Chinese-style public chip

Abstract: A Taobao store through Peer-to-peer Network loan platform to close to hundreds of investors 15,000,001 months late, an IPO reopened rumors almost the market dragged down. The pace of IPOs has slowed since the second half of last year, but Peer-to-peer network lending platforms are killing a new financing channel

A Taobao store has been offering 15 million to nearly hundreds of investors through a peer-to-peer network loan platform

In late January, rumours of an IPO reopening were almost pulling the market down. Since the second half of last year, the pace of the IPO has slowed down, but the Peer-to-peer network loan platform is "killing" a new financing channel.

Recently, by Peer-to-peer Network loan platform Red Ridge as a medium, a famous celebrity square Taobao store to nearly hundred investors 15 million yuan IPO financing.

"The internet has a natural ability to gather vast amounts of information and facilitate trading, which is itself a huge exchange." "An industry insider believes that the rise of Internet IPO financing may even have a huge impact on the traditional IPO platform."

However, there are a number of risks to this innovation, such as the question of public fund-raising, how corporate disclosure is regulated and how investors manage the company.

A network of Taobao shop

Elite Square in 2008 since the sale of women in Taobao, the end of 2012 the company's total assets of 37.12 million yuan, the plan for this March change registration as a limited company.

The increase in capital, the majority shareholder Xu Feifei and his wife Xia Jingjing held 40% of the shares, by Xu Feifei took out 15% equity transfer, the increase of 15 million, thereafter the money into the company operation. Other people buy shares are held by the company's major shareholders.

"They're offering a prospectus in the group, and I signed up for it that day, but I'm lucky to be able to buy a lot of shares." "Shanghai investor Mike told reporters.

In a short period of one week, the number of participants enrolled in more than hundred people, the intention to share funds twice times the capital increase plan.

These investors are dominated by individuals, most of whom have never known the apparel industry before, only to learn that the start-up has financing needs on the Internet.

In fact, the famous American public-funded web site Kickstarter has been doing this business: the need for funds in the network issued the will, people with funds through the network to find them and investigate investment.

The rise of this model broke the traditional financing mode, so that the source of financing is no longer limited to rigorously investment institutions.

"Generally, companies that raise money through the Internet are very small. Even the general VC in the first round of fundraising generally also around 5 million yuan, the 15 million yuan can be raised through the network, it is really shocking. A VC industry in Shanghai told reporters.

A small electric business enterprise can raise funds at such a high speed, some senior personage in the venture industry has expressed great surprise.

"Investment agencies to see a project are to do rigorous due diligence, six months to a year to track the company, and some companies even at the beginning dare not vote, after two or three years after tracking the venture to invest." "Gan Jianping, director of Qiming Venture, told the first financial daily newspaper," The Economist, "The Internet, although a large number of information, but only on the Internet to promote the introduction of projects in the case of shares are rare. ”

The 15 million-dollar network of the IPO financing plan behind the Red Ridge venture.

In fact, Red Ridge Venture has also made its own platform for the IPO, and completed the expansion of the business registration, its shareholders a full of 158 people, most of them are small investors with a very low share of the stock, the Red Ridge is the first copy of the model to its own investment enterprises.

Peer-to-peer Network Loan Transformation: an attempt at Red Ridge venture

The winter of Shenzhen is still sunny, after midday, the area is not small snake mouth Theater has been full of people, including celebrities square staff, individual investors, as well as the Red Ridge Venture representatives.

On the stage, the Red Ridge venture in charge of Wang Zhongping and Xu Feifei shook hands to celebrate the celebrity square in the past year to achieve sales results. The relationship between two companies is remarkable.

As of this week, the fund-raising has been initially finalized, the current announcement of investors about 94 people, including the smallest investor investment in the amount of 50,000 yuan, the largest investors invested in 350,000 yuan.

"It's hard to make early investments in China because there's a lot of corporate fraud." It is hard to believe how these investors are examining a company on a network. Gan Jianping told reporters.

Red Ridge founder Zhou Shiping told reporters: "Every year in the Red Ridge borrowing enterprises have thousands of companies, the capital flow and financial situation Red Ridge is very familiar with, equivalent to the establishment of a business database can be checked, where the choice of equity investment objects relatively safe." ”

The celebrity Square is one of the most important clients of the Red Ridge venture, and the peak borrowing value of the 2012 Red Ridge venture was about 17 million yuan. Some of these loans for a longer period of time, there are still investors through the Red Ridge Premium transfer of the rights of celebrities Square.

As early as 2010, the socialite Square is only a registered capital of 500,000 yuan of unknown Taobao shop. At the time of the scale of the celebrity square, almost no money was borrowed from the bank.

"The problem that a clothing electric business enterprise encounters is usually not to sell, but to have no money to lay goods." Every season when the purchase of raw materials, the organization of factory production, need to turnover a large amount of money. Red Ridge Venture Deputy general manager Lu Shiming told reporters.

From the four quarter of 2010, the founder of the socialite Square began to borrow money in the Red Ridge, faster cash turnover will quickly fatten. According to the financial data released by the celebrities Square, in 2012, the celebrity Square has 13 stores in Taobao, Beijing-east and other electric platform, and its annual operating income is hundreds of times times more than three years ago.

Unlike traditional public-chip websites, many of these investors have spent the past two years acting as the golden master to borrow money from the Red Ridge venture to get to the ladies ' house, where the original debt investment via the Internet will be converted into equity investment.

"The current domestic data collection of small and medium-sized enterprises is a blank, which also led to the domestic early venture capital failure rate is very high, who can collect this piece of data resources, can put this piece of certainty to improve." Red Ridge Venture This road is equivalent to get the enterprise data from the net loan, and then make money from the investment in these enterprises. An insider told reporters.

The ladies ' Square has borrowed more than 2 years on the Red Ridge, each repayment timely, the interest is relatively high, the general Red Ridge platform for corporate borrowing interest rate in the year 10%, and the interest rate of celebrities square can reach about 18% of the year.

The reason why the Internet IPO financing is hot, one important reason is that the financing plan is very attractive.

Tempting solution: 100 million yuan valued + promised premium repurchase

According to a "Shenzhen Yong Shinrui and accounting firm," a profit statement issued by the celebrities Square, the company's profits in 2012 more than 8 million yuan.

The company estimated 2013 sales of 200 million yuan, 2014 sales amounted to 400 million yuan, the current net profit margin of about 10%.

If the 100 million-dollar valuation, the 2012 price-to-earnings ratio is 11.5 times times, this is not low. So there are investors in the network and the celebrity square boss bargain.

A: Is it a little too expensive to look at last year's operating income?

B: "Xu, give us a little cheaper, so 2013 years of stock prices have more room for growth." ”

C: "But if the target of 2013 years can be completed as promised, this valuation is low." I think the price of the future Ladies ' square will rise. ”

"If the net profit of 2012 is more than 8 million yuan, valuation 100 million is an astronomical figure," he said. However, if the 2013 celebrities square to complete the sales target, the completion of 200 million yuan revenue, net profit margin remained unchanged, then the net profit of about 20 million, valuation 100 million is relatively cheap. Mike told reporters.

Early corporate valuations have been difficult because of the volatility of earlier firms.

"It's really hard to estimate the companies that have been growing so fast for the first two years, and the way each institution can be valued varies." Generally used this year's expected profits to be valued, coupled with a certain amount of gambling provisions such as share repurchase is a more common approach. The VC industry insiders told reporters.

In early venture capital, valuations are only part of the process. "This kind of enterprise risk is very high, especially women's wear, the income fluctuation is very big, does not have to the gambling agreement general investor does not invest." The VC industry insiders told reporters.

According to the prospectus of the celebrity shop, the big shareholder will have a stock repurchase in two years ' time, that is to say, if investors need to cash in then, or if they are not optimistic about the company's future, they can sell the stakes to the big shareholders. And the celebrity Square also agreed to buy-back prices-a premium of 25% a year. If an investor invests 1 million yuan in a socialite's stake, the big shareholder will be willing to buy back 1.5 million yuan after two years.

Triple risk

After tempting returns, the risk is inevitable.

The moral hazard of company and third party, the legal risk of equity transfer itself and the risk of company operation are the triple risks in the IPO.

"Professional investors have a lot of pitfalls in their early investments, and it's harder for individual investors to do professional due diligence." The VC industry insiders told reporters.

Celebrities Square IPO, investors to the celebrities square information access to highly dependent on Red Ridge, and Red Ridge itself as a third party in the absence of information disclosure rules of their own moral hazard. For more than two years, the ladies ' square is almost counted as the work of Red Ridge, and the Red Ridge itself holds a 20% of the shares of the socialite Square.

"We keep reminding investors to make their own independent analysis. Even so, if everyone makes money, everything is fine. But the enterprise has the problem, to the Red Ridge creates the investment is also the test. Zhou Shiping told reporters.

In addition, because it is online fund-raising, investors are very dispersed, it is difficult to play effective supervision.

And in the law completely through the Internet to raise money is still in the gray area, the legal risks it faces is obvious.

At present, there is only one hard standard for a limited company, that is, it is impossible to raise funds for shareholders over 200 people. "Another criterion is whether or not to raise money to the public," said Zeng Zhihong, the director of Shanghai Han Road law firm. ”

In Wang Zhongping view, investors are Red Ridge platform to find, belong to the targeted fund-raising.

"Of course it would be forbidden to publish information through the public media." But it is debatable whether it is illegal to raise funds through the Internet community. Zeng Zhihong told reporters.

In the IPO, the investor buys the stake by Xu Feifei.

"The main consideration is that if the investors want to transfer the equity, the business registration information is very troublesome to change, so the celebrities square selected in the first two years by the major shareholder's behalf of the scheme." Xu Feifei told reporters.

However, disputes arising from the holding of shares have emerged in recent years, especially after last year's judicial interpretation of the company Law (iii), which increased the risk of holding shares.

"In order to limit this situation, the current agreement on behalf of some foreign investors is very complex to restrict it, in order to make it easier for businesses, officials and some non qualified shareholders to bypass regulatory options." Zeng Zhihong told reporters, "Once there is a dispute, surrogacy is a very large legal risk of the form of agreement, the final title may not be recognized." If you have to choose the form of holding, the investor needs to retain more effective evidence such as the investment record, and also have a clear agreement on behalf of the holder. ”

In addition, there are operational risks, if the celebrity workshop once the loss, these investors can withstand the risk?

"The most feared is the introduction of unqualified investors and information disclosure flaws." "Lu Shiming told reporters," This kind of company's financial report certainly does not have the listed company to do well, in case the company manages the problem, the financial question flaw may cause the dispute. ”