In Jinshan City, Yuan Lin formally met Lan Baolin. After the meeting, Yuan Lin went straight to the point: "Mr. Lan, we are all very busy, so I won't say polite words. I will ask three questions. First, what is an investment bank? Second, why use stocks instead of exchanging stocks for cash? Third, what impact does the investment bank have on Shangguo?"
Yuan Lin's straightforwardness surprised Lan Baolin, and he held back many of the polite words he had prepared. But Lan Baolin had made sufficient preparations after all, so he took out the document and began to interpret it.
"First, let's talk about investment banking. Simply put, investment banking is a unique financial service that is different from the banking business in the past. Before talking about investment banking, let's talk about the past. In the past, banking business was to absorb deposits from the public and then wait for people who needed loans to come to the door, and there were also various audits and qualification restrictions. In particular, the continuous and urgent repayment problems in the later period have a serious impact on the development of corporate groups. According to my investigation and interviews, about 80% of companies have financial pressure and have loan needs; but only 30% of companies can pass the audit and obtain loans. However, even among these 30% of companies, 20% will be crushed by the loan pressure, and the remaining 10% can truly stand out."
"This is normal." Yuan Lin didn't seem to care. "It's a one in ten success rate. You have to know that in the past, the chances of ascending to heaven through cultivation were less than one in ten thousand, or even one in a million."
"But I have a way to increase this success rate by at least three times," Lan Baolin said forcefully.
Yuan Lin's eyes suddenly brightened up, staring at Lan Baolin and looking at him seriously. Yuan Lin certainly knew what a three-fold increase meant, which meant that the development speed of Shangguo would increase by three times, or even more! If it tripled every year, then its influence would be immeasurable!
After looking at it for a while, Yuan Lin nodded: "Go on."
"Then let me tell you what an investment bank is." Lan Baolin turned the page of the document and continued, "The so-called investment bank is essentially a bank, but it is also an alternative stock service institution.
We will inject the capital we absorb from the private sector into those companies with potential and purchase their shares, so that the companies can develop without worries.
After purchasing shares in a company, we will not directly participate in the management of the company, but will supervise its development.
We will not require companies to repay the loans regularly, and there will be no interest.
In essence, we are also investors in the company, so we will bear market risks together with the company.
Once the company is successful, we will sell our shares in the form of stocks in the market, cash out and recover our capital.
If successful, the return on this type of investment can reach ten times, thirty times, or even a hundred times.
Of course, if you fail, you won’t get any money back.
This is a high-risk investment, but also a high-return investment.
That’s what investment banking is. So we have to use equity as initial capital.”
Yuan Lin closed his eyes and thought for a while, then suddenly asked, "Where are the depositors' savings?"
Lan Baolin said very straightforwardly: "We will share the risk with the investment bank. If it succeeds, everyone will get rich. If it fails, everyone will lose money together. We will explain this clearly to the depositors."