The Entrepreneur operating cycle

Companies have different characteristics – and specific capital needs – in every stage of their lifecycle, and are called upon to interact with a variety of financial and strategic investors. In the venture stage, companies have fewer personnel, smaller-scale production and operating capabilities, and various levels of experience in corporate management, in addition to shoestring budgets, limited market share, and limited ability to manage downside risk and business adversity. During that period, they will turn to angel and venture investors in hopes that their business plans and market understanding can be validated and set the stage for growth.

During the growth stage, capital investment begins in earnest, with the keys being rapid buildout of product/technology development, production, operations, and sales. Rapid growth also entails partnerships, with venture investors as well as consultants who can contribute specific expertise. The key is to begin to execute on a validated business plan, and secure market share and positive growth momentum.

Finally, companies achieve a phase of maturity, where corporate strength, market share, profitability and growth have been solidified. For enterprises seeking to drive additional development, market expansion or extension across industry segments, the need to raise significant capital through IPO or an M&A strategy becomes crucial, and brings into play investment bankers, consultants, and capital in the form of private equity or public investment.

This path is not without its pitfalls: incoherent strategies, changes in the value chain, or poor financial structuring resulting in excessive dilution and a fragmentation of decision-making power can doom the best efforts of small and mid-size enterprises.

The modern day Chinese private enterprise

In today’s new era of capital development, capital means more than simply money: the crucial goal is to assemble “value capital”, which can be the engine towards rapid growth and the emergence of new, game-changing business models. And rather than having capital dictate operations for the benefit of investors, today’s best market players understand that capital must be used to leverage and multiply the strength of ideas. The compound effects of overseas listing only accelerate that necessity: international success hinges on agility, market understanding, operational excellence and product capability.

YELLOWSTONE Capital actively partners with entrepreneurs in leveraging various external resources to drive enterprise growth. We ensure a coherent strategy across different aspects of the business and apply our expertise to drive operational excellence. We also bridge the gap between entrepreneurs and global investors, helping to prepare companies to leverage global capital markets.

YELLOWSTONE Capital is committed to providing value that goes beyond capital. Our advisory services, unrivalled resources and expertise help drive the success of portfolio companies. We understand that passive investment is rarely successful: the new demands that global company management places on Chinese entrepreneurs makes the management expertise that investors can contribute crucial to success. YELLOWSTONE Capital’s partners contribute industry-leading managerial and operational experience in running local companies, and contribute extensive channels and networks and high credibility in global capital markets. The capabilities of our professional and experienced team enable YELLOWSTONE Capital to provide tailor-made services to its portfolio companies, assisting their sound growth.