Yanzi Valley of Jingcheng

Chapter 223 Don't Transfer Equity

It was 9:25 in the evening when Guan Sha came home. Holding a large stack of documents, she pushed open the bedroom door without thinking, and saw Xiao Jie sitting at the desk, staring at the computer. Guan Sha just wanted to retreat and not disturb When Xiao Jie was working, he heard Xiao Jie say, "Come in."

"You came home early today..." Guan Sha said with a smile, she took off her coat and put down the documents, and when she jumped to Xiao Jie, Xiao Jie happened to turn off the screen of the laptop.

"What? Are you afraid that I will see your Jin Quan's secret information?" She pressed her hands on Xiao Jie's shoulders to help him massage his shoulders and neck.

"I heard that you plan to give the company's equity to a designer named Qiao Sen?" Xiao Jie cut to the point.

Guan Sha stopped her hands when she heard the words, "What's wrong?"

Xiao Jie turned his face, his eyes were deep, "Why didn't you tell me about this?"

Guan Sha didn't know what was wrong, but Xiao Jie's attitude was as if she had done something wrong, "You didn't even ask about any shareholders in my company...and you didn't invest in it."

"That was before." Xiao Jie said, "We were just ordinary friends before."

Guan Sha's eyes lit up when she heard Xiao Jie's words, "So it's not ordinary now? How extraordinary is it?!" She bent down and put her arms around Xiao Jie's neck directly, "How extraordinary do you think you are? explain!"

Xiao Jie's serious expression did not ease, "Do you know that every change of equity in a company will be recorded, and everyone who has entered will leave their names. Not everyone can be a shareholder."

"I... I don't have anyone in here... Qiao Sen is a designer, a top designer! If the style of my apartment is all designed by him in the future, then I will not worry about no one coming to rent it. Look at it ha……"

Guan Sha said and began to count her fingers for Xiao Jie, "Sister Shen Li likes Qiao Sen's style, Ren Tianxing likes it, Guan Zhenzhen likes it, I showed it to our mother and she likes it too (the "our mother" here naturally refers to Xiao Qianxing), Oh, by the way, there is also the fat security guard downstairs, Lei Biao, and the village chief, Uncle Lei, including your aunt. They have all seen it, and they all say it looks good! I really went to Qiaosen in person after showing them all. Your aunt still regrets that her house is not a blank, otherwise she would be happy to decorate it according to Qiao Sen's design! And Sister Tian..."

"Show me his design..." Xiao Jie interrupted Guan Sha.

Guan Sha immediately took the bag and took out the tablet, operated it twice and handed it to Xiao Jie.

When Xiao Jie flipped through Qiaosen's design drawings one by one, Guan Sha said, "Didn't you see it? Each of these drawings is alive, not rigid at all, not just colors, as in Qiaosen's works There is a soul! This kind of design is put on the Internet..."

"I don't think it looks good." Xiao Jie raised his head, his tone was very calm.

"what?"

"I said I don't think it looks good."

"You're lying!" Guan Sha scowled.

"White walls are the best." After Xiao Jie finished speaking, he handed the tablet back to Guan Sha.

In fact, Xiao Jie can give any comments, but Guan Sha is not comfortable with his attitude of browsing Qiao Sen's works casually and losing interest after a quick glance.

"You didn't even look at it seriously!" Guan Sha pulled the tablet from Xiao Jie's hand and muttered, "Anyway, none of my tenants are people like you, you..."

"If you really like it, you can pay." Xiao Jie said, "One transaction counts as one transaction. Don't give equity easily."

"I don't want to either!" As soon as Guan Sha mentioned this, she felt extremely wronged, "The money in my hand has to be renovated, and I have to take care of sales and operations. It is impossible to use all of it to pay for design fees. If I had money, I would have... ..."

"I'll give it to you." Xiao Jie said.

"Ah?" Guan Sha didn't respond.

"I'll give it to you." Xiao Jie pointed to a large pile of documents that Guan Sha brought back, "If the "Share Transfer Agreement" has been printed, I'll take it to the company for you tomorrow and process it with a shredder."

Seeing Guan Sha's bewildered expression, Xiao Jie stood up and patted Guan Sha's back lightly, "Stop signing."

Guan Sha recovered and said, "No...do you know how expensive Qiaosen is?"

"80." Xiao Jie didn't even think about it, this number was naturally told to him by Shen Li.

"Yes, 80, are you sure you will give me this much money?" Guan Sha was a little disbelieving.

Xiao Jie stood still at the same spot and didn't speak for about five or six seconds. Just when Guan Sha wanted to say something, Xiao Jie said, "If you want to pay it back, you can."

Guan Sha had black lines on her face when she heard the words, she was very puzzled, "No... I don't understand, even if it's not worth sacrificing equity, but he is Qiao Sen, and how many international awards his designs have won, if we have him in our team ..."

"A top-notch designer doesn't mean he knows how to operate a long-term rental apartment." Xiao Jie interrupted Guan Sha again, "It doesn't mean that you won't be able to cooperate with him in the future if he isn't a shareholder."

"But I didn't let him manage the company. I will definitely be in charge in the future. He is just a shareholder." Guan Sha emphasized, "And his shareholding is only 25%."

"Sister Xiao! Eat glutinous rice balls!" Shen Li's voice came from outside the house urging Xiao Qianxing to eat glutinous rice balls.

"25% is more than enough." Xiao Jie continued to say to Guan Sha, "If you just look up the proportion of founders' equity in some large companies, many of them are only 20% to 30%, and some are even less. A designer accounts for 25%, are you [-]% sure that you will not lose absolute control in the future?"

Hearing this, Guan Sha thought that Xiao Jie was worrying too much, "Look, if my shares are less than 30%, his will definitely be even less. Every time we raise funds in the future, no matter if I transfer them directly, or Capital increase and share expansion, the original shareholders’ shareholdings are diluted in the same proportion..."

Xiao Jie put his hands in his belt, "Then what if he doesn't agree to the same ratio dilution? What if he exercises the right of first refusal every time?"

Guan Sha: "..."

Xiao Jie went on to say, "First of all, the "Company Law" stipulates that when a shareholder transfers his equity in accordance with the law, other shareholders have the right of first refusal under the same conditions. The shareholding ratio exercises the right of first refusal on the newly issued shares, especially if there are anti-dilution clauses in your investment agreement, his shareholding ratio is locked.”

Guan Sha blinked her eyes a few times after hearing this, "So you mean...in the future, if I sell my own stocks or issue additional shares, he can buy them first?"

"If he wants, he can." Xiao Jie said, "especially the anti-dilution clause..."

Guan Sha didn't wait for Xiao Jie to finish speaking, and quickly took out her mobile phone to open the mailbox, because not long before she entered the house, Qiao Sen's studio sent them their revision opinions on the "Equity Transfer Agreement".

Guan Sha's fingers kept sliding the screen, and sure enough, she saw the new terms in the agreement, in which "our company" refers to "Qiaosen Studio", and "company" refers to "Guan Sha's Yanzi Valley (Qingyang) Assets" Management Co., Ltd."

"1. Pre-emptive stock options
When the company issues equity securities (except for the issuance of "option pool" shares and other customary circumstances), our company has the right to purchase the corresponding number of shares in proportion to its shares (fully diluted).

2. Anti-dilution clauses for price reduction financing

After the completion of this equity transfer, and before the company goes public, unless the investor agrees in writing, the company shall not issue new equity securities, including but not limited to common shares, preferred shares, and convertible bonds, at conditions lower than this capital increase. etc.; even when the investor agrees to issue such new equity securities, under the same conditions, the investor enjoys the preemptive right to maintain its shareholding ratio before the new round of capital increase or issuance.

After the completion of this equity transfer, before the company goes public, if the price of the company’s newly increased registered capital or newly issued equity is lower than the price of the investor’s capital increase this time, the investor’s capital increase price shall be calculated according to the equalized weighted average method. Corresponding adjustments (the weighted average method is defined as: the sum of the total amount of the investor’s capital increase price this time and the company’s subsequent capital increase price divided by the sum of the registered capital subscribed by the investor this time and the newly added registered capital, the average capital increase price obtained ), the adjustment method can be carried out by the actual controller compensating the corresponding price difference to the investor, or by transferring part of the equity from the actual controller to the investor for free; after completing this capital increase, before the company goes public, the investment The equity ratio of the company held by the investor should also be adjusted proportionally in the event of the company's stock split, stock dividend, share merger, or issuance of new shares at a price lower than the capital increase, as well as other asset restructurings, to ensure that the investor's equity ratio will not be lost. "

Every line in the clause was hit by Xiao Jie, leaving Guan Sha speechless.

"He added this one." Xiao Jie knew when he saw the modification trace, "He is probably not short of money now, but he has no time to start other companies, so he started to invest everywhere. If my guess is right His studio must have his own lawyers and investment advisors."

"So if his equity ratio is not diluted every time the company raises money in the future, then it can only dilute mine?" Guan Sha pointed to herself.

Xiao Jie just stared at Guan Sha without saying a word, Guan Sha looked ashamed, "Then...well...then don't give him the equity, give him the money, I'll pay in cash." Guan Sha stretched out her hands In front of Xiao Jie.

"I'll lend you." Xiao Jie said.

Guan Sha's eyes widened, "Didn't you tell me back just now?"

Xiao Jie shrugged, "I thought about it later, after all, 80 yuan, it's not appropriate to give you so much money directly."

After hearing this, Guan Sha suddenly pushed Xiao Jie down on the bed, narrowing her eyes, "No, no, no, let me reconsider, Xiao Dashen, you said so much, and you deliberately played cool in the room at the beginning, you must be jealous Already!"

Xiao Jie: "..."

"Sister Shen Li with a big mouth, you know that Qiao Sen wants to invite me to dinner and a movie, right? Then you became jealous and didn't want me to have frequent contact with him, so you obstructed him in every possible way to buy shares!"

"You think too much." Xiao Jie said.

Guan Sha pressed Xiao Jie's hand with both hands at this time, and the tips of their noses almost touched, "Am I really thinking too much? Or do you think you are not handsome? Are you afraid?!"

Guan Sha was about to take "action" when she said that, Xiao Jie immediately stopped her with his lips, "My mother is outside." Xiao Jie, who has a keen ear, naturally heard Shen Li urging Xiao Qianxing to eat glutinous rice balls just now.

Guan Sha stopped her movements, "If you want me to let you go, you can give me 80 yuan?!"

"Lend it to you." Xiao Jie corrected.

"Will you give it to you shameless man! Let me see if you will!"

Clang, clack, ah, uh, woo, oh...Xiao Qianxing was so startled by the movement in the room that the glutinous rice balls that slipped into his mouth almost fell out.

She looked depressedly at Shen Li who was also eating glutinous rice balls and said in a low voice, "Why did you say that the glass in Qingyang Bay hasn't been repaired after so many days! It's been more than two weeks?!"

Shen Li leaned closer to Xiao Qianxing, "It's not that fast. I heard that the glass is out of stock, and the master who installs the glass can't get in line. There are a lot of sea view houses in Qingyang Bay that suffered this time..."

Xiao Qianxing: "..."

(Note: The anti-dilution clause, also known as the anti-equity dilution agreement, refers to the measures taken by PE investors to avoid the depreciation of their shares and the dilution of their shares during the subsequent project financing or private placement of the target company.

At present, two types of anti-dilution clause measures are usually adopted: one is the right of first refusal set to prevent the dilution of the equity ratio, and the other is the right to adjust the conversion price to prevent the dilution of the value of single shares and the total value of shares. )
(End of this chapter)