China Merchants Capital has layouts from VC industry to PE, including the current industrial funds. For the financing difficulties mentioned by many companies, we can make a simple analysis based on the development stage of the company. In addition to Cross-border Communication, which has now been listed through backdoor listing, there are seven or eight companies that have successfully listed through the New Third Board. But for these companies, the New Third Board is not the end. If they have the ability to raise funds in the future, it may be better. As a company, you can estimate 20 to 30 times this year.
For investors, if you put the expected profits in the next two or three years into the post-investment valuation given to investors, it is a challenge for investors themselves. Other transactions equivalent to this transaction only have 10 or 12 times PE. If you compare them in this way, which one is more cost-effective?
For super sellers with tens of thousands of products, they pay more attention to their operational management efficiency and make comparisons with the same industry. For example, whether to use direct mail parcels or overseas warehouses, what is the inventory turnover rate, what is the cash flow, it is possible that you have been developing but you can’t see when the money will be in the account, which is very concerned by the capital party. For “small and beautiful” enterprises, it is to focus and do the best. No matter what industry you are in, you must focus and do the best. Only in this way can you tell stories to investors and impress them.
For example, Sheln’s team is not necessarily achieved by most companies. It is not that the company does not have this ability, but the team does not have this ability. If you can make the product as perfect as SheIn’s team, either do very well in the regional market or do very well on the service side, then your company can be considered “small and beautiful”. For “small and beautiful” companies, what is your core competitiveness? If you explain this to investors, you will definitely be able to impress them.
As for valuation, it does not mean that the company representative thinks that his company is a golden baby, and it only makes 10 million this year, but it is estimated to be 300 or 400 million, and then tells this story to investors. No investor will listen to this “reason”. Investors will recognize this PE, or even this PEG, and make valuations based on the company’s profit growth ability, but they will definitely consider it a reasonable valuation. It has never been advocated that companies adjust their valuations high when they have such financing plans. I believe that there must be investors or institutional investors who may invest in you, but when they invest in you, they will definitely attach many conditions. If the conditions are not met, it may be a fatal blow to your company. Some people say that this is being kidnapped by investors. This is not called being kidnapped by investors. When both parties offered this condition, the company either accepted the bet or offered a lower price. For enterprises, equity financing is the most expensive, and equity is your core.
Regarding “small and beautiful” companies, if they have sales revenue of 1 million to 5 million US dollars a month, what is the way out in the future? Some people say mergers and acquisitions, the New Third Board, and IPO. IPO, it is not recommended that you continue to operate. Of course, it is not impossible to go straight down, but at this time, it is not impossible to adopt the merger and acquisition method. Find a New Third Board listed company that you think has the same concept as you. They all have merger and acquisition needs, as long as you meet the requirements. As for the selection of the target, these standards should be similar. They definitely have the intention to acquire, but they must have synergy with your company. In the end, in terms of the generated income, there will not be much difference. In addition, in addition to your own financial freedom, you also have to give an account to the team. If you want to connect with the capital market, mergers and acquisitions are a good way. In addition, China Merchants Bank may invest tens to hundreds of millions of dollars in the future and is also looking for investment opportunities.