The biggest scam of capital, investors don’t make money from dividends
Pinduoduo lost 14 billion in 4 years, and Huang Zheng is worth 450 billion.
JD lost 30 billion in 12 years, and Liu Qiangdong is worth 150 billion.
Didi lost 50 billion in 6 years, and Cheng Wei is worth 30 billion
Meituan lost 115.5 billion in 8 years, and Wang Xing is worth 120 billion
The founders made so much money, and the investors made a lot of money.
The question is how did they make this money?
The first round of investors in your company invested 5 million, accounting for 10% of the equity, so your company is valued at 50 million!
In the second round, an investor invested 50 million, and you sold 20% of your equity, and your company's valuation rose to 250 million.
In the third round, you got another 500 million in financing, and you sold another 20% of your equity, and your company's valuation was 2.5 billion.
At this time, the investors in the first round have made 50 times
Then every round is analogous until the company goes public and cashes out, and everyone makes more money.
This is the charm of capital. Investors make money from equity premiums, not dividends from the company. The purpose of investors investing in you is to raise the valuation and finally make money from equity premiums and price-earnings ratios.
So when raising funds, don't use products and profits to attract investors.
Investors need valuable projects, not profitable projects!
