The Peninsula chaebol started by rescuing Samsung's little princess.

Chapter 88 Dual-Class Equity Structure

"I believe that your Mars Network, Chairman Li, is the next target for our Renren Network!"

To be honest, I think I took the wrong path from the start and shouldn't have blindly imitated Facebook in the US.

The venture capital environment in the United States is better than in Asian markets, making it easier for small companies to grow!

On the contrary, Chairman Li, the growth trajectory of your Mars Network is simply a textbook example for small companies!

Therefore, I plan to develop [dating matching], personal showcases, and social games, similar to your Mars website, to increase the website's cash flow —

Faced with Wang Xing's incessant talking, Li Haorong did not interrupt immediately, but listened patiently.

Many founders of Huaxia Internet came to Seoul to meet him, but Li Haorong valued Wang Xing the most.

As Lei Jun said: "If you're riding the wave, even a pig can fly."

Many website founders in China rose to prominence by riding the wave of a trend, but if they were to do it again, they might not be able to succeed.

But Wang Xing in front of us is not like that; he's like an unkillable cockroach!

Although he repeatedly failed in his business ventures in his previous life, he never gave up.

After being forced to sell Xiaonei.com, Wang Xing started another business, founding Fanfou.com, the Chinese version of Twitter, and HaiNei.com, an SNS website targeting white-collar workers.

Unfortunately, they all went bankrupt due to policy reasons.

Even under these circumstances, he was able to make a comeback and found the Ugly Group. No matter how you look at it, he's quite a talent!

"So, your plan for the company's future development is to completely copy my Mars website?"

After listening to Wang Xing's story, Li Haorong deliberately asked a question.

"Uh—that's right!"

When asked by Li Haorong, Wang Xing hesitated for a moment, but still nodded firmly in response.

However, fearing that Li Haorong might misunderstand, he continued before Li Haorong could speak, "I believe that a business model like yours, which has already withstood the test of the market, should be boldly adopted!"

Li Haorong was actually satisfied with Wang Xing's answer.

After all, MarsNet's strategy was essentially borrowed from the original Renren.com.

However, the original Renren.com was developed by Oak Pacific Interactive Group, not by the current Wang Xing, which made Li Haorong doubt whether the Wang Xing in front of him could handle this task.

It seems that people who are able to achieve continuous success do possess vision and ability!

As long as he follows his own development path, there shouldn't be any major problems.

"However, I have to throw cold water on your hopes. The distribution rights for my three social games in China have already been bought by Tencent. There's no way I'll sell them to you, and besides, you can't afford them!"

"It's okay, we already know the concept of social games, we can develop our own!"

Seeing Wang Xing's confident demeanor, Li Haorong nodded, then changed the subject: "Regarding investment, what are your needs?"

"Xiaonei.com has already secured its angel round funding, so for this second round, we plan to sell 20% of our shares for 500 million RMB!"

"Pfft—"

When Wang Xing shakily uttered a number, Li Haorong burst out laughing.

"Do you think I'm a sucker?"

Li Haorong's Chinese proficiency impressed Wang Xing once again; he was even able to use the word "sucker".

Of course, that's not the point. The point is that this investment is going to be lost!

Wang Xing quickly explained, "Our website currently has 50 users, so this price is very fair!"

"So Chen Yizhou also paid 2500 million to acquire you?"

Upon hearing this, Wang Xing was speechless.

He hadn't expected Li Haorong to have such a clear understanding of the market situation in China.

To be honest, Renren.com is worth 2500 million at this stage, but whether a deal can be made depends on both the supply and demand sides.

Seeing that the funding chain between Xiaonei and Xiaonei had broken down, Chen Yizhou took advantage of the situation and was only willing to offer 1000 million. How could Xiaonei.com possibly trade at the actual market value?

Even if Wang Xing negotiates and manages to raise Chen Yizhou's final acquisition price, it will definitely not exceed 2000 million.

Wang Xing originally wanted to gamble on Li Haorong's lack of understanding of the Chinese market and take the opportunity to make more money, but he didn't expect Li Haorong to be so aware of his own situation.

Isn't he from the peninsula? Why does he know so much about his own company? Could there be a mole inside?

But he quickly dismissed the idea. How could his small company possibly be worth the effort of the other side sending an undercover agent?

"So, how much do you think is appropriate?"

Wang Xing asked Li Haorong.

"How about this, 40% of the shares, $100 million!"

Li Haorong thought for a moment and then gave a number.

It must be said that the number Li Haorong quoted was very tricky, hitting the very point where Wang Xing was about to refuse or accept it.

Based on the 2006 exchange rate, 100 million US dollars was approximately equal to 790 million RMB.

This offer is only slightly better than Chen Yizhou's, but at least it allows their startup team to retain control of the company.

But this also means that if there are three or four rounds of financing in the future, it is only a matter of time before the company loses control.

Li Haorong's proposal and Chen Yizhou's proposal are like two cups of poison, the difference being that one is a slow suicide and the other is an immediate suicide!

If you work hard for a long time, only to end up benefiting someone else, you might as well sell the company in the first place, take the money, and leave!

After much hesitation, Wang Xing finally made up his mind: "I'm sorry, your asking price for shares is too high. Please lower it a bit!"

"Don't rush to object. I have another idea. How about we implement a dual-class share structure?"

Wang Xing was slightly taken aback upon hearing Li Haorong's suggestion.

The so-called dual-class share structure, also known as AB shares, is what people generally understand as different voting rights for the same shares.

They divide the stocks into two classes, each with different voting rights. Generally, Class A stocks have 10 times the voting rights of Class B stocks!

In this way, the founder only needs less than 10% of the stock to firmly control the company!

"That's possible! But how can you guarantee you won't interfere in the company's day-to-day affairs?"

After a moment's thought, Wang Xing asked another question.

"You can rest assured. We are a foreign company, at most a shareholder. I don't think your government would let us control one of the largest social networking sites in China, right?"

Therefore, our investment goal is to cash out and leave after your company goes public. Our goals are aligned now!

Alternatively, we can sign a performance-based agreement.

We will sell our shares at a reasonable price, provided you commit to going public within five years.

However, if you fail to do so, we will take back an amount we have determined!

"That's impossible! Once a company goes public, no one can be certain what the stock price will be!"

Wang Xing quickly refused, as the risk was far too great; a slight misstep could lead to a worse fate than simply selling the company!

"Haha, then let's change it to you having the right of first refusal!"

"That works!"

At this point, both parties have basically reached an agreement, and all that remains is for their lawyers to refine the details of the cooperation.

Before leaving, Li Haorong called Wang Xing back again: "Here's a suggestion: your website name is too limiting. After college students graduate, they'll still need to use your website. Are you going to keep calling it 'Xiaonei.com'?"

"What should we change the name to?"

"Let's call him Renren!"

"Renrenba?"

"Everyone!"

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