ABT Chapter 110: A Good Calculation

 The representative sent by Sukula was a polite gentleman named Fang Hui. He was dressed in a well-fitted suit, meticulously groomed, and wore a pair of rimless gold-rimmed glasses without lenses. It was evident at first glance: oh, this is a white-collar worker.

And one with an annual salary exceeding half a million.

However, his attitude was good, neither humble nor overbearing, and he didn't resort to any tricks. Moreover, the offer made Li Fanyu feel that he and ZGX888 were highly valued, so out of respect for this offer, he sat down and had a chat with him.

However, although Fang Hui's words were polite, his intentions were very clear, and his methods were direct; he saw potential in the ZGX888 engine and wanted to enter the venture capital (VC) stage.

Venture capital, in simple terms, is investment in risky ventures. Officially in China, it's called entrepreneurial investment, where someone with a project that catches the eye of an investor receives funding in exchange for shares, and when the project turns profitable, the investor gets a share of the profit.

In essence, venture capital is straightforward, but the intricacies involved are endless. For example, venture capital is divided into three stages according to the maturity of the project: seed stage (Angel), growth stage (VC), and mature stage (PE).

Projects in the seed stage often only have an idea and an initial team. These projects are highly uncertain, so the venture capital firms or individuals investing in this stage are called angel investors. It means they're rich and foolish, and also come with a halo of holiness. The implicit meaning is "I believe in you, take the money for entrepreneurship, and when you make money, we all share it, and if you lose, it's my loss."

Although investment in this category is relatively small, the risks are often significant. Investors either make a big profit or lose big.

The mature stage is more interesting. Projects at this stage generally have a feasible path and a basic strategic formation, ready to allocate resources.

Li Fanyu's ZGX888 is currently at this stage.

Because the engine has been successfully developed, there is a great demand in the market for an excellent independent powertrain, and ZGX888 has gained good reputation and market expectations.

According to the normal procedure, Li Fanyu should now submit ZGX888 to the Ministry of Industry and Information Technology for review. Once approved, he can establish a production line for mass production.

However, production requires production lines. With just the resources Li Fanyu has on hand, it's far from enough.

But five billion in exchange for fifteen percent of the original shares made Li Fanyu feel that this matter was a bit unpredictable. And he also had some reservations about giving away his shares.

In his impression, venture capital is more prevalent in the internet industry, and it's relatively rare for someone in the industrial field like him to receive venture capital.

Moreover, venture capital is inherently risky. Many startup teams have ended up empty-handed due to the arbitrary actions of their investors.

Although venture capital intervention is desirable for early to mid-stage projects, Li Fanyu feels that, except for quenching his thirst when establishing a production line with the five billion, he doesn't really expect much else.

And the decision-making power of the project, like a girl's virginity, once given away, cannot be taken back.

Think about it, originally, whether it's the company or the team, he had the final say, but if someone else interferes, wouldn't it be annoying?

Li Fanyu stroked his chin thoughtfully and said, "Thank you for your kind offer, but let me consider it again."

Fang Hui clearly didn't expect him to refuse such a tempting offer. In his opinion, the leaders above must have lost their minds to offer such conditions.

For this rookie entrepreneur, exchanging fifteen percent of the shares for five billion is indeed quite extravagant.

But, with such a tempting offer that could drive other entrepreneurs crazy, he actually turned it down!

Is this kid out of his mind?

Adjusting his glasses, crossing his fingers on his lap, Fang Hui said, "Mr. Li, I don't deny that you have a very outstanding project in your hands, and it has indeed touched on the pain points of the domestic automotive industry. But please think carefully, your engine has not yet passed the review of the Ministry of Industry and Information Technology, and all calibration parameters are approved by your own laboratory.

The condition offered by our company is, in the eyes of all projects at the VC stage, the highest level. Moreover, our company can also provide guidance and assistance for the establishment and mass production of your future production lines. Especially in terms of government resources, our Sukula company still has a certain influence in China."

Li Fanyu remained noncommittal; he knew very well what the engine was like.

In the parallel world he inhabited, even the EA888 engine, despite its flaws, had an extremely high market share.

Why? Because apart from burning oil, it had no shortcomings. If you ignore its history of burning oil, the EA888 could completely be called a generation of divine engines!

And government resources, hmph... buddy, do you think I'm a fledgling in society?

The first domestic independent engine, ah! Over the years, how much money have domestic car manufacturers given to foreign engine manufacturers? Now that we have our own, I don't believe any department would obstruct ZGX888! They're probably eager to send me for review.

Now using these two lame excuses to suppress me, you're seriously underestimating my intelligence.

"Mr. Fang, I think I've made myself clear, please feel free to leave."

Fang Hui was stunned, a dismissal!?

This kid is really arrogant; if it weren't for the instructions from the general manager before he came, he really wanted to slap the briefcase in front of this guy's face.

The first time he's seen someone give money and still make it so difficult; that's five billion! Five billion!

He stood up abruptly, his face turning cold. "Mr. Li, do you really have confidence in your project, or are you just inflating your own value and seeking more from our company? If it's the latter, I advise you to recognize yourself."

Li Fanyu tilted his head and looked at him, "What, are you suggesting that I must gratefully accept your intervention?"

"I think any rational person wouldn't refuse such conditions. Opportunities don't come every day, you should know that. Since I entered the industry, I haven't seen any project at the VC stage receive such funding. I'll be blunt; we've also looked into the financial situation of Zhengxin Company. Although the profits are okay, if you want to mass-produce the engine, it's just a drop in the bucket! And the engine field is not something you can enter as you please. Our Sukula investment is a subsidiary of Mitsubishi Heavy Industries. As long as we cooperate, we can provide you with unexpected benefits relying on Mitsubishi Heavy Industries' industrial advantages!"

Li Fanyu finally understood why the other party had offered such a high price; they had ulterior motives! A company with a Japanese company's stakeholder, can it still be considered independent?

Mitsubishi Heavy Industries, they're playing a clever game!

"Take your business card and get out!"

Li Fanyu was furious.


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