Chapter 644: Funding Issues
"The first product we planned to produce was a shipping container. ”
Chen Wei began to tell Feng Xiaochen about specific technical issues, so he let go, and was no longer as restrained as when he first came in.
"I chose this product because Senior Brother Qi said that they have a packing box factory in their hands and have also produced containers in the past, but the technology is relatively backward and the product has no market. I have considered that containers are consumables and there is a large market demand every year. The production of this product is not technically difficult, and it is a labor-intensive product, which is very suitable for the production of countries with low labor costs such as China. In addition, the investment in the early stage of container production is relatively low, which is also suitable for entrepreneurial enterprises like us......"
When he said the last one, Chen Yun's voice was a little empty. Qi Ruicang said the latter words for him: "The initial investment that Chen Xuan said is relatively low, and it is also relative. We roughly calculated yesterday that on the basis of making full use of the original equipment of the mining machine factory and the packaging box factory, at least about 40 million yuan will be invested to establish a production line with an annual output of 50,000 TEUs. Chen Wei has calculated that if the production scale is less than this amount, then the product will not be competitive. ”
"50,000 TEUs, what is the turnover in a year?" Feng Xiaochen asked.
"At $800 per TEU, that's about $40 million. ”
"What about profits?"
"I've roughly calculated that the gross profit margin should be around 25%. ”
"In other words, there is a gross profit of 10 million US dollars a year, which is equivalent to 80 million yuan?"
Chen Yun nodded slightly, looking at the magnitude of his nod, it could be guessed that he had no score in his heart. In fact, according to the results calculated by Chen Yun himself, the gross profit margin is even higher than the 25% he said. But even he couldn't believe this figure, and the reason was very simple, that is, the profit was too high, so high that it was beyond his imagination.
Don't look at Chen Wei as a doctor studying in the United States, he is actually a poor Chinese child in his bones. In the first few years when he came to the United States to study, he relied on serving dishes in Chinese restaurants to earn his living expenses, and at that time, he felt very satisfied that he could earn $500 a month. Now tell him that he can make $10 million a year, how can he accept it?
Feng Xiaochen turned his head to look at Qi Ruicang and asked, "Old Qi, what do you think?"
Qi Ruicang replied without hesitation: "I think this number is only a little less. ”
Feng Xiaochen nodded, he and Qi Ruicang had more say in the production cost of running a business in China. Chen has been in the United States for many years, and when calculating costs, he often follows the standards of American companies, so he overestimates many expenses, and the calculated profits are reduced.
"I heard that Dr. Chen originally planned to start his own business in the United States, so he should have some of his own funds, right? Now that he needs to invest 40 million yuan, how much can Dr. Chen come up with by himself?" asked Feng Xiaochen.
Chen said: "I now have about 200,000 US dollars in my hands, all of which I have earned from helping some companies do technical services in the United States over the years. I did plan to use these funds to start a business in the United States, but when I met Senior Brother Qi, I decided to return to China to develop. ”
Feng Xiaochen said with a smile: "Dr. Chen, as Lao Qi said just now, even if you make full use of the existing plant and equipment of Yubei Mining Machinery Factory and Packing Box Factory, you need to invest another 40 million yuan to form a large-scale production capacity. What are you going to do when you only have $200,000 and you want to start a new business in the United States?"
Chen was a little embarrassed, and said: "My original plan was to use the $200,000 to set up a company, and then attract venture capital and use venture capital to develop." ”
"Venture capital?" Feng Xiaochen's eyebrows furrowed slightly.
"Oh, venture capital can also be called venture capital, which is when some money invests in start-up companies in exchange for the original equity of those businesses. If these companies can develop greatly in the future, then the dollar invested in the initial stage of venture capital may become 10 yuan, 100 yuan or even more in the future...... Chen explained.
Feng Xiaochen waved his hand and said, "I've heard of venture capital. I mean, what Dr. Chen wants to do is a real company, and venture capital is probably not interested, right? ”
"That's true, Mr. Feng really understands!" Chen Wei gave a thumbs up and praised sincerely.
Prior to this, Qi Ruicang had also introduced Feng Xiaochen to Chen Yun, saying that he was a very avant-garde and capable official. But in Chen Yun's mind, he felt that Qi Ruicang might be putting gold on Feng Xiaochen's face. In Chen Yun's view, Qi Ruicang can be regarded as an avant-garde person, because he has studied in the United States for many years. And Feng Xiaochen, as a local official, may be capable, it may be true, but it is difficult to say how avant-garde his thinking is. Chen Yun has also been in contact with domestic officials in the past, and knows that these people have a narrow field of vision, and their knowledge is far from being comparable to that of him, a doctor who studied in the United States.
When Chen Yun talked about venture capital just now, he couldn't help but introduce one or two things to Feng Xiaochen, also because he felt that Feng Xiaochen might not know this concept. Who would have thought that Feng Xiaochen not only knew about venture capital, but also said that the U.S. capital market favored Internet companies and did not favor industrial enterprises, which was beyond Chen Yun's expectations.
Mr. Feng is right, at present, the most important thing for venture capital in the United States is Internet companies, and in the field of Internet, what is lacking is Idea, and Money is not a problem at all. As long as you have an idea, even if it's terrible, the bankers on Wall Street will go crazy and invest in you, not caring about the rate of return. And for an industrial project like mine, it's really hard to get financing now. Chen Su said depressedly.
Feng Xiaochen said: "It doesn't matter, the Americans don't invest, we invest." They are willing to invest their money in the virtual economy, that is their choice, but we still have to vigorously develop the real economy. ”
Chen Wei said: "Mr. Feng, don't underestimate the virtual economy you said. When I was in the United States, I discussed with my friends that the 21st century would definitely be the century of information, and traditional industries could only be marginalized. To be honest, I now regret that I didn't learn computer science in the first place, otherwise I could have easily gotten tens of millions of dollars when I went back to China to open an Internet company and then go to the United States to raise money. ”
"Really, is Dr. Chen planning to change his career to the Internet?" Feng Xiaochen asked in a mocking tone.
"It's too late. Chen Xuan said with some frustration, "After all, I didn't study computers, and I couldn't figure out many technical problems." Besides, after studying marine engineering for so long, I am indeed reluctant to let go. ”
"That's good. Trust me, not letting go is the best option. Feng Xiaochen said.
Regarding the prospects of the Internet economy, I am afraid that no one knows better than Feng Xiaochen. At present, the three major domestic portals have begun to be built, and they will become domestic legends in the next few years. In the future, BAT will appear one after another, and develop into three behemoths in just a dozen years. In this period, there are indeed many opportunities to devote yourself to the Internet. But at the same time, Feng Xiaochen is also very aware of how many "martyrs" have fallen in the process of Internet development, and many famous websites have finally crashed to the ground after burning hundreds of millions of funds, leaving behind bricks and tiles.
In contrast, at this time, running a physical enterprise with technical content and operating it seriously for 20 years will not necessarily achieve less than those Internet elites. In the 1990s, the United States gradually turned to the virtual economy and implemented the strategy of "de-industrialization", and in the new century, it began to taste the evil consequences of industrial hollowing, so that Aoshi and Chuan were desperately shouting for the "return of manufacturing".
Of course, Feng Xiaochen would not talk to Chen Yun about these things in the future, he turned his head to Qi Ruicang and asked, "Old Qi, what do you think about the issue of funds?" For such an enterprise with an annual profit of nearly 100 million yuan, can't you even solve the problem of 40 million start-up capital?"
Qi Ruicang sighed and said, "Xiao Feng, let's be honest, our China Merchants Bureau has held meetings to discuss Chen Yun's project many times, and we have specially invited experts in shipping to consult. Everyone thinks that setting up a container factory is very promising, and some people even think that the hope for the revitalization of Yubei lies in Dr. Chen. ”
"I don't have that much power. Chen Yun hurriedly expressed his modesty.
Feng Xiaochen didn't answer Chen Yun's words, but continued to say to Qi Ruicang: "That's right, since you are so optimistic about this company, you can't solve it with a mere 40 million yuan of funds?"
"Just 40 million?" Qi Ruicang wrinkled his face into a bitter gourd, "Xiao Feng, what is the economic situation in Yubei, you don't know." Although it is said that after a year of readjustment, the current economic situation has greatly improved compared with the past, the losses of enterprises are still very large, and the financial funds are not enough to subsidize the loss-making enterprises. We have contacted the bank, and the banks together are estimated to be able to make up about 10 million funds, and the remaining 30 million is not settled at all. ”
"After talking about it for a long time, your China Merchants Bureau can only solve 1/4 of the cost, with such economic strength, you dare to go out to attract investment, isn't this a lie?" Feng Xiaochen said with a smile.
Qi Ruicang stiffened his neck and said: "How can it be a lie? Our China Merchants Bureau really can't solve the 40 million funds, but we can't stand up to me having a classmate who is the general manager." ”
"Be the general manager's classmate?" Feng Xiaochen was stunned for a moment before he reacted that Qi Ruicang was talking about himself. He smiled and said: "Lao Qi, this is too much, when did I say that I can help you solve the problem of so many funds, this is obviously your own business in Yubei China Merchants Bureau, don't rely on me." ”