Chapter 103: Chapter 102: Compromise
"President Gu, regarding the evaluation of ’Huafeng Dimension,’ we’ve completed it when we received President Shan’s investment invitation a few days ago.
Currently, the daily active users of ’Huafeng Dimension’ do not exceed 30,000, and registered users have just surpassed 300,000. Our total valuation is 12 million, based on which investment is warranted. However, President Shan’s valuation is 40 million, which has completely exceeded our expected valuation. Therefore, our evaluation department and risk control department unanimously concluded that this project holds no investment value and have already dismissed it, with the approval of President Shao."
The young man reported everything to Gu Bai truthfully with the information in hand.
After listening to his report, Shan Fengling immediately rebuked.
"Our website’s initial investment has already exceeded several million, and the 40 million valuation was determined by several third-party evaluation agencies. Also, ’Huafeng Dimension’ is in an ascending phase. With sufficient financial support, we can completely surpass the million registered users mark in a short time. After all, there’s a huge market for ACG in China."
Seeing that Gu Bai hadn’t responded, the young man continued, "President Shan, you should know that any investment bank will have its own evaluation criteria. It’s not about how much you think it’s worth, and we will give as much.
Also, you mentioned that our valuation is far below your expectation, this is something we won’t deny. However, the value of the project does not depend on how much money you spent, but on its actual value. In Black Swan Capital, ’Huafeng Dimension’ only has a valuation of 12 million, and the project’s rating is B-, which means it does not hold much investment value."
Seeing that Shan Fengling still wanted to speak, Gu Bai coughed, interrupting her speech.
"Alright, leave the information here and you may go out first."
The young man placed the information down and respectfully left the general manager’s office.
Taking a glance at the information, Gu Bai smiled as he spoke to Shan Fengling, "President Shan, you’ve seen it yourself. It’s not that I’m unwilling to invest, but your company indeed lacks investment value. After all, I’m doing business, not charity work.
I can understand your feelings; every project is the brainchild of the founder, like their child. But this has nothing to do with me. In your eyes, your child is full of limitless potential, but in others’ eyes, it may not be worth mentioning. Do you understand this analogy?"
"President Gu, there’s no need to belittle ’Huafeng Dimension’ so much. Since I’m here today, and you’re willing to sit here and listen to me, this shows that you have some interest in our website, albeit perhaps very little, right?"
Gu Bai did not hide it, faintly nodding his head.
Seeing Gu Bai’s expression, Shan Fengling continued, "Actually, B Station has contacted us before, with a packaged acquisition price of 20 million. Now you’re offering a valuation of 12 million, isn’t this just bullying?"
Hearing her words, Gu Bai chuckled.
"President Shan, are you interested in hearing something unrelated?"
"Please go ahead."
"Actually, you’re not suitable for entrepreneurship, or rather, you’re not suited for starting up an internet company. Once you get involved with internet companies, you cannot avoid contacting various capitals in the future. Being so naive, sooner or later, you’ll be devoured, leaving nothing."
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"The reason B Station would value you at 20 million is because your business overlaps with theirs. Whether it’s investing or acquiring you, it will benefit them. But Black Swan is different.
We’ve never dipped into the ACG industry, nor do we have plans to venture into it in the foreseeable future. Naturally, the value is lower, you should understand that, right? It’s like I want an apple, but you insist on selling me a pear at a high price, how should I accept that?"
"But B Station..."
Shan Fengling had just started to counter when Gu Bai directly interrupted her.
"I believe there’s no need for you to mention B Station again. If B Station’s offer was so generous, why didn’t you accept it and instead came to me?
Let me explain, your business overlap is too high. Although one operates in the domestic style, and the other covers the entire ACG animation industry, there is essentially no difference.
To put it bluntly, you just can’t accept the acquisition conditions from giants like B Station and Tencent. So why do you think Black Swan is a benevolent entity? Last night, I already told you, we at Black Swan are also capital. Although our scale isn’t as large as theirs, in terms of ruthlessness, we’re just as bad."
"Then President Gu, why don’t you lay out your ultimate bottom line? I believe that such a busy person as yourself won’t waste time talking so much nonsense with me."
Shan Fengling calmly looked at Gu Bai’s young face and said.
Gu Bai leaned back in his chair, looked at Shan Fengling, and slowly laid out a proposal.
"Two choices, President Shan, it’s up to you to decide.
The first choice, a 12 million valuation, we, Black Swan Capital, invest 2.4 million to acquire a 20% stake, obtaining the same proportional voice but not participating in management.
The second choice, a 15 million valuation, a 6 million investment with a 40% stake, requiring management rights."
Having finished, Gu Bai watched Shan Fengling, letting her make the choice herself.
"That’s impossible! Is President Gu suggesting this 12 million is the post-investment valuation? I can’t accept that. As for management rights, we can’t let go of them. If I accept your second condition, I might as well package ’Huafeng Dimension’ and sell it to B Station!"
Upon hearing Gu Bai’s conditions, Shan Fengling became visibly agitated.
"Then I wish President Shan a profitable sale."
With that, Gu Bai shrugged, smiling as he leaned back in his chair.
"President Gu, can we discuss the first condition further?"
Shan Fengling, almost pleadingly, looked towards Gu Bai.
"Then tell me your financing requirements."
With his fingers interlocked and placed flat on the table, Gu Bai stared into her eyes.
"I can accept the pre-investment valuation, but I hope the valuation is 15 million. We are willing to offer 20% equity."
"The 12 million valuation is the baseline. If President Shan can’t accept it, you can offer more equity. If you’re only willing to offer 20%, my conditions won’t change."
Gu Bai rejected her outright without even thinking.
Though it’s only an additional 600,000, business is business.
Similarly, Shan Fengling couldn’t accept giving away 40% equity right at the angel round, let alone giving up management rights. Such conditions are barely different from a packaged sale, and once further financing is secured, Black Swan Capital, with its financial power, is fully capable of following up or reinvesting. Once agreeing to Gu Bai, perhaps it wouldn’t be long before "Huafeng Dimension" would have a prefix added.
Black Swan·Huafeng Dimension.
In the end, Shan Fengling still compromised in the face of capital.
The main issue was that the website couldn’t hold out any longer; without a capital injection, users would soon run away, leaving it worthless.
Though 2.4 million isn’t much, it’s enough for them to burn through a period. And although Gu Bai’s ruthlessness isn’t much different from Tencent and B Station, at least he left her with a last glimmer of hope.
Since Shan Fengling agreed, Gu Bai also stood up to shake her hand.
Unlike Black Swan Entertainment and Xingnai Media, he had personally witnessed the future development trends of the live broadcasting and internet celebrity industries.
But ’Huafeng Dimension’ is different; in his foresight, he had never heard of this site.
This investment was as if conducting an experiment.
He wanted to see if he could change the future.