It's hard to tell when the mall is floating. There are many examples of failures from the past to the present.

The following are some classic cases.

1, real kung fu

Case characteristics: entrepreneurs internal disorder - can **** bitter can not share the same sweet

Lessons for entrepreneurs: no forever brothers, only forever interests

Lessons for VC: whether the equity structure is reasonable is an important basis for judging the project is good or bad

McDonald's and KFC are very popular in China, Chinese food chains have been indignant, and people keep jumping out to challenge foreign fast food. From more than ten years ago, "red sorghum" to the now very hot "real kung fu", "red sorghum" has long been unknown, "real kung fu "seems to be really a bit of kung fu, chain stores more and more.

With the company's name, in August 2009, "real kung fu" headquarters in Guangzhou broke out of a real kung fu show, in the investment and entrepreneurial circles quite a sensation: *** with the founder and the company's major shareholder, Pan Yu Hai, appointed his brother, Pan Guoliang, as the "Deputy General Manager "and sent to the headquarters of the office, but by" real kung fu "actual controller, chairman of the board of directors CaiDaBiao's refusal, triggered a violent dispute.

To make sense of the "real Kung Fu" management right contradictions, but also from the beginning. 1994, Cai Dabiao and his best friend Pan Yu Hai in Dongguan Changan Town opened a "168 steam store", and later gradually to the national chain, and in 1997, the name was changed to "Double Seed". In 1997, the name was changed to "Double Seed" and eventually to "Zenkongfu". The shareholding structure of ZKF was very simple, with Pan Yu Hai taking up 50%, and Cai Dabiao and his wife Pan Minfeng (Pan Yu Hai's sister) each taking up 25%. In September 2006, Cai Dabiao and Pan Minfeng divorced by mutual agreement, and Pan Minfeng gave up her 25% shareholding in exchange for custody of her children, which made the shareholding of Pan Yu Hai and Cai Dabiao a 50:50 ratio.

In 2007, "ZKF" was renamed "ZKF" after "Double Seed". "

In 2007, Zhenkongfu introduced two venture capital funds: the domestic Zhongshan Linkage and the foreign capital Today's Capital, which injected 300 million yuan into the company, with each taking up 3% of the shares. In this way, after the financing, "real kung fu" shareholding structure into: Cai, Pan each accounted for 47%, VC each accounted for 3%, the board of directors *** 5 seats, composed of Cai Dabiao, Pan Yuhai, Pan Minfeng, and VC's dispatched to the director of each one.

After the introduction of venture capital, the company is seeking to go public, so creating a modern corporate management and governance structure is a top priority. However, Cai Dabiao's efforts to establish a modern enterprise system touched the interests of another shareholder, Pan Yuhai, and "Zhenkongfu", under the auspices of Cai Dabiao, implemented internal management reforms to "family-oriented", replacing some of the original family management staff with professional managers, and a large number of old employees left the company. A large number of old employees left. The company has also introduced from McDonald's, KFC and other catering enterprises *** about 20 senior management, occupying most of the company's key positions, basically by the Cai total authorization of authorization, Pan Yu Hai has clearly been hollowed out.

The conflict between the two sides intensified. on April 22, 2011, Guangzhou public security organs confirmed that Cai Dabiao and others are suspected of misappropriation of funds, misappropriation of duties and other criminal acts, and Cai Dabiao and other four suspects to carry out the arrest.

The chaotic struggle between Cai and Pan over ZhenGongF made today's capital unable to withstand the pressure of shareholders and chose to withdraw. on November 30, 2012, today's capital will be under the banner of today's capital investment - (Hong Kong) Limited (hereinafter referred to as today's capital Hong Kong company) held by the 3% stake in ZhenGongF transferred to the Run Hai Company Limited. So far, the real Kung Fu shareholding and again back to the Cai Pan two families in half the situation.

Three years later, the case of Cai Dabiao, the former president of ZKF, has been settled. According to the verdict of the second trial of the Guangzhou Intermediate Court, Cai Dabiao constituted the crime of occupation and misappropriation of funds was upheld 14 years in prison. With the final verdict of Cai Dabiao's criminal case coming into effect, 41.74% of Zhenkongfu's equity held by Cai Dabiao has entered the judicial auction process, and there are rumors that the equity is valued at up to 2.5 billion yuan.

2, Yitang

Case features: China's Internet industry financing the largest case

Lessons for entrepreneurs: more money, you have to save and spend, or the winter is not good

Lessons for the VC: "turtles" + "concepts "

In the Internet industry, the birth and death of a company is very difficult to attract people's attention, but this company is undoubtedly an exception: it was once the new nobility, high-profile birth; it is nothing, down to the domain name were auctioned. This company is the billion Tang.

In 1999, on the eve of the bursting of the first Internet bubble, Tang Haisong, who had just received an MBA from Harvard Business School, created Yitang, whose "dream team" consisted of five Harvard MBAs and two MBAs from the University of Chicago. With an attractive business plan, Yitang got two tranches of financing of about $50 million from two famous American venture capitals, DFJ and Sevin Rosen. Until today, this is also one of the largest private financing cases in China's Internet sector.

Yitang claims to be not only an Internet company, but also a "lifestyle group" dedicated to creating and introducing internationally advanced lifestyle products through online, retail and wireless services to serve the so-called "bright yellow e-generation" of young people between the ages of 18-35 years old, who are defining the future of China's economy and culture. The company is committed to serving the so-called "Minghuange Generation" of young people aged 18-35 who are defining China's economic and cultural future.

Yitang.com came into being overnight, quickly attacked the major universities, and quickly "burned money" nationwide: in addition to the establishment of branches in Beijing, Guangzhou, and Shenzhen, Yitang also recruited manpower and carried out massive publicity and publicity campaigns around the world. 2000 year-end, the Internet's winter came suddenly, and Yitang money burned. At the end of 2000, the cold winter of the Internet came suddenly, and Yitang burned out most of the money, and still could not make a profit. From 2001 to 2003, Yitang continuously cooperated with professional companies, launched handbags, backpacks, condoms, underwear and other daily necessities, and online and offline sales at the same time, but also quietly try to cell phone wireless business. In the following two years, relying on the SP business to survive Yitang, the only thing that can leave an impression on the user is to become the official news release site of the CET (four, six) examination.

In September 2005, Yitang decided to overthrow its previous development model and launched a personal virtual community website called hompy.cn, which was on par with the then popular Web2.0. Subsequently, except for a few pages such as Yitang mailboxes, Yitang shifted all other pages and traffic to the new website, hompy.cn, which transformed Yitang's website into a new web2.0 website. 2006, Yitang sold its best SP assets (license resources) to Qihoo for $1 million, trying to make a last struggle on hompy.cn. last struggle on hompy.cn. However, hompy.cn has been shut down in 2008, Yitang company is only an empty shell, the former "dream team" in the company burned out of money have also chosen to go out.

May 2009, etang.com domain name due to the non-renewal of the public auction, the final bidder to 35,000 U.S. dollars.

Etang lived a great life, but died an unglorious death, which can only be described as uneventful or even tragic. Other dead website more or less some assets will be acquired by other companies, after recuperation may have the opportunity to re-emerge, but billion Tang has been reduced to the domain name of no one renewed and reduced to the auction of the end of the goods. Yitang has not made any noteworthy contribution to China's Internet, and perhaps the only contribution it has made is to provide an extremely failed investment case. It is a nobleman born with a golden spoon, tens of millions of dollars of capital in exchange for only a sigh of relief.

3. Shang Yang Technology

Case features: China's largest first round of financing, the case of the largest number of co-investors

Lessons for entrepreneurs: defeated by the market is not scary, but disintegrated internally is scary

Lessons for VCs: executives of large companies may not necessarily be able to be the leaders of the startups

Shang Yang Technology, which was founded at the beginning of 2003, has been in a state of flux since it was born. In early 2003, Sunplus Technology was shrouded in a blinding aura from its inception.

First of all, the company's founder and CEO is Netcom's former COO Zheng Changxin, and the management team also includes former Huawei vice president Chen Shuo and general manager of the network products department Mao Senjiang, which can be regarded as a powerful family;

Secondly, the company received $58 million in initial financing from a number of well-known venture capital organizations at the beginning of the company's inception, and the main investor, Walden Capital, invested $18 million, DCM invested $10 million, IntelCapital invested $7 million, NEA invested $5 million, and other investors include Sycamore Ventures, Morgenthaler Ventures, Jerusalem VenturePartners, Sumitomo Group's investment company Presidio Venture Partners, STAR Venture, Hitachi, ITOCHU, Shanghai United Investment Co, and more.

Sunshine Technology, which has been recognized as one of the top 100 private companies in Asia by RedHerring Magazine, is committed to becoming a leading Next Generation Service Platform (NGSP) provider in the communications field and to opening up a new era of free communications with "free communication without boundaries". The company's main businesses include value-added fixed-line solutions, broadband wireless solutions and enterprise communication solutions. At that time, telecom operators were also ready to make a big effort in value-added business - China Telecom's "Connected Star", China Mobile's "Mobile Dream Network", China Unicom's "Unicom Unlimited", and China Telecom's "Mobile Dream Network". "Unicom unlimited", this transformation for the sunshine technology provides a huge space for development. Although Shang Yang has a few good core business, such as UU language letter, but ultimately did not seize the market opportunity. 2 years later, due to the company's poor management since its inception, Zheng Changxin was forced to "step down", Shang Yang Technology, a substantial layoffs, the business also began to transform from the former equipment solutions provider to the Internet value-added business providers. The business also began to transform, from the former equipment solution provider to the Internet value-added services provider. In the market not only with the instant messaging field of the well-known Microsoft MSN, Skype and Googletalk and other multinational giants to compete, but also face the domestic QQ, Sina, NetEase, 263 and other local enterprises of instant messaging tools challenge. In the end, Sunshine's business did not "rise" as its name suggests, and eventually its dreams were shattered and it withdrew from the market in 2006.

Shangyang Technology has fallen to this point, according to people familiar with the matter, there are problems in management. First, the company's heavy research and development, light market, the market can not catch, and research and development, the first financing is used up, there are not yet a few decent products; Second, the company's internal gangs are serious, between the divisions to do their own thing. At the same time, from the top to the staff "composition" is extremely complex, there are "sea turtles" and "turtle", there are from the state-owned enterprises also from foreign enterprises, there are from start-ups, there are from the Global 500 companies, and even from Huawei's management team to bring the old, has remained in Shenzhen, out of control.

Huadeng International's Chen Liwu has a wealth of investment experience in the investment field, Zheng Changxin and other is a star level, real-world management team, and more than a dozen well-known investment firms, a large injection of capital, enough to illustrate that the space and attractiveness of China's communications market. These positive factors add up to a better counterpoint to the pity of this case.

References

The six saddest failures of Chinese companies! Business Merchants.com [cited 2017-12-24]