I just saw a question in the comments. There was a big debate. The other person was very angry and felt that I had written randomly. I was also very angry and felt that the other party was being careless...

Later, I just asked some friends about the situation and found out where the problem lies!

Regarding whether to use pre-investment valuation or post-investment valuation in financing, in fact, as long as both parties reach an agreement and understand clearly, either one can be used. Obviously, the post-investment valuation is used in the article.

Then because of this issue, there was a lot of controversy. It was not until I asked some relevant people in China that I discovered that we seem to use pre-investment valuation by default...

This is very emmm...

This reminds me of another issue, which is the gambling agreement. Let’s talk about the two together:

Regarding the use of post-money valuation, the source that I think is not problematic is the article "premoney vs postmoney - which is a better technique for" by Mr. Thomas Tonguz, a partner of Redpoint Venture Partners. Negotiating?》

This is an article about financing negotiation skills, which talks about: With the popularity of debt-for-equity swaps as a new seed investment tool, and the generalization of employee stock ownership esops, post-investment valuation is more important to investors. Simple, but this will not become the mainstream in the future.

Because in the anchoring effect, a high post-money valuation is more likely to scare away investors, so it is better to use a pre-money valuation! First, use a pre-money valuation anchor that does not include debt-for-equity swaps and the surface price of esop is lower. Determine, attract investors, and then slowly discuss the equity structure and negotiate a higher price.

Although the final result of both may be the same, the pre-money valuation that appears to be lower is obviously more likely to attract the attention of investors.

At the end of the article, the author summarizes it in one sentence: "when negotiating your next round, talk premoney."

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To sum up, I think it is not difficult to make a judgment. That is, in the American market, using post-investment valuation is a very common financing negotiation behavior, so he wrote such an article to teach entrepreneurs how to use New, use pre-money valuation negotiation skills to help yourself win over investors!

This logic should not be difficult to understand, right?

I was born in 1999. To be honest, I don’t know what was commonly used in American entrepreneurial financing in the 1980s. The process I am writing now is deduced based on this information. Since the author said in 2017, post-investment valuation will be used in the future. It should not become mainstream, so the inference is that before, post-investment valuation was the mainstream! Is there anything wrong with it?

I really didn't expect that something went wrong and there was a disagreement here. I was very depressed and angry at first, but then I looked at it and understood it again... I don't know if this means that something happened, but our people are playing with money... Sometimes I feel much dirtier than foreigners...

It’s this kind of, well, little trap-like tricks that are emerging one after another. There are many gambling agreements in our country, but there were very few in Europe and the United States in the early days. However, with the development of gambling agreements now, referring to the example of South Beauty, they have actually changed a lot.

Already..

That is, after a certain cow succeeds, it gradually becomes a party in need of financing. There is no reward for completing the gambling agreement; but if it is not completed, there will be penalties, such as refunding money, or compensation for more equity, etc.

After clarifying this logic, I am... a little speechless, right? I can only say that it is a misunderstanding, but forget it...

In addition, I have omitted a lot of specific details in the financing talks. But it should be obvious: the lead investor is Fidelity, which was negotiated half a month in advance. Before the talks started, I omitted the reply and did not write it.

; The negotiation process of the main investment institutions is not fully written down. Firstly, it is too watery. Secondly, after all, it is not a business textbook.

There is also the bidding atmosphere that the person mentioned: there is very little financing required for direct selling, and Boston Capital continues to follow in the investment. Isn't this creating anxiety and heightening the bidding atmosphere?

Well, the main thing is to promote the development of the plot. It should be noted that I will try my best to restore the places that need to be restored. But this is actually a very frustrating job. After all, financial derivatives were not developed at that time, and some strategies were not developed.

It's not as winding as it is now.

If you don’t bring investors together, you worry that they will join forces to lower the price. But when you have already secured some of these institutions, and then you bring people together again, that is reverse pressure. Use some investors who have already promised a higher valuation.

Investors, pressure those with low valuations to think quickly and make decisions quickly!

Do you want to keep up? No, I won’t be far behind, and the car will be launched soon. When the financing amount reaches the target, I won’t want you to come again! In this environment, I personally think that, as a family, all investors will

Pull it together, no problem!

Okay, reply here!

The main thing I want to express is the same as the previous banking issue. We need to consider the background of the times. The Bank of America in the 1970s was different from that in the 1980s, and it was different from the 1980s and the 1990s. The Bank of America in the current sense is 1999.

Future products. In the same way, the investment institutions, strategies, methods, and tools available at that time were also different from today.

With limited information and no actual experience, I can only try my best to deduce and restore a rough model! Including financial investment strategies and the like, we are not born with a major, mainly based on business operation logic and operation

It mainly focuses on logic and simple science popularization of the laws of economic operation. These contents are added as, um, condiments to the plot.

Originally, what we wrote was not a textbook. We worked hard where we should work hard. I really feel that I can’t accept it because the conflict is too great, so there’s nothing I can do about it...

In addition, as of now, the updates for June have been completed. I will count the updates for July later. Thank you for your support! Yeah!
Chapter completed!