Chapter 0962: The Art of Financing

For many people, money is a kind of original sin, because money gives rise to too much evil in this world. But for Zhao Fusheng, when he can resist the temptation of money and use it as a tool, money becomes flawless.

At the top of this world, it is always the clever who think hard, choose the right direction, and then risk their lives to overdraw themselves. Therefore, every successful person often has one psychological problem or another.

Perfectionism, paranoia, near-arrogant self-confidence...

Such personality traits often appear in those who lead the times.

But Zhao Fusheng did not have them. The reason was simple: he was not a so-called genius; he was just an ordinary person. The reason he could stand ahead of most of his peers was that he had experience and insight beyond his years in his mind.

So, even though he was slightly schemed against by Han Bin, Zhao Fusheng was only a little frustrated at first. He didn't have many other thoughts and could accept the matter calmly.

Many times, facing oneself is also a skill.

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After settling the investment matter, the relationship between Zhao Fusheng and Han Bin changed somewhat.

Previously, although Han Bin and Zhao Fusheng got along harmoniously, they were ultimately just collaborators. Their relationship, to put it bluntly, was more like the Aipu Han family providing money, and Zhao Fusheng giving them advice.

Do as much work as you are paid for.

That was probably the most reasonable explanation.

In other words, if Han Bin took the initiative to befriend Zhao Fusheng, it was called showing respect for talent; if Zhao Fusheng took the initiative to befriend Han Bin, it was called currying favor with a noble.

Moreover, the interest relationship was clear; both knew they could never become true friends.

Some people like to say: enough money to spend is fine; spiritual satisfaction is what matters most.

But the problem is, humans do not live on a desert island like Robinson Crusoe, isolated from the world. Money may not be omnipotent, but most of the time, the amount of money is the most direct reflection of a person's value and can even determine one's status.

Scientists who dedicate themselves to the country are, after all, a minority; ordinary people with desires are the living state of most people in this society.

Money determines where you sit, wealth determines your confidence. This may sound a bit crude, but the saying is rough yet true.

Today, Zhao Fusheng already had the confidence to communicate with Han Bin, no longer needing to rely on his talent to impress the other party as before.

"What do you think? How far can Xiaonei.com develop?"

Han Bin went out to make a phone call, asking his subordinates to come over and negotiate with Dong Chenxi's people, but he himself turned around and chatted with Zhao Fusheng.

As a boss, you don't necessarily have to do everything yourself. Once the general direction of the negotiation is set, the rest will naturally be handled by others.

"That's hard to say." Zhao Fusheng shrugged: "First, it depends on our promotion efforts; second, on the speed of internet development. And of course, besides you, whether anyone else will be interested in this project."

You see, for the Xiaonei.com project, Zhao Fusheng planned to go public to raise money.

And for pre-IPO financing, the industry customarily divides it into angel investment, Series A, Series B, Series C, Series D, etc.

For startups that can generate net cash inflows in a relatively short time, they usually go through only one or several stages of equity financing. For startups that need continuous capital investment over a longer period, they may go through all the above stages, and some stages may even require multiple rounds of financing.

Simply put, it is also a process of raising money.

Angel investment and seed investment, as the names suggest, may involve only a concept with nothing started, or just beginning operations without a product yet, or having a product but not yet selling on a large scale. At this point, watering the seed will make it grow, and you are an angel.

And as the seed grows, there are still many risks in the process, requiring more care. Hence, Venture Capital gets its name.

After Series A comes Series B, and if you like, you can have Series C, D, E, F, G.

Of course, the names A, B, C, D, E are just conventions; if you prefer, you can call them Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Sheep rounds, or simply First Round, Second Round, Third Round.

When nearing the end of the road to listing, if someone still wants to hop on, it's called mezzanine investment. After listing, financing can also be done for company privatization.

Specifically, at the seed investment stage, there is basically no team, only an idea, with one or two founders needing start-up capital. The investment amount is not large, around one to three million, mainly to help the company get started.

In that case, the company's valuation would not exceed 15 million RMB.

At the angel investment stage, there must first be a core technical team. The team is basically in place, about three to five people, working for a while, with the product about to hit the market and visible internally. The investment amount is around five million, and the company valuation does not exceed 30 million.

During this period, if funds are insufficient, another round of financing can be sought. But at that time, the product is usually already online, though without much data performance, needing a sum of money to support the team in further validation. The financing amount does not exceed 10 million, and the company valuation is around 30 million RMB.

When the basic product model has been proven and capital is needed to continue scaling, the financing amount exceeds 10 million, and the company valuation rises to 50 million or even higher.

As for subsequent financing, it basically follows this pattern. The only difference is that the valuation of companies after Series C is hard to predict, and scalable profitability is used as a measure. The financing amount is basically negotiated, based on the company's financial forecasts according to its business development.

So in fact, both Zhao Fusheng and Han Bin knew that acquiring 25% of Xiaonei.com for 40 million was basically in line with financing rules.

Next came the issue of negotiation between the two sides.

After all, it was not unheard of for the founding team to be ousted.

To be precise, it happened quite often.

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The negotiations between the two sides were very fast, and an agreement was soon reached. At the moment when Dong Chenxi and Han Bin signed the contract, Zhao Fusheng suddenly felt an indescribable sense of achievement.

For him, watching the company he founded grow bit by bit into a behemoth was truly a delightful feeling.