24 pitfalls that have to be identified in equity investment

Mondo Finance Updated on 2024-02-05

This article introduces the investment traps that must be identified in investment through 24 idioms for those who pay attention to the equity industry.

1. Fox fake tiger might.

In the early days of its establishment, 2VC's startups increased their visibility by letting well-known ** take shares, and then raised their industry status through publicity.

2. Wood without roots.

As soon as a technology mentioned by a startup was published in the lab, some investors wanted to successfully commercialize it on a large scale in a few years.

3. Three people become tigers.

The well-known ** organization bureau, and the frequent publicity of start-up companies, make the industry think that there is a new outlet.

4. Drumming and passing flowers.

Through multiple rounds of investment and publicity, the ** group has speculated on the valuation of the project, waiting for the takeover.

5, Ye Gong is a good dragon.

I have always imagined what are the characteristics of the project, but after investing, I found that there is a big gap between the imagination and the real situation.

I have always imagined who can succeed in entrepreneurship and investment, and I have imagined a bunch of conditions, and found that they are completely different from real talents.

6. Buy and return the pearls.

By investing in ** companies, I have collected a lot of highly educated people with industrial backgrounds, but I have forgotten that the final return on investment is what I need.

7. Wait for the rabbit.

Luck has invested in a good project, and instead of thinking about how to improve, I hold on to the previous pseudo-experience and wait for the next good project.

When promoting copywriting, focus on one or two successful projects, not mention most of the other unsuccessful projects, and wait for LPs who don't know the truth to take the bait.

8. On paper.

I talked a lot of theories, often paid for lectures, and held training camps, and the real performance was completely different from what I said.

9. Peep leopard in the tube.

Technological innovation is systematic, but only seeing a breakthrough in a certain link is considered to be a major business model innovation.

10. Put the cart before the horse.

Some institutions on various rankings are not on the list because of their good performance, but by paying to be on the list to make potential investors think that they have good performance.

11. A leaf obstructs.

Investment is to invest in people, and when you see people from a large factory or a certain college come out to start a business, you will invest without thinking.

Seeing the success of a certain industry Serial entrepreneurs, re-entrepreneurship across industries, invest without brains.

When I see what well-known ** and well-known investors say, I don't think it's right.

A remark from the boss's friend negates the investment team's long-term efforts.

12. Seedlings are promoted.

Enterprises burn money to blindly expand recruitment, and take excessive orders, which exceeds their own management capabilities and delivery capabilities.

13. Yin eats grain.

In order to whitewash the performance, under the pressure of the gambling of investment institutions, the company's capital reserves for many years in the future have been overdrawn, resulting in financial difficulties in the short term.

At the time of financing, the financing amount far exceeded the capital needs of the current development stage of the enterprise, and the founding team achieved ultra-high remuneration without listing.

14, Mu monkey and crown.

Some company founders and partners use the list to label themselves as professional through various forums, but they do not prove these labels through their own ability.

15, Zhang Guan Li Dai.

Investors are looking for logic in order to invest, and say that a small team of startups can handle the technology that can only be realized by large factories.

16. Refer to the deer as a horse.

Entrepreneurs boast of very general technologies as being the same as large factories, such as building and breaking the ecology at every turn.

Entrepreneurs obviously can't do the technology, find a similar technology, and tell the investor that this is the technology you want.

17, Zheng people buy shoes.

Investors can clearly see is believing, practice is true, but they believe some research reports or experts think.

18. Stick to the old ways.

The experience summed up in the last cycle has been used, completely ignoring the current environmental changes. For example, projects that could have a hundredfold return in the previous cycle are almost non-existent in this cycle.

You can't find the New World with an old map. According to past experience, if we do not push through the old and bring forth the new, there will be no great development.

19. Carving a boat for a sword.

If you don't invest in the big era of globalization as the coordinate system, but in the small coordinate system you see in front of you, then there is a high probability that you will not get back the money you invested.

20, Dong Shi Xiao Feng.

Knowing that he has no investment ability and his performance is very poor, he prefers to imitate and copy the investment logic of the best with good performance.

21. Behind closed doors.

Some research institutes, without in-depth due diligence, can produce a large research report.

Some startups, when their technology is not mature, envision how their technology can change the industry.

22. Paint a tiger according to the cat.

Investment needs to be down-to-earth, without considering one's own actual situation, and trying to surpass according to the experience of others is often counterproductive.

23. Kill chickens and take eggs.

Without the ability to manage a large amount of funds, they have to raise large-scale funds to earn management fees, and ultimately cannot cash in returns to LPs, resulting in LPs not continuing to invest.

24, Li Lingzhi fainted.

When a certain track exploded, it was clear that the valuation was out of reality, but in order to gain fame or incentives, it continued to invest at a higher valuation.

The above can be evolved as part of the negative list in the investment due diligence.

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