the author: guo-dong du, focused on venture enterprise equity structure and venture investment, micro letter number public duguodonggo
‘s regiment the eerie sprint to the IPO, the financing amount equivalent to the general O2O enterprise B round, let a person have to think of two or three years ago,’s controversial financing propaganda. In fact, entrepreneurial enterprises in financing, often making false propaganda, the false information in the media to spread and fermentation, often until a public company, can see it in the prospectus was real. So, could not help but find’s regiment was finance news, then compares the prospectus disclosure of the situation, at the same time, also conveniently summarized a market financing venture enterprises promotional gimmick.
‘s group’s financing propaganda and the prospectus disclosure of
1. Exaggerated financing
when news: in May 2011, high-profile’s group announced the first round of financing will amount to $200 million, was the largest single group purchase industry financing. ‘s group announced the news started outward, claims that the funding will come from Goldman sachs. The “daily economic news” reporter about this interview at Goldman sachs, the relevant person in charge of its stated that no comment about it, but suggested journalist, should continue to focus on the news, the truth will be clarified. On May 25, 2011, corwin’s group at the news conference, said money from CDH, god bless, clear division, but refused to reveal details of the amount of each investment. Gavin ni qing’s President to the media, said: “we must be voted for the money, but now is not convenient to disclose the number of”.
the prospectus disclosure: in April 2011,’s group A – 1 round of $5 million, for the division of capital. In May 2011,’s group A – 2 $32 million round of funding. Until July 2011,’s group to A – 3 rounds of financing, financing amount is $18 million.
‘s group in A round of funding, A total of $55 million, the qing dynasty capital totaling $7 million, CDH total investment of usd 30 million, god save the invested more than 770 dollars. ‘s regiment publicity, however, the total amount is $200 million, A round exaggerate nearly 4 times than they actually are.
in July’s group in 2011 in A – three rounds of financing, found that there was A $1 million investment, named David Tse Young Chou investor, director of Goldman sachs have an investment management is also called this name, but not in the prospectus’s regiment did not reveal the relationship between person and Goldman sachs. Can reasonably guess, therefore, may be it in his personal name’s regiment for the investment, and has nothing to do with Goldman sachs. But, according to media reports,’s group in May 2011, A – 3 round of funding has yet to take effect at the time, Goldman sachs investment is propaganda.
2. Quietly financing
when news: according to the current search, have not found any news or’s group’s propaganda, showed that’s group B round of funding. ‘s group CEO Xu Maodong only in February 1, 2012 had sent a tweet: “after all the corn together, over the past year’s WBH performance were obtained. At the beginning of the New Year, a friend care’s progress of IPO, IPO’s regiment in accordance with the original plan, are waiting for the right window capital market. There are currently no plans to replace the underwriters. IPO for’s, is the starting point, also beginning of the new service e-commerce of life.”
the prospectus disclosure: on February 29, 2012,’s group B $12.5 million round of financing, investment mainly based on A wheel for the team.
‘s regiment of the financing amount, less than A quarter of A round of funding amount, and very strangely quiet. Neither’s group before style, also does not conform to the entrepreneurial companies usually each round of financing amount than the last round of financing amount usually trend of increase. Combination of news reports, there’s group in the second half of 2011, a massive wave of layoffs, so even a large number of labor disputes disputes, is likely to be the emergency financing just investors help’s group for help.
3. Seems to be not financing
when news: on May 21, 2014, confirmed to the media’s team has won $50 million in financing. CEO Xu Maodong in an interview with the media, according to the original shareholders team’s regiment has added $50 million to the’s regiment again, add up to 310 million yuan, in order to promote’s longitudinal deepening development services to the life.
the prospectus disclosure: record not found in 2014 with financing.
‘s group the campaign to raise $50 million m, the distance from the sprint to the IPO, in January 2015 7 months apart. The financing’s regiment publicity amount is $50 million, announced its IPO financing amount is $65 million (first published is us $40 million). May reasonably doubt that’s regiment of the IPO, is its C round of financing in May 2014 after failing to find an alternative options.
2, start-up financing common gimmick of false advertising
1. Exaggerate the financing amount
to exaggerate the financing amount is usually the most common ways include:
(1) deliberately confusing financing currency, such as renminbi financing, as the dollar funding, counting rate, financing amount is six times had been exaggerated.
(2) deliberately fictional financing amount, the actual amount of financing zoom in four to five times.
(3) according to the startup investment enterprise performance is in place in stages, by fuzzy propaganda for once.
in the start-up financing, financing the phenomenon of 3-5 times. So, for many start-ups propaganda financing amount, multiplied by 20% to 30%, it should be the actual amount of financing.
exaggerate the financing amount, in some ways even win-win for all parties, so people are “happy” :
(1) investment institutions and foreign exaggerate raised entrepreneurial companies formed the tacit understanding. For new start or a small investment agency, said the investment amount bigger, can display its strength. And cases, is the investor has been kidnapped by the enterprise, the money, so can only hope that enterprise development as quickly as possible, do a high valuation, exaggerated propaganda has acquiesced to the enterprise.
(2) to exaggerate the financing amount, improve the enterprise valuation, can let the business partners, customers and users, the more trust.
(3) the business enterprise can also through the controversial financing amount of media attention, the media in the shadows, free do the advertising campaign for a startup.
(4) to exaggerate the financing amount can also make startups to rival a deterrent, disturb the layout of the competitors. Competitors, of course, can also according to the news for its potential investors, the chance to raise their social status and value.
2. Early disclosure has a famous investment institutions to participate in
a lot of startups will disclose in advance are approached famous investment institutions, the financing often has not yet been finalized, probably just got the term sheet, or in the due diligence phase, or investment agency decision-making committee has not yet been decided.
a startup early investment situation, on the one hand is to give the investors pressure, prompting the decision as soon as possible. Of course, does not rule out some cases self-defeating, lead to investment institutions give up investment. Start-up companies, on the other hand, in so doing, can also be the opportunity to attract other investment institutions. Even as other investment institutions and finally found that actually has not been completed financing venture enterprises, but also can attract the investment institutions to understand the situation of venture enterprises, make business enterprise the opportunity to investment institutions to promote themselves, prompting enterprises gain new investment opportunities. The new investment opportunities, and can in turn to before is preparing the investment of investors, formation pressure.
3. The reaction of the venture capital industry
at the beginning of the New Year 2015, xiao-ping xu, launched the “venture capital industry report raised real initiative and action”, hope the New Year, can eliminate the phenomenon of false investment venture capital industry. Xiao-ping xu in the weibo said: “at the beginning of the New Year, I want to launch an initiative: friends of the venture capital, everybody together to eliminate the phenomenon of the false investment. I dare not say, but I’ll know precisely what is very firm raised. I asked the company either not submitted to the finance news, want to report will be submitted to the real number, otherwise I would in weibo “accidentally” revealed that I know the truth. Ran wang also respond to the initiative of xiao-ping xu said, at the same time also cautions entrepreneurs in their financing by peers about raising interference, avoid others, form a two day hanging in the sky.
these large, well-known investment agency, already don’t need to false advertising to build momentum and finance instead of the false mouth will disturb their investment plans, so they have the enthusiasm to advocate true released raised. Honest about the financing amount, however, is indeed a correct and positive values, is also a founder of the embodiment of the honest quality, moreover, the paper is not to live, to the fire in the next round of due diligence, in the public disclosure of information, the actual situation will be exposed sooner or later. Business such as the battlefield, however, virtual false false strategy is difficult to avoid, like read sun tzu, 36 plan which skill is not full of cheating? To make real raised most entrepreneurial companies and investors are released, difficult!
the author’s note: helpful hints, about’s group, is only according to the record of retrieval of news and the prospectus to speculate that limited reference only, without any intention of misleading.