How to resolve the paradox of risk financing

Entrepreneurship and investment and financing are full of paradoxes (contradictions), such as:

-Opportunities with seemingly low growth potential may turn into good business opportunities;

-in order to make money, you have to spend money first; In order to finance, you have to pay the financing cost first. )

-in order to create wealth, we must first give up wealth; (willing: unwilling)

-With your success, there are countless setbacks and failures; (For example, Wang Zhidong was abandoned by Sina, which he founded; Tang Junmen, etc. )

-Entrepreneurship and financing need to be considered comprehensively (business plan), but entrepreneurship is basically an unplanned thing;

Wait a minute.

The paradox between enterprises and funders mentioned in my previous blog is the most common situation: enterprises ask funders to invest in order to make money (help in time); The funder requires the enterprise to make money before investing (icing on the cake). It looks like an irreconcilable contradiction between immortals and fairies!

There is a law of unity of opposites (dualism) in philosophy, which is extended to "dualism of opposites" here: that is, not only enterprises, capital and the third party can solve the paradox (deadlock). I think this third party is the "process". If the concept and method of "process" are involved in the deadlock between enterprises and capital, there will be a way out. Borrowing Newton's mechanical formula: F=MA force = mass * acceleration, we can simulate it as: investor = enterprise * process, or enterprise = investment * process. It means: integrate enterprises with processes, and investment and financing will be easy. Or: Only by integrating investment and financing with processes can enterprises have a way out.

The following is an explanation of the "opposition theory":

For example, if banks are required to lend to small and medium-sized enterprises, they must issue financial statements that prove their stable operation for three years, otherwise they cannot believe that enterprises can repay the principal and interest. Small enterprises often fail to produce financial statements, and the two sides are deadlocked. We introduce the concept of "process": let banks see that small enterprises have the ability to repay the principal and interest in the process of development. For example, if a small enterprise has an order, the process is that the bank promises the value of the order. The enterprise signs the final order under the promise of the bank, and the bank gradually lends money according to the final order. Enterprises use loans to produce and deliver goods in stages according to orders, customers repay loans to banks, and banks further lend to enterprises, and enterprises use the money to implement the next stage of production. . . As long as this process continues, loans will continue to be put in. Readers can clearly see that the intervention of the third-party "process" has solved the deadlock between enterprises and banks.

The law of unity of opposites in philosophy is that "the opposing sides can be transformed into each other under certain conditions", which develops here as "the opposing sides can move forward with the intervention of a third party to form a new balance".

Two things happened recently: First, the Beijing Development and Reform Commission invested 654.38 billion yuan to invest in high-tech enterprises through venture capital companies; On the other hand, Bank of Communications has joined hands with venture capital institutions such as Lenovo Investment to invest in equity or creditor's rights in different development stages of SMEs. These innovations all involve the "process" in the formula of promoting investment and financing by investors and enterprises. Just kidding, physical mechanics has F=MA E=MC2 (Einstein's Theory of Relativity), which is a formula known to middle school students! If there is only one binary formula F=M, children should laugh.