"Zhou Bingcheng came to Shan City this time to inform Henglong of something."
Zhang Qingxue's voice interrupted from the side, pulling Zhao Chen back from his thoughts.
"Green Energy Technology is preparing to launch a new round of financing, which is expected to raise more than 1 billion to prepare for mass production.
They plan to build the first Thousand-Ton Scale Mass-Production Line, and the estimated capital requirements are between 500 and 800 million.
We have initially contacted several financing targets - Dening Times, Bidiya, and Two Central State-Owned Enterprises's industrial funds."
"It's all Industrial Capital." Zhao Chen said.
"Yes. Pure Financial Investment organization, Zhou Bingcheng can't find any."
There was a hint of complexity in Chen Xi's tone,
"He told us very straightforwardly. Green Energy Technology In the next stage, what we need most is not money, but industrial resources.
Dening Times has the world's largest Energy Storage application scenario, Bidiya has a complete New Energy industrial chain, and central enterprises have policy and project resources.
Henglong can give you money, but not these things."
Zhao Chen leaned on the back of the sofa and tapped his fingers lightly on the armrest.
Outside the window, the snow on Manhattan stopped, and the outline of Central Park slowly became clearer in the afternoon sunshine.
"Did he make any other requests?"
Chen Xi and Zhang Qingxue were silent for a moment at the same time.
"Yes." Zhang Qingxue opened a document,
"Zhou Bingcheng, on behalf of the founding team of Green Energy Technology, formally proposed to Henglong that it is hoped that Henglong will give up the right to participate in this round of financing."
"What's the reason?"
"He said it very frankly. If Henglong continues to participate in the investment, the shares of the founding team will be further diluted.
Green Energy Technology Currently Equity Structure and Henglong account for 40%, the founding team accounts for 45%, and early angel investors and employee stock ownership platforms account for 15%.
This round of financing plans to release 20% to 25% of the equity to Industrial Capital.
According to this dilution ratio, if Henglong fully follows the investment and maintains 40% without being diluted, and the founding team does not have enough funds to follow the investment--"
"Henglong's shareholding will exceed the entire founding team." Zhao Chen finished for her.
Meeting Room was quiet for a few seconds.
Chen Xi's fingers tapped lightly on the laptop twice, calling up Green Energy Technology's Equity Structure deduction table.
"If Henglong fully follows the investment and maintains 40%, and Industrial Capital takes 20%, the founding team's shareholding will be diluted from 45% to less than 30%.
By that time, Henglong will not only be the number one Major Shareholder, but its shareholding ratio will exceed the total of the founding team."
She raised her head and looked across the screen to Zhao Chen's face.
"Zhou Bingcheng said that it's not that he doesn't trust Henglong. But if the founder team of a company loses its controlling position, the company's genes will change.
He does not want Green Energy Technology to become a 'capital-driven company'."
Zhao Chen picked up the tea cup and found that the tea was already cold.
Su Wantang stretched out his hand from the side to change it for him. He waved his hand and took a sip of the cool Pu'er.
The bitter taste spread on the tip of his tongue, making his thoughts become extremely clear.
"Aunt Zhang, from a legal perspective, how is the co-investment right of Henglong agreed upon?"
Zhang Qingxue Open Investment Agreement.
"It is clearly agreed in the Series A Investment Agreement signed by Henglong and Green Energy Technology that Henglong enjoys the 'preferential subscription right' in the subsequent financing of Green Energy Technology,
That is, the company has the right to participate in subsequent financing under the same conditions to maintain the shareholding ratio from being diluted.
At the same time, the agreement also stipulates that if Henglong gives up the investment, the right will be automatically extended to the next round and will not be permanently lost due to giving up once.
In addition, if the founding team of Green Energy Technology plans to transfer equity to a third party, Henglong enjoys the 'right of first refusal' and the 'right of joint sale'.
This means that any Industrial Capital who wants to transfer Existing Shares must obtain the consent of Henglong."
She raised her head.
"Judging from the terms of the contract, Henglong's right to co-invest is fully protected by law.
Zhou Bingcheng's proposal to ask Henglong to give up participating in the investment is essentially a 'request', not a 'rights claim'. Henglong has the right to refuse."
"But if Henglong insists on following the investment, what will be the consequences?" Zhao Chen asked.
Zhang Qingxue was silent for a few seconds.
"There is no legal problem. But commercially--Zhou Bingcheng actually makes sense.
If Henglong insists on following the investment, Industrial Capital's shareholding ratio will be reduced, and Industrial Capital's enthusiasm for entering the market will be significantly reduced.
Industrial giants like Dening Times and Bidiya want to invest in an upstream materials start-up company not just for financial returns, but for the right to speak in the industry chain.
If their shareholding ratio is reduced to less than 5% and they cannot get even one Board of Directors Seat, they will most likely choose to give up investment."
She paused.
"What Green Energy Technology needs most at this stage is precisely the resources and endorsement of Industrial Capital.
Without the application scenarios of Dening Times and without the industrial chain collaboration of Bidiya, no matter how advanced the technology of Green Energy Technology is, there is still a huge gap between Mass-Production Line and Commercialization at Scale.
It is precisely because Zhou Bingcheng is aware of this that he bites the bullet and comes to Shan City and asks Henglong to give up participating in the investment."
"Chen Xi, what do you think?"
Chen Xi tapped his fingers on the table twice.
"Zhao Zong, from a pure Financial Investment perspective, Green Energy Technology is a seed planted by Henglong four years ago.
If the cost of Two Hundred Million is exited at the valuation of this round of financing, the return will be at least eight to ten times more.
If Henglong chooses to partially exit and partially retain, it will already be a very successful investment."
Her voice slowed down a bit.
"But if you ask me what I really think - Green Energy Technology is a company worth holding Henglong for the long term.
Not because of how many times it can give us returns this round, but because of its technical route and the existing New Energy industry chain layout of Henglong, which has natural room for synergy.
Henglong has heavily stocked Bidiya, and Era Vanguard has heavily stocked Tesla.
If you add a Green Energy Technology company that controls the core Thermal Storage Material, the three lines can intersect."
Zhao Chen raised the corners of his mouth slightly.
Chen Xi has been following him for so long and has learned to think about problems in his way of thinking.
"Aunt Zhang, what's your opinion?"
Zhang Qingxue pushed up his glasses.
"Zhao Zong, my opinion is divided into two levels.
The first level is the legal level - Henglong's right to co-invest cannot be given up easily.
It's not because of the valuation of this round of financing, but because the very act of "giving up on participating in the investment" will set a bad precedent.
In the future, if other companies invested by Henglong encounter similar situations in subsequent financing, they will cite the example of Green Energy Technology and ask Henglong to give up its co-investment rights.
At that time, Henglong's equity in every invested project will be slowly diluted like a frog being boiled in warm water."
She turned to the next page.
"The second level is the strategic level.
The core appeal of Zhou Bingcheng is actually not to get Henglong to give up following the investment, but to allow Industrial Capital to obtain enough shares while ensuring that the founding team is not overly diluted.
This appeal does not necessarily conflict with the interests of Henglong.
As long as the transaction structure is well designed, Henglong can not only retain the right to participate in the investment, but also meet the demands of Zhou Bingcheng, while allowing Industrial Capital to obtain the shareholding ratio they want."
Zhao Chen leaned on the back of the sofa and tapped his fingers on the armrest three times.
In an instant, he had already thought of a countermeasure.