The basic objective of corporate financing is needed to satisfy its survival and development, but in different types of enterprises and the growth stage, there is a great difference between the nature of the enterprise and its external uncertain factors, the demand for capital show different size, structure, risk and cost characteristics, also need different ways of financing. When there is a big difference between the existing enterprise capital structure and the optimal capital structure, entrepreneurs need according to the characteristics of the development stage, considering their financing ability, capital demand and financing constraint factors such as external environment, choose reasonable financing modes for adjustment, in order to improve financing efficiency, reduce the risk of financing, promote the long-term development of enterprises.

 

　　1, the seed stage

 

　　Because venture is pregnant stage, does not have the corresponding legal structure, demand for capital is mainly reflected in the enterprise start-up costs, feasibility study costs, some technical research and development costs. Seed funding requirements may not be much, but no cash inflow, lack of funds, need long-term use of funds. But at this stage the mortgage (guarantee) less, the technology was not mature, the market uncertainty, financial risk, it is difficult to bank financing support. In addition to its own funds, seed funding ways mainly have: pawn financing, friends borrowing, owners and shareholders direct investment, angel investment, risk investment, government fund.

　　Seed funded mainly by the entrepreneurs themselves, there is no basic rights, but must consider the long-term ratio of equity financing, provide a blueprint for the future. In the business plan, entrepreneurs need according to the changes in the expected future free cash flow, determine the amount of demand, financing institutions and financing opportunities, to enterprise bud sprouting and growing demand for funds combined consideration. Based on the business plan, entrepreneurs can start mechanism and angel investors, venture capital or the bank contact, prepare in advance for the budding period money supply.

 

　　2, the bud

 

　　The bud enterprise debt financing is less, mainly equity financing. In general, the newly established enterprise mainly through financing endogenous retained earnings financing funds etc.. Good growth of new enterprises need to focus on equity financing to new investors or venture capital institutions, actively seeking government funding, inter enterprise business credit and financing leasing, borrowing by appropriate.

　　At this stage in the process of equity financing, investment and financing both sides of enterprise value is often exist in the larger differences, the equity ratio is fierce. Entrepreneurs need according to the actual situation of development and market of enterprise's revised business plan, rational planning of future sales revenue and the future free cash flow, focusing on the issue of the financing of the enterprise value evaluation, equity ratio and the relevant contract legal procedures, the next round of financing plan and scheme.

 

　　3, growth period

 

　　Growing enterprise can use retained earnings of equity financing, private equity, the gem listing a variety of ways, but only rely on equity capital is still difficult to meet the needs of the rapid development of enterprise requirements. Therefore, the growth stage of the enterprise the credit financing, bond financing, trust financing, debt financing has become an inevitable.

　　Because the debt financing costs are generally lower than the cost of equity financing, debt financing and the stage of growth rate will be higher than equity financing growth rate. But the high debt will increase the financial risk of the enterprise, is not conducive to the healthy development of enterprises. In general, corporate debt capital and equity capital of the stage's proportion is 6:4 better.

 

　　4, the mature period

 

　　Mature enterprises can choose the most financing way according to the need, but the capital structure adjustments. Generally speaking, most angel investment and venture capital will withdraw from the enterprise, commercial credit and the proportion of internal financing is greatly reduced, debt financing, bank loans and stock market financing has become the main mode of financing.

　　This stage enterprise although relatively stable, but sales and profit growth has slowed, the crisis has appeared in some degree of precursor. Therefore, the mature enterprises despite the choice of many low capital cost of debt capital, but should adopt the steady financial policy, not excessive debt. Generally speaking, the enterprise debt capital and equity capital ratio of phase in 3:7, the financial risk of small enterprises, combined with lower capital costs, enterprises are relatively safe.

 

　　5, the recession

 

　　The recession enterprises rising costs, shrinking market, less cash, profit decline, credibility, management risk increases, the debt financing does not have the actual conditions. But the recession has higher management level of enterprises, strong capital strength and a certain market position, should actively coordinate with banks, loans for the repayment time structure and enterprises with investment demand, and according to the enterprise development needs appropriate to introduce strategic investors and private equity investment, optimization, restructuring of internal resources, to inject new vitality into the enterprise. When enterprises are facing a crisis of survival, needs through the pawn, sell the stake, sub (Branch) companies or assets, in exchange for money, in order to survive.

　　In a recession, enterprises should carefully analyze the financial situation and the main problems, to develop in line with the actual, business recovery plan feasible, according to choose the mode of financing and financing needs, maximize the limited resources to the best direction to profit growth. For the short term, medium term may not be more effective project, should defer investment or compress the scale of investment.

　　In short, do poineering work at different stages of the life cycle, not only the internal and external environment will change, the pursuit of the financial objectives may vary. The key to choose venture financing is to determine the property relationship of funds and the proportion in the total funds, so as to make the financing risk and the financing costs to match. The relationship between entrepreneurial only correctly understand the characteristics of various kinds of financing ways and its capital structure, enterprise value, can from the enterprise finance goal, rationally in the acquisition and control the financing risk the biggest income seek a balanced, realize the value goal of entrepreneurial standard.

 

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