Recently, many investment banks have begun to conduct due diligence on target companies after signing an agreement on intent acquisition or investment and merger with the target cold chain logistics company, and I often hear the founder or partner of a company in the circle say how much is the pre-investment valuation of me by a certain investment bank, and they are currently conducting due diligence on us. If you want to work with me, at least you can't go below this valuation, and you need to give me as much money as you want first.
This reminds me of a story:
A plainly dressed old lady walks into the Bank of Manhattan with a bag of $500,000 in cash on her back. The president received the old lady in the VIP room.
CEO: Is this your savings for the rest of your life?
Old lady: **I gamble for a living, and I will win every gamble, just won!
President: "Impossible! ”
Old lady: "Then take a bet, I bet that your two balls will become square tomorrow morning, and the bet is this 500,000!" ”
The president hesitated, looked at a bag of cash, and decided to gamble.
After the old lady left, the president reached out to the crotch of his pants from time to time and touched the round eggs until he went to the VIP room at the appointed time the next day.
The old lady was already waiting for the VIP, and next to her stood a well-dressed lawyer.
Old lady: Today, the lawyer testified to check your balls, as long as it is not Fang's 500,000, it is yours.
President : "You lost". Then he quickly took out the balls from the crotch of his pants, asked the lawyer to verify them, and asked the old lady to inspect them on the spot. The old lady touched it with her hand: "Sure enough, it's not square, I lost."
At this time, the lawyer's face was pale, and he kept banging his head against the wall, and the president was shocked.
Lawyer: "She made a bet of 1.5 million with me last night, saying that you would take off your pants in front of me this morning and let her touch your balls!" ”
Here's the problem, the president of the bank won $500,000, and he asked the old lady to touch the balls of the president of the bank of Manhattan in the presence of his lawyer. Your company is the target of the investment bank, whether the real purpose of the investment bank is to invest in the merger and acquisition of your company, or for other reasons need to get your company's financial reports and real operating conditions, based on the need to find out, only if you make a high valuation before investment or give you a regular promise will you be willing to accept his due diligence action, this is the old man's "500,000 US dollars on his back", and her old man's intention is to let you let her "touch your balls" under the witness of the lawyer, do you understand?
The real valuation and negotiation is after due diligence. Due to the non-standard operation of the enterprise, the valuation needs to be discounted, the financial payment needs to be rearranged due to the flaws, the industry market prospect is not good, and the enterprise needs to be built with heavy money because it has no core competitiveness. At this time, you may see that your company has a lot of shortcomings, and the company's secrets have been disclosed to the due diligence officer. At this time, you realize that the old lady does not necessarily send you money, she just "carries 500,000 US dollars to show you" and asks for "let me touch your balls" in public.
Of course, when we are touched on the balls, it is actually an opportunity for us to self-examine the company, and we sometimes need to touch the balls often and know our own balls.
Investment is a very deep science, which requires us to continue to learn and understand, so that we can better use the double-edged sword of capital.