Which is better, traditional financing or crowdfunding?

With a project and a team, there is another important resource for starting a business, and that is money! In the business plan, there is a very important chapter about financial planning, which involves the capital demand of the business. The entrepreneurial enthusiasm of college entrepreneurs is high, but the shortage of funds has become a major obstacle on the road to entrepreneurship. So how do college students manage money and find money?

Financing refers to an economic behavior that enterprises raise funds through certain channels and ways from their own production and operation and capital utilization to meet the needs of enterprise development. Simply put, risk financing refers to raising risk capital. Local governments at all levels, relevant departments and social institutions have different preferential policies for college students' entrepreneurship. It is suggested that college students who start businesses in Hangzhou can choose the following financing channels and methods:

I. Government policy financing

Government policy financing is a financing fund set up by the government to encourage entrepreneurship, support technological innovation and professional development, and is used for the operation of new enterprises. It is the financing method that college students should strive for most. The Notice of Three-year Action Plan for College Students' Entrepreneurship in Hangzhou (2017-2019) stipulates that qualified college students should be given more financial support to start their own businesses, and the projects should be given free subsidies ranging from 200,000 to 200,000. For the winning works in various entrepreneurial competitions at all levels, if they are transformed in Hangzhou, the maximum support can reach 6,543,800 yuan.

Second, financial management of relatives and friends.

Financial management for relatives and friends is to raise funds from family members or other relatives and friends. This method is the simplest and most effective, and it is one of the ways of debt financing. Because of the strong kinship and friendship, it is easier to gain the trust of the other party and it is relatively simple to raise funds. However, the funds raised by this financing method are limited, and it is more a kind of friendship sponsorship.

Third, venture capital.

Venture capital refers to all investments with high risks and high potential returns. Entrepreneurs will obtain funds for enterprise development by selling some shares to venture capitalists. Venture capital is generally interested in projects with scientific and technological content, innovative business model, background and rapid development, so this kind of college students' entrepreneurial projects can consider venture capital for financing. In addition, college entrepreneurs can also get venture capital opportunities through the media, entrepreneurial competitions, venture capital companies, etc. For example, the Challenge Cup series has opened the door for college students to start businesses within five years after graduation.

Fourth, partnership financing.

Partnership financing is a financing method that directly absorbs individuals or relevant units to invest and start a partnership enterprise according to the principle that * * * has investment, * * has operation, * * has risk and * * has income. Many college students will try to start a business in partnership in the early stage, which can not only effectively raise funds, but also give full play to the cohesion of the team, effectively integrate and utilize various resources and reduce the risk of starting a business. However, the shortcomings of this method are also obvious. With more partners, there will be more bosses, which will easily lead to disagreement, or conflicts between partners due to unequal rights and obligations.

Verb (abbreviation of verb) financial institution loan

Local governments at all levels will designate relevant banks to provide small loans for college students' entrepreneurial enterprises, with simple loan procedures and large preferential margins. Hangzhou implemented college students' entrepreneurial guarantee loans and "risk pool" fund projects. Eligible college students can apply for a business guarantee loan of less than 300,000 yuan (inclusive) and enjoy the corresponding discount policy. For scientific and technological achievements transformation, R&D or cultural and creative projects, the maximum loan amount can be increased to 500,000 yuan. Moreover, the government has increased the interest subsidy for loans and implemented full interest subsidy for college students' entrepreneurial projects.

Of course, in the actual process of starting a business, some college students have chosen the crowdfunding model and released fund-raising entrepreneurial projects through the Internet to raise funds. Compared with traditional financing methods, crowdfunding is more open, and whether to obtain funds is no longer based on the commercial value of the project. As long as netizens like your project, they will invest corresponding funds. But in fact, the crowdfunding model is not mature and its legitimacy is widely questioned. Therefore, as a college student entrepreneur, we should try our best to strive for other financing channels and methods.

After knowing who to ask for money, you need to know how much your entrepreneurial project will cost, otherwise the lion will not get the money as soon as he opens his mouth! So how do college students calculate how much money they need for their entrepreneurial projects?

The total capital demand of college students' entrepreneurship can be calculated according to the following formula:

Total capital demand = working capital demand+debt repayment capital demand+investment capital demand = fixed investment capital demand+capital operation capital demand+speculative capital demand.

Among them, liquidity demand mainly measures the funds used to maintain production, expand scale, increase liquidity investment, pay expenses, make up for seasonal differences in income, undertake new contracts, and need to advance funds or increase investment.

The demand for debt repayment funds is mainly to calculate and maintain the reputation, and it is necessary to return the funds needed for external loans such as bank loans and suppliers' payment.

Fixed investment demand mainly measures the cost of purchasing production equipment, its workshop and real estate construction.

The capital operation demand mainly measures the deposit for handling bank acceptance bills, the cost of purchasing land and handling land certificates, and the funds needed to obtain certain qualifications, expand enterprise capital and acquire enterprises.

The demand for speculative funds mainly measures the funds needed for speculative securities and stocks, land and real estate, and non-performing assets.

The use direction of venture capital is mainly manifested in four aspects: technology and product development, production equipment, market expansion and human resources. The empirical data of its capital demand in different stages are shown in the following table:

Empirical data of various capital requirements of entrepreneurial enterprises at different stages of development

According to the above table, college students can estimate the amount of funds needed in each stage of starting a business, reasonably choose financing channels and methods, and raise funds to lay a solid foundation for the good development of enterprises.