Chapter 129 - 92: Company Valuation and Equity Distribution
At the conference table, both sides went back and forth, engaging in their first skirmish over the company’s valuation.
Zhong Min presented a well-researched argument, citing market risks, industry practices, and case studies of similar companies to justify the reasonableness of his ten-million valuation.
Meanwhile, the university’s law teacher latched onto Chen Lin as the "core asset," repeatedly emphasizing his rarity and irreplaceability, refusing to give an inch.
Just as the two sides reached a stalemate, the two heavyweights who had been mostly silent finally stepped in.
"Hahaha, Zhong Min, don’t be so rigid." Peng Yifeng laughed, breaking the deadlock. "This time, we’re not investing in a balance sheet. We’re investing in a person! In the future! You need to have a more long-term perspective."
On the other side, Principal Chang Kai also said to He Qun and his team with a smile, "Teacher He, President Peng has come a long way to be our guest. We should show some sincerity as well."
Ultimately, with the two heavyweights smoothing things over, both sides took a step back.
The pre-investment valuation for Yanhai Technology Consulting Co., Ltd. was finally set at fifteen million yuan.
Chen Lin sat there listening to the final number, his mind reeling.
’Fifteen million?!’
’My company is worth fifteen million after just a short negotiation?’
’Is making money this easy?!’
With the first item on the agenda smoothly resolved, the atmosphere in the conference room eased considerably.
However, when Teacher He brought up the second topic—the equity allocation plan—the recently eased atmosphere instantly grew tense again.
He Qun cleared his throat and spoke slowly. "Regarding the equity shares, our university’s plan is as follows. Chen Lin will contribute his technology as capital for a 51% stake, ensuring his absolute controlling interest as the founder. We, Yannan University, plan to invest 3.15 million for a 21% stake."
He paused deliberately at this point, glancing at Peng Yifeng before continuing, "There’s an additional condition for our university taking a 21% stake. We hope that in the future, once the company has grown, Chen Lin will have the option to buy back 16% of our shares at a ten percent premium. This would allow Chen Lin to increase his shareholding to a supermajority, while our university permanently retains a 5% stake, creating a deep, long-term partnership with the company."
On the surface, this plan seemed to be designed entirely with Chen Lin’s best interests in mind.
But for Peng Yifeng, who was sitting across the table, the smile on his face visibly faded.
Zhong Min, however, furrowed his brow and bluntly pointed out the problem. "Teacher He, according to your proposal, Tiansheng Investment would be capped at a 28% stake. That’s a huge departure from our initial expectations."
His tone carried a hint of dissatisfaction. "Before the university decided to get involved, our preliminary agreement with President Chen was that we would fund the company for a 49% stake, while President Chen would contribute his technology for 51%. Now the university has jumped in and cut our share by nearly half. Once Yanhai Company grows, our potential return on investment will shrink dramatically. With all due respect, we find this proposal very difficult to accept."
It was as if Zhong Min’s unequivocal "very difficult to accept" had sucked all the air out of the room. Chen Lin felt like he could barely breathe.
The university’s law teacher was clearly a seasoned veteran. He simply smiled faintly and retorted at a measured pace, "Manager Zhong, I think you may be misunderstanding. Our university proposed this plan precisely for the sake of Yanhai’s long-term, healthy development. For a startup, the founder’s absolute control is the cornerstone of its innovative vitality and strategic stability. In essence, our plan is designed to protect Chen Lin, which is to say, to protect the company’s most crucial asset."
Zhong Min pushed up his glasses, his gaze as sharp as a knife from behind the lenses. "Teacher, I respect your opinion, but the capital market has its own logic. Tiansheng Investment is not a charity. We’re investing cold, hard cash, so naturally, we expect a proportional return. A 28% stake is not enough to justify our commitment to fully empowering this project and allocating significant resources to it."
"Oh? So President Peng isn’t investing in Chen Lin for his personal abilities, but for how much equity he’s willing to give up?" He Qun interjected, his words soft but with a sharp, hidden barb.
For a moment, a war of words erupted at the table, with sharp retorts flying back and forth.
Both sides dug in their heels, refusing to concede an inch. One side spoke of passion and the future, the other of risks and returns. Neither could persuade the other.
Chen Lin sat at the head of the table, listening quietly without saying a word.
He finally understood everything completely.
’President Peng, Zhong Min... for all their talk about risks and uncertainties, they were actually more bullish on his company’s future than anyone else.’
’That initial ten-million valuation was nothing but a smokescreen, a standard lowball tactic used in business negotiations.’
’They genuinely believed that every extra percentage point of equity they could get now would be worth a mountain of gold in the future.’
’That’s why they were so dissatisfied with only getting a 28% stake—so dissatisfied that they were willing to fight tooth and nail for more, even at the risk of bringing the negotiation to a standstill.’
This realization, paradoxically, calmed Chen Lin’s nerves.
’Since everyone wants a seat on this ride, then I’m the one in the driver’s seat. I have all the leverage.’
The debate in the conference room continued, but much of the acrimony had faded. They were just talking in circles, and everyone knew they wouldn’t reach an agreement today without something new on the table.
During a brief lull, as both sides fell silent to sip water and gather their thoughts, Chen Lin turned his head slightly. He leaned close to Huang Yiyi’s ear and quickly whispered a few words in a voice so low only the two of them could hear.
Huang Yiyi listened, nodding almost imperceptibly. A flicker of surprise crossed her eyes, but it was quickly replaced by consummate professionalism.
After he finished, she didn’t speak right away, but instead waited patiently for the perfect moment.
Finally, as another clash between the university’s law teacher and Zhong Min concluded and the room once again fell silent, Huang Yiyi cleared her throat. Her calm, clear voice rang out, instantly capturing everyone’s attention.
"Everyone, regarding the matter of equity allocation, we at Yanhai would also like to propose a supplementary plan."
Principal Chang Kai and Peng Yifeng simultaneously fixed their gazes on her.
Huang Yiyi sat ramrod straight, a composed smile on her face as she spoke slowly. "In consideration of Tiansheng Investment’s faith and support in our company, and to help facilitate this partnership, President Chen is willing to concede an additional 5% of his shares from his personal 51% stake to Tiansheng Investment."
