“Abogen Biosciences is too big a business, and my funds are limited, so it’s impossible for me to invest it all at once.”
Abogen Biosciences is a leading mRNA vaccine company in China. They have just completed a Series B financing round of RMB 600 million and are about to conduct a Series C investment of more than RMB 700 million.
The biopharmaceutical field is an extremely capital-intensive one, especially for companies developing innovative drugs. It's not uncommon for billions of dollars to go down the drain.
The shares that Cheng Gang strategically placed will be released from lock-up at least two years from now. He himself can only afford to take out a maximum of 20 million RMB in cash. Even if he uses the original shares of Kechuang Bio to get a loan, he can only borrow about 100 million RMB.
Investing 120 million in innovative drugs is not only a waste of money, but it doesn't even qualify you to give it a second glance.
"Moreover, the idea that Abogen Biosciences can compete with foreign pharmaceutical giants in mRNA is too small," Cheng Gang cautioned.
Young considers himself a master strategist, especially after investing in Scitech Biotech, which gave him even more influence within IDG.
“Abbott doesn’t need to compete with Pfizer and Modena, it only needs to compete with Stemirna Therapeutics. Besides, IDG has co-invested in both companies.”
Stemirna Therapeutics is another domestic biopharmaceutical company that produces mRNA.
Cheng Gang patted his forehead: "Science and Technology Innovation Biotechnology is about to go public, and my brain is a little fuzzy lately."
Young's subtext is that foreign pharmaceutical giants' mRNA vaccines simply cannot enter the Chinese market. If Abogen and Smecta can capture most of the Chinese market, they will already be making a fortune.
"You guys are too shrewd. You've put eggs in both baskets, so you won't suffer any losses at all," Cheng Gang remarked. "Foreign investment banks are just more astute in their project management."
Whether it's Stemirna Therapeutics or Abogen Biosciences, IDG's return will be more than 10 times, which is equivalent to investing 2 and getting 10.
Back when venture capitalists were investing in internet companies, they invested in all the top companies. As long as one of them went public, their return on investment would be at least 50%.
As long as there's no major mishap and the company you didn't invest in catches up with it from a third party, this investment is guaranteed to make a profit.
Black swan events can occur in any type of investment, and even asset management products can default.
Therefore, some angel investors claim in private conversations that angel investing is actually low-risk and high-return. Of course, insiders can say such things, but laymen should just listen and not take them seriously.
These are boastful remarks made during an economic upswing; let's see if they dare to say them again when the economic cycle is in a downturn.
"How about it? Do you want to invest? I can give you a portion of IDG's shares."
This is a more sophisticated form of sexual favors, euphemistically called an exchange of benefits.
If someone tells you that a stock is guaranteed to rise next week, and even tells you how many points it will rise from which day to which day, and the maximum number of shares you can buy, would you take the plunge?
After thinking for a moment, Cheng Gang nodded and said, "I'll think about it and give you an answer later."
Young: "Make a decision as soon as possible. The Abogen Biosciences project is urgent; they have a pressing need for funding."
"Speaking of which, you don't actually need to set up any investment company. Isn't the Kechuang Bio company a good enough option?"
"You've already achieved complete financial freedom with this strategic placement, so why are you still making a fuss?"
For Young, sharing his investment with Cheng Gang was just a casual move. His investment strategy was much more skillful and subtle than what Li Miaomiao had encountered before.
Moreover, there was absolutely no violation of regulations, not even in terms of human relationships or morality. I was simply helping a friend make connections, and my investment behavior was completely legitimate.
Cheng Gang, having managed to survive for so many years, was naturally shrewd; he knew Young was trying to provoke him.
“We met back in America. You achieved financial freedom many years before me. Why are you still constantly trying new things all these years?”
“We are the same in this respect. Anyone who has started a business can’t stop. Their excitement threshold has been raised, and daily life can no longer stimulate them.”
"If I don't do something I'm interested in, I'll be no different from a skeleton in a tomb, since I won't feel anything anymore anyway."
Cheng Gang and Young are both members of the Western Returned Scholars Association. In addition, Cheng Gang is also in the venture capital circle, and the two have occasionally communicated before.
After his meeting with Young, Cheng Gang was quite emotional. Although the two knew each other before, he was a level below Young, so their communication was very limited.
Cheng Gang was previously one of the investment directors at Shunwei Capital, which is essentially a high-level employee, while Young is a partner at IDG Capital and a shareholder. Even a small shareholder is still a shareholder.
"If it were me in the past, I probably wouldn't have known which companies participated in Abogen Biosciences' Series C funding round until the Series C investment agreement was finalized."
"Not to mention the opportunity to get investment."
"In the past two years, Shunwei Capital has invested quite a bit in the biopharmaceutical field due to its participation in the Series A investment of Kechuang Biotech. I don't know why they didn't participate in the investment of Abogen Biosciences this time."
"Although this matter is neither illegal nor against company regulations, I will still report it to Chairman Zheng."
"If I am disliked by Chairman Zheng because of this, and it affects my position at Kechuang Biotechnology, then that would be a huge loss."
Cheng Gang is very self-aware. He knows that he can make investments in the biopharmaceutical field. People are willing to mentor him not because he has a PhD in biopharmaceuticals, but because he is the general manager of Kechuang Biotechnology.
If he loses this position, he can only invest in small startups or become a partner in a venture capital firm. With his experience in science and technology innovation, he can improve his resume by a level compared to before.
However, it is still far behind Kechuang Biotechnology.
"Recently, Suzhou is building a new biomedical park, which is said to be a major development project for the biomedical industry. Abogen Biosciences is said to be a project that they are strongly supporting."
"If Abogen Biosciences can truly become the next innovative biotechnology company, then the biomedical industry cluster in Suzhou can be said to be on the verge of being established."
A cluster cannot rely on a single enterprise; it needs successors and other related enterprises to support the entire industrial cluster.
In Hangzhou, there are not only Ali (the company behind Ali), but also a group of other good internet companies such as Ant Financial, NetEase, Mogujie, and Tongdun.
“Abogen Biosciences is located in Suzhou. After Kechuang Biosciences goes public, we can go and do some research to see their technological strength.”
“We can invest in one project through Kechuang Bio, and then I will invest in another project in my personal capacity.”
As Cheng Gang sat in the car on his way home, his mind was filled with all sorts of thoughts.
"If you want to invest, you can invest, whether it's Abogen Biosciences or Smicro, I have no objection."
“I have no objection to your decision to start a venture capital company, but you must keep your personal and business interests separate and not put your personal interests above the company’s interests.”
“I don’t know much about these two companies you want to invest in. You’ll have to decide for yourself.” Cheng Gang asked Zheng Li, and Zheng Li’s answer was direct and straightforward: I’ve drawn the boundaries for you, and you can’t cross them.
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