My rebirth is different

Chapter 478 Over 200 Million Valuation

"Mr. Fei, do you know the revenue of these three portals last year?" Xue Chunhe asked with a smile.

He thought that Yu Wenfei hadn't read the relevant financial reports at all, and was bragging casually.

"Of course, listed companies publish their financial reports every year. Among the three websites, Sina has the best profit status. Last year, it made a total profit of 6000 million US dollars, Sohu made about [-] million US dollars, and NetEase was only a little bit less, with only [-] million US dollars. "Yu Wenfei replied casually.

"Then these three companies add up to [-] million US dollars! Mr. Fei said that in the next three to five years, Facebook's profit will exceed the sum of these three companies?"

Xue Chunhe leaned back against the back of the chair, twirling a ballpoint pen in his hand, and looked at Yu Wenfei with a smile.

"Hehe, Mr. Xue may think that it is impossible for Facebook to do it. Regarding the future, there is really no way to verify it now, but it is also very simple to resolve this disagreement." Yu Wenfei said calmly.

"How to deal with it?"

"Signing the performance vs. betting agreement, I can write the promise of performance into the investment agreement!" Yu Wenfei said bluntly.

…………

VAM agreements are too common in the investment circle.

In venture capital, there will be a VAM agreement, and the entrepreneur will lead the company to achieve the scale of the company within a limited time, or how much profit it will achieve, then the investment bank will give corresponding investment or additional follow-up investment.If the entrepreneur fails to do what he promised, then there will be penalty clauses triggered, such as the transfer of company shares to the investment bank of the bettor without compensation.More seriously, there may even be cases where entrepreneurs are kicked out of the company.

During acquisitions, the acquirer and the acquiree often sign a VAM agreement.To give an example that everyone is familiar with, when China Literature acquired Xinli Media, a film and television media company, it signed a VAM agreement.

In terms of the agreement, China Literature will acquire Xinli Media at a total price of 140 billion, but only pay 100 billion in the early stage, and whether the remaining 40 billion will be paid depends on the performance of Xinli Media within three years after being acquired.

If Xinli's profit can reach 40 million, [-] million, or [-] million within three years of being acquired, then China Literature will pay the remaining [-] billion in cash.

On the contrary, if this profit cannot be achieved, then the remaining 40 billion...

no more!

Therefore, when Yu Wenfei said that he would sign a VAM agreement and write performance commitments into the contract, Xue Chunhe smiled slightly and asked, "So, to what extent does Mr. Fei think Facebook can reach within three years? How much profit can you make?"

The reason for saying three years is because Xue Chunhe believes that as long as Facebook continues to develop normally, it will definitely be successfully listed on NASDAQ within three years.

After listing, the company's market value basically depends on these two main factors, one is the industry status of the website, and the other is the profit data!

Yu Wenfei smiled, first stretched out two fingers, and then stretched out the entire palm.

Xue Chunhe understood, two fingers means that the number of Facebook users will exceed [-] million within three years, and a whole slap means that the annual profit will reach [-] million US dollars.

He frowned, and said with a half-smile, "Boss Fei has so much confidence in Facebook?"

[-] million users, [-] million US dollars in profits, neither of these two figures is easy to achieve!
In fact, in 2003, no website in China could do any of these data!
If history has not changed, in August 2003, Tencent will announce that the number of QQ users has officially exceeded 8 million!

As for the annual profit of [-] million US dollars, except for Shanda and NetEase, which later transformed into a game company, and Tencent, which is vigorously developing the game business, other websites will not be able to achieve it until many years later.

In other words, after a few years, everyone will discover that online games are the real Internet cash cows...

In the face of the jaw-dropping profits of online games, portal websites relying on advertising to make money are simply weak!

Of course, Xue Chunhe didn't know where Yu Wenfei's confidence came from. If he knew, then his achievements would not be limited to the investment field. People of his age look down on games from the bottom of their hearts.

"It doesn't matter whether I have confidence or not, what matters is whether I can do it!" Yu Wenfei said bluntly.

"Well, since Mr. Fei dared to write these two performance-to-bet clauses into the agreement, then I agree that Facebook's performance can be compared with Sina." Xue Chunhe was also unambiguous.

His words are an admission that Facebook's valuation can reach 32 billion US dollars.

In 2003, the exchange rate between the U.S. dollar and the renminbi was still around 260, so the market value of Sina converted into renminbi was [-] billion!

Yu Wenfei invested 260 million RMB, of which [-] million was used on Facebook, and in just half a year, it skyrocketed to [-] billion RMB!

That's the beauty of the Internet.

In any other industry, it is impossible to do this step.

"This is Facebook's first financing, so I can only transfer [-]% of the shares. I don't care how Softbank and Jiaotong University Venture Capital allocate it. You can discuss it yourself." Yu Wenfei continued.

260 billion valuation, ten percent is 26 billion!
Yu Wenfei was a little worried about whether Softbank China and Jiaotong University Venture Capital could take over, but the past few years have been the most prosperous time for Softbank, and Mr. Sun, who is rich and powerful, will not be lenient.

[-]% of the shares, an investment of [-] million US dollars...

These two numbers made Xue Chunhe's pupils shrink slightly, and his expression became cautious.

On the other hand, Director Wang of Jiaotong University Venture Capital was very straightforward and said, "We only need a small share of shares, and we will contribute 200 million U.S. dollars."

He was very straightforward, and he dared to make a final decision without even going through cumbersome procedures.

That's because he knows that in the school leadership, the two principals are very supportive of Yu Wenfei. In a sense, this Facebook is a banner for Jiaotong students to start their own businesses!

Not to mention that Facebook is indeed very promising and valuable, even if it is ordinary, Jiaotong University would dare to throw money at Yu Wenfei.

Xue Chunhe was not so straightforward. The investment of nearly [-] million yuan is no longer something he can decide on here.

However, this is the first contact, and it will take some time before the actual cooperation is reached, so there is no rush.

Xue Chunhe said solemnly: "The amount of investment this time is huge. We need to go back and discuss it. In addition, we need to notify the headquarters to send a team over there. It is estimated that Mr. Sun will come in person."

Yu Wenfei nodded, which is what it should be.

An investment of [-] million U.S. dollars, even the wealthy Softbank, can't just give it casually.

That old man probably wants to come over in person to meet and chat with him.

…………

When the business came to an end, Yu Wenfei took Xue Chunhe and Director Wang to visit the company.

Seeing the computer room occupying the entire floor and the huge team of nearly 2000 people, Xue Chunhe couldn't help shaking his head and smiling wryly.

"Mr. Fei, your company is not a start-up company. Even companies like Sina and Sohu, which have been listed for several years, don't have as many employees at the headquarters as you do."

Yu Wenfei smiled lightly, and said meaningfully: "If you want to do a big business, you must have the corresponding hardware and software! The goal of Facebook has never been a website like Sina Sohu."

The meaning of these words is that even the domestic portal giants are not in their eyes...

Xue Chunhe couldn't help asking: "Which company is Facebook's target?"

"Keep it secret, after Softbank becomes a shareholder, you will understand." Yu Wenfei laughed.

"Then besides the Facebook website, will the company develop other businesses? For example, emails, portals, search engines, etc." Xue Chunhe asked curiously.

After Internet companies reach a certain scale, they will definitely not only do a single project, because that is a waste of user resources.

Generally, multiple related projects will be launched to tap the potential of users, and sometimes the sideline business will exceed the original main business. This is very common.

"Of course, we have already approved four major projects, and they will be launched in a month or two." Yu Wenfei replied.

"What's the business? Can you tell me?" Xue Chunhe asked curiously.

"Business secrets, no comment." Yu Wenfei said with a smile.

Well, it's a commercial secret again, Xue Chunhe is very helpless.

However, he also understands that after all, the two parties are not partners yet, and it is naturally inconvenient for the other party to tell him some things.

…………

Xue Chunhe was a little dissatisfied when he met with Facebook's top team, but he didn't say anything in person.

In private, he asked Yu Wenfei implicitly: "Is your company's management power a bit weak?"

This is indeed Facebook's weakness. After all, the company has not been established for a short time, and Yu Wenfei's requirements are high after all. Some key positions are still vacant.

"I already have a target candidate. I will find time to meet with the candidate recently, and I will be there soon." Yu Wenfei said frankly.

"Well, you must pay attention to this point. Mr. Sun attaches great importance to the entrepreneurial team! Of course you have no problem, but if your subordinates have a more glamorous resume, they will also get a lot of points. What I said is, Senior’s reminder to junior, haha.”

Xue Chunhe certainly hopes to achieve this investment.

Yu Wenfei is his junior. In the business world, this kind of relationship is usually very important.

What is a circle?

This is called a circle!

This investment was introduced by Principal Lin to himself. If there is no such relationship as being from Jiaotong University, why should Yu Wenfei want SoftBank’s investment instead of contacting VCs such as Sequoia, IDG, and Tiger Fund first?

In the same way, I have to invest money anyway, why don't I help my junior to get the money.

Anyway, it’s all the company’s money, not my own…

Yu Wenfei gave up Tsinghua University and Peking University and chose Shanghai Jiaotong University, and the effect has already begun to show.

If you go to Tsinghua University and Peking University, not to mention that the two principals value him and introduce investment to him, it is estimated that it will be difficult for him to start a business!
(End of this chapter)