New York 2006

Chapter 166 Series A Financing

Luo Ji said: "Although the competition in this industry is fierce, I think I can always stay ahead of my peers because of first-mover advantage, data and capital."

Bill Lee said: "How to say?"

Luo Ji explained with a smile: "The so-called first-mover advantage is the number of users. No social game company can have as many users as we do. So every time we develop a social game, we can push our game to these old users. New games, and those old users will also drive their social connections to play our games. This can save a lot of publicity costs. This is something other social game companies do not have."

"What about the data?" Bill Lee then asked.

Luo Ji spoke confidently: "The data is easy to understand. We have developed so many social games, and now five of the top ten are included. Almost all types of games are included. Through the analysis of the data, we clearly know which games are more popular." Which games are easy to become popular and which games are not easy to become popular. This is the core secret of our company and can only be seen by the board of directors and senior management. It is not convenient to display it for the time being."

The people at KPCB nodded, and then said, "What about capital?"

Luo Ji said seriously: "In the field of social games, no company has made a bigger bet than my company. All of our company's revenue, company's cash flow, and loans, in addition to maintaining the company's daily operations, we all We have invested in building global servers, exploring game talents, establishing our virtual currency system, and improving our network security department, marketing department and advertising department. We have invested more than 2000 million yuan so far. We are the most prepared of all social game companies. Plenty. This is a condition that individual developers and other social game companies do not have."

"When you say capital, do you mean that you invested the most capital?" someone from KPCB asked.

"Yes, it also means that we will invest the most capital in the future."

Luo Ji then revealed a fierce look, showing the aggressiveness of a capitalist: "Capital can be used for many things. We regularly purchase all the data in the social gaming industry from Facebook so that we can discover those super companies with particularly fast growth rates." Games with potential. Our first goal is to acquire their company. If we cannot acquire them, then we will directly imitate their game model and recreate a similar game. Then we will quickly develop it through our powerful game production staff, and then Through our publicity capabilities and capital promotion, we can quickly surpass them.”

When people from Tencent heard this, they immediately understood that this guy had completely copied their company, even the business strategy was the same.Nothing has changed.

Sarah Gore responded: "Would this have a bad impact? There will be issues such as public opinion and legal proceedings."

Luo Ji also knew that such an image was bad, so he smiled and said, "Our company's primary strategy is acquisitions. I believe no one will refuse the acquisition of shares and cash from a leading company like ours."

Bill Lee said: "Then if the other party disagrees in the end, will it go to court?"

"Then we can only see it in court, but I will try to avoid this situation. We expect that the users of social games will only fall into the first dozen games, so this situation will rarely happen."

The person from KPCB said: "So what are your thoughts and plans on company financing now?"

Luo Ji said calmly: "The valuation is 1.4 million US dollars, and the AB shareholding structure will be implemented."

Bill Lee said: "I have no objection to AB's equity structure. This is how the Internet industry works now. But the valuation is a bit too high. Your company has only been established for less than a year."

The person from KPCB looked at the financing plan in his hand and said: "I know that your company did not conduct a seed round of financing, but directly opened the A round of financing, but based on current calculations, your company's annual revenue is only At 2000 million meters, the profit is still negative, and the price of 1.4 million meters is obviously unreasonable."

Luo Ji stared at him and said seriously: "But we have 630 million users. You can completely predict the future user growth rate. You often invest in the Internet industry, so you should understand this. I also personally promise that before the company goes public, we will never Without cashing out any shares, as the company's chief strategy officer, my salary can be set at one meter. The three of you are in a competitive relationship. Whoever agrees first will get the most shares. Of course, all three of you have investment shares, and there is a time limit. Three days.”

"A very aggressive financing method." After the KPCB person finished speaking, he said, "I will report it to the company."

Luo Ji said to several people with firm eyes, "You know, I am an investment genius, and my investments have never failed. You can completely trust me."

Three days later, in the conference room of Holi Game Company, several investors took the financing agreement and read it over again, and Luo Ji also took it for a closer look.

"The funding goal after financing is to build global server nodes and improve the company structure. Set up office space, recruit top talents from various departments, and acquire potential companies."

"The company's entrepreneurial team promises that before going public..." People from Tencent signed first, followed by people from Bill Lee and KPCB.

Tencent itself is one of the pioneers of social games and agreed on the same day, so they got the largest share of the investment. KPCB also agreed two days later.Although Bill Lee was not satisfied with the valuation, he was still willing to give it a try and get the least.

Luo Ji looked at the equity structure of Holi Game Company after financing, with a total share capital of 10 billion.After financing, the equity of the original shareholders will be reduced by the same proportion.

For example, this time, Holi Game Company sold 15% of its shares for $2100 million through financing, so the previous shareholders' shares must be multiplied by 85%.If 20% of the shares are sold through financing, the shares of the previous shareholders must be multiplied by 80%.

Several other founding team members 4%.

1% for other senior executives of the company.

Company CEO Yang Jian 5%.

Tencent 8%.

KPCB Venture Capital 5%.

Bill Lee 2%.

Felix Slott Rowe 75%.

In this round of financing, the company's top executives were rewarded with a small number of shares. Yang Jian was rewarded the most, with a direct reward of 1%.Other low-level employees of the company also have option commitments, and can purchase certain stocks at low prices before the company goes public.

The guy from KPCB came over with a smile: "Logic, the company can get a loan from Silicon Valley Bank next. Is this why you brought our company to invest?"

"Haha, your name is still resounding." That's why Luo Ji came to them. Luo Ji smiled and said, "4200 million is enough to burn for a while."

For Internet companies like this, which do not make any profits but suffer losses, traditional banks are generally unwilling to provide loans.Luo Ji also approached Wu Jianmin, the chairman of Huami Bank, and he gave him a loan of 500 million yuan.

But Silicon Valley Bank is different. They specifically target this type of emerging Internet industry. However, there is a prerequisite for getting a loan from them. They don't look at your revenue. As long as you can get those big venture capital companies to give you venture capital, they will Loans can be given.

For example, this time, the company has a large venture capital institution like KPCB participating in financing of 2100 million yuan, so Silicon Valley Bank can lend them 2100 million yuan, and the interest rate is relatively low.But in the future, the company's cash flow will be deposited into their company.

The person from KPCB said seriously: "Logic, can I ask you a more personal question?"

"of course can!"

"Don't you have a cash cow like music records? Why would you let a company provide financing?"

Luo Ji started to explain: "This is what I promised the founding team. They believe that only a third party can have a correct valuation of the company."

"I understand." The KPCB man nodded.

This was certainly not the main reason. The main reason was that after Luo Ji's research, he found that building a global Internet business empire would cost at least one billion dollars.How can he get so much money to grow the company by himself?Even if he had the ability, he didn't have the guts to invest all his wealth in it.

(End of this chapter)