jump to navigation

VC/PE潜规则 June 26, 2011

Posted by Ian Cheng in Funding.
add a comment

各行业都有其潜规则,VC/PE市场也一样。随着风险投资和股权投资基金对于中国市场的渗透愈益深入,其背景和成分也愈益复杂,企业与投资方的潜台词也更加丰富。想把VC/PE们看个清清楚楚、明明白白,无疑需要一双慧眼:股权投资专家张雪奎讲师在讲学中经常提醒,VC/PE的鲜花背后可能是陷阱,暴风眼里可能最平静,没有感觉的风险最危险,潜规则后面就是风险。

20110712-112141.jpg

  潜规则一:原来VC/PE也讲等级

  资本市场本身就是多层级的,投资机构和企业的位置泾渭分明。在智慧方面大基金与小基金没有必然的差别,就象卡车司机不一定比跑车司机技术高超一样。

  两者的区别首先资金运规模,大项目私募时金额已经相当可观、IPO时更涉及数十亿计的股票承销。其次是成本,不同水准的基金运作成本天差地远,重量级不够的项目取得的投资收益根本无法覆盖大基金的成本。大型投资机构是摩根、凯雷、软银;中型的有联想投资等大陆、港台风投机构和刚刚进入中国试水的海外基金;小型基金多由海外证券机构或华人发起,对行业的专注度较高。

  风投领域虽无明文规定却是等级分明,具体企业适于那个级别的风投机构是不言自明的。

  规则二:越投越贵,越贵越投

  风投最先在国内“试水”阶段投资的项目一般只有是几十万,一百万的很少见。

  随着中国概念在国际资本市场名声鹊起,专门投资中国的VC/PE募集到的金额日益庞大。对VC/PE来说,投资200万美金的项目与2000万美的项目花费的时间基本相同。所以总的来说呈现越投越贵、越贵越投的现象。但投资机构又有分散风险的理念,计划投入中国IT业的1亿美元分散投到50家比集中投入5家风险小得多。为此风投选择结伴而行,比如2002年10月,摩根、英联、鼎辉三家联手向投蒙牛投入2600万美元。分别管理着成百亿资金的三家投资机构这样做的目的无非分散风险。还有一重动机是搭便车,一家机构花精力考查项目、其它机构直接跟进。被搭便车的机构不仅不以为忤、反而将其视为四两拨千斤的杠杆。比如完成对项目的审查后投入1000万、其它3家机构各跟进1000万(企业共获得4000万),对牵头机构来说等于以1块钱带动了4块钱,杠杆比为1:4。

  规则三:注重人脉

 通过邮件发送的商业计划书,超过80%都将在5分钟内被否决。风投行业的条条框框本来就少,虽有规则但投与不投常在一念之差。而且在风险遍地的情况下投给朋友介绍的企业总比投给完全不摸底的企业强些。投行机构、专业中介机构(会计师所、律师所、财务顾问公司)、财经媒体和被投资企业构成若干相互交叉的“圈子”。回过头来看,成功获得投资的企业中90%以上得益于圈内人的推荐。

  另一个重要原因是风险投资极为重视创业者的为人。所以,从熟悉且信任的人那里得到企业者的信息会得到风投极大重视。

  规则四:近地缘

  北京和上海是最受风险投资基金和风险投资家青睐的地方。而海外的经验,比如在硅谷,一般的风险投资家只投资在方圆30公里左右的范围的公司,如果你要拿到这个风险投资家的钱的话,没办法你就搬进去吧。

  原因其实也不是很难理解,因为风险投资本身就是要如何去建立公司,如果风险投资家每3个月才去拜访这个公司一次,跟管理层用电话来沟通,那么肯定是没有效率的。你要跟其它的董事,或者是跟公司的高层管理人员要有非常密切的接触,一个礼拜去拜访一次,去讨论一下业务发展的情况等等,才有效果。所以一般的风险投资企业取向是投在他办事处附近的一些企业。

  规则五:VC/PE是最昂贵的融资方式

 融资本质上是企业与投资人就风险分担与收益分配达成的一种制度安排。企业找都懂得关心基金对自己的估值,殊不知基金对自己也有估价。这个价就是预期回报率:从被投资企业的成功退出获得的内部收益率与实现成功退出的概率相乘。预期回报率的高低取决于资金所有者的“贪婪”程度,主流的量化模式简称。

  比如一个企业所在行业的平均投资收益率为33%、国债利息率为3%,通过这样的测算,投资人希望的回报率为每年48%!通俗地说,如果3年后能够成功地从企业退出(企业上市或高溢价出售)投资人要求的总回报率在324%以上。即给你1000万、3年后要拿走3240万。实际上,由于中国经济的走强及企业的优异表现,风险投资从成功上市企业获得的回报率远高于300%。可见,接纳风投是世界上最最昂贵的融资方式,资金估值公式客观地说明了风险投资高回报率预期的依据。

  规则六:VC失手是常事。

  VC可能会给经评估有40%概率会倒掉的企业投资。因为一旦该企业成功将给VC带来500%的回报,项目的预期回报率为300%(即:500%X60%)。

  所以看似勇猛地追逐风险的VC,实质上追求的是高额回报,风险和收益只要匹配就会有人问津。如果要求基金投资成功率高于95%,期满清盘时计算总的内部收益率(IRR,即为使项目净现值为零的折现率数值)恐怕不到10%,而将投资成功率降低到80%、总的内部收益率也许会超过30%。

  从以往风投总的业绩看,它们每投入十个项目有两三个亏本、三四个持平只有两三个成为明星。所以,衡量风险投资家的成功是看他做成了明星项目、基金的总收益率有多高,而不是他是否有过投资败绩。为追求高成功率过多地拒绝企业的投资申请,被拒者中难免会有携程、分众那样的“好苗子”。按照私募股权投资专家张雪奎教授说法就是:VC不能错过(不错过好项目),PE不能做错(安全)。

  成功的VC专家从不自我标榜“从未失手”,那会招内行笑话的。总之,创业型企业的有形资产少、无形资产难以量化,的亮点只有一个:高成长性。风险的厌恶者如银行避之不及,只有风险的偏好者为追逐高额收益才会投资这样的企业。但风投先要确认可从企业取得与风险相匹配的收益。简言之,你的企业值得风险来冒险。

  规则七:拔苗助长、落袋为安

 投资人相信:一鸟在手胜于十鸟在林。而且,绝大多数风险投资机构是靠募集组建的有限合伙制公司,存续期为5到10年。只提供资金不参与经营的有限合伙人仅以其出资为限承担责任,风险投资专家则为普通合伙人。快进快出是他们的理想,只有退出变现,风险资本才能流动、循环。通俗地说,如果被投资企业是颗摇钱树,风投则试图高价卖掉这颗树。亲自摇树、乐此不疲的不是真正的风投。

  被投资企业的发展阶段可粗略分为:种子期、创建期、扩展期和成熟期。风投资本在四个阶段企业的分布大致为12:22:42:24。当可供投资目标众多时,风险投资趋向于涉足较为成熟的企业。在投资过程中如果有套现机会,比如高溢价私募、首次公开募集(IPO)之时,VC一般会套现一笔远远超过初始投入的资金。再视情况保留或多或少的股权,以便继续分享企业的成长。总之,VC/PE是在落袋为安的倾向下尽量寻找利益最大化的退出时机。比如联想投资适时将卓越网的股权卖给亚马逊,取得了13倍的回报。风投争于落袋为安的取向加快了企业发展、壮大、上市公募的进程,在相当大程度上助长的被投资企业的浮躁。西方学者早已注意到了风投的这个负作用,而盛大等纳斯达克新贵的一系列不成熟表现也证明了这一点。

  随便一个中小规模的基金都有不下十名分析师,各人都有专长的投资领域、对目标行业的宏观微观情况了如指掌。以上六条只是他们分析项目、制定方案、实施投资过程中最常用到的规则。

  规则八:不要为VC/PE放弃权底限

 不要为了VC/PE而VC/PE。现在很多行业内的聚会,主题就是怎么骗VC/PE。于是很多创业者都在疲于奔命,钱拿不到不说,也把自己钱砸进去了,尽做些没有效果的工作,一点技术含量都没有。行业的浮躁,使业界成功的标准已经退了一大步,原来是上市才成功,现在的成功概念是拿到VC/PE就算。甚至有创业者为了获得VC/PE而向投资人跪求。

  一些海外基金的管理其实比较正规,但他们过多脱离中国市场,为了适应这个市场,通常在本地招募有VC运作管理经验的人,也会寻找一些有互联网经验的人进行合作。但这些合作者寻找投资对象常常为了自己牟利,他会私下要求给予自己股份,或要求对方收购一家公司。

  很多拿到VC/PE的公司,不得不违心地高额收购一些公司,或给予投资人部分股份。通过这些投资人违规套现,结果创业公司就变成了没钱,或者钱不能花到钢刃上去。

 还有些VC则剽窃创业者的创意,许多创业者一旦递交了他的创业计划书,通常几个月后没有获得VC,就被人家复制到了其他项目中去了。某些VC,其实投的是自己的项目,顺便拉着别人的基金一起来投而已。即使拿到了VC,许多企业也为当初让步太多而后悔。全景网的吕辰就为自己引入第一轮风投时作价过低而懊恼不已。 “当时融资不知道该卖多少钱。现在看起来是卖便宜了。”这种“贱卖”甚至影响到吕辰进行第二轮VC融资。“在寻找第二轮融资时,那些VC都说,你别出那么高的价格,我清楚你当初给中经合的价格。”

  规则九:保持清醒,不要相信VC/PE的赞誉之辞

  当你获得投资的时候,VC/PE或许会赞美你——90%以上他们会对你极尽鼓励之能事。但你必须冷静。说不定VC/PE心里在想:你的企业有40%的概率在3年内倒掉!

  风投决断事物的标准其实只有一条:风险与收益是否匹配。按照私募投资专家张雪奎(欢迎订制张雪奎讲师投资融资课程13602758072)教授的说法就是,有风险不怕,只要利润高就可以。其实根据经验和精心测算,经过周密的准备、精心的计算和多次实验,柯受良驾车飞越黄河的风险不比步行穿过长安街大,这就是风险控制的典范或者说是奥秘。

 职业投资人从入门的第一天起就开始建立风险控制的理念。特别是那些历史悠久的投资机构,曾目睹无数企业的兴亡乃至国家的兴衰。他们知道一切皆有可能发生、只不过发生的概率有大有小。风险不可怕,一味回避风险将一事无成,关键是尽可能精准地确定风险在哪里并有效地加以控制。

  风险投资基金/私募投资基金是从实力强大的机构(美国风投60%来自养老基金)或极富有的个人那里募集设立的,其性格是“不惧风险,追求超高回报”。股市、期市的收益率仍不能令其满足,于是投入初创期的各色企业,国内外的数据明这类企业的成功率不足10%,其中的成功者却有可能成为微软、思科、惠普、苹果和英特尔这样的巨人给投资者带来十倍、百倍的收益。

  VC/PE对你的企业的理解,和你是不同的。如果企业是你的孩子,它或许要你的孩子放弃高考去参加“超级女声”,至于发展后劲,那不关他的事。他要你的企业的效益最快地显现出来。企业是你的孩子,所以你要保持清醒。

  规则十:VC/PE是功利的经济动物,随时可能“变脸”

 要知道,VC/PE是“骑墙”的,他的眼里只有利润。例如,在投资方式上,VC/PE多采用“变种”的股权投资方式,特别是“可转换优先股”。投资人注入的资金首先要体现为债务,企业有到期还本付息的义务。如果企业成长得好、股权价值飞升,风投行使“选择权”将债权转为股权获取更大收益。在股权投资与债权投资间的切换是风投控制风险的重要手段。

  有经验的VC/PE不会一次满足企业发展进程中的资金需求,而是分阶段地投入随时准备止损退出。确定目标企业后,风投一般会先给一年或半年所需的资金,然后观察投入的效果。一但发现苗头不对就果断止损,毫无“妇人之仁”。如果以美好蓝图引入VC/PE,然后想利用对方 “舍不得”前期投入的心理来套住基金是很难奏效的。萨士比亚的《威尼斯商人》中有句台词:想找到你射出的箭就朝那个方向再射一箭并看清落在哪里。VC/PE不会朝一个让它失望的企业再“射一支箭”的,所以企业对未来几年的业绩预测要保守些。

  规则十一:一个行业的想象空间只有那么大

  “不要把鸡蛋都放在同一个篮子里”这句西方谚语,在投资基金的词典型里叫做“风险分散”。

  大的机构投资者都采用“自上而下”的分散方式。操作细节(分配比例、是否组建子基金等)虽有不同,但没有不“分散”的基金。越是大的投资机构越有能力在世界各地、各行业同时投资于成百、上千家公司,从而最大限度地分散风险。

 具体到一个细分行业,比如动漫制作,VC/PE只看得上这个行业第一、第二名。因为在激烈的商战中,老大、老二都有胜出的可能。比如,根据AC尼尔森的调查分众和聚众分另占有全国12个主要城市楼宇电视广告市场的49.8%和46.7%。随后,聚众传媒(老二)被作价3.25亿美元并入分众(老大)。

  除了考虑竞争态势,资本市场也不会同时接纳同一国家、同一行业的多家企业。比如携程、e龙之外,盛大、第九城市之外的企业很难到纳斯达克风光。当你把企业的主营业务告诉投资者,他们的第一反应就是归类。订机票、订客房的归到携程、网游归到盛大、公共场所电视广告归到分众。企业一定要在商业模式方面有实质性的创新,否则你抗议说和携程、盛大、分众不同也没有用。如果某个行业的前两家地位已经不可动摇,其他企业被挤死的风险远大于出人头地的机率,万难从VC 得到资金。

  规则十二:VC/PE的中国异化

  最近活跃的不少外资VC/PE都变得颇有“中国特色”——短、平、快。实际上在一两年内就通过上市退出获利的投资者只是起上市辅导的作用,通俗地说也就是作了投行的业务却赚了几乎相当于始创者的利润。

  当前内地不少外资VC/PE投资一家企业的时间一般在两年以内,这和国际上的情况大相径庭。在国际上一个VC/PE基金的投资期间通常是7年。虽然为了分散风险,在投资组合内会同时包含中前期以及中后期的创新企业。但大体而言VC/PE投资一家企业的周期通常都长达3~5年。真正意义上VC/PE介入时间也会比较早,基本上算是企业其中一个建立者,担当着孵化、协助的作用。而那些在接近IPO时期注资的基金投资者,严格来说不是VC而是以投资过渡期企业或者即将上市企业为目标的过桥融资。这类型的资本对一个国家的创新产业培育效果并不明显。

  VC/PE通常被称为风险投资/私募投资,这体现了 VC/PE投资的一个特点——高风险,高回报。在近期许多VC投资个案中我们都会看到这么一种投资合作组合:传统VC+老牌投行风险投资部门。由于在成熟期介入,而且还有传统VC打头阵,这类型的投资实际上是低风险的“风险投资”。和传统VC通常只占企业20%以内股份情况不同,这类“VC”投资的金额比一般的创业投资要巨大得多,甚至已经带有股权收购的意味。其中一个例子就是软银亚洲联合美国凯雷投资向顺驰(中国)不动产网络集团投资4500万美元,该项投资创下中国2010年单项金额最高纪录风险投资。

  这些VC/PE退出都比较快。因此,在培育高新技术公司方面的作用不大,反而有可能成为把中国优秀企业资产从国内转移到海外的“买办”。在顺驰的例子中就运用了“海外曲线IPO”的方式,以绕过国内监管实现在纳斯达克上市。其操作实质是通过建立没有资产含量的海外壳公司,然后通过并购内地企业达到绕开内地严格的外币监管条例以全外资身份海外上市的目的。为了顾全外资VC在企业中投资需要在海外以外币方式退出收回的需要,某些“手腕”是不得以而为之。但是在这场“乾坤大挪移”中,被改变的真的只有企业的国籍而已吗?

Mark Suster: Raise Money Now So When The Party’s Over You’re Sitting Pretty June 18, 2011

Posted by Ian Cheng in Funding.
add a comment

Alexia Tsotsis

Earlier this week GRP Parter VC and VC blogger Mark Suster gave the keynote talk at the Founder Institute’s Founder’s Showcase on “Getting Funded In A Frothy Market.” Suster began the keynote with the declarative statement that we’re in a bubble, “We’re in a bubble, you can quote me on that and I generally haven’t been saying that publicly,” he affirmed.

Suster went on to refer to the uniqueness of this particular period of exuberance, in that it’s localized, “If you’re in Cleveland, Ohio you don’t particularly feel like there’s a bubble,” but right now the usual 3-5 months it takes to raise capital have been distilled down to 3-5 days for startups in Silicon Valley, New York and L.A.

Suster urges these startups to raise money now, so they can survive when the bubble inevitably pops, “When the party’s over the party’s over” he went on, urging entrepreneurs to start raising… “when the Hors d’œuvre tray is passed around take two, and put a third in your pocket,” likening the market froth to a hopping party where everybody is drunk, off of their own Kool Aid in many cases.

Having lived through three previous cycles, Suster knows how the party will end (with a hangover for most), and relays his key takeaway which basically amounts to stocking up on supplies for the winter — So you can live to tell the tale:

“Go get yourself funded, in whatever way shape or form you have to, at whatever price you feel comfortable with, with people you trust like and respect in whatever amount and go build a company. Really in the end it’s kind of a binary outcome; You raise money and give it your all, you give it your college best and sometimes you succeed and sometimes you don’t.

It’s a wonderful experience to go through. I just remember in the last three cycles the companies that didn’t raise money are the ones that weren’t around to tell that story.

And I know how this ends, this is my crystal ball; When the party ends everyone goes home and you can’t hire people, you can’t raise money, the Wall Street Journal isn’t writing articles about you any more, no one returns your phone calls. Honestly that’s the most rewarding time to be a startup entrepreneur, provided you have money.”

VIE structures 可变利益实体(VIE)结构 June 14, 2011

Posted by Ian Cheng in Funding.
add a comment

This posting will explain the use of variable interest entities (VIEs) by U.S. listed Chinese companies.  I have selected E-Commerce Dangdang, Inc. (NYSE: DANG), which listed on the NYSE late in 2010, as an example of how the VIE structure is used.  I have selected Dangdang because it follows the archetypal model for VIE structures, not because it has any higher or lower risks than other companies using VIEs.

Offshore holding companies. Like most U.S. listed Chinese companies, the actual listed company of DangDang is a Cayman Islands corporation.  After the IPO, founders Peggy Yu and Guoqing Li controlled 44.1% of the voting power of the company.

Chinese companies that list in the U.S. mostly use a foreign incorporated company as the listed company. The exceptions are large former state-owned enterprises like PetroChina or China Life, which list the Chinese incorporated parent company. The foreign parent companies are usually incorporated in the Cayman Islands because it is a favored location for offshore companies due to its tax-free status and established legal system that is built on English law. Some companies have used corporations formed in the British Virgin Islands or the U.S. U.S. holding companies are usually a poor choice, since this brings the corporate group into the U.S. tax net. Such arrangements are usually an accident of history –  the founders having started the company in the U.S. or used a reverse merger with a U.S. shell company.

The usual way to prepare for an IPO would be to contribute the shares of the Chinese operating company to the Cayman Islands company so that the Chinese company becomes a wholly owned subsidiary of the Cayman Islands company.  The big problem with that was that foreign investment is not permitted in the internet sector where Dangdang operates. There are other problems related to foreign exchange and taxes that I will cover in another posting. In order to list in the U.S. (or anywhere for that matter), it was necessary for the Cayman Islands corporation to be able to consolidate in its financial statements the Chinese operations of Dangdang that were held by the founders. The Cayman company also needed a way to get access to the profits of the Chinese operations for the benefit of the shareholders.  Since they could not simply transfer the Chinese company to the Cayman Island holding company, they used the VIE rules to consolidate the Chinese operations by putting in place the archetypal VIE structure, as illustrated in this chart from their registration statement:

VIE entities.  Beijing Dangdang Kewen E-Commerce Co. Ltd. (Dangdang Kewen) is a Chinese company that is owned by Dangdang’s founders, Peggy Yu Yu and Guoqing Li, who are husband and wife.  Because both shareholders are Chinese citizens, Dangdang Kewen is permitted to hold the licenses that are essential to the operation of Dangdang.  Dangdang Kewen has a 100% owned subsidiary in Wuxi.

WFOE entities.  The Cayman Islands corporation established a Chinese subsidiary, Beijing Dangdang Information Technology Co. Ltd. (Dangdang Information).  Because this entity is 100% owned by a foreign corporation, it is known in  China as a wholly foreign owned enterprise (WFOE).  Dangdang Information is not permitted to hold the necessary licenses to operate the business, and is not permitted to sell audio and video products in China.   It does, however, conduct a significant portion of Dangdang’s business in China, including , for example, handling product procurement and fulfillment operations and operating warehouses.  Ideally, Dangdang Kewen would also be a WFOE, but this is not permitted in the internet sector.  Dangdang Information has a 99% owned subsidiary in Wuxi.

Agreements. The concept that underpins a VIE structure is that control is obtained through legal agreements rather than through share ownership.  Taken together, the agreements are intended to provide Dangdang Information with substantially all of the economic benefits from Dangdang Kewen and the obligation to absorb all of its losses. Dangdang uses five agreements to achieve this.  These agreements are typical of most VIE structures:

Loan agreement. The founders borrowed funds from Dangdang Information in order to capitalize Dangdang Kewen.  By using Dangdang Information instead of the Cayman Island parent to make the loan, the agreement is between two Chinese companies, avoiding the need to deal with the State Administration of Foreign Exchange.

Equity pledge agreement. The founders executed an equity pledge agreement with Dangdang Information which pledges their shares in Dangdang Kewen as collateral under the loan agreement and the other agreements.

Call option agreement. The founders agree to sell Dangdang Kewen to Dangdang Information at any time for the original capital contribution. The payment price can be offset against the loan.  From a practical viewpoint, the option cannot be exercised unless at some point in the future China allows foreign investment in companies like Dangdang Kewen.

Technical support agreement. Dangdang Kewen agrees to use Dangdang Information as its exclusive technical service provider including platform and technical support, maintenance and other services. It is through this agreement that Dangdang extracts the profits of Dangdang Kewen. The transfer price that determines the amount of the charge for technical services creates tax risk, which I will discuss further in a later post.

Power of attorney. The founders give a power of attorney to Dangdang Information that gives it all the normal shareholder rights, including voting, attending shareholder meetings and fulfilling the call option agreement.

Operations. The registration statement of Dangdang does not provide details on how it will operate, but there are some clues.  The objective in any VIE structure will be to minimize the profits in the VIE.  Residual profits in the VIE cause problems because the ultimate transfer of these profits to the public shareholders is difficult and expensive. While VIE agreements typically require the VIE shareholders to turn any dividends over to the public company, any distributions to the VIE shareholders would be subject to individual income tax in China, layered on top of corporate taxes already paid.

Companies with VIE operations in China typically try to conduct as much of the business as they can justify in the WFOE.  In Dangdang’s case, it appears that they intend to conduct procurement, fulfillment and warehousing activities in the WFOE (except for audio and video products that the WFOE is prohibited by law from handling).  On top of that, the WFOE will charge the VIE for a technical service charge to compensate for developing and maintaining the internet trading platform. The ideal situation will zero out the profit of the VIE, resulting in all of the profits residing in the WFOE.

This posting has outlined the basic structure of VIEs using a typical example. There are some variations on this structure that I will explain in future postings. In these postings I intend to present some of my research on how VIEs are actually being used in China, and outline some of the more significant risks.

这篇博文的主要目的是解释在美上市的中国公司所使用的可变权益实体(VIE)结构。为此,我选择了电子商务公司当当(NYSE:DANG)来作为VIE结构的例子。之所以选择当当,主要是因为它使用了典型的VIE结构,而不是因为它的风险比其它使用VIE结构的公司更高或更低。

离岸控股公司:和大部分在美上市的中国公司一样,当当的上市公司是一家注册在开曼群岛的公司。在IPO之后,该公司的创始人俞渝和李国庆控制该上市公司44.1%的表决权。

绝大部分在美上市的中国公司都用一家在国外成立的公司作为上市公司。只有大型国有企业,如中石油和中国人寿例外 – 它们的上市公司就是中国境内的母公司。在美上市中国公司的外国母公司大部分都在开曼群岛设立,该地由于免税和基于英国法的完善法制制度,一直都是设立离岸公司的优先选择。其它一些公司在英属维京群岛或美国设立控股公司。在美国设立控股公司通常不是一个好的选择,因为这样做将把该公司纳入美国的税收网中。这样的结构往往是出于历史原因 – 创始人在美国成立公司开始创业,或者是利用反向收购并购美国壳公司上市。

通常为IPO做准备的方法是将中国营运公司的股份转移到开曼群岛公司,从而使中国营运公司成为开曼群岛公司的全资子公司。但这样做存在一个重大问题:当当网从事互联网行业,而中国的互联网行业禁止外资投资。同时,这样做还会引起外汇和税务问题,我将会在另外的博文中讨论这些问题。为了在美国(或者是任何地方)上市,开曼群岛公司必须能够将由创始人控制的中国营运公司纳入其合并财务报表范围。同时,开曼群岛公司还需要设法代表股东提取中国营运公司的利润。由于无法简单的将中国公司的股份转移到开曼群岛公司,他们将中国营运公司放置于一个典型的VIE结构中,并利用VIE相关的准则将其纳入合并报表范围内。下图摘自当当公司上市申请登记表,解释了他们所使用的公司结构。

可变权益实体:北京当当科文电子商务有限公司(当当科文)是一家由当当的创始人俞渝和李国庆夫妇所有的中国公司。由于两位股东均为中国公民,当当科文可以持有对于当当的运营至关重要的许可证。当当科文在无锡有一家全资子公司。

外商投资企业:开曼群岛控股公司设立了一家中国子公司 –
北京当当网信息技术有限公司(当当信息)。由于这家公司由外资100%持股,它在中国被归类为外商投资企业(WFOE)。当当信息无法持有当当运营所必要的许可证,同时也不能够在中国境内出售音频和视频产品。但是,它负担着当当在中国业务的很大一部分,包括产品采购、库房运营等。当当科文当然也可以成为一家外商投资公司,但这样做将会使它被禁止踏入互联网行业。当当信息在无锡有一个99%持股的子公司。

协议:VIE结构的基础概念是,控制通过法律协议而不是持有股权实现。这些协议的目的是使当当信息拥有当当科文的全部经济利益,同时承担其所有的损失。当当运用了五个不同的协议来实现这一目的。这些协议在VIE结构中非常典型。

借款协议:当当的创始人们向当当信息借款以为当当科文提供资金。通过使用当当信息,而不是开曼群岛母公司签订借款协议的目的在于:通过当当信息,该协议是在两家中国公司之间签订的,因此并不需要接受到中国国家外汇管理局的管理。

权益抵押协议:当当的创始人们与当当信息签订权益抵押协议,将他们在当当科文的股权作为借款协议和其他协议抵押给当当信息。

认购期权协议:当当的创始人们同意在任意时间以原始出资额向当当信息出售当当科文的股份。股权转让款可以与借款相抵。实际上,除非在未来中国允许外资投资当当科文这类公司,否则该期权无法行权。

技术支持协议。当当科文同意雇佣当当信息为其唯一的技术服务提供商,提供包括网络平台、技术支持、维护和其他协议。通过这个协议,当当得以将利润从当当科文转出。技术服务费的转移定价存在税务风险,我将在另一篇博文中讨论这一事项。

授权书:当当的创始人们授权当当信息以他们的名义行使所有的一般股东权利,包括投票、出席股东会和完成认购期权协议。

运营:当当的上市申请登记表并没有提供它的营运细节,但是在其中有一些线索。任何VIE结构的目标都是使VIE公司的利润最小化。VIE公司的留存收益将带来问题 – 将这些收益转移至公共股东手中非常困难并耗费不菲。虽然VIE协议一般要求VIE公司的股东将其收到的股利全部支付给上市公司,向VIE股东支付的股利在缴纳企业所得税之后,仍需要缴纳中国个人所得税。

使用VIE结构的中国公司通常将其业务尽可能多的放在外商投资公司中。对于当当来说,他们看起来准备利用外商投资公司进行(除了外资禁止运营的音频和视频业务外的)采购、订单实现和仓储业务。在此之外,外商投资公司将收取VIE公司一笔服务费,以弥补为其开发和维护网上交易平台的费用。理想的状态是,VIE公司的利润在支付服务费后为零,所有的利润都在外商投资公司里。

这篇博文通过一个典型样本概述了VIE的基本结构。这种结构有着不少变体,我将在未来的帖子里解释它们。我计划通过这一系列博文分享我关于VIE结构在中国的运用的研究,并同时指出一些比较重大的风险。

互联网企业IPO加剧风投行业“贫富分化” June 14, 2011

Posted by Ian Cheng in Funding.
add a comment

  LinkedIn和Groupon等热门互联网公司的IPO(首次公开招股)加大了风险投资行业的“贫富差距”。

  红杉资本、Greylock Partners、Accel Partners和安德森-霍洛维茨基金(Andreessen Horowitz)是少数几家拥有这些高估值创业企业股票的风险投资公司,使得他们得以接触到最有潜力的企业家,并获取了大量的金钱收益。与此同时,其他多数风险投资公司却都在为融资发愁。

  LinkedIn的IPO为红杉资本和Greylock等支持者带来了超过20亿美元的账面利润,而作为Groupon的两大外部投资者,New Enterprise Associates和Accel也将在该公司IPO时拥有50亿美元的股票。但没有参股这些高估值企业的基金则被排挤在新的互联网交易之外,这就意味着很少有几家公司能够收获前景可期的回报。

  美国律师事务所Michelman & Robinson新兴企业和风险投资行业主管大卫·施瓦茨(David Schwartz)说:“富者愈富,他们正在以更高的估值寻找更好的产品和更好的企业。这令二线基金的日子很难熬。”

  过往的成功也打开了一扇签订更好交易的大门,因为企业家们都希望与这些基金当前投资的企业建立关系,并认为,这些基金的合伙人对新兴趋势有着更好的理解。

  行业趋势

  风险投资行业过去十年间已经逐渐萎缩。互联网泡沫的破裂和全球金融危机导致大量创业企业破产,而幸存者的上市难度也越来越大。根据美国风险投资协会的数据,2010年的全美风险投资基金融资额为125亿美元,较2008年减少52%,创下7年来的新低。

  根据安永会计师事务所的数据,IPO枯竭也导致2010年上半年全美活跃的风险投资公司数量减少47家。在此期间,每个季度至少展开一笔投资的美国风险投资公司仅为167家,而2009年全年的这一数字为313家。这一下滑也创造出了一批“僵尸”公司——只与已经投资的企业有业务往来,但却没有资金开展新的投资。

  IPO热潮重启又吸引了部分回流的资金。美国风险投资协会的数据显示,今年第一季度风险投资公司融资额达到71亿美元,同比增长76%。至少有294家公司已经宣布了今年在美IPO的计划,创2000年以来的历史同期最高值。风险投资公司可以在所投资的企业上市或被收购时获得收益。

  LinkedIn成为首家上市的美国大型社交媒体企业。这家上月IPO的职业社交网站目前市值为72亿美元。美国流媒体音乐提供商Pandora Media也于周二晚些时候确定了IPO发行价,并将于周三开始上市交易。Groupon同样提交了IPO申请,而社交游戏开发商Zynga也有望于6月底提交IPO申请。

  据消息人士透露,全球最大社交网站Facebook计划于2012年开始报告财务业绩,该公司目前在非上市公司股票交易所SharesPost的估值达到528亿美元。Twitter的估值达到66亿美元,但该公司尚未宣布上市计划。

  最大赢家

  只有少数风险投资公司有可能会成为这些交易的最大赢家。

  Grelock是LinkedIn、Facebook和Pandora的早期投资者,并在后期参与了Groupon的投资。知情人士透露,Groupon的IPO估值有望达到250亿美元。Accel持有Facebook和Groupon的大量股权,合广投资(Union Square Ventures)同样是Twitter、Zynga和移动应用开发商Foursquare Labs的第一批投资者之一。

  由网景创始人马克·安德森(Marc Andreessen)创办的安德森-霍洛维茨基金也持有Facebook、Zynga、Groupon、Twitter和Foursquare的股权。

  “无论是首次投资还是追加投资,企业家都被我们所吸引,因为我们的公司拥有曾经的企业家和运营高管。”今年3月出任安德森-霍洛维茨基金合伙人的斯科特·维斯(Scott Weiss)说,他还曾经是网络安全公司IronPort Systems的联合创始人。

  KPCB投资社交媒体的领域较晚,过去一年间以数十亿美元的估值参股了Facebook、Groupon和Twitter。但该公司此前也曾于2008年投资了Zynga。

  前景预测

  美国风险投资公司General Catalyst Partners合伙人克里斯·法莫尔(Chris Farmer)表示,安德森-霍洛维茨基金最有可能在未来十年内取得成功。他对风险投资行业有着15年的研究经验。

  除此之外,排名前五的还包括红杉资本、Accel、Benchmark Capital和合广投资。法莫尔使用了他发明的InvestorRank来对风险投资公司未来的成就进行预测,但数据都取自当前的投资和关系。

  法莫尔估计,未来十年内,将有三分之二的行业回报被15家公司获得,低于互联网泡沫破裂至今的50家。

  他在接受媒体采访时说:“强者的融资将继续增加,而其他很多企业都将衰落。有数不清的风险投资公司目前的融资额仅为十年前的一小部分。”

  基金规模

  Draper Fisher Jurvetson、Menlo Ventures和Highland Capital Partners都已经削减了最新成立的基金规模,而Greylock、Accel、红杉资本和Bessemer Venture Partners每家都至少新增了10亿美元融资。

  Menlo Ventures董事总经理肖恩·卡罗兰(Shawn Carolan)说:“大基金可以在企业发展晚期领投大规模的融资,从而拉大与竞争对手的距离。”

  Highland Capital普通合伙人彼得·贝尔(Peter Bell)表示,该公司的最新一只基金规模为4亿美元,符合目标。“对于我们而言,我感觉规模正好。我们的回报一直都高。“他说。

  Draper Fisher Jurvetson发言人则拒绝对此置评。

  行业新秀

  部分风险投资公司在互联网泡沫繁荣时尚未成立:安德森-霍洛维茨基金成立于2009年;合广投资是由弗莱德·威尔森(Fred Wilson)于2003年创立的;Twitter的支持者麦克·马普斯(Mike Maples)的公司Floodgate Fund成立于2006年;第一家参股Zynga风险投资公司Foundry Group也是2007年成立的。

  美国企业家埃里克·瑞艾斯(Eric Ries)表示,这些年轻的公司在追逐社交网络、网络游戏和移动应用趋势时脱颖而出,并且很早就介入其中。

  “他们建立了新的声望,尤其是在互联网圈内。”他说。不过,对于红杉资本和KPCB等企业而言,“强大的品牌优势仍然能够吸引企业家”。

The Option Pool Shuffle June 7, 2011

Posted by Ian Cheng in Funding.
add a comment

Summary: Don’t let your investors determine the size of the option pool for you. Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation.  If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call:

Option Pool Shuffle

You have successfully negotiated a $2Minvestment on a $8Mpre-money valuation by pitting the famous Blue Shirt Capital against Herd Mentality Management. Triumphant, you return to your company’s tastefully decorated loft or bombed-out garage to tell the team that their hard work has created $8Mof value.

Your teammates ask what their shares are worth. You explain that the company currently has6Mshares outstanding so the investors must be valuing the company’s stock at $1.33/share:

$8Mpre-money ÷6Mexisting shares = $1.33/share.

Later that evening you review the term sheet from Blue Shirt. It states that the share price is $1.00… this must be a mistake!Readingon, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.”

You call your lawyer: “What the fuck?!”

As your lawyer explains that the so-called pre-money valuation always includes a large unallocated option pool for new employees, your stomach sinks. You feel duped and are left wondering, “How am I going to explain this to the team?”

If you don’t keep your eyes on the option pool, your investors will slip it in the pre-money and cost you millions of dollars of effective valuation. Don’t lose this game.

The option pool lowers your effective valuation.

Your investors offered you a $8Mpre-money valuation. What they really meant was “We think your company is worth $6M. But let’s create $2Mworth of new options, add that to the value of your company, and call their sum your $8M‘pre-money valuation’.”

$6Meffective valuation + $2Mnew options + $2Mcash = $10Mpost

or

60% effective valuation + 20% new options + 20% cash = 100% total.

Slipping the option pool in the pre-money lowers your effective valuation to $6M. The actual value of the company you have built is $6M, not $8M. Likewise, the new options lower your company’s share price from $1.33/share to $1.00/share:

$8Mpre ÷ (6Mexisting shares +2Mnew options) = $1/share.

The shuffle puts pre-money into your investor’s pocket.

Proper respect must go out to the brainiac who invented the option pool shuffle. Putting the option pool in the pre-money benefits the investors in three different ways!

First, the option pool only dilutes the common stockholders. If it came out of the post-money, the option pool would dilute the common and preferred shareholders proportionally.

Second, the option pool eats into the pre-money more than it would seem. It seems smaller than it is because it is expressed as a percentage of the post-money even though it is allocated from the pre-money. In our example, the new option pool is 20% of the post-money but 25% of the pre-money:

$2Mnew options ÷ $8Mpre-money= 25%.

Third, if you sell the company before the Series B, all un-issued and un-vested options will be cancelled. This reverse dilution benefits all classes of stock proportionally even though the common stock holders paid for all of the initial dilution in the first place! In other words, when you exit, some of your pre-money valuation goes into the investor’s pocket.

More likely, you will raise a Series B before you sell the company. In that case, you and the Series A investors will have to play option pool shuffle against the Series B investors. However, all the unused options that you paid for in the Series A will go into the Series B option pool. This allows your existing investors to avoid playing the game and, once again, avoid dilution at your expense.

Solution: Use a hiring plan to size the option pool.

You can beat the game by creating the smallest option pool possible. First, ask your investors why they think the option pool should be 20% of the post-money. Reasonable responses include

“That should cover us for the next 12-18 months.”

“That should cover us until the next financing.”

“It’s standard,” is not a reasonable answer. (We’ll cover your response in a future hack.)

Next, make a hiring plan for the next 12 months. Add up the options you need to give to the new hires. Almost certainly, the total will be much less than 20% of the post-money. Now present the plan to your investors:

“We only need a 10% option pool to cover us for the next 12 months. By your reasoning we only need to create a 10% option pool.”

Reducing the option pool from 20% to 10% increases the company’s effective valuation from $6Mto $7M:

$7Meffective valuation + $1Mnew options + $2Mcash = $10Mpost

or

70% effective valuation + 10% new options + 20% cash = 100% total

A few hours of work creating a hiring plan increases your share price by 17% to $1.17:

$7Meffective valuation ÷6Mexisting shares = $1.17/share.

How do you create an option pool from a hiring plan?

Many factors affect option allocations including the quality of the existing team, the size of the opportunity, and the experience of the new hire.  If your company already has a CEO in place, you should be able to reduce the option pool to about 10% of the post-money. If the company needs to hire a new CEO soon, you should be able to reduce the option pool to about 15% of the post-money.

Bring up your hiring plan before you discuss valuation.

Discuss your hiring plan with your prospective investors before you discuss valuation and the option pool. They may offer the truism that “you can’t hire good people as fast as you think.” You should respond, “Okay, let’s slow down the hiring plan… (and shrink the option pool).”

You have to play option pool shuffle.

The only way to win at option pool shuffle is to not play at all. Put the option pool in the post-money instead of the pre-money. This benefits you and your investors because it aligns your interests with respect to the hiring plan and the size of the option pool.

Still, don’t try to put the option pool in the post-money. We’ve tried – it doesn’t work.

Your investor’s norm is that the option pool goes in the pre-money. When your opponent has different norms than you do, you either have to attack his norms or ask for an exception based on the facts of your case. Both straits are difficult to navigate.

Instead, skillful negotiators use their opponent’s standards and norms to advance their own arguments. Fancy negotiators call this normative leverage. You apply normative leverage in the option pool shuffle by using a hiring plan to justify a small option pool.

You can’t avoid playing option pool shuffle. But you can track the pre-money as it gets shuffled into the option pool and back into the investor’s pocket, you can prepare a hiring plan before the game starts, and you can keep your eye on the money card.

Most VCs can appreciate an entrepreneur who is focused on building his business and doesn’t want to raise money full-time. If a VC is asking for an inordinate amount of diligence and meetings, forget them and move on. They’ll be even worse once they’re on your board.

One negotiation tactic I’ve used successfully when there’s unreasonable pushback regarding size of the option pool is to propose that upon an acquisition all unallocated/unvested options that would be cancelled instead convert into common shares (that the cancelled shares get allocated back pro-rata to common shareholders).  I’ve never seen this actually get implemented, but I’ve found that this helps cut straight to the chase and reach a compromise number that works for both sides.

If  you do another round of financing, those unallocated shares will go into a new option pool. This allows your existing investors to avoid playing option pool shuffle against any new investors and avoid dilution at your expense.

As you know, it all really comes down to the investor wanting to limit his dilution in future rounds by having an option pool that will not need to be topped up much in future rounds. But they are never going to admit to that.

I’ve never seen an investor actually go for a structure like this. But I’ve multiple times seen them become willing to accept a much more reasonably sized option pool. I’ve seen the discussion go like this:

VC: Carve out a 25% option pool.

We only need 7%.

VC:You should do 22% for blah blah blah

OK, we’ll do 22%, but any unused shares convert back rather than rolling over or being cancelled. Or we can just do 10% standard terms.

VC: How about 12%?

Deal.

The key question is how much the new investors are valuing the contributions of the existing shareholder.

Valuation Basics June 6, 2011

Posted by Ian Cheng in Funding.
add a comment

An important component of the venture capital investment process is the valuation of the business enterprise seeking financing. Valuation is an important input to the negotiation process relative to the percentage of ownership that will be given to the venture capital investor in return for the funds invested.

There are a number of commonly used valuation methods, each with their strengths and weaknesses. The most commonly used valuation methods are:

Comparables

The Net Present Value Method

The Venture Capital Method

Comparables

Similar to real estate valuations, the value of a company can be estimated through comparisons with similar companies. There are many factors to consider in selecting comparable companies such as size, growth rate, risk profile, capital structure, etc.

Hence great caution must be exercised when using this method to avoid an “apples and oranges” comparison. Another important consideration is that it may be difficult to get data for comparable companies unless the comparable is a public company. Another caveat when comparing a public company with a private company is that, all other things being equal, the public company is likely to enjoy a higher valuation because of its greater liquidity due to being publicly traded.

Net Present Value Method

The Net Present Value Method involves calculating the net present value of the projected cash flows expected to be generated by a business over a specified time horizon or study period and the estimation of the net present value of a terminal value of the company at the end of the study period. The net present value of the projected cash flows is calculated using the Weighted Average Cost of Capital (WACC) of the firm at its optimal capital structure.

Step 1: Calculate Net Present Value of Annual Cash Flows

Cash Flow for each future period in the time horizon or study period of the analysis is defined as follows:

CFn = EBITn*(1-t) + DEPRn – CAPEXn – .CNWCn

Where:

CF = cash flow or “free cash flow”
n = the specified future time period in the study period
EBITn = earnings before interest and taxes
t = the corporate tax rate
DEPRn = depreciation expenses for the period
CAPEXn = capital expenditures for the period
.NWCn = increase in net working capital for the period

It should be noted that interest expense is factored out of the cash flow formula by using EBIT (earnings before interest and taxes). This is because the discount rate that is used to find the net present value of the cash flows is the WACC. The WACC uses the after tax cost of debt, which takes into account the tax shields that result from the tax deductibility of interest. By using EBIT in the cash flow calculation, double counting of the tax shields is avoided.

Step 2: Calculate the Net Present Value of the Terminal Value

The terminal value is normally calculated by what is often referred to as “the perpetuity method.” This method assumes a growth rate “g” of a perpetual series of cash flows beyond the end of the study period. The formula for calculating the terminal value of the company at the end of the study period is:

TVt = [CFt*(1 + g)]/(r – g)

Where:

TVt = the terminal value at time period t, i.e. the end of the study period
CFt = the projected cash flow in period t
g = the estimated future growth rate of the cash flows beyond t

The Venture Capital Method

Most venture capital investment scenarios involve investment in an early stage company that is showing great promise, but typically does not have a long track record and its earnings prospects are perhaps volatile and highly uncertain. The initial years following the venture capital investment could well involve projected losses.

The venture capital method of valuation recognizes these realities and focuses on the projected value of the company at the planned exit date of the venture capitalist.

The steps involved in a typical valuation analysis involving the venture capital method follow.

Step 1: Estimate the Terminal Value

The terminal value of the company is estimated at a specified future point in time. That future point in time is the planned exit date of the venture capital investor, typically 4-7 years after the investment is made in the company. The terminal value is normally estimated by using a multiple such as a price-earnings ratio applied to the projected net income of the company in the projected exit year.

Step 2: Discount the Terminal Value to Present Value

In the net present value method, the firm’s weighted average cost of capital (WACC) is used to calculate the net present value of annual cash flows and the terminal value.

In the venture capital method, the venture capital investor uses the target rate of return to calculate the present value of the projected terminal value. The target rate of return is typically very high (30-70%) in relation to conventional financing alternatives.

Step 3: Calculate the Required Ownership Percentage

The required ownership percentage to meet the target rate of return is the amount to be invested by the venture capitalist divided by the present value of the terminal value of the company. In this example, $5 million is being invested. Dividing by the $17.5 million present value of the terminal value yields a required ownership percentage of 28.5%.

The venture capital investment can be translated into a price per share as follows.

The company currently has 500,000 shares outstanding, which are owned by the current owners. If the venture capitalist will own 28.5% of the shares after the investment (i.e. 71.5% owned by the existing owners), the total number of shares outstanding after the investment will be 500,000/0.715 = 700,000 shares. Therefore the venture capitalist will own 200,000 of the 700,000 shares.

Since the venture capitalist is investing $5.0 million to acquire 200,000 shares the price per share is $5.0/200,000 or $25 per share.

Under these assumptions the pre-investment or pre-money valuation is 500,000 shares x $25 per share or $12.5 million and the post-investment or post-money valuation is 700,000 shares x $25 per share or $17.5 million.

Step 4: Calculate Required Current Ownership % Given Expected Dilution due to Future Share Issues

The calculation in Step 3 assumes that no additional shares will be issued to other parties before the exit of venture capitalist. Many venture companies experience multiple rounds of financing and shares are also often issued to key managers as a means of building an effective, motivated management team. The venture capitalist will often factor future share issues into the investment analysis. Given a projected terminal value at exit and the target rate of return, the venture capitalist must increase the ownership percentage going into the deal in order to compensate for the expected dilution of equity in the future.

The required current ownership percentage given expected dilution is calculated as follows:

Required Current Ownership = Required Final Ownership divided by the Retention Ratio

Business Valuation Methods June 6, 2011

Posted by Ian Cheng in Funding.
add a comment

Business Valuation has become an intrinsic part of the corporate landscape. The corporate landscape has witnessed dynamic changes in the recent years as mergers and acquisitions, corporate restructurings, and share repurchases are happening in record numbers, both in the United Statesand abroad. At the core of the dynamics of all these activities stands some notion of valuation. The valuation methods are not only necessary for accounting purposes but they also serve as roadmaps for the angel investors, venture capitalists and corporate acquirers in order to know the true value of a company’s assets.

Although there are numerous individual valuation techniques, these are categorized into four standard business valuation approaches applying standard formulas:

Asset Accumulation
The Asset Approach is based on the premise that it is generally possible to liquidate the property, plant and equipment (PP&E) assets of a company, and after paying off the company’s liabilities the net proceeds would accrue to the equity of the company. Valuation of assets based on liquidity does not yield better results if the fair market value of assets is in excess of value of its assets on a liquidated basis.

Discounted cash flow method
This valuation method based on free cash flow is considered a strong tool because it concentrates on cash generation potential of a business. This valuation method uses the future free cash flow of the company (meeting all the liabilities) discounted by the firm’s weighted average cost of capital (the average cost of all the capital used in the business, including debt and equity), plus a risk factor measured by beta. Since risks are not always easy to determine precisely, Beta uses historic data to measure the sensitivity of the company’s cash flow, for example, through business cycles.

Market Value
This valuation method is applicable for quoted companies only. The market value is determined by multiplying the quoted share price of the company by the number of issued shares. This valuation reflects the price that the market at a point in time is prepared to pay for the shares. This valuation method broadly takes into account the investors?perceptions about the performance of the company and the management’s capabilities to deliver a return on their investments.

Price Earnings Multiple Valuation
The price-earnings ration (P/E) is simply the price of a company’s share of common stock in the public market divided by its earnings per share. By multiplying this P/E multiple by the net income, the value for the business could be determined. This valuation method provides a benchmark business valuation as the non-listed companies wishing to use this method; a comparable quoted company/sector should be used.

Financial experts believe that business valuations using any method should not be too high or too low because that could be costly, resulting in either overpayment or lost opportunities. The firms that face important investment, acquisition, or growth decisions, particularly in a rapidly changing competitive environment, effective management requires an understanding of value creation and a command over valuation analysis.

%d bloggers like this: