Liu Hai stayed in the hotel and remotely controlled the Lin Capital team to reduce shareholdings.
Lin Fan took Zhang Chenguang to visit Chen Hong, CEO of Hanergy Investments.
Hanergy Investment has done very well and has branches in San Francisco, Beijing and Shanghai.
It happened that Chen Hongren was in the Magic City, and he received Lin Fan warmly.
While sipping tea in Chen Hong's office, Lin Fan looked around at the luxurious office and said with a smile: "This investment banking business is different. The office is very nice."
Chen Hong waved his hand, "No, no, what else can I do in front of your brother?
How can we call it an investment bank? At most, we can call it an intermediary, a financial intermediary.
Only those on Wall Street can be called investment banks.
Due to domestic regulatory reasons, we simply cannot develop into a large investment bank, and all our business has been taken over by securities firms."
Lin Fan shook his head and laughed, "Companies such as Goldman Sachs and Morgan Stanley did not develop overnight. They all experienced decades of development and growth before they got to where they are today step by step.
Hanergy Investment can also buy a brokerage license in the future and do it on its own."
Chen Hong shook his head, "Contracting, undertaking, underwriting, each step requires a lot of resources, you understand, right?
I just returned to China the year before last, and I had been in the United States before. I knew almost no one in the domestic securities market."
Lin Fan smiled and nodded.
Wall Street investment banks such as Goldman Sachs and Morgan Stanley have very high status in the United States.
Domestic investment banks are just a department under securities firms.
Investment banks like Chen Hong have a lower status, but they have a reputation as a boutique investment bank.
At the same time, it is also called financialadvisor, abbreviated as fa, and its Chinese translation is called financial advisor.
"I founded a company called Lin Capital in the United States, which has hedge funds, VC funds, and in the future there may be PE funds, real estate funds, etc."
Every time Lin Fan announced a word, Chen Hong's eyes lit up.
Two grown men, Lin Fan felt a little uncomfortable when he saw such hungry eyes.
"What's your AUM now?" Chen Hong asked with eager eyes.
aum is the asset management scale, which is mainly used to measure the scale of the asset management business of fund management companies, investment banks, commercial banks or financial holding companies.
The larger the AUM, the higher its industry status.
Lin Fan said calmly, "The combined asset management scale of the two funds is probably over 100 million US dollars!"
In fact, the initial capital of the Lichun and Lixia Funds was only over 50 million U.S. dollars, but due to floating profits from stock trading, the fund's net assets have exceeded 100 million U.S. dollars.
Upon hearing this, Chen Hong's eyes that brightened up quickly dimmed again.
However, he is a good person and realized that this was rude, so he immediately adjusted it and said with a smile: "It's pretty good. The fund must have just started, right? One hundred million yuan is still pretty good.
To tell you the truth, funds worth tens of millions of RMB are now everywhere in China, and they are still in their infancy, which is normal.
Once the results of the first fund are released, the next few funds will be raised."
Lin Fan smiled and reminded: "Actually, it is not RMB, the currency unit is US dollars."
Chen Hong was drinking tea. When he heard Lin Fan's words, he got so excited that he choked on the tea and started coughing repeatedly.
Seeing Chen Hong choking on the water, Lin Fan quickly helped and patted his back.
Chen Hong's face turned red, he coughed a few times, and finally calmed down.
He asked: "Ahem, it turns out to be 100 million US dollars? I thought it was RMB. Lin's capital is strong."
Lin Fan then explained, but did not go into details. He simply said that the Lin Group injected capital, and after some operations it became 100 million US dollars.
Sometimes, Lin Fan won't give everything away, but to show his strength, he still has to show off his muscles.
Otherwise, if he is looked down upon, it will not be Lin Fan's style.
Moreover, if you can get the maximum benefit at the minimum cost, why not?
After understanding the whole story, Chen Hong smiled and commented without appearing too surprised.
He is the first Chinese overseas student to bring his company to Nasdaq, and he is someone who has seen big events.
In his eyes, the asset management scale of Lin Capital is nothing.
Originally, he thought Lin Fan would start with $100 million in fundraising, so he was a little surprised.
Chen Hong asked: "What are the main strategies of your hedge fund?"
Lin Fan said calmly, "The stock is long."
Chen Hong knew it well and continued to ask: "Only invest in the US stock market, or the global market?"
Lin Fan replied, "Of course it is global, and it has a heavy position in Chinese concept stocks."
Chen Hong smiled and said, "Well, if there is a private placement of Chinese concept stocks or an agreement to transfer the business in the future, I will contact you."
Lin Fan smiled and said: "Haha, thank you very much Mr. Chen, we are currently lacking resources in this area."
Chen Hong waved his hand and said, "It's okay, we are all friends and we help each other."
Then, Chen Hong asked about the Lichun Fund again, when he heard that Lin Fan mainly engaged in angel investment.
He frowned and sighed, "The amount of early-stage project financing is too small. To be honest, we don't receive much of this kind of business.
Moreover, the domestic venture capital market has just started. As a financing intermediary, the market is too small to maintain the normal operation of the company, so now we also make direct investments.
To put it bluntly, there may be more direct investment business than financial advisory business.”
Lin Fan nodded and smiled. He could hear the other person's sadness and helplessness.
FA is essentially a third party between entrepreneurs and investment institutions, providing investment and financing matching services to both parties.
It is not limited to private equity financing services, but also includes mergers and acquisitions, strategic restructuring, IPOs, private placements, etc.
Different FA institutions have different priorities.
In early projects, the commission of FA institutions is usually 3%-5% of the financing amount. For later projects with larger financing amounts, the commission ratio will be appropriately lowered.
FA is currently very difficult to do, mainly because the domestic venture capital market is not yet prosperous.
There are few entrepreneurs, few investment institutions, and there are also very few fas surviving in this industry chain, and the business is bleak.
The "direct investment" in Chen Hong's mouth is to play the role of vc.
After fa becomes big, it will usually set up its own fund to invest in good projects it has discovered. This can not only establish a deeper relationship with entrepreneurs, but also develop further up the industry chain and capture greater benefits.
Chen Hong is very rich. After all, he led the company to go public and started direct investment.
Ordinary FAs can't do direct investment because they don't have money and can't afford to play.
Strictly speaking, FA is an industry that strives for human resources and relationships.
We do not sell any financial products, we sell services.
The fa industry will have a bleak future for many years. It will not be until the wave of mobile Internet entrepreneurship breaks out and there is more hot money in the market that the entire industry will usher in real development.
A small FA team of 10 to 20 people helped dozens of entrepreneurs raise tens of billions of equity financing in one year, and earned a commission of 100 to 200 million yuan.
The advantage of this industry compared to VC and PE is that money comes in quickly. Once the financing is in place, the entrepreneur will pay FA.
On the other hand, VC and PE have to wait at least three to five years, or even longer, before the company can go public and receive exit dividends.
Therefore, in the early days, Lin Fan had no way to do it and had been setting up abroad. Now that there is an opportunity in China, of course he will come back.
After Lin Fan had a general understanding of the development of Hanergy Investment, he smiled and said: "Currently, Lin Capital is mainly engaged in angel investment, but that does not mean that it will not invest in other mid- to late-stage projects.
As long as the project is suitable, no matter what round it is, we will invest.”
Chen Hong smiled and said: "How should I put it, your style of play is a little weird.
Your fund is not large in scale, so I suggest you do a good job in early investment and build one or two benchmark projects.
With a benchmark project in hand, it will be easier to raise more funds in the future.
When the scale of the subsequent funds increases, it will not be too late to expand to mid- and late-stage projects.
Of course, this is just my suggestion and may not be absolutely correct."
Lin Fan nodded, knowing that the other party was speaking maturely, but this was not suitable for Lin Capital.
Because temporary capital is nothing but money.
Not wanting Chen Hong to think of him as someone who ignored advice and insisted on going his own way, Lin Fan said again: "Actually, the first phase of the Beginning of Spring Fund was all funded by me personally.
In the future, I want to build this fund into an early institutional fund.
But during the creation process, I don’t want to miss some good projects in the middle and later stages.
So we don’t stick to the rules too much, and Lin’s Capital is not short of money.”
"In addition to the Beginning of Spring Fund, I have personally invested in several angel projects, and the current valuation of my holdings totals US$20 to 30 million."
Lin Fan continued: "If these projects are successfully withdrawn, they should continue to add additional funds to the Lichun Fund."
Chen Hong had a rough idea and said with a smile: "Mr. Lin, I see that you are very interested in investing, and your investment results are pretty good.
Look at you, you can earn tens of millions of dollars by running a hedge fund, and several of your personal angel investment projects have entered the next round of financing."
Lin Fan smiled and said a few words of modesty. He came here today to show off his abilities, so he didn't make too many reservations.
"Mr. Chen, have you found any good projects recently? If so, you can recommend them to me."
Chen Hong's heart moved and he immediately understood the other party's intention. So many family assets are not free of charge. Are they trying to show off their wealth?
"I do have a project here, but I don't know if you dare to invest in it?"
Chen Hong put away his smile and said with a serious face: "It has four characteristics: large investment, high risk, high return, and fast return."
Lin Fan suddenly became interested, "I can accept the last three characteristics, but I don't know how big the investment is.
Within 100 million, there should be no problem!
Of course, it has to be RMB!”
The FA industry is actually about pimping. Lin Fan initially planned to try his luck at Hanergy Investment and see if there were any good projects.
He didn't have high hopes, but from Chen Hong's tone, it looked like there was a big fish out there.
Chen Hong got up and rummaged around in the office for a while.
Soon, he found a stack of documents, threw them on the coffee table, and said with a smile: "See for yourself, it's very maneuverable, but the risk is not small.
You read it first, and after you finish it, I will explain to you what the risks are?"
Lin Fan nodded, picked up the document, and read it carefully.
The front page of the document reads a large table of contents: "Framework Media Series B Financing Plan".
Frame Media was established in 1999 and is the leading elevator print advertising service provider in China...
Lin Fan carefully read the contents of the plan and roughly extracted a few key pieces of information.
Frame Media was established very early and enjoyed the dividends of industry development. Before 2003, its development was smooth.
However, due to the low entry barriers to the industry, new competitors are constantly entering the elevator print advertising market, and the market has quickly become a "red ocean."
When competition in the industry becomes fierce, price wars become a conventional weapon.
As a result, the market has become increasingly chaotic, the industry has become more and more disorderly, and profits have become thinner and thinner. Advertising companies everywhere are facing the dilemma of survival.
Frame Media is also facing the problem of slowing down development and urgently needs to find a breakthrough.
At this time, Frame Media was inspired by the success of the LCD screen advertising of Shandong Media and wanted to achieve "differentiated" competition in elevator advertising and transform from static to dynamic advertising.
So in 2003, Frame Media launched a round of financing, raised nearly 20 million yuan, and launched an LCD advertising project.
But it is a pity that the LCD screen advertising business did not take off, and the original frame business had no time to take care of it. The market was quickly eroded by competitors.
Amid internal and external troubles, the company launched Series B financing.
The company's revenue in 2004 is estimated to be 40 million yuan, and its net profit is estimated to be about 8 million yuan.
After carefully looking through the documents, Lin Fan looked at the date of signing, which was November 2004.
It has been nearly three months since today.
Putting the documents aside, Lin Fan asked calmly: "It has been three months and the financing has not been successful yet?"
Chen Hong smiled and said: "Of course not, the financing has been successful, guess what the valuation is?"
Lin Fan frowned, "Based on ten times the price-earnings ratio, it's at least 70 to 80 million yuan, right?"
Chen Hong laughed and said: "If their business maintains a very good growth rate, let alone ten times the price-earnings ratio, they can give it twenty times.
But unfortunately, when Frame Media found us, their advertising market share was shrinking.
LCD screen advertising was crushed by Focus Media and Juzhong Media, and framed print advertising was cannibalized by other competitors.
After negotiation, we injected RMB 15 million into Frame Media at a pre-money valuation of RMB 20 million and took 43% of the shares.
Of the 15 million yuan, we invested 10 million yuan and idg invested 5 million yuan."
Lin Fan said nothing.
Are you taking advantage of the situation?
But what capital does is to add icing on the cake and provide help in times of need!
When the icing on the cake is added, the valuation must be sky-high, and capital is needed for founders.
Giving someone timely help will, in turn, crush the valuation to death.
An advertising company with an annual net profit of nearly 8 million yuan wasted its pre-money valuation of only 20 million yuan.
On the one hand, it can be seen that Hanergy Investment and idg are ruthless guys;
On the other hand, it can also be seen how bad the situation of Frame Media was at that time, and it could agree to such financing conditions.
"You've already invested, why are you looking for me? Invest in a B+ round?"
Listening to Lin Fan's tone, Chen Hong felt that the other party was a little unhappy. Maybe he didn't like this project, or maybe he felt that Hanergy didn't notify him earlier.
Chen Hong and Lin Fan met at the annual meeting of Huayuan Science and Technology Association last year. They even drank together and have known each other for more than half a year.
It's impossible to say how deep the relationship is.
However, Chen Hong was a smart man and said tactfully: "Oh, Mr. Lin, it's not that I didn't inform you, I didn't even know you founded Lin Capital at that time.
And since you have been in the United States, I thought your development focus would be in the United States.
Wang Gongquan, a partner of idg, is friends with me and Tan Zhi, so I finally found them.
Tan Zhi is a partner and managing director of Hanergy Investment and a senior consultant of Tom Group.
Currently, he has been assigned by us to Frame Media as the company’s chairman and is responsible for the transformation plan of Frame Media.”
While talking, Chen Hong calmly observed Lin Fan's expression.
But Lin Fan's expression was as usual, and Chen Hong didn't notice it at all, secretly cursing that he was really a little fox.
"Mr. Lin, what do you think? Our two institutions only delivered the equity investment last month.
Lam Capital’s additional investment at this time comes at the right time.”
Lin Fan nodded, "Okay, let me think about it."
Chen Hong didn't bother Lin Fan and just waited quietly.
Lin Fan was trying to recall, had he never heard of a company like Frame Media?
When it comes to advertising in elevators, the most famous ones are undoubtedly Focus Media, Juzhong Media, and in the future there will be Xincheng Media.
Frame Media also entered LCD screen advertising, but judging from the introduction in the plan, it failed.
Failure is normal.
Focus Media is so powerful. Before Jiang Nanchun founded Focus Media, he owned a traditional advertising company called Yongyi, and it achieved an annual revenue of 150 million yuan.
If you really think about it, Jiang Nanchun is the one who has made mistakes in life. He earned his first million through advertising agency when he was 21 years old in his junior year.
Then in 2003, Yongyi Company was renamed Focus Media, opening a new chapter in life.
Lin Fan once considered investing in Focus Media, but he couldn't afford it. When the company received a round of financing in 2003, it accepted an investment of tens of millions of dollars from SoftBank China.
What he is thinking now is whether to invest in this little-known Frame Media?
I’ve never heard of it, so there’s a high probability that you’ll die halfway through starting a business, right?
However, he did not make a decision rashly, but asked: "Now that we are investing in round B+, what will be the valuation?"
Chen Hong thought Lin Fan had figured it out and said with a smile: "Our investment agreement was signed in November last year, and then Tan Zhi joined Frame Media as chairman and was responsible for the transformation of the company.
It has been three months now, and compared to before, the company has undergone certain changes.
If you are interested in learning more, I will call Tan Zhi over and he will talk to you."
Lin Fan nodded, "Okay, let's call over and talk together!"
Chen Hong took out his cell phone and started calling Tan Zhi.
After waiting for almost an hour, a middle-aged man wearing a suit with gray temples walked in.
"Hello, Mr. Lin, I am Tan Zhi, currently serving as the chairman of Frame Media.
If you want to know anything about the situation, you can ask it directly."
While Tan Zhi shook hands with Lin Fan enthusiastically and talked, he was also looking at this young man who was thirty years younger than him.
Lin Fan looked at this old man who had a rather elegant temperament due to his gray hair on his temples and his slender appearance.
The more I look at it, the more familiar it becomes...
When he felt like he was about to remember, Chen Hong interrupted: "Mr. Lin, what's wrong with you? Have you and Tan Zhi known each other before?"
Come on, Lin Fan forgot about it again after being interrupted by Chen Hong.
"I don't know him, but I think Mr. Tan has a very elegant temperament. He doesn't look like a businessman, but more like a diplomat or a program host."
Lin Fan's words made Tan Zhi couldn't help but smile, "Mr.
On the other hand, your heroic appearance and spirit are far superior to those of Ding Sanshi and Chen Tianqiao. People can’t help but sigh when they see them. There are talented people from generation to generation in China, and there are talents everywhere in China."
Lin Fan laughed so hard that his mouth almost split open to the back of his head. If he knew how to praise others, he would just praise them a few more times.
"Mr. Lin, you are really right. Tan Zhi is considered the most popular among girls of our generation among the international students when he was young."
Tan Zhi spread his hands and said humorously: "Isn't it also popular with middle-aged women now?"
Chen Hong nodded, "Yes, to deal with the lady, I have to send you to the scene."
Lin Fan chuckled a few times. He didn't expect the two of them to be so old and dishonest at their age.
"Mr. Lin, every time we meet, we like to make a few jokes, which makes you laugh."
Chen Hong pointed at Tan Zhi and introduced: "This guy never served as a diplomat when he was young, but he served as the director of the computer center of the Ministry of Foreign Trade and Economic Cooperation. He was only in his early thirties at the time!
I also worked as an official and businessman for several years, and did business abroad for several years.
People who have been officials naturally have a certain temperament about them, which is different from us ordinary people."
Chen Hong asked Lin Fan to take a seat while complaining about his partners.
"He worked at UTStarcom for several years, and then went to serve as the deputy general manager of Microsoft China, and then went to 8848 as their CEO..."
Lin Fan asked: "8848?"
"Yes, that's the e-commerce website."
After Chen Hong said this, he noticed that Lin Fan suddenly laughed, and his smile was inexplicable.
