The biggest scam of capital is that investors do not make money through dividends at all.
Pinduoduo has lost 14 billion in four years, while Huang Zheng is worth 450 billion.
JD.com lost 30 billion in 12 years, while Liu Qiangdong is worth 150 billion.
Didi lost 50 billion in 6 years, while Cheng Wei is worth 30 billion
Meituan lost 115.5 billion in 8 years, while Wang Xing is worth 120 billion
The founders have made so much money, and the investors have made even more money.
The question is, how is this money made?
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. If you sell 20% of the equity, your company's valuation will rise to 250 million.
In the third round, you received another RMB 500 million in financing and sold another 20% of your equity. Your company’s valuation is RMB 2.5 billion.
At this time, the first round of investors had already made 50 times the profit.
Then every round and so on until the company cashes out after it goes public, everyone will earn more.
This is the charm of capital. What investors earn is equity premium money, not the company's dividends at all. The purpose of investors investing in you is to raise your valuation and ultimately earn money from equity premium and price-earnings ratio.
So when raising funds, don’t use products and profits to attract investors.
Investors want valuable projects rather than money-making projects!
