This is the situation this year, if SAL is a smoothly developing enterprise, there is obviously no problem with such a valuation for share transfer, but SAL is obviously not such a stable development enterprise.

On the contrary, SAL is now in a high-speed development stage, and if by next year, SAL expects revenue to reach or exceed $1 billion, then in this case, SAL's valuation will soar to $30 billion, which is so far from this year's valuation of $10 billion that it is equivalent to more than doubling.

Therefore, Cai Siqiang, Dong Feng and Zhao Jianwu will not transfer part of their shares now unless they have to, and they are not willing to do a single one.

But if you want to discount next year's valuation, you have to convince VCs that the company will be able to reach this revenue next year, which is very difficult, after all, there is too much uncertainty about the future, and this expected revenue jump is too large, and this expectation is extremely risky for VCs.

Of course, there is no way to deal with this risk, if the shareholders of the entrepreneurial team are very sure that their company will achieve the expected goals, everyone can reach an agreement through another way: that is, to sign a VAM agreement.

For venture capital firms, the startup team has to raise the profit forecast, for example, SAL predicts that it will be $660 million in profit next year, then the valuation is about $20 billion, OK, no problem, we will talk about investing in shares according to this price, for example, investing in one billion dollars, according to the valuation of $20 billion, that is five percent of the shares.

If the company's profit next year meets or exceeds the target value of 660 million, everything is fine, and the billion dollars will be the five percent of the shares. But if the expected value of market fluctuations is not met, for example, only 200 million US dollars is realized, then sorry, the company's valuation is only 6 billion, then the original investment of one billion dollars to account for one-sixth of the shares, that is, the shares of venture capital will be changed, to about 16.7 percent of the company's total shares.

Therefore, the VAM is very risky for the entrepreneurial team, like in the above example, if the initial investment share accounts for 20%, then in the case of the expected profit is not realized and the gap is large, the control of the company may directly change hands.

Therefore, the entrepreneurial team will not easily adopt this kind of VAM agreement unless it is absolutely necessary, after all, the risk to the entrepreneurial team itself is too high, and the benefit to the venture capital company is too great.

However, this thing is also a double-edged sword, and the venture capital company's funds also have safety requirements, and if the uncertainty is large, the venture capital has to raise the asking price to dilute the risk.

Cai Siqiang did not want to sign the VAM agreement, but the gap between this year's expected income and next year's expected income is large, so it is very undesirable to value the company according to this year's income.

ACCORDING TO A MORE CONSERVATIVE APPROACH, IT IS NECESSARY TO ACQUIRE A CONTROLLING STAKE IN TOMTOM AND ENSURE THE SAFETY OF THE COMPANY'S CASH FLOW, AND IT IS BEST TO ENSURE THAT THE ACQUISITION FUNDS ARE FULLY FINANCED, WHICH MEANS THAT SAL NEEDS TO RAISE MORE THAN $500 MILLION. At the current valuation of about $10 billion, SAL will have to give up at least about 5 percent of the new shares.

You must know that if you stay up for a year, the $500 million is likely to become $1.5 billion, and the acquisition of TOMTOM will add $1 billion in new revenue to the company in a year?

Now that the financing is being raised, the risk of this capital has been passed on, but the share income has also gone.

Paying such a heavy equity cost really made Cai Siqiang, Dong Feng, Zhao Jianwu and others a little painful. After all, now everyone can see that SAL's income is increasing day by day, and the price of the shares held in his hands is also rising with the increase in income, who is willing to spit out the fat in his mouth.

But without financing, no one can think of any other way to complete the acquisition and effectively reduce the company's operational risk.

Therefore, in front of everyone, there is a dilemma.

Financing? Not financing? It's a really difficult question to decide right now.

Everyone was silent for a while, of course, now it's not that everyone has forgotten Duke, the major shareholder, but that no agreement can be reached in a small area, so put this issue in front of Duke and let Duke take the idea, it will be really meaningless, it seems that the management team headed by Cai Siqiang is not responsible.

After all, Duke is basically completely out of control of SAL now, and Duke has never objected to any decision made by Cai Siqiang.

"WHY DON'T WE BUY A BIG GUY LIKE TOMTOM?" Dong Feng wavered and cautiously put forward his new proposal.

"But in this way, the starting point of our navigator career is relatively low, or we have to fight bloody with many domestic cottage factories, after all, we are a new brand, even if we have FAW's standard qualifications, we can take advantage of some advantages in China, but after all, the competitive environment is too fierce, it is difficult to open the gap at once, so if we go on, the prospects of our products will be general." Zhao Jianwu sighed and said.

This is still the domestic market, relying on technological advantages and some competitive confidence, but the international market, well, in three or five years, everyone should not think too much. This thing is no better than software products, which can quickly cross national borders. It's not like the brainwave telekinetic helmet product developed by Duke, which is basically a unique and irreplaceable monopoly product.

Personnel, brand, after-sales service, sales channels, which SAL company has the qualifications? Without TOMTOM, SAL is starting from scratch, and these things cannot be accumulated in a short period of time. Not to mention the list of parts suppliers that have entered the high-end market such as BMW and Mercedes-Benz.

Or someone said how about finding an international small business to acquire? They also have sales channels in the international market, but the person who asked this question asked rhetorically, if it really has the strength to break into the top market, will this company still be a small company?

The acquisition of TOMTOM is tantamount to leapfrogging unconventional development, while the acquisition of a domestic enterprise is a relatively stable development.

The question is that if you have the opportunity to run fast in a bullet train, who wants to ride a two-wheeled bicycle slowly?

"I think it's better to make a plan with the goal of TOMTOM, the venture capital piece, I'll see if I can think of a way to try to get a good price." Cai Siqiang thought about it for a long time, but he still made up his mind. If this TOMTOM is to be won, the price problem of the wind investment stock must also be solved, at least it must be tried first. You can't just give up so easily.

After all, if you can finance to solve the problem of capital for the acquisition, it is equivalent to a high-quality complete navigation system production and service chain, high-end navigation device market tens of millions of units per year, only Mercedes-Benz, BMW, Audi three high-end brands of cars annual sales of up to about 4 million units, if you can win in this market, the profits are also very rich.

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