Southern Beauty, Daniang Dumplings, Tianfu Cola, Dabao, Mecanese and so on, they used to have a lot of glory and full of energy, but now they are sluggish and silent, and they are going to be forgotten and abandoned by this fast-developing era, so what's going on? Below I takeSouth Beauty and Damiang Dumpling as examples to introduce to you how our quality companies are being harvested.
How was South Beauty harvested?In the beginning, Zhang Lan brought in investment from CDH Venture Capital in order to accelerate the company's growth. In order to guarantee the return of investment, CDH required Zhang Lan to sign a listing betting agreement, which stipulated that if South Beauty could not be listed within three years due to reasons other than CDH, CDH had the right to withdraw from South Beauty by way of buyback.
Specifically, the signing of the agreement determines the amount of return that DingHui can get after South Beauty is listed, and if it can't be listed, it will have to be paid according to the amount, and DingHui can also get back the capital invested. Of course, South Beauty can get the right to use DingHui's investment funds for three years.
As a result, South Beauty was caught in a difficult business situation, and was eventually unable to go public on schedule, due to the "ban on official consumption" and the decline in reputation and sales.
At this time, CDH demanded strict implementation of the betting agreement, and due to the sharp drop in revenue and financial constraints, founder Zhang Lan was forced to accept CDH's offer to sell 82.7% of her shares in South Beauty to CVC, a Hong Kong-based private equity fund with a European background, to fulfill the original betting agreement with CDH.
After the financing incident, Zhang Lan not only lost control of the company, but also South Beauty is no longer the same as before. The DingHui, which once said it would *** make money together, didn't give the other party a chance to make a comeback when South Beauty made a mistake, and resolutely enforced the betting agreement, leading to the decline of a generation of well-known Chinese food brands, which can be said to be the capital's unequivocal pursuit of interests, and can't wait for a single moment.
How was Damiang Dumpling harvested?Damiang Dumpling was founded in 1996, and after nearly a decade of development, it has opened 450 stores nationwide, with an annual turnover of 1.5 billion yuan, making it a master of the dumpling restaurant industry. Because of his advanced age, Wu wanted to find a relatively easy way to run Daniang Dumplings. Then CVC, a Hong Kong-based private equity fund that had invested in South Beauty, approached Wu and said it was willing to invest in Daniang Dumplings.
At first, Wu was reluctant to invest, but after the CVC fund gave Wu advice on product standardization and building the No. 1 fast-food brand in China, and offered a high price for his stake, Wu was moved to invest in CVC with only a 10 percent stake in the company. since CVC's entry into the company, Daniang Dumplings has gone from being an entrepreneurial venture to a capitalist enterprise.
In order to increase revenues, Damiang Dumpling tampered with the cost of its products, saving money by cutting corners and reducing the number of employees by lowering the weight of each original dumpling from 20g to 17.5g, drastically reducing the quality but not the price, which resulted in Damiang Dumpling starting to lose fans and customers, and its revenues plummeted and even There was a negative growth. And Wu was forced out after only 3 years as a consultant and 2 years as chairman.
When consumers gradually moved away from Daniang Dumplings, CVC got a new idea and quickly cashed out by transferring the brand's residual value to a domestic company, Gemei Group, at a low price of 350 million yuan.
Summary
Capital is always profit-seeking, how much money into the investment, we must double back, this kind of mentality and the founder of the mindset of quick success and profit to do the concept of a hundred years of branding is fundamentally different, and once the enterprise on the capital of the pirate ship can not be turned back. It can be said that a business whether voluntary or involuntary, once the partnership with the capital institutions, the loss of temperament and dignity, the development experience has become stifling and bumpy up.
But Huawei Technology and Lao Gan Ma Food, both founded in the 1980s, have great branding and impressive performance, and because they have a clear understanding of their own development and the nature of capital, they have avoided getting involved in the sinister manipulation of capital. Because they know that once a company introduces capital, it will be off the existing development track, the company no longer belongs to itself, and the brand is likely to disappear.