Mezzanine finance was originally created on Wall Street to refer to a bond grade between subordinated and junk bonds, and was later extended to corporate finance.

This kind of financing is still essentially a type of corporate debt, but it is not guaranteed, and it is often accompanied by certain debt-to-equity swap conditions, the lower the interest rate, the more investors have the right to subscribe for equity.

In layman's terms, it is a kind of loan, which is not guaranteed, but comes with the conditions of debt-to-equity swap, and if the conditions are met, the investor has the right to convert the debt into the equity of the invested company, that is, shares.

The commonly known debt-to-equity swap is a type of mezzanine financing, which generally appears after the start-up round of financing and before the IPO.

It is said that the listing on the NASDAQ is simple, but it is only relative. In fact, companies that can be listed on the NASDAQ are already leaders in their own industries, and they must also have relatively good performance. Here, listed companies compete with thousands of listed companies around the world for the attention and favor of investors.

The NASDAQ is fair and ruthless, and if the performance is not good or there is no development potential and imagination in the future, the final outcome can only be a lack of trading volume, a low turnover rate, and a small upside in the value of the stock.

This is also the reason why so many domestic companies regret their listing on the NASDAQ, and then go to the domestic A-share queue to re-list.

Therefore, even on the NASDAQ, the IPO is not so easy, before the IPO, if you do not want to continue to do equity financing to dilute the shares, but need new financing to solve the problem of development funds for the enterprise, then mezzanine financing is a very good choice.

Under such financing conditions, even if the debt-to-equity swap is carried out, it is often the subscription right after listing, similar to the IPO of domestic stocks, rather than the initial equity before listing.

In this way, the financier can not only further dilute the stock before listing, but also obtain funds to support the further development of the enterprise, which is more conducive to the promotion of future IPOs.

Moretz has been thinking about it for a long time, and I have to say that compared with Matrix's equity financing, the temptation of mezzanine financing is much less. Even if you get the subscription rights of Matrix, you can only get the premium income of the new shares rising after the IPO, which is really not attractive compared to the minimum yield of 100% of equity financing.

But correspondingly, it also reduces the risk, and the guaranteed 20% rate of return is a profit of $70 million for $350 million. Sequoia could get at least 40 percent of the profits, or $28 million.

"I'll convey your suggestion to the intermediary, and of course in the end it depends on the investor's meaning, you know, this No. 8 fund is different from the first seven Sequoia funds, and the investor has a considerable say. Moretz looked at Zhang Chen calmly through the round glasses, and there was no expression on his thin face.

Zhang Chen smiled: "Of course, if the Koch brothers do not agree to these two plans, let me know as soon as possible, so that I can find other financing channels." ”

Moretz suddenly had a strange feeling in his heart, Zhang Chen didn't seem to care about the $350 million of the Koch brothers, did he really have any back-ups? But neither Silicon Valley nor Wall Street had heard of any new financing trends in Tindersource recently, where did his money come from?

Moretz carefully calculated that Zhang Chen's current cash holdings would not exceed $400 million, and his plan to buy Apple would not have succeeded without new financing channels.

Although Zhang Chen seems to have a great interest in this financing, he always feels that it is just an interest, not a thirst, and at this time, someone sends him the funds that can solve Zhang Chen's problem, he should be more eager.

Looking at Zhang Chen, who was full of confidence, Moritz really couldn't tell whether the other party was just bluffing or really winning.

Zhang Chen took advantage of the Asian financial crisis to make more than $1.8 billion in profits from Goryeo and Xiangjiang, and few people in Tinder Source knew about it, and Moretz naturally didn't know about it.

"Well, after the X press conference, I'll meet with Ed and ask for his opinion. If he had been able to convince the rest of the board to accept the merger proposal, perhaps it wouldn't have been so troublesome. Moretz got up to take his leave.

Zhang Chen nodded and said, "Of course it's best if you can do this, by the way, the invitation has been received, right?

Moretz held his glasses: "Of course, I will definitely participate." What does the 'one more thing' on that invitation mean?"

Zhang Chen smiled: "It's a little surprise for everyone, you'll know when the time comes." ”

Moretz shrugged: "Looking forward to your little surprise, oh, there is one more thing, the Peta Luma project Sequoia is out and is not ready to continue." ”

The Petaluma project is an investment project that Tinder, Sequoia, KPCB, and several small VCs are striving for. Later, several founders of the company did not get along, so the company's original three business units were split into three companies, and Petaluma was one of the departments that did network system engineering, especially the research and development of network equipment such as switches and routers.

Now that the dot-com bubble is blowing bigger and bigger day by day, as long as Silicon Valley is a startup, there will be a group of VCs chasing after it, and Petaluma is no exception. In just a few rounds of bidding, each company raised $5 million for a Series A financing of 20% of Petaluma's shares.

"Oh?" Zhang Chen asked casually, "There is a problem with this company?"

"The price is too high. Moretz shook his head, "In the past few months, companies in Silicon Valley have been hyped up at sky-high prices, and Petaluma's business scope completely overlaps with Cisco, Sequoia doesn't think that a second Cisco is needed in the market." ”

Zhang Chen naturally didn't pay much attention to this kind of company that he had never heard of in his previous life, so he had nothing to say: "I'll go back and study this company, if it really doesn't have any potential, I will quit, even if I give John Doerr a favor." ”

Matrix Building 3 has access control, only under the leadership of Zhang Chen, John Doerr followed Zhang Chen into the elevator, "The founder of this company is several Indians, all graduated from the Indian Institute of Technology, the research and development strength is not weak, but there are some problems in management, the shareholding structure is not good, although now their products seem to be unique in technology, but in the long run, the possibility of success is not high." ”

Zhang Chen shook his head indifferently: "I'll take a look at the information of this company in a while, if the success rate is indeed low, then forget it." The Matrix launch will start the day after tomorrow, and I don't want to waste my energy. "Please Baidu "Throw Book Network" Thank you for your support!