8848, China’s earliest e-commerce company, is also known as the originator of China’s e-commerce.
It was established in May 1998, earlier than eBay and earlier than Ali.
However, due to short-sightedness of capital, too much ambition, too little voice of the founder, catching up with the Internet bubble and other reasons, the company went silent in 2001.
However, it has also been brilliant for two or three years. Long before Ali, it had reached a cooperation with China Merchants Bank in 1999 to provide a variety of innovative services such as online payment and online purchase of movie tickets.
Its founder, Wang Juntao, is even more famous. His pen name is Lao Rong, and he wrote the famous "No Tears in Dalian Golden State" about his thoughts on watching football.
As the CEO of this company, Tan Zhi was once a prominent figure on the domestic Internet at the turn of the new and old centuries.
But due to the decline of 8848, Tan Zhi was also kicked out of the company by capital.
This person, together with former Sina President and CEO Wang Zhidong, Yinghaiwei founder Zhang Shuxin, Kelihua Chairman Song Chaodi and others, was included in the media's "Personal Profile of China's Internet Development in the Decade - Top Ten Outcasts"
List.
This is not a good list, it is full of frustrated people who have slipped from the top of the mountain to the bottom of the valley.
At this time, Tan Zhi was over 50 years old, with silver hair and gray temples. From the vice president of utStarcom, to the deputy general manager of Microsoft China, to the CEO of 8848, his career had experienced ups and downs. Everyone thought that he had no chance to make a comeback.
Already.
But Lin Fan knew that this man finally climbed out of the quagmire, first becoming the CEO of Focus Media, and later joining Deng Feng's Northern Lights Investment as a partner.
How to get into Focus Media?
The answer falls on the current company, Frame Media.
Lin Fan now fully recalled that Focus Media finally acquired Frame Media and made it a subsidiary responsible for the frame advertising business.
He did not die on the way to starting a business, but was acquired by a listed company.
From an entrepreneurial perspective, it’s not a big success, but it’s still a small success.
It has certain investment value.
Lin Fan recovered his thoughts and asked with a smile: "Mr. Tan, I would like to know where Frame Media has developed and its next business plan."
Chen Hong coughed, brought a pen and paper, handed it to Lin Fan, and said with a smile: "This is a confidentiality agreement. It's a routine matter. Mr. Lin, you have to sign it."
Lin Fan nodded, took the agreement, read it carefully, and signed his name.
Tan Zhi straightened his waist, looked at Lin Fan, smiled and said: "Okay, let's get started, let me start with the LCD screen advertisement.
In this market, Focus Media and Juzhong Media have already formed huge competitive advantages.
They have completed multiple rounds of financing, have a lot of money in hand, signed long-term contracts with many buildings, and enjoy exclusive renewal rights...
Therefore, in this market, we basically have no chance.
Last month, we sold our LCD advertising business to Focus Media for 17 million yuan, completely abandoning this market.
While getting rid of the burden, it also recovered considerable cash flow.
Next, we plan to focus all our energy and resources on the frame advertising market.
This is a market where princes are fighting each other. We can avoid dividing the crowd, gather the crowd, and fight a differentiated war.
My idea is to integrate companies in the same industry, increase our market share in frame advertising, and expand the company.
As long as we hold on to a segment of the building advertising market, we can compete with Focus and Juzhong and seek to go public.
You can merge with one of them and get a more ideal valuation.
Because the two companies are currently competing fiercely and the battle situation is stalemate.
Whoever eats Frame Media may have the balance of victory tilted in his favor."
Lin Fan nodded, he probably understood Tan Zhi's thinking.
Overseas, this is a standard example of capital operation.
Pack and integrate a bunch of small companies into one big company.
Then sell it at a high price.
It sounds easy, but there are many problems in actual operation.
Acquisition negotiations, post-negotiation integration, finding buyers, etc., every step must be done correctly, otherwise it will be a failure.
Chen Hong smiled and said: "Mr. Lin, what do you think? Does this talisman meet the four characteristics I mentioned?"
Lin Fan nodded, "It fits the bill quite well. The investment is large, the returns are large, and the returns are quick. Of course, the risks are also very high."
"Actually it's not bad."
Chen Hongxun praised the separation and lied: "Didn't he just say that? If you want to go forward, you can go public, and if you go back, you can be merged and acquired. The risk is not particularly high."
Tan Zhi nodded and agreed, "Yes, the overall situation is relatively controllable.
During the three months since I joined Frame Media, I have been busy reorganizing the company, and I have already achieved initial results.
There are no problems within the company, and the next step is to wait for the growth process.
These can all be adjusted, and I will not make any exaggerated publicity."
When Lin Fan heard what the two said, he knew that the other party was preparing a valuation quote.
He couldn't remember exactly how much Frame Media was sold for, but it was probably around US$180 million, equivalent to RMB 1.5 billion at the time.
Because the payment is cash + equity, and there is a one-year performance bet.
When the transaction was completed a year later, Focus Media's share price had more than tripled, and the transaction consideration had become RMB 3 billion.
Tan Zhi became famous because of this. He acquired and integrated nine companies in the same industry in nine months, which was as fast as one. At the same time, he also created the fastest capital appreciation rate at that time.
In more than a year and less than two years, the return rate reached nearly 100 times.
Of course, the specific return is not calculated in this way.
Because Frame Media integrated nine peer companies, it conducted a large number of share exchange operations.
Frame Media’s initial shareholder return is rumored to be only 25 times, which is based on the initial transaction consideration of 1.5 billion yuan.
Based on a rough calculation based on Frame Media's current valuation of 35 million yuan, the rate of return is actually more than 40 times.
The loss of more than ten times is naturally due to the share swap diluting part of the equity.
Lin Fan was almost satisfied. Chen Hong probably wanted to get him to join the team and invest a lot of cash in Frame Media to prepare for the subsequent acquisition and integration.
In the previous life, without his participation, Frame Media would have adopted a share swap operation.
And if he provides a large amount of cash, the dilution of the equity can be greatly avoided.
Hanergy Investment, why idg no longer injects capital, is naturally to avoid certain risks.
Larin's Capital's entry into the partnership is a favor, and the equity will be diluted in the subsequent acquisitions and integrations anyway.
Lin Fan sighed in his heart, what a good calculation.
After understanding his own value, Lin Fan was not polite and said calmly: "If we want to complete the integration of the industry, we will need a lot of funds, right?"
Tan Zhi nodded, "To tell you the truth, at first, we planned to acquire everything through stock exchange.
If an investment institution is willing to provide us with cash, using cash to acquire it is undoubtedly the best way to ensure that everyone reaps the maximum benefits."
Lin Fan smiled and said, "Then let's just open the skylight and tell the truth. How much money do you need? What is the valuation of Frame Media?"
"Pre-money valuation of 100 million yuan, financing of 50 million yuan!"
Tan Zhixiao said, "We have calculated that with this money, plus Frame Media's own cash, and some financial operations, we can basically win over nine major competitors on the market."
Lin Fan tapped his fingers on the table and said with a smile: "It has only been a month and the valuation has tripled. Isn't it a little too high?"
Chen Hong seemed to have expected what Lin Fan would say, and shook his head calmly, "Mr. Lin, you are wrong.
We started to contact Frame Media in July last year, and it was not until November that we officially finalized the contract.
In the past four months, we have not been idle. We have been thinking about a way to succeed for Frame Media.
The acquisition and integration plans you have heard about so far may seem simple, but in fact we have spent a lot of time collecting information on industry competitors, analyzing them, and verifying their feasibility.
These things are all intangible values. Please download the novel app Aiyue app to read the latest content
In addition, Tan Zhi joined Frame Media in November last year.
Frame Media today is different from what it was three months ago.
Not only did we reorganize the team and determine development goals and directions, but we also cleared all obstacles before taking action.
If you invest in Frame Media now and wait for up to one year, it will definitely give you a satisfactory result."
What you say is clear and logical, and your purpose is just one, not to lower the price yourself.
Lin Fan saw it clearly and began to reason.
"Hanergy and idg invested 10 million and 5 million respectively, but we have to invest 50 million, and the risks and pressure we bear are much greater.
Divide the public, gather the public and treat the building advertisement as a place to sleep. How can you allow others to sleep soundly?
Once the dispute in the LCD advertising market ends, the next thing they will take advantage of will definitely be frame advertising.
The two of them each have hundreds of millions of dollars in capital, and once they get serious about it, Frame Media may not be able to withstand it."
Tan Zhi smiled, "The battle for LCD advertising will not be decided so quickly, and they may not necessarily choose to be our enemy.
If you want to go public, if you want to obtain a higher issue price and market value, you must have a good-looking business report.
If you try hard with us, the gains outweigh the losses.
I have dealt with both Jiang Nanchun and Yu Feng, and they are both smart people who know what to do to their benefit."
Lin Fan shook his head, "It's impossible to say. If the acquisition of Frame Media requires 400 million, they only need to spend half of it, that is, 200 million to defeat Frame Media."
“I admit this, in terms of capital strength, we are indeed not as good as Focus and Juzhong, which are supported by top capitals such as SoftBank, Goldman Sachs, and Carlyle Investments.
But Mr. Lin, you can’t look at the problem this way.
For these two companies, the advantages of acquiring Frame Media obviously outweigh the disadvantages. With their complete advertising channels, Frame Media’s revenue may double many times after being acquired.
If it is a listed company, if the stock price rises by a few points, the cost of acquisition payment will be wiped out.
If there is a price war with us, the stock price will drop a few points.
The investment institutions on their board of directors are not good people.
When a company is listed and investment institutions want to seek exit, they naturally have to choose a high point to sell the stock price.
Even if the founder is unwilling to acquire us, he wants to continue fighting with us.
Shareholders will also have objections, because doing so is not in their interests."
Chen Hong looked at Lin Fan with a smile on his face and analyzed the game between listed companies, venture capital institutions and founders unhurriedly.
Lin Fan felt that it was difficult. They were all old capitalists and it was difficult to deal with them.
"With a pre-money valuation of 50 million, we can entrust the corresponding voting rights to Mr. Tan Zhi and continue to serve as the capital representative."
Tan Zhi looked at Lin Fan with a smile and said: "Mr. Lin, I am fifty years old and I feel old. In fact, I don't think much about being the chairman of the board.
We have been looking for management talents before, but we have never found a suitable candidate, so I have been taking on the part-time role.
If Lam Capital has a suitable candidate, I can step down and make way for him."
Chen Hong looked at Lin Fan with a smile. Lin Capital was a newly established fund and had no talent reserves at all.
Even if they asked Lam Capital to host Frame Media, they would not be able to recommend suitable people.
Therefore, in his eyes, Lin Fan's renunciation of voting rights was not an important weight.
It's just that the operations of these two people made Lin Fan a little funny. In terms of talents, the Lin Group doesn't say how many they need, but it does have a lot of talent reserves.
It's just that Lin Fan doesn't like this yet, so he can just make a fortune from it.
Lin Fan saw that the two of them looked unmoved and put forward a new condition.
"If you focus on the crowd and gather people to find trouble in the future, Lin Capital can still make additional investment."
Chen Hong became a little more interested and asked: "How much more?"
Tan Zhi also looked at Lin Fan.
Although they keep saying that they are not afraid of the threat of fragmentation and crowding, merger is more in the interests of both companies than competition.
But no one can guarantee that there won't be any accidents.
Lin Fan is willing to guarantee additional investment, which is what Frame Media urgently needs and is also a fallback path.
"Within 100 million, there is no problem. Of course, it depends on the specific situation."
Hearing this, Tan Zhi looked at Chen Hong, and the two looked at each other.
Chen Hong said: "Let's do this, with a pre-money valuation of 80 million yuan, you invest 50 million yuan and become the company's largest shareholder."
Tan Zhi also smiled and nodded, agreeing to this condition.
It's not easy to be a major shareholder.
Once you invest 50 million yuan, you are on their boat, and the sunk cost is very high.
If there really is a fierce competition between Focus, Juzhong and Frame Media.
They can all give up, but Lin's Capital cannot. They must go all the way until the end, unless they give up the 50 million.
This is not a trap, it can only be regarded as a kind of binding.
"If the price is reduced by another 5 million, based on the pre-money valuation of 75 million, I will invest 50 million and take away 40% of the shares."
Chen Hong hesitated for a moment and finally nodded, "Okay, this is also our first time working together. I hope you all have a happy cooperation."
After saying that, Chen Hong stood up and held out his hand to Lin Fan.
Lin Fan shook hands with him and said with a smile, "It's a pleasure to cooperate."
Next to him, Tan Zhi also stood up and shook hands with Lin Fan. He was quite satisfied with the result. Compared with the previous round's post-money valuation of 35 million, this round's pre-money valuation has more than doubled.
It’s not a big profit, but there is a certain amount of profit on the books.
The most critical thing is to obtain sufficient cash, which will provide the strongest support for their upcoming series of acquisitions.
"I have no other requirements. I just hope that the funds will be available as soon as possible, preferably within half a month."
Chen Hong looked at Lin Fan and made a request.
Tan Zhi added: "This is because we plan to start taking action this month, uu Kanshu www.uukanshu.com We cannot delay the funding."
It is normal for venture capital institutions to be slow to deliver investment funds.
Take Hanergy and IDG as an example. They signed the contract in November last year and completed the delivery in January this year.
This is because the decision-making process of some investment institutions is very long and requires due diligence.
The most important thing is that everyone likes to delay the trade so that if something unexpected happens midway, the loss can be stopped quickly.
Lin Fan knew that Frame Media needed money very much, so he expressed his position: "Don't worry, I will always pay very quickly."
"Haha, that's good."
Chen Hong smiled and invited Lin Fan to drink tea.
"Then should we sign the investment agreement now? Or should we wait a few more days?" Tan Zhi looked at Lin Fan and asked tentatively.
Chen Hong also looked at Lin Fan, who smiled and said: "No need to wait, aren't you in a hurry? Sign now.
I will call tonight and inform the due diligence team to fly from the United States tomorrow."
Lin Fan's vigorous and resolute actions made the two of them very satisfied.
Chen Hong took out his mobile phone, walked to the next door office, and called someone from idg.
After about half an hour of chatting, Chen Hong came back. He said with a smile: "The people at idg have no objection. Wang Gongquan will fly over from the capital tonight. Tan Zhi, please go back to the company to arrange and draft the contract!"
Tan Zhi nodded and quickly left without stopping.
Chen Hong continued to chat with Lin Fan and planned to go to Frame Media Company later.
"Mr. Chen, you have a lot of connections. Can you help me find someone?"
While chatting, Lin Fan suddenly remembered someone, so he asked.
"Who are you looking for?"
Having just reached the cooperation, Chen Hong was in a good mood and looked at Lin Fan with a smile on his face.
