深圳信安智能:科创企业的窘境(B)

Translated title of the contribution: Chasm Security: Facing the Technology Startup's Dilemmas (B)

Wen‐Ching Chang (First Author), Liman Zhao, S. Ramakrishna Velamuri

Research output: Other contributionCase Studies

Abstract

This series of case studies describes the dilemmas encountered by Shenzhen Chasm Security Co., Ltd. (referred to as "Chasm Security") in its three rounds of funding since its establishment in 2012. As a company with Internet security technology as its core asset, it has five co-founders from three regions, and four of them have a strong technological background. Given the political and economic context of the China–U.S. trade war and the sensitivity of the information security industry, this entrepreneurship case series always generates vigorous and enthusiastic discussions. Case (A) focuses on the first two rounds of funding in mid-2016 and discusses various dilemmas faced by the founding team. First, should the equity split among the co-founders be based on instinct or logical rationale? Second, should the company's shareholding structure be more concentrated or distributed? Third, should President Zhi Wang exercise his veto power? Crucially, the judgment on the last question encompasses three other dilemmas: (1) whether to insist on his rationale on market positioning, or swallow his opposition for the sake of maintaining relationships; (2) whether to gain a firm foothold in the Chinese market, or pursue a broad global presence; and (3) whether to chase a high valuation and wealth, or retain company control. Case (B) is based on the China–U.S. trade war and discusses how this Chinese Internet security company with American capital raises Series C funding in the second quarter of 2018. Should the company seek dollar funding to grow in the global market, or opt for RMB funding to focus on the Chinese market? Of utmost importance is how to deal with a situation where U.S. investors are pessimistic about Chinese security companies, and RMB funds are unwilling to invest in businesses with a dollar funding structure. Case (C) introduces the latest progress of Chasm Security as of the end of 2018. It then poses a very inspiring question to comprehensively summarize the case series: "If the founders had a second chance, how would the game play out?"
Translated title of the contributionChasm Security: Facing the Technology Startup's Dilemmas (B)
Original languageChinese (Simplified)
Number of pages2
Publication statusPublished - 30 Jun 2020

Case number

ENT-20-637

Case normative number

ENT-20-637-CC

Case type

现场案例

Update date

2020-08-04

Published by

中欧国际工商学院

Keywords

  • 创业
  • 创始团队
  • 困境
  • 科创企业
  • 股权分配
  • 融资

Case studies discipline

  • Entrepreneurship

Case studies industry

  • Professional, Scientific, and Technical Services
  • Information, Media & Telecommunications

Fingerprint

Dive into the research topics of 'Chasm Security: Facing the Technology Startup's Dilemmas (B)'. Together they form a unique fingerprint.

Cite this