Treat the investment model of the coffee industry correctly, and treat the domestic market more rationally!

Since 2011, TSG has been investing in private equity funds in Shudun City, which has slowly moved from a small store to a "corporatization". Opened more branches in Los Angeles and New York, and made canned iced coffee. Obviously began to embark on the road. Another role model for the berries couple abandoned berries. Is it true that the trend of the world's boutique coffee industry is to allow private equity to intervene?

Huaxia has been a private equity fund trustee of State Street Bank in the United States for 8 years and has a clear view of its face of seeking to maximize profits in a short period of time. There are many definitions of private equity fund (Private Equity). In fact, to put it bluntly, it is to raise funds privately and operate for a small number of investors. Not supervised by zhengfu, but supervised by creditors (banks, angels, etc.) or partners. Buffett and Soros all play with private equity funds.

As private equity funds want a small number of people to raise money, so the investment target is stronger, can better meet the requirements of investors. Unlike online public mutual funds, there are losses and profits in many projects, but they are unable to get what they like. China's zhengfu has relatively loose management of private equity funds, so the investment method is more flexible but risky. In China, there are numerous cases of absconding with money; and private equity funds are not open, the investment is hidden, the possibility of being tracked by the market is small, and the investment return will be higher than mutual funds.

In addition, the private equity fund management system has its own characteristics. It is usually a partnership system. It can effectively reduce the principal-agent risk under the separation of ownership and management. Partnership is composed of limited partner (LP) and general partner (GP). LP is the real investor, while GP is a team of investment experts, which means to invest only in technology and a small amount of money. If the investment is successful, LP will gain a large profit, and if it fails, GP will suffer losses first. Generally speaking, a private equity fund has only one GP, but it can have multiple LP.

There are many kinds of investment strategies for private equity funds, which can be divided into three categories:

1. Venture capital (Venture Capital) refers to supporting a small private enterprise into a large listed company, which is called venture capital because of its high risk. Shudun City is an example. TSG invests and controls Shu Dun City when it does not have a certain scale. When it has a certain economic base and scale, TSG is prepared to sell 90% of its shares publicly, so Shu Dun City will become a listed company.

2. Growth Investment (Growth Capital) refers to supporting startups not only in capital, but also in BD, management, marketing channels, market research and so on. Wait until the company grows up, and then push it offline to the listed company to benefit from it.

3. Leveraged buyout (Leverage Buyout) refers to the acquisition of a listed company at a low price, which is about to go bankrupt because of its heavy debt and fiscal deficit. Private equity companies drag online listed companies to the offline, carry out rectification, find problems, change the leadership and other measures. When the company makes a profit, it will auction its shares and turn it into a listed company. This strategy is the one with the fastest money and a lot of money. Many large companies, such as Goldman Sachs, KKR and Clarlyle, basically get rich through this strategy. However, the investment with high rate of return will certainly be risky, and there will be a lot of capital injected in the early stage.

Is it suitable for China's coffee industry to introduce private equity funds? Let's first take a look at the different forms of expression of coffee itself in China and the West. Coffee belongs to FMCG (Fast Moving Consuming Good) in Europe and America, that is to say, coffee is a necessity of daily life. Foreigners can't wake up in the morning without coffee, can't work without coffee in the morning and afternoon, and can't sleep without coffee at night. Therefore, in Europe and the United States, the supply and demand of coffee is almost equal. In China, coffee is a luxury, with 3% of the population of coffee, so it can only be regarded as a Luxury Product. Private equity fund is a kind of investment with high return and desperation, and the project invested must have intuitive effect. In China, some coffee merchants have introduced venture capital, and there are plenty of people who follow the culture of cafes to do zoos and steakhouses. I can only say one thing: We are not ready Yettenham! Only by popularizing coffee culture in China and increasing the percentage of coffee population can we be qualified to introduce venture capitals. otherwise, do you have a conscience if you waste other people's money?.

To sum up, blue bottle, stump city, and intellectuals and other boutique coffee VCs are correct, because everything is available, only money is needed. It is too early for China's coffee industry to take venture capitals. what we should do is to promote coffee culture first.