Chen Fan did not expect that the first meeting between Deepin and Goldman Sachs would go so smoothly, although no agreement has been signed, Goldman Sachs is more active than Deepin. Pen | fun | pavilion www. ｂｉｑｕｇｅ。 ｉｎｆｏ

The progress of the next in-depth corporate financing also exceeded Chen Fan's expectations, so that he hurriedly returned to China before he had time to deal with the patent application.

Goldman Sachs paid more attention to the Guardian Company than the in-depth company contacted Goldman Sachs, and in June, US President Clinton visited China with as many as 2,000 people, including many practitioners in the US financial industry.

On July 2, Clinton visited the earliest Internet café in China, 3C+T, and the 3C+T Internet Café and the Guardian Internet Café Management System attracted the attention of the domestic media, as well as the attention of venture capital funds in the United States.

One of them entered China in the 80s and invested in computer magazines such as "Computer World" and "IT Manager World" and IDG of network companies such as Sohu and 8848; The other was Sequoia Capital, a venture capital firm that would later become legendary with its vision and keen sense of smell.

In mid-July, Goldman Sachs received a commission from Sequoia Capital, which had not yet entered China, to provide an analysis report on China's domestic Internet market and Internet café market.

Chen Fan and others arrived in Hong Kong on August 5, and it was also for this reason that the first day went smoothly.

Goldman Sachs has long been eyeing the Guardian Company!

Sequoia Capital in the United States and IDG, whose tentacles have entered China, are also paying attention to them!

It's just that their previous focus was on the Guardian Internet Café Management System, and Chen Fan's financing needs were deep portals.

Because Goldman Sachs had already prepared, the speed of progress in the next few days completely exceeded Chen Fan and Liu Wenhuan's expectations!

In less than a week, Chen Fan and his family will return to Songzhou to enter the stage of substantive contact with venture capitalists, and there are three venture capital funds that have a strong interest in the financing plans of deep companies: Walden, IDG and Sequoia Capital.

For this reason, Chen Fan and Liu Wenhuan also frequently lamented that Goldman Sachs is worthy of being a world-class large company in the financial field, and service is professional!

Because the time was too urgent, Chen Fan could only make an appointment with a patent agent and law firm that was under negotiation to sign a contract in Songzhou before returning to the mainland.

Chen Fan and his family returned to Songzhou on August 11, leaving only Yang Yun and his family and Chen Fan's parents to continue their travel in Hong Kong. Yang Yun didn't say a word to Chen Fan in the past two days.

On August 12, the three venture capital funds sent personnel to Songzhou to conduct due diligence and gain an in-depth understanding of the historical data, personnel, products, management, technology and finance of the company and the guardian company.

The three investors are so eager to perform this investment not only because of the participation of competitors, but because the three venture capital funds believe that the company that needs to be founded has entered a period of expansion.

Venture capital funds generally divide the enterprises that need to be financed from them into five stages, which are generally divided into seed stage, creation stage, survival period, expansion period, and maturity stage.

Enterprises at different stages of development have different requirements for financing, the funds required at different stages have different characteristics, and enterprises at different stages of development also mean different risks for venture capital funds.

The seed stage does not require much capital, and the investment is mainly used for the development and testing of new technologies or products. During this period, entrepreneurs need to invest a considerable amount of money in research and development, or test or validate their ideas.

Entrepreneurs at this stage even have only one idea, one idea, or one story.

At this stage, the risk is too great, venture capital funds are generally reluctant to participate, and entrepreneurs attract mainly individual investors called "angel investors".

Enterprises in the establishment period need to start preparing for the establishment of a company and put the developed products into trial production, so they need a certain amount of "threshold funds". Entrepreneurs often cannot support these activities with their own funds, and with no past business and credit history, it is unlikely that they will be able to apply for a loan from a bank. Therefore, the focus of this stage of financing is that the entrepreneur needs to raise equity from a new investor or institution.

Surviving enterprises need to vigorously explore the market, promote products, survive in the market competition and achieve a leading market position, so they need a lot of capital.

These two stages are also often the starting point for venture capital funds to get involved, and start-ups generally raise funds for the first time in these two stages, which is known in the industry as Series A financing.

The survival problem of enterprises entering the expansion period has been basically solved, and enterprises have relatively stable customers and suppliers and relatively good credit records. However, the enterprise has developed very rapidly, and the original asset scale can no longer meet the needs. To this end, the company must increase its capital and shares, and inject a large amount of new capital.

Generally speaking, companies in this period should be raised for the second time, which is called Series B financing in the industry. At this time, the investment risk is greatly reduced, so venture capital funds are often willing to pay more money to obtain fewer shares at this stage, and promote the company to complete the listing and recover the investment as soon as possible.

Mature companies are generally reluctant to ask for money from venture capitalists, and at this time they generally hope to go public directly.

In the traditional field, only companies that have reached the mature stage have the hope of going public, and the NASDAQ network technology bubble in the United States has made many network technology companies can be listed in the expansion period, and the market has a very high acceptance of network technology companies in the expansion period, and the value recognition given to enterprises with large imagination space has also made investors crazy.

The investigative phase was quickly over, and the two sides moved on to the negotiation phase.

The Guardian Internet café management system has no competitors in the market, the product is also very mature, and the Guardian Company has prepared extremely perfect countermeasures for possible competition in the future.

The three venture capital funds soon showed that they did not have much resistance to Chen Fan's offer, and after several attempts to lower the price to no avail, Chen Fan and their proposal to increase the original shares by 10% to raise $50 million in the price, the three venture capitalists no longer tried to lower the price.

They quickly shifted their negotiation tactics to other demands.

In the end, the negotiators reached a series of agreements in the last days of Chen Fan's summer vacation:

Deepin Company was reorganized into a joint stock limited company, with 10 million original shares, and 5 million shares each subscribed by the original shareholders Umbrella Company and Guardian Company.

Deepin Company issued 1.5 million shares to three venture capital funds, raising US$75 million, and the three companies each subscribed for 500,000 shares at a price of US$25 million.

Deepin then reversely acquired Guardian Inc. for $25 million plus 5% equity. Umbrella Computer did not participate in the plan, and the original shareholders of Umbrella Computer invested funds to acquire the shares of Umbrella Computer owned by Guardian Company.

Guardian Inc. became a wholly-owned subsidiary of Deepin Company, and the original 5 million shares of Deepin were cancelled.

……

It can only be said that these venture capital funds are a group of sophisticated masters.

They obviously gave up on lowering prices, but the final result made Chen Fan feel incredible.

Chen Fan and the others clearly proposed to raise $50 million by issuing 10% of the original shares, and the agreement signed was that the three companies would each pay 25 million yuan to get an additional 5% of the shares, that is, the last three venture capitalists should each get 4.35% of the shares (the result of all shareholders being diluted together).

After all these agreements were reached, on the other hand, the three venture capitalists each contributed $25 million, and the final stake was 7.07% of each venture capital.

Deepin got the $50 million it wanted to raise, and the original Guardian shareholders got an additional $25 million and 8.12% of Deepin, and it didn't look like they were losing money.

The restructuring of the deep company into a company limited by shares has made further preparations for the listing, and the reverse takeover of the guardian company has made the corporate structure more reasonable.

The whole process seems that no one on their side suffers, why each venture capital got 7.07% of the shares in the end.

Until the beginning of school, Chen Fan didn't figure out this problem.