Restart life

Chapter 219 0216 [I don't want to talk anymore, I need to go to class]

On the fifth day of negotiations, Carlyle Group, which had already left, was persuaded to return.

The main reason is that the other major venture capital firms have invested in too many projects over the past year. They need a well-funded peer to lead the investment!
Moreover, Carlyle has brought in a woman this time – Yang Lin, who took office as Vice President of Asia (excluding Japan) at the end of last year.

Yang Lin personally intervened because Facebook's Series B funding round was completed, valuing the company at $5.5 million post-money!
The combined user base of ByteDance's two websites (excluding overlap) far exceeds that of Facebook, and they also possess new features that Facebook lacks. Additionally, there's Kaixin Marketplace, as well as shares in Tudou.com and Bailian Technology.

Yang Lin analyzed the due diligence materials in detail and became very interested in ByteDance.

“With Carlyle leading this round, we only need one non-executive director seat,” Yang Lin said. “I am also responsible for Carlyle’s M&A and post-investment management in Asia (excluding Japan). If ByteDance has any needs, I will personally help optimize the company or help you acquire other companies. Especially for future IPOs, adjustments must be made to meet listing requirements.”

Chen Guiliang smiled and said, "Thank you very much. I need to add an independent director."

“Okay,” Yang Lin readily agreed.

As a result, ByteDance's board of directors consists of 2 founders, 1 lead investor in Series A (IDG), 1 lead investor in Series B (Carlyle), and 1 independent director.

Chen Guiliang continued, "I must nominate the independent directors. I have a veto right when an independent director is removed."

The venture capital managers looked at each other.

The founders were too forceful, so they had no choice but to accept it.

Therefore, Chen Guiliang is the only one who can propose candidates for independent directors. If he disagrees with removing an independent director, he can veto the proposal during the vote.

Yang Lin asked, "Whom do you plan to nominate as an independent director?"

Chen Guiliang said, "One of my teachers was Professor Wu, the vice dean of Peking University's Guanghua School of Management and the founder of Peking University's Department of Strategic Management."

“I agree,” Yang Lin said.

"I agree."

The other investment managers nodded in agreement.

Independent directors cannot be employees of the company, and those who have left the company within the past year are not eligible. They also cannot have significant business dealings with the company, and they cannot be representatives of related parties (such as relatives).

Wang Kai, the incubation manager of Peking University Science Park, could also serve as an independent director.

However, Wang Kai's reputation and position are not high enough, which might displease these investment institutions.

Bringing Professor Wu in is perfect; we can also leverage his resources. When it really matters, Professor Wu will need our help—just give him a small amount of stock options.

Chen Guiliang then produced a supplementary agreement: "I forgot about this during the Series A financing, so I'm adding it now. I need to have veto power over board agenda items. The scope of the veto power includes: amending the company's articles of association, financing and mergers and acquisitions, appointment and removal of senior executives, and business transformation."

Yang Lin was both amused and exasperated: "Mr. Chen, you are very confident."

"Isn't a founder's confidence what venture capitalists like to see?" Chen Guiliang asked rhetorically.

Yang Lin said, "Let's stop here for this morning. We'll continue this afternoon."

……

The Peking University Science Park Innovation Center has moved into the newly completed six-story building.

It was renovated very beautifully, with a strong sense of architectural artistry.

"Wow, Professor Wang's office is quite nice," Chen Guiliang exclaimed as he entered.

Wang Kai laughed and said, "I got promoted because of you."

Wang Kai was previously a senior incubation manager, but last year he was promoted to vice president of the incubation services department. His superior was also promoted this year, so Wang Kai took over the job and became the general manager of the incubation department.

Although it has long been corporatized and lacks a clear administrative hierarchy, a reference point still exists. Wang Kai's current position is roughly equivalent to a section chief in a university.

The rank is not high, but the actual authority is very large!

Especially for the entrepreneurial faculty and students at Peking University, they should treat Wang Kai like a living bodhisattva.

He really benefited from Chen Guiliang's influence; otherwise, he couldn't have risen so quickly.

Wang Kai personally brewed tea for Chen Guiliang, his face glowing with pride, and asked, "How did the Series B financing go? I heard you drove away Carlyle's representative the other day?"

“They’re back, and this time it’s the Vice President of Carlyle Asia,” Chen Guiliang said.

Wang Kai was slightly surprised: "The Asia Vice President came to talk in person?"

Chen Guiliang speculated, "This vice president was newly appointed at the end of last year, and I guess she also wants to achieve results to solidify her position. I drove away an investment manager, and she just found an opportunity to take matters into her own hands. Moreover, I also benefited from Facebook's momentum."

"Has Facebook finished its Series B funding round?" Wang Kai asked.

Chen Guiliang nodded and said, "The post-investment valuation is $5.5 million."

Wang Kai gasped in astonishment: "In just over half a year, Facebook has already reached $5.5 million? That's incredibly fast!"

Chen Guiliang laughed, "It's a crazy investment frenzy. Both the US and China have gone mad." In a few months, Google will be the one truly going mad.

YouTube was acquired by Google for $16.5 billion just a year and a half after its creation!
After that deal is completed, Tudou.com's value will skyrocket.

……

A small meeting room in the Peking University Science and Technology Building.

SoftBank representative Lin Heping said, "This Chen Guiliang, like Chen Tianqiao of Shanda and Ding Sanshi of NetEase, has an abnormal desire to control his company. If he doesn't make any major wrong decisions, he is actually a very good investment target."

Yan Yan, the head of SoftBank's China operations, was not present; he is currently leading investments in other companies.

They have already invested in 58.com this year and are currently investing in Perfect World, Digital China, Mobi Antenna, Yiatong, and more, and have also increased their investments in PPTV and Acorn International.

Therefore, SoftBank's investment in ByteDance this time is only a small-scale follow-on investment; Carlyle is the lead investor.

Feng Kaixuan, an investment partner at DCM, said, "Chen Guiliang has a very accurate eye for investment. He only invested in two projects, and both of them have seen significant gains. Bailian Technology and Tudou.com are both very promising."

IDG's Lin Dongliang laughed and said, "I don't care. We already saw what DJF did last year, and we were even forced to change a director."

"Since no one has any objections, let's go eat first," Yang Lin said.

Yang Lin's family background is very mysterious and has never been revealed to the public.

All that is known to the public is that she graduated from Harvard with two bachelor's degrees. After graduation, she joined Tiger Asia Investment Fund, then moved to Goldman Sachs, and subsequently served as a director at KKR. Last year, she was parachuted into Hong Kong as Vice President of Carlyle Asia.

Many female investors who are doing very well in China have followed this development path.

……

Afternoon, continue.

Bailian Technology is valued at 5 million RMB (somewhat underestimated). ByteDance owns a 25% stake, equivalent to 1.25 million RMB.

Tudou.com recently completed its Series B funding round, valuing the company at $4000 million post-investment. ByteDance owns a 20% stake, equivalent to $800 million.

Based on data from various sources including Renren, Kaixin001 (formerly known as Xiaonei.com), Kaixin Marketplace, Bailian Technology, and Tudou.com, ByteDance was valued at $150 million.

Chen Guiliang expressed his dissatisfaction: "5Q Campus Network, which I crippled last year, has a parent company, Oak Pacific Interactive Group, that received a $4800 million investment last month. Its pre-investment valuation was a staggering $1.45 million! ByteDance's value is only $500 million more than Oak Pacific Interactive's?"

SoftBank investment manager Lin Heping said, "We also co-invested in Oak Pacific Interactive, whose core product is Mop. But in addition, it also has stable cash flow products."

"Rumor software and wireless value-added services full of consumer traps?" Chen Guiliang asked with a smile.

Lin Heping said, "Don't worry about how Qianxiang Interactive makes money; their revenue is indeed stable."

"Is Bailian Technology considered to have stable revenue? I don't think so. The revenue of 'The Emperor' has been growing rapidly," Chen Guiliang said sarcastically. "You're underestimating Bailian Technology, and I haven't commented on that. But don't treat me like a fool!"

Feng Kaixuan, an investment manager at DCM, said, "DCM ranked second in terms of investment amount in the financing round of Qianxiang Interactive last month. It is different from ByteDance. Qianxiang Interactive's stable revenue products belong to its wholly-owned subsidiaries. No matter how high the revenue of 'Quan Yu Tian Xia' is, it only belongs to Bailian Technology, and ByteDance only owns 25% of the shares."

Chen Guiliang sneered: "You invested in Qianxiang Interactive because you valued social networking sites like Mop. It has nothing to do with its profitable subsidiaries! Moreover, those products with stable revenue have extremely high legal risks."

Yang Lin asked, "Mr. Chen, what do you think ByteDance is worth?"

“5 million US dollars!” Chen Guiliang said.

Yang Lin pointed out: "Facebook's post-money valuation was only $5.5 million. How did you value ByteDance at $5 million before you invested?"

Chen Guiliang said, "Facebook's various data are far inferior to ByteDance's two major websites. Nor is it like ByteDance, which has successfully invested in a game company and a video website."

Without comparison, there is no harm.

Qianxiang Interactive was valued at $1.45 million before the investment and received $4800 million in funding. This made Chen Guiliang feel that ByteDance's valuation of $1.5 million was an insult.

They absolutely have to ask for an exorbitant price!

Negotiations have stalled again.

Several major venture capital firms held a private discussion and adjusted the valuation to $1.8 million the following day.

Chen Guiliang was still not satisfied. He printed out hundreds of pages of materials: "The advertising revenue of Renren.com and Kaixin.com is steadily increasing every month. Weibo's revenue is also increasing rapidly. And Kaixin Marketplace has long since achieved a balance between income and expenditure!"

"Xiaonei.com currently holds a monopoly, and is undoubtedly the number one campus social networking platform. With its dominance over the entire high school and university market in China, can't you imagine its future growth potential?"

"Hainei.com is also number one in the industry, and more and more celebrities are joining. Especially Weibo, with the improvement of mobile phone and communication technology, it has unlimited development prospects."

"Two top-ranked websites in their respective industries can leave Mop.com far behind! How dare you only give such a small estimate?"

"I don't want to talk today, I'm going to class!"

Chen Guiliang then stopped the negotiations, abandoned several investment managers, and rode his bicycle to class.

(End of this chapter)