the enterprise wants and the way of full operation; ten is the security guarantee the financier can provide. Different funders focus on the above issues slightly differently. If the enterprise's statement is clearer, the funders will usually ask questions on the above issues in depth. The above content, whether the capital side or financing enterprises, are generally around the content of the business plan to state and ask, which is why we have repeatedly emphasized the need to write a good business plan for one of the reasons. The content of financing communication If you enter the substantive negotiation stage, it is often not far from the success of financing. This part is still illustrated with an example of a more complex venture capital investment. At this stage, the two sides are usually involved in the following: first, the amount of financing; second, the composition of shareholders and equity structure settings, whether the capital side can be controlling? Third, the capital contribution of both parties; fourth, the determination of the value of intangible assets and the disposal method; fifth, the original debt contingent responsible for the disposal; sixth, the corporate governance structure of the new company; seventh, the arrangement and remuneration of personnel; eighth, the formation of the management team and incentives; ninth, the government departments concerned to strive for policies; tenth, the auditing, appraisal, legal and financial advisers and other intermediaries employed; eleventh, the two sides of the work of division of labor and The schedule of work of both parties.
Most of the above content belongs to the framework of the cooperation agreement between the two sides, but also includes some considerations for the future operation of the company.
Strategy 3: Determine the steps of negotiation
Steps of financing negotiation
In view of the importance of the financing communication and negotiation and the duration of a long time, in order to facilitate the applicant to grasp, we can put the process of work flow analysis of this process is as follows;
First, the financing communication and negotiation of the preparation; the second is the site statement and communication; the third is to supplement the improvement of information and policy consultation; the fourth is to further communication and negotiation; the fourth is to further communication and policy consultation; the fourth is to further communication and negotiation. The first is the preparation of financing communication and negotiation; the second is the on-site presentation and communication; the third is the additional improvement of information and policy consultation; the fourth is the further communication and determination of the intention of financing cooperation; the fifth is the substantive negotiation; and the sixth is the signing of financing agreement.
Preparation stage of communication ?
Preparation of information
Enterprises need to prepare the information listed in the list of financing information and business plan, and print and bind the relevant documents in the appropriate number of copies for use. If you are able to do so, you can make a PowerPoint file and prepare to make a presentation. Team Preparation Team preparation is mainly to determine the team to participate in the presentation and communication candidates, and do a good job of the specific division of labor. Generally, in addition to the participation of the financing director, the personnel responsible for finance (sometimes the same person as the financing director), technology and marketing should also participate in case of inquiries. Most small and medium-sized enterprises, the team lacks, and is not good at communication, in this case can be elected in all aspects of familiarity with the situation and more familiar with the financing plan, as the main presentation and communication personnel. ? Utilization of external resources In order to improve the efficiency and effectiveness of communication, enterprises in a position to participate in the negotiations with the help of external forces, as a financial adviser to the enterprise financing, you can ask the government departments in charge of small and medium-sized enterprises to participate in the work of the department responsible for. ? Preparation of enterprise site management Generally, the location of the exchange between the capital side and the enterprise will be selected in the production and operation site of the enterprise, so as to visit the site. Therefore, it is best to prepare for the production site and management site of the enterprise, and arrange for familiar personnel to make on-site briefings.
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Simulation exercises
If the enterprise team lacks experience in financing negotiation or is not familiar with the content of the financing plan, we suggest that the purpose of simulation exercises in financing negotiation is not to deceive the funders, but to be able to correctly convey information about the enterprise and the project, and to make presentations in accordance with the content consistent with the financing plan, so as not to conflict with the content of the plan, which would make the funders misunderstand and distrust each other. Misunderstanding and distrust. Supplementary information and policy consultation stage If the funders are more interested in the enterprise and the project, the enterprise can be ready to supplement information or conduct legal and policy consultation on the issues raised by the funders that cannot be solved on the spot, as well as the issues not covered in the business plan. Things to pay attention to at this stage include: 1. After judgment, the funding party has no intention of cooperation, you can not provide information; 2. Involving the business secrets of the enterprise, you can provide simple information or explain to the funding party to enter the substantive stage of cooperation and then provide; 3. perfunctory, to cope with the work, we must be serious, and do not provide false information, ? False is true when it is true? 4. If the information provided requires greater input from the enterprise, it is necessary to consider it carefully and make a comprehensive judgment on the purpose and authenticity of the financier to decide whether to provide or input. If necessary, the enterprise may ask the financing service organization or relevant experts to assist in the decision-making. Substantive Negotiation Stage Questions to pay attention to when negotiating with debt funders: First, prepare detailed information; second, pay attention to listening to the funders' concerns; third, answer each question raised by the funders carefully; fourth, don't be in a hurry; and fifth, consider the issue from the funders' point of view, and think in a different way. Problems that should be paid attention to when negotiating with equity capitalists, first, please ask experienced personnel to participate in the negotiation; second, prepare a variety of cooperation modes in advance, don't stick to one mode of cooperation; third, it is best to design the relevant cooperation framework in advance, so as to avoid being caught by surprise; fourth, don't easily express refusal or agreement to issues that involve the enterprise's major, long-term interests, so as to avoid being passive; fifth, in the early stage of the negotiation, the enterprise proprietor Do not easily come forward or take a position; do not easily give up the controlling right; Sixth, pay attention to understand and ask the ideas and opinions of the funding side; Seventh, the cooperation process, pay attention to show the image of the team. Every negotiation is a demonstration of the image of the enterprise, so attention must be paid to it, and if necessary, the financing consultant can be asked to provide technical support. Signing a financing agreement The financing agreement is an important legal document for both parties in need of funds to clarify the rights and obligations of both parties in need of funds and to coordinate the relationship between the two parties (or possibly more). Financing agreements are categorized as follows: Firstly, according to the different nature of financing, they can be classified into debt financing agreements and equity financing agreements. Secondly, according to the classification of different financing tools, it can be divided into: bill financing agreement, entrusted loan agreement, trust loan agreement, loan agreement, financial lease agreement, financing agreement and project financing agreement and so on. This categorization facilitates enterprises to enter into different agreements according to different financing tools. Thirdly, according to different financing channels classification,
can be divided into; bank financing agreement, pawn financing agreement, trust financing agreement and financial leasing agreement and so on. Fourth, according to the different investment and cooperation mode is divided into: Sino-foreign joint venture agreement, Sino-foreign cooperative agreement, joint venture agreement and investment agreement. This stage is the embodiment and consolidation of the negotiation results, but also the capital arrangements and the premise of substantive cooperation between the two sides. Generally the capital side has a fixed format of the agreement, the enterprise can be revised on this basis to better reflect the results of the negotiations between the two sides, to protect the interests of the enterprise.
Strategy 4: Mastering Negotiation Skills
Although financing negotiations are different from diplomatic negotiations, they also require participants to have high political and business qualities. First, we must be familiar with policies and regulations; secondly, we must understand the investment environment; thirdly, we must be clear about the status of the project; fourthly, we must have the strategy and art required for the negotiation. Therefore, regardless of the size of the negotiations, the level of high and low, the participants should be treated seriously and seriously, and must not be allowed to engage in hasty. Because the agreement contract is the project (enterprise) of life and death, once the mistake will bring irreparable economic losses and adverse political impact. Determine the principle of negotiation All financing activities are based on the project, to negotiate, signing as a precursor. Negotiation, signing of the level of how, off the economic interests of the political impact, so, some of the minimum principles must be adhered to: 1. And the principle of negotiation. Everything beforehand, not beforehand. Investment negotiation is also the case, beforehand to be fully prepared. First, the composition of the negotiators, who talk, who cooperate, who translates, who do consultants, all kinds of people to be ready, and beforehand, there should be a clear division of labor and responsibilities; Secondly, we must prepare the program, including policies and regulations, the investment environment profile, project specifics, conditions of cooperation; Thirdly, the contract, the text of the agreement and the relevant information Vienne see ready; Fourthly, the commitment and guarantee measures. Preparedness, will win the initiative to negotiate, to achieve the desired results. 2. Principle. The purpose of financing cooperation is to promote the development of enterprises, so it must be based on the actual calculation of the approved reasonable benefit standards. Mutual benefit can be said to be the theme song of financing. 3. Principle of reciprocity. Investors can be different countries, regions, different systems, institutions under the background to people, ideological differences, there is a gap between rich and poor, but as a collaborator, the two sides in the legal status of equality; on the negotiation should not be humble, in and out, polite and courteous. 4. Strategy reasons. Financing is not begging, begging, and dealing with funds is not just a financial and technical problems, so not only to talk about the policy, but also to talk about strategy. In the negotiation, the negotiation strategy is the unity of principle and flexibility performance. Prior to have a plan, the parties should be adaptive, pay attention to the way, method, to be advantageous and courteous, which is the highest level of negotiation. Select the timing of the introduction of many enterprises are eager to seek strategic investors, eager to sell their projects and business plans to investors, but the introduction of a timing problem. How to choose the timing, specifically described as follows:
First, the policy interests appear, that is, the newly introduced policies to the enterprise to bring significant business opportunities, such as: 1. ID card unified replacement policy; 2. Medical waste centralized treatment policy; 3. The state encourages energy-saving small-displacement cars; 4. The state encourages the development of leading enterprises in agricultural industrialization; 5. The state encourages enterprises to improve information technology. . Any enterprise related to these policies is more favorable in the financing process.
Secondly, the enterprise obtains a large number of orders, in the capital market, listed companies will often release the news of obtaining government procurement or winning the bid, which will have a certain stimulating effect on the stock price. Similarly for unlisted companies, obtaining orders for future cash flow has a great persuasive power, at this time to attract capital to the enterprise is more favorable.
Third, the enterprise obtains patent certificates or title deeds of important real estate.
Fourth, the financial information is ready. After the financial information, mainly the financing plan is well prepared, it is a good opportunity to contact with the funders.
Maintaining the interests of the enterprise First, the protection of trade secrets. In the process of providing a business plan and communication, the enterprise will certainly involve the business plan, market, technology and strategy of the enterprise. This depends mainly on the enterprise plan to plan the information of the proportion of the grasp as well as the judgment of the identity of the investor, but also can be constrained by confidentiality agreements and other ways.
The second is to determine the financing methods and strategies in advance, preparedness, so that you can avoid the negotiation process is not prepared, hasty decision-making.
Third, a reasonable determination of the value of intangible assets. Many small and medium-sized enterprises, especially technology-intensive enterprises, will face this problem in the process of attracting capital, which mainly depends on the negotiation pricing ability of the enterprise and the capital side.
Fourth, the support of external experts. For many enterprises, the importance of this issue has not yet been recognized.
Businesses generally value physical investments and place less emphasis on the value of intelligence and external brains. This is an area where many SMEs should improve. Of course, the utilization of external experts also requires a certain level of discernment. ;