Sell projects or sell companies? A debate in the cold winter of financing | the first scene

This is a real debate
.

The founders and investors of the on-site biopharmaceutical company were divided into positive and negative sides, and the theme of the debate was "Which is the green mountain between the project and the company?" Under the cold winter, which is more conducive to survival and development? "Opinions collide fiercely, right and wrong, and companies continue to operate with their own agreed strategies – only survival is important
.

Debate 1

In the current environment, do you want to sell your good projects to survive with cash?

Square view: Stay in the green mountains

The opposing view: If a good project is sold, the company is worthless

Square one argument

Answer this question
with your own personal experience.

The opposing side argues

As a biotech company, you should stick to your original intention and should not sell your core assets
.

Square two defense

Selling the project to the company is not valuable, which means that the company is not worth much
.

In addition, the other party's defense friend said that a good project is the crystallization of wisdom, yes, but it is not enough to think so, you need the market to prove it
.

The second defense of the opposing side

In fact, the opposing defense friend secretly changed the concept and confused
the cooperation with other companies with sales.

Square three defense

I would like to remind the opposing defense that it is winter, not summer
.

The three defenses of the opposing side

We all know that discovering new drugs is a very, very difficult process
.

Square four defense

The first thing to understand is what characterizes our industry, anything back to first principles
.

The four defenses of the opposing side

Returning to the debate, he was talking about whether to sell his good projects in the
current environment.

Square summary

The current entrepreneurial environment is no better than it was at the beginning
.

Counterparty summary

In fact, we are not against selling projects, but only against the premise of this debate, because of the temporary pressure of the environment, selling their best projects
.

Debate 2

At present, many rounds of financing in A/B or even C rounds are not easy
.

Counterparty: For the sake of investors/shareholders, seek exit channels for corporate mergers/mergers

The opposing side argues

We want to seek mergers and acquisitions, first of all, around the original environment of China's biotech, China's biotech is facing a completely different
drug pricing system from Europe and the United States.

Square one argument

There is a logical problem
.
If you feel you need to join forces with a manager to form a team, you can join forces when starting a business
.
When we founded the company, we talked to investors about all aspects, if we really think that the merger of the company is better, is it not that I said it wrong? It shows that we are not persistent
enough.
Again, to give my own example, I sold a project but didn't sell the shares
.
I still think the technique is good, the track and the idea is good
.
So I have to stick to the ideal, not sell the company
.

The second defense of the opposing side

The merger of the company is equivalent to two people coming together and merging more resources together
.
A soldier will fight a family
.
The strengths are strengthened, and the weaknesses can also be complementary
.
Also through the merger of companies, we can put better resources together, the project is still there, but the ownership of the project has changed to a certain extent, so that the project can advance to the next milestone
earlier.
In addition, from the perspective of the project itself, merging some pipelines can focus resources more
.
Our view is that mergers and acquisitions can play well on the strengths of both sides
.

Square two defense

The point we advocate is that pipelines can be sold, companies can't
.
It is clear that the company's money can only be burned for another 6 to 9 months
.
Whether it is easy to sell the company or easy to raise funds, people with practical experience should be able to understand
.
Company mergers and acquisitions, including various technology transfers, process transfers, and transactions can hear a variety of uncertainties, and the complexity of the company's merger and acquisition process will only increase
exponentially.
Including how we can rule out hostile acquisitions and buy projects back and not develop them
.
Based on the objective time window and subjective will, I don't think it is a good idea to merge from my own point of view
.
As a founder, you have to persevere, and the company is likely to succeed
.

The three defenses of the opposing side

We also recognize that cash flow is important and survival comes first, but the strategies we adopt may not be the same
.
One reason is the problem of duplication of production capacity, not only in China, but also in the early 21st century, many large pharmaceutical companies in the West are also mergers and layoffs, because there were many duplicates of projects at that time, and resources were reused on
inefficient projects.
In addition, if you treat the project as a child, you want to give him the best environment
to grow up.
A biotech doesn't necessarily have the resources to extract the full value of the project, and merging can make the project the best developed
.

Square three defense

In fact, mergers and acquisitions are very high-risk things
.
Really good mergers and acquisitions may only be about 10%, and you risk 90% of the time and probably find a harsher environment
.
So, mergers and acquisitions are a very difficult decision to make and the risks are extremely high
.
In the current environment, we continue to insist on financing, and there are many means to obtain funds, including banks and local governments
.
To reiterate our point of view, stay in the green mountains without fear of no firewood
.

The four defenses of the opposing side

According to my understanding of the debate, it should refer to the situation of trying to raise funds
.
As we all know, doing new drug projects is very expensive, if you can keep clinical projects running through creditor's rights or some government subsidies, you will not feel such a lot of pressure
in the cold winter.
When there is only 6 to 9 months of cash flow, the financing will not stop, but we must talk about mergers and acquisitions, otherwise we will not fulfill our responsibilities
as founders and chairmen.
Technology transfer or corresponding activities can occur in the future, do not choke on food
.
Whether "Aoyama" refers to the company or the project, everyone stands in different views
.
We believe that the project is "green mountains", and if the company can ensure that the project runs better or integrates strong and strong in the case of mergers, it is actually to preserve the project itself
.

Square four defense

We believe that every founder has a dream, to build a great company, not to sell the company
just because of a little difficulty.
Go against
your dreams first.
Second, entrepreneurship is not a matter for the chairman alone, it is a team affair
.
In our personal experience of starting a business, the most difficult thing is a highly tacit understanding and very well integrated team
.
And that takes time, it takes luck, and it's a lot of factors that make it the most valuable and soulful part of the
company.
To sell the company, you have to think about the team
.
In addition, looking at the current environment, it is very likely that it is a passive selling company, and if you want to sell, you can't sell at a good price
.

Counterparty summary

If we think of pipelines as the children of the company, mergers and acquisitions are like two companies that achieve child support
through marriage.
Couples must run in, can not feel that the team run-in is difficult, do not merge
.
It is not that after the merger or merger, the founders want to cash out or leave, everyone is actually running together to raise children
better.
Keeping the project and getting the drug to the patient is what our side thinks of as a green mountain
.
Companies can exist
in various forms.
Of course, from the perspective of shareholders, we should also let them have the opportunity to exit, China is not talking about biotech now want to become biopharma, eventually there will be mergers and mergers, we do not because of some hypothetical situation to refuse such an opportunity
to let the project go on.

Square summary

Back to this, if you need money, concentrate on money, this is a sentence from the other side's defense friend just now, and I also gave it to them
.
Financing and M&A are not a dimension in terms of technical difficulty
.
And the company is a living organization, the merger of the two companies will involve many changes in the management structure, including some of the benefits promised to the core team that year are often not guaranteed
.
In this case, the founder actually pit the team in disguise, and he himself fell into an unkind and unjust place
.
So is there an account for the shareholders? In the current capital environment, it is basically very difficult for the buyer to give a premium, the capital wants to exit, it is very good to get the principal, more cases may be the exchange of shares, after the exchange of shares to become a small shareholder, all shareholders have no rights
.
Therefore, with good illusions, you may eventually fall into a more tragic situation
.
In summary, I think that as the founder of a company, the most important thing he should do at this time is to adjust the company's strategy, optimize the company's asset structure, optimize the efficiency of capital use, and adjust the financing strategy and expectations
.
That's king.