In the past two years, financing has been a hot topic in the RV camping circle. It has been mentioned many times in various forums and meetings. Everyone expects to raise money through various methods, and the amount of financing is also increasing. However, what is the basis for financing? Which round should the corresponding seed, angel, round A, round B, and round C be fused with?
First of all, it should be explained that what is discussed here is capital increase and share expansion, that is, financing in the case of the gradual development of the enterprise. It is not the case of selling corporate assets or financing by way of pledge. For the currently impetuous investment and financing circle, a good story and a popular industry are far more meaningful than auditing a company’s tangible or intangible assets. Moreover, most companies in the RV and camping industry are probably not worth a lot of money after the audit. And it’s not profitable at all, who will enter the market to get involved?
Seed round financing
The first is the seed round of financing. Some like-minded people are optimistic about the RV camping industry and decided to do a project together. Then, the company can be launched, and it needs seed round investment. This stage does not require much capital, often hundreds of thousands can start the project. It should be said that for the big guys in the industry, this small amount of money is not a big deal. What is needed at this stage is an entrepreneurial team and an Idea. Basically, it is not difficult for everyone to start at this stage.
Angel round financing
The second is angel round financing. It should be said that this is the pain point that plagues the RV and camping industry. Because at this stage, in addition to the initial team and idea, it is necessary to come up with marketable products and services, and at the same time have an initial business model for others to see. Financing in the RV circle seems to be quite simple. The RV is the product, and the camp is the service. But if you want to have preliminary customer data and write an attractive enough business model, I’m afraid you don’t have that much time. You know, the current project can raise two rounds of financing in a year, and you haven’t sold double-digit RVs in a year. Moreover, many camps are more like a parking lot, and no one cares about them. At this stage, there are generally millions of investments, enough to improve products and services, and to make certain market customer data.
The third is venture capital, which can be divided into A round, B round, C round and so on. For the A round, a mature and reliable product is needed. If it is still sales of RVs, referring to the 30,000 vehicles that are relatively recognized in the industry, this product and data accumulation are not very attractive. Not to mention that without a profitable business model, everyone is losing money. For profit-seeking capital, how can they favor the RV and camping industries? Everyone looks at project investment, which is not something that can be obtained after a few meals and a good relationship. Generally speaking, tens of millions can be raised at this stage, which is enough for everyone to work hard in the market.
As for the subsequent B rounds, C rounds, etc. In the short term, the industry does not have this ability, so let’s not talk about it. Moreover, it is unrealistic to only talk about problems without talking about methods, and it is unrealistic to rely on people in the industry to work behind closed doors. May wish to mention a point or two.
The RV product is a 5-10-year periodic consumer product, and its audience is very limited. Its market is by no means equal to 1.3 billion people. Therefore, high-frequency consumption products are needed to shorten the consumption interval and lower the consumption threshold. In 2016, the number of tourist consumption in my country exceeded 4 billion. Only by linking products to this market can we talk about follow-up development. As for the services of the campsite, in addition to parking, accommodation, and catering, the campground with hundreds of acres can provide far more services than these. For short-term reference, the services provided by the farmyard can always be used.
The more important points at this level include: new products, new technologies, customer data, and operational data that can be expected in the future. If RVs could be regarded as a new product ten years ago, the freshness of this product has passed now, and it no longer has the characteristics of a new explosive new product, so it is advisable to switch to a relatively traditional industry to look at this industry. Everyone who has ever consumed is our data sample. Are we all registered? If RV sales can also register customer information like the traditional auto industry, what about camping sites? You can get the customer’s phone number and other information through a simple online appointment, and often only need a small discount. With the initial data, follow-up data such as secondary consumption, related influence, and split marketing need to be estimated by yourself. RV bosses, have you thought about it now? The round of financing and the materials that need to be prepared. Finally, I suggest that everyone get out of the small ecology of the RV and camping industry and look at the vast market outside. I believe that you will meet more people with insights.