Chu Yuanxi suspected that An Qi might be under some pressure in the Demon Capital Golden Group, so he had to come to him with a cheeky face, only to hear An Qi say: "Why do you want such a high valuation? Is it to ask for more financing? Startup financing involves gambling, not the higher the valuation, the better, do you understand?"

Chu Yuanxi really can't refute this, because what Anqi said is true, and this is also the most common mistake made by entrepreneurs who step into the venture capital circle for the first time in a general sense. A high valuation may be the starting point for take-off, and it is more likely to be a poison pill.

However, Chu Yuanxi is definitely not a sky-high price. The so-called Han Xin's more soldiers is not that Han Xin's lion needs to ask for too much, which means that others can't bring so many soldiers, so they can only bring 10,000 to 100,000, and for Han Xin, any number of soldiers can be moved, so the more the better.

For a master of capital operation, the principle is exactly the same. The purpose of a high valuation is to obtain a higher amount of financing without giving up a large percentage of the shares, allowing the founders to obtain valuable capital while securing control of the company.

So what's with that? Harsh VAM agreements.

Successfully getting investors to come up with a large sum of money is only the first step. Assuming that investors are not stupid and quick to make money, and are willing to invest a high amount of money without caring too much about the proportion of equity, they are either extremely optimistic about the company, or they are more interested in some of the company's hard assets. Either way, the other party will be required to come up with a high performance after financing, which may be turnover, net profit, or scale.

There are even more outrageous requirements, such as an IPO.

This is the meaning of Han Xin's point of soldiers, different entrepreneurs may get 10 million cash and the effect is almost the same, and the difference of 100 million is not obvious, but when you get 1 billion, A's capital efficiency may only be 5, and B's efficiency can be 100!

In other words, the more money is not the better, let Yang Jiangang start a business, he may only need 10 million, and he doesn't dare to ask for 50 million, because he at least knows what B number he is, and taking the extra money plays a negative role, 50 million gambling on performance requirements are definitely different from 10 million, and the interest on the bank account of 40 million is definitely not enough to complete the extra gambling requirements.

What if you change it to someone who doesn't have a B number in your heart? The jubilant valuation of 500 million yuan is high, which is really high! I get 50 million yuan in financing and forget about it, and after two years of gambling failure, the company will become someone else's, which is equivalent to an investor spending 50 million yuan to buy the underlying assets of a company back.

And Chu Yuanxi is different, I have the confidence to spend as much money as you give me......

In short, when the financing exceeds the ability of the entrepreneur, if you can only lie on the account and cannot turn over, then it is basically impossible to complete the bet. Therefore, many companies have set up a position called CFO, whose responsibility is mainly to sort out the company's cash flow change expectations, so that their own development can complete the VAM.

It is important to know that VAM agreements sometimes have deep pits. For example, in the case of performance betting, it takes a certain amount of time from the time the company is put into production to the release of performance after the company gets the investment, which may be as long as several years.

Then if there is no CFO to sort out the performance when betting on performance, it is likely to be cash-out. For example, it is not expected that a large amount of money will be needed at some point in the future, so that the first financing is used for production, but the second money is missing for sales, so the company's production link is doing very well, but it cannot be financed, and then the investor happily takes over the production line according to the VAM agreement.

For example, these are all expected, but the problem of the sales cycle being affected by the outside world is not calculated, so that the performance of the second year is postponed to the third year, so the performance of the first and third years can be completed, but the second year cannot. The result is that the company belongs to investors again?

You must know that entrepreneurial failure is nothing, anyway, it is a well-deserved death, pulling investors to GG. But if the business is obviously successful, and the future of the enterprise is very bright, but because of financial problems, the equity is taken away, then the founder is not a blood spurt to vent his anger......

These thoughts flashed in Chu Yuanxi's mind, and thousands of words converged into one sentence: "I understand everything you said." Of course, it is useful for me to need a large amount of financing, basically I have a need of 100 million to 150 million. ”

Angel almost squirted on the side of the magic capital, and said that your mouth will cost 1 small goal, dear!, "Where are you going to spend it?"

"This should be explained during the roadshow, but I'll give you a thorough explanation in advance. Chu Yuanxi opened the document and said, "The first is the acquisition." I need to make money to improve the industrial chain, and it is too late for me to develop slowly, and this kind of investment will definitely achieve the effect of 1+1 greater than 2.

The second is to improve the product line, buy advertising, do publicity, lay offline, etc., all of which also require money. You must know that our main profit is the realization of IP after it becomes bigger and stronger, and this realization requires upfront investment, whether through games or film and television.

Finally, I still have some investment ideas that also need money. ”

In fact, the last point is the point, the well-off, you need money! Although according to Chu Yuanxi's own abacus, by the time the well-off starts, Ba Ren Entertainment has already begun to make a profit, and it itself produces cash, which can be used to supply, but as long as there is room to be left, it is definitely good to have one more reserve.

"Good...... How much do you value yourself now?" said slowly on Angel's lips, but what she thought in her heart was: It's over, and you have to be criticized when you go back!

If you fool a college student, he can first pull the relationship, and then give the other party a sinister contract, and tell the other party that if you don't sign my brother, I will be expelled Yunyun, this contract doesn't look good, it doesn't matter, our relationship is so good, will I cheat you? You also do me a favor Don't let me be in a dilemma.

However, he felt that he was almost fooled by Chu Yuanxi, and if he wanted to fool Chu Yuanxi, it was impossible for this valuation to fall, it was impossible to drop in this life, and it would be good not to be too manic.

I only heard Chu Yuanxi's slightly questioning voice on the WeChat phone: "Let's look at 1.2 billion first, right? Don't forget that my artifact company has already made a lot of money, so I will suffer a loss." ”

Eat your mother!

Chu Yuanxi closed the WeChat phone, and said in his heart that Anqi don't look at the investment circle, he is still a little tender, and he didn't find out where the real big problem in the financing link of Baren Entertainment is.

What is the real big problem in the investment and financing process? In fact, it is neither the valuation nor the amount of financing, but the inability to attract real predator-level investors.