2003: Starting with Foreign Trade

Chapter 387 Tripartite Cooperation Reached
Strategic investments don't require too many shares; too many won't raise money.

If he had money, Tan Jincheng wouldn't want Shen Nanpeng involved, so it's reasonable for him to borrow some money from Shen Nanpeng, right?
Tan Jincheng has returned to Shenzhen once again. This is the seventh day since he came to Shenzhen. The first month of the lunar calendar is about to end, and the weather is getting hotter day by day.

“When we came here, I could still wear the inner lining, but now one is enough,” Tan Jincheng exclaimed.

At this time of year in Ningbo, it's still warm enough to wear a coat, and some people with weaker constitutions haven't even taken off their thermal underwear yet.

"It's a bit hot here, but it seems to save money. I don't need to buy many winter clothes."

Tencent is in Nanshan, so Nanshan is always a top choice, Dexian Electronics is located in Longgang District, and SF Express is in Bao'an District. In just a few days, Tan Jincheng has already traveled to three districts in Shenzhen.

Many well-known companies that are now more than 10 years old were not large in size or impressive in the early 2000s, including those that did not yet have their headquarters. SF Express was no exception.

However, SF Express occupies a large area. As a logistics company, the factory area is very clean, with rows of freight trucks parked there.

It is said that Wang Wei already had the idea of ​​buying airplanes and engaging in air transport at this time. I don't know if it's true or not. If it is true, then Wang Wei is not only ambitious but also very farsighted.

In the later stages, the express delivery industry is all about service and speed. After Cainiao failed to acquire Tonglu Bang Express, the express delivery industry really dared to compete fiercely, burning money no less than the internet industry.

At this stage, cooperating with the Tonglu-based express delivery companies (STO Express, YTO Express, ZTO Express, and Yunda Express) is actually better than cooperating with SF Express, because they have an advantage in the Yangtze River Delta region, Orange Technology's main battlefield.

However, these companies relied too heavily on Taobao, which led to them all being swallowed up by Cainiao in the later stages. The companies lost their operational autonomy, and the logistics system of Orange Technology would eventually be controlled by the Ali Group after cooperating with these companies.

If things go wrong, the final outcome might be the same as all the companies acquired by the Ali Group: they'll be responsible for providing them with financial support, but in the end, the companies will slowly be ruined by them.

Whether in physical stores or online, Tan Jincheng wasn't particularly fond of Ali, and he tried to avoid cooperating with them whenever possible.

The reason for choosing SF Express is its independence. Mr. Wang would rather give up the Taobao market than accept Mr. Ma's investment, which shows his strong will.

"Mr. Tan, I've heard so much about you."

As soon as Tan Jincheng and Gu Qingqing entered the conference room, Wang Wei warmly stepped forward and waved to greet them. No matter how low-key a businessman may be, he is bound to be a social person and is unlikely to be socially awkward.

The same applies to Wang Wei. Tan Jincheng was meeting him for the first time; they had only communicated a few times on the phone before.

Strictly speaking, Wang Wei and Gu Qingqing are more familiar with each other, because Gu Qingqing was in charge of the previous work on the integration of the Orange Logistics System.

Immediately afterwards, Wang Wei warmly greeted Gu Qingqing, who was standing behind Tan Jincheng. To outsiders, although this President Gu was still just a student, she was often regarded as Tan Jincheng's appendage, a figurehead whom Tan Jincheng put on the front stage.

However, Wang Wei believes that this is not the case. During the process of connecting the two logistics systems, Wang Wei was able to feel the young woman's work ability and attitude.

Employees of Orange Technology have also said that President Tan rarely appears at the company, and President Gu is in charge of the company's daily operations and management. How could someone who can manage a new internet company so well be just a figurehead?

"Mr. Wang, it's an honor to meet you," Tan Jincheng replied with a smile.

Having appeared on CCTV and met many celebrities, Tan Jincheng, apart from showing some curiosity when facing Ma Ying-jeou, was able to maintain a calm demeanor towards other entrepreneurs.

SF Express has considerable strength in Guangdong Province, and Flash Motors also has a place in Zhejiang Province. Given the current policies that favor electric vehicles, Tan Jincheng's position is perfectly fair to them.

Shen Nanpeng was also there. After Wang Wei, the host, finished exchanging pleasantries with Tan Gu, he also exchanged pleasantries with Shen Nanpeng.

All three parties have a strong desire to cooperate, and today's negotiations can be considered formal.

Regarding SF Express's valuation, the Sequoia team, as investors, has a very professional calculation method. They have already done a full calculation in the past few days, so Tan Jincheng doesn't need to worry about this, nor does he, as a contributor, need to worry about it.

However, Wang Wei's first words at the start of the meeting surprised Shen Nanpeng and Tan Jincheng.

"The shares invested in cannot be registered under Orange Technology's name, otherwise there is no point in investing in them."

Wang Wei's idea was simple: Sequoia Capital's investment in Orange Technology was almost a done deal. If the shares were then placed under Orange Technology's name, wouldn't a large portion of the shares return to Shen Nanpeng's name?

Furthermore, Orange Technology has another investor, Wang Wei, who does not want too many venture capital firms to get involved in SF Express at this stage.

Furthermore, Orange Technology is an internet company, and going public is their only path. There is a high probability that they will introduce new investment institutions later, which will lead to a complex shareholding structure. If these people are ruthless, they could even seize control of Orange Technology.

He doesn't care who controls Orange Technology; what he wants is the business from the collaboration, but he can't put SF Express at risk. He's giving up a significant portion of his equity in this investment, 20%, with Sequoia Capital, the lead investor, holding 15% and others participating in the follow-on investment at 5%.

Wang Wei was quite cautious as this was his first time dealing with venture capital firms.

Shen Nanpeng was stunned for a moment, but quickly realized that he invested not only in internet companies, but also in physical companies. He quickly understood why Wang Wei was doing this.

Unlike the startup teams of internet companies, who either lack money and resources or are inexperienced and easily fooled, Pony Ma gave up a lot of equity when he founded the company.

The founders and founding teams of physical enterprises are different; they are much more vigilant about equity. Take Tan Jincheng for example: although his Flash Group and several subsidiaries have other shareholders, the equity is firmly controlled in his name.

Even the equity structure of Orange Technology reflects this, clearly demonstrating that business owners have far more experience than novices in internet startups.

In fact, what Shen Nanpeng admired most about Tan Jincheng was not how large Flashway became, nor how he acquired shares in the entire industry chain, but rather his brilliant handling of the equity in Jinpeng Industrial.

As the trading company in which he initially held the majority of shares and from which he made his fortune, Tan Jincheng decisively sold his shares after accumulating his first pot of gold, withdrawing the funds to invest in electric vehicles.

In less than two years, the electric vehicle business grew rapidly, and the company quickly surpassed Jinpeng Trading, which was making a fortune every day.

It's true that transferring shares to one's childhood friend is a very kind thing to do, but losing control of a lucrative trading company and a major source of income is undoubtedly a loss.

However, no one expected that in the days that followed, he would be able to persuade his good friend to willingly hand over control of Jinpeng, which had already transformed into a real business, and bring Jinpeng back under his own name.

All they gave up was 3% of the parent company's shares and 49% of the subsidiary's shares, which is quite a shrewd move.

As an investor, one is quite sensitive about a company's equity. Tan Jincheng's ability to enrich the group's business while regaining control of Jinpeng and keeping his good friend from objecting is something not everyone possesses.

As Tan Jincheng's fame rose, Zhang Xupeng's fame also increased. In addition, GXG has been opening stores in various places recently and has also formed an e-commerce team, making quite a stir.

Among the media outlets that follow Flash, there are quite a few with ill intentions. When interviewing Zhang Xupeng, they deliberately brought up this matter, trying to provoke a conflict between him and Tan Jincheng.

Why would someone give up control of a lucrative company to become a subordinate of a good friend? Were they coerced into doing so?

When faced with such interviews, Zhang Xupeng remained calm, showing no signs of coercion or unwillingness; it was all voluntary. He even joked that he felt much more at ease following Xiao Tan.

"Then what should we do?" Tan Jincheng's question interrupted Shen Nanpeng's thoughts.

"It's very simple. Just put it under the personal name of Mr. Tan or Mr. Gu. At the same time, I hope Mr. Tan can sign a concerted action agreement with me. It's not that I don't trust Mr. Shen, but Mr. Tan and I are both in the real business, and relatively speaking, we have more experience in running businesses than investors like Mr. Shen."

Shen Nanpeng smiled, nodded, and said nothing.

There's no need for the other party to have such concerns. He's a professional investor who wants investment returns. He has absolutely no interest in the company's management rights, nor is he allowed to have such an interest. Otherwise, how can he invest in the future?

There's really no need for the other party to have such concerns. He can understand their attitude, since they haven't dealt with investment institutions before.

Shen Nanpeng wants a large share of the entire express delivery and logistics industry market. In the future, he will invest in more express delivery companies, not just SF Express.

"What did President Shen say?" Tan Jincheng asked Shen Nanpeng.

"I have no problem. Sequoia will only appear as an investor in any company, in the shareholder seats, to help the company grow and develop. I will not covet any company. Both President Wang and President Tan can rest assured on this point."

“Since President Shen has no problem, then I have even less problem. Let’s discuss the details.” Tan Jincheng nodded.

By leveraging the strategic partnership between Orange Technology and SF Express, Orange Technology invested in SF Express and acquired a 5% stake. However, this 5% stake was not registered under the company's name but under an individual's name, raising suspicions of personal enrichment.

However, this is not against the rules, and it can be explained to the outside world as Tan Jincheng investing in SF Express in his private capacity, thus facilitating this strategic cooperation between the two parties.

Chinese is profound and complex; it all depends on how you use it.

Sorry it's a bit late today, I forgot to set the timer.

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(End of this chapter)