Rebirth starts from e-commerce

Chapter 356 Valuation $10 Billion

VAM agreements are not uncommon.

In the investment process, the financing party hopes that the company can get a higher valuation, while the investor side is just the opposite.

Simply put, one wants to get more money and the other wants to pay less.

At this time, in order to reach a cooperation as soon as possible, it is necessary to reach a compromise through an agreement.

Due to the information asymmetry between the two parties, the financing side knows more about how much their company is worth, so it is necessary to protect their own interests through a VAM agreement for the convenience of investment.

Luo Xiu remembered that in 2019, the prince who was known as the "National Husband" had the best moment.

Everyone praised him as a business genius. In just a few years, he made 5 billion with the 40 million given by Lao Wang, and his assets increased by 8 times.

Of course, there are also many people who say: That's because he has a good father, give me 5 million and Lao Wang's connections, and I can earn 40 billion.

What is unexpected is that this business genius turned from earning 40 billion to owed 20 billion overnight.

This day has become the day with the largest number of divorces in the world, because the prince's online wives have announced unilateral dissolution of marriage.

The prince is in trouble, and the wife is dismissed.

It confirms the sentence: Husband and wife are originally birds in the same forest, and they fly separately when disaster strikes.

Not long after, the family helped him pay off the debts, and the wives realized that the 20 billion debts were nothing to his family, and they all came back with their suitcases.

They claimed the divorce was just a joke.

In fact, the so-called earning 40 billion is just the valuation of Panda Interactive Entertainment.And later owed 20 billion in debt because of the failure of the gambling.

Panda Mutual Entertainment, founded by Wang Gongzi, has raised a total of 6 billion after 16.5 rounds of financing.

At the same time, it signed a VAM agreement with investors, which included clauses such as that Panda Interactive Entertainment must be listed within 5 years.

In the end, these financings were burned out, and the VAM performance failed to be achieved. Panda Interactive Entertainment needed to repay the investor 16.5 billion and the agreed interest, a total of about 20 billion.

It seems that the investor is sure to make a profit, because your project is completed, and he can earn more.If the project is not completed, he can still get back the principal and interest.

There is no way, Panda Interactive Entertainment itself is not worth that much money. If you want to get more than one billion in financing, you can only accept this kind of gambling agreement. After all, other people's money is not blown by the wind.

In fact, Prince Wang himself is also an investor. His capital once invested in LeTV and signed a VAM agreement.

In the agreement, LeTV Sports promised to go public before December 2018, 12. If the listing fails, it needs to repurchase the equity in cash according to the agreement. The repurchase price is the investment principal + annualized 31% return.

According to this agreement, even if LeTV fails to go public in the end, Wang Gongzi can still get back the principal, and there is still an annualized 12% return.

You must know that if this money is placed in Yu'e Bao, it will only have an annualized return of 2%.

Unexpectedly, Boss Jia fled to the United States, and the gambling agreement could not be fulfilled.

When others bet against you, you can't escape after losing, because you know your parents are rich.

You bet with others, although you won, but others escaped.

The reason why Yang Chen from Chong Hing Capital in front of him dared to brag about how much money you want and how much money I will give you is that he came with a VAM agreement, anyway, he made money no matter what.

He dared to make such a bet because he was not afraid that Luo Xiu would run away.

He knew that Luo Xiu had more valuable rice balls and Pinru e-commerce in his hands, and he would not throw away the watermelon just because of the sesame seed of bosom friend.

"What kind of performance does Mr. Yang need me to achieve?" Luo Xiu asked.

It's not impossible to sign a VAM agreement, it depends on what the conditions are and whether you have the confidence to complete it.

"It's very simple. First of all, I ask Zhiyin to ring the bell before December 2015, 12."

The ultimate goal of venture capital is for the company to go public successfully and then cash out.

Most of the VAM agreements aim at this.

Luo Xiu nodded: "There are only more than three years, it is a bit difficult for bosom friend, but we will work hard for it."

"There is also a condition that each financing before listing cannot be less than [-] million US dollars, and the valuation of each financing can only increase, not decrease."

Luo Xiu thought for a while and said, "Although we are very confident that we will be able to complete it, but the ugly thing is to say, what if we fail to meet the above conditions?"

"If it fails to be achieved, the financing party will repurchase all the equity at the price of investment principal + annualized 10% return."

"Understood, I need a little time to think about it."

"You have 24 hours and we're hoping we'll be able to sign by this time tomorrow."

……

……

The two shook hands and said goodbye.

Luo Xiu picked up the landline on the table and informed the secretary to cancel all the itineraries for these two days.

He needs to calm down and seriously consider whether this bet is worth his bet.

[-] million US dollars is not much, and it is not much, but at this moment, it is enough for Zhiyin to snap up a large number of music copyrights and open up a world.

Although his own net worth is huge now, they are all valuations, all of which are false, and he can't give much cash.

Fantuan has the largest market value, but it loses money every year, let alone makes money.

The money earned by Pinru e-commerce is making up for the losses of Fantuan.

If Zhiyin wants to develop rapidly, it must take the financing route.

At this time, Zhiyin is still a child. In the eyes of most investors, this child has great potential, but it will definitely not reach the value that Luo Xiu wants.

So to get the money, you have to sign the bet.

The other party also saw this point.

After Luo Xiu thought it over, he took the initiative to ask the other party to meet the next day, reviewed the contract with the legal counsel, and then signed the first gambling agreement in his life.

"I really like talking about cooperation with Mr. Luo, a straightforward person like you. Sure enough, young people have the drive to do things."

"One hundred million dollars can be taken as soon as it is said, Mr. Yang is more straightforward than me."

The two clasped their right hands tightly, facing the camera together, with professional smiles on their faces.

The next day, major financial news and portal websites published this picture one after another.

"Luoxiu succeeds in starting a business again?Zhiyin received USD 1 million in Series A financing from Chong Hing Capital, with a valuation of up to USD 10 billion》

"Zhiyin, a music player software that rose due to the rise of Good Voice, received $1 million in Series A financing from Chongxing Capital"

"Another Giant Participates in Carving up the Music Industry, Zhiyin Receives $1 Million in Series A Financing from Venture Capital"

Different people feel differently when they see such news.

Ordinary melon-eating netizens only stare at 10 billion US dollars, lamenting how easy it is for this young man named Luo Xiu to make money.

Just like in the future they lamented that Prince Wang earned 40 billion easily.

"Isn't this Luo Xiu amazing? It's been less than a year since Bosom friend came out, and he has earned 9 million US dollars."

"Damn it, I can only say that it's too easy for the rich to make money, and we ordinary people only have a few thousand dollars for working hard."

"If this continues, the rich will become richer and the poor will only become poorer, and they will never turn over."

"You can't say that. Luo Xiu seems to have started from nothing, and his family didn't give him any support."

"His family background is average, but he has a good father-in-law. I heard that he has already joined the Guan family."

"The daughter of the Guan family should be a 200-jin fat woman. Even if Luo Xiu's small body is rich, I don't know how many years she can live."

……

Ordinary netizens are like this, some people envy and others hate.

In the eyes of industry insiders, it is another view:
"This Luo Xiu is too greedy, [-] million US dollars is not so easy to get, I guess the gambling agreement is very harsh."

"The VAM agreement is just a superficial trap. The most important thing is that the first financing is valued at US$10 billion. How much should you value for your next financing? Surely it can't go down any further? You probably won't be able to carry out the next round of financing." Financing, when the time comes, the company I have worked so hard to create may be taken away by others and make wedding dresses for others.”

"This trap is too obvious. Even if Luo Xiu has no experience and doesn't understand the truth behind it, won't the people around him persuade him?"

"He has been too successful in the past few years. It is inevitable that people will swell, and the people around him may not be able to persuade him."

"There are [-] million dollars in front of you, don't you want it? I'm afraid it would be difficult for me to get rid of this temptation."

"Only by controlling your own desires can you achieve great things. If it was me, I would only take 1000 million and return the remaining 9000 million."

(End of this chapter)