Chapter 1002 - Tai Hua Consultancy
Chapter 1002 – Tai Hua Consultancy
“Hi, please introduce your company and tell us about its direction.” The evaluators replied with their standard lines. They had said the same thing dozens of times a day.
“We are an IT company dealing with digital information and are running our website. We are currently transiting to network technology…” Wang Zhixi replied with his head held high. He seems confident that he will get Tai Hua Consultancy’s venture capital investments.
The few evaluators looked at each other, and the team leader looked at the confidential name list given to him by the General Manager. Wang Zhixi’s name is included in the list.
They must invest in this person’s business!
“Alright, Mr. Wang, we are interested in your company. How many investments are you looking at, and how many shares can you give us? Also, what is your company’s shareholders’ structure like now? What is your position in the company?”
“I am the General Manager of this company, and my company still has a shareholder, Ba Da Cooperation, which is a state-owned enterprise. We are asking for 30 million USD in exchange for one-third of the company’s shares. This investment will be used to acquire a Silicon Valley-based Chinese portal website and set up our Sina website!”
“Mr. Wang, you mentioned earlier that Ba Da Li Fang Company’s total assets are less than 2 billion RMB, and the company still has some debts. What product from your company can let you increase your company’s value by more than ten times?”
A small company that is not worth more than 3 million USD wants to get a 30 million USD investment. Tai Hua Consultancy does allow such investments, but you cannot give us only one-third of the company’s shares.
“Many companies are interested in investing in our company now. We have a team of talented engineers, have operational experiences, and the coding for some websites. These are all priceless assets…”
“Mr. Wang.” Before Wang Zhixi can finish, an evaluator interrupted him. “You only need to explain why you value your company as 60 million USD will do.”
Wang Zhixi was speechless. He is nervous when he comes to Tai Hua Consultancy to ask for investment today. His company had opportunities to get venture capital investments. Three VCs had wanted to invest 7 million USD into his company, but Ba Da Cooperation stopped it.
At that time, no Chinese IT company had received investments from international VCs, and Ba Da Cooperation does not want to be the first. This decision hindered Ba Da Li Fang’s development, especially their website Ba Da Online’s development.
Now, the Chinese have its first Venture Capital investment company, and Ba Da Cooperation asked Wang Zhixi to apply for investments. Ba Da Cooperation is not increasing its investment in Wang Zhixi’s company. They still have not recovered the 5 million HKD they invested initially.
During the talks with those three international VCs, Wang Zhixi is also not satisfied with the terms. Those three companies had wanted a high percentage of shares and also wanted to interfere with the company’s operations. They wanted a restructuring of the company to international management standards, etc.! They are implying that Wang Zhixi is not good at running the company!
Wang Zhixi’s dream is to get 50 million USD to acquire that Silicon Valley-based Chinese portal website, and become the first Chinese international tech firm! Even with a 30 million USD investment, he will gain the upper hand during the negotiations with that Chinese portal website.
Of course, those three VCs are also that Chinese portal’s shareholders. They knew what Wang Zhixi wanted, and that’s why they dare offer harsh conditions.
If Wang Zhixi agreed to their terms, the company’s biggest shareholder would be these foreign investors!
“How many shares does your company wants?” Wang Zhixi asked.
Wang Zhixi is a famous software developer in China. Liu Chuanzhi and Qiu Bojun had tried to recruit him because the Chinese operating system Wang Zhixi developed is as popular as Win 95.
But Wang Zhixi had already started his own company and refused to be recruited. Now, he is going into network technologies and felt it is different from Kingsoft’s direction.
Nevertheless, Feng Yu had been waiting for him, and Wang Zhixi had finally reached out to him.
It is the same as recruiting when Wang Zhixi approaches Feng Yu’s company for investment! He will still be making money for Feng Yu!
“If we use the market value of your company, we can ask for at least 90% shares of the company. But your technologies are quite good and does have some value. How about this? We will send a team over to evaluate your company before we make any decision.”
“I will not let you all hold the controlling shares!” Wang Zhixi is not willing to let others have control over his company, and Ba Da Cooperation will not allow it too.
“Then, we will have to lower the invested amount. Let’s talk about we evaluated your company.”
After Wang Zhixi left, the team leader immediately calls Sun Lijie to inform him that Wang Zhixi had come. Still, the amount he is asking is too high.
Sun Lijie heard this and knew he must tell Feng Yu immediately.
“You all go for the site visit first. Remember, I am very interested in investing in this company. You all must not let others get this investment, and not let them know our eagerness.”
……
“What? Wang Zhixi was here and wanted 30 million USD?! Just agree!” Feng Yu replied without hesitation.
“Boss, his company, is not even worth 2 billion RMB, and he is only willing to give us one-third of the company’s shares for 30 million USD. How can we agree to that?”
Huh?!
Feng Yu was speechless. This Wang Zhixi is asking for too much! Although Feng Yu knows that after Wang Zhixi acquires that Chinese portal site, and got listed, he will get high profits. But now, he must not shortchange himself.
If Feng Yu made this as an exception, how is he going to continue with other investments? Everyone will think Tai Hua Consultancy are idiots and is giving out money for free.
“Can we get the controlling shares in his company?”
“No. He said he would not let us hold the controlling stake in his company. That means the most shares we can get is 49%. But our people had told him that 30 million USD is too high, and we need to lower it.”
Tai Hua Consulting had advertised that they have 1 billion USD of funds and got the attention of many startups or companies that are looking for investors. But at the same time, these people started to increase their demands!
“Ok. You all continue to negotiate with him first. I will go over and speak to him two days later.”
Feng Yu is very curious about this person. In his previous life, after the dot.com bubble burst, Wang Zhixi became the scapegoat and was fired from his position. Although he owns less than 10% of the company’s shares, he was still a famous tycoon in China!
Maybe in this life, Wang Zhixi’s fortune will change.