King of Capital

Chapter 106: Silicon Valley Wolf Warriors, US Dollar Fund

Chapter 106: Silicon Valley Wolf Warriors, US Dollar Fund

"10 million US dollars valuation, I need % of the shares."

After more than an hour of in-depth communication, Xie Jingxing gave a quote on the spot before the conversation ended.

Yuan Zheng warmly persuaded him to stay, "It's lunch time now. Mr. Xie, please stay for lunch. There is a good Chinese restaurant near the company."

"I was in a hurry to come to the United States this time, and I had an appointment with a friend from Sequoia at noon." Xie Jingxing explained apologetically.

Yuan Zheng took the initiative to extend his hand: "Then I wish you a happy Mid-Autumn Festival in advance. I will give you an answer after the festival at the latest. I will send it to you."

The two sides exchanged a few polite words and walked out of the office side by side. When passing by the workstation closest to the office, the slightly plump Chinese programmer greeted Song Anli and said in code: "How is it, is it okay?"

"Thank you, senior." Song Anli smiled politely.

"Be careful next time. Don't forget what I told you."

"Yeah, sure!"

Xie Jingxing and Yuan Zheng were confused by the brief conversation. Looking at the slightly plump programmer's face full of poetic expression, they thought they should write a letter to the San Jose City Council to suggest opening two foot massage parlors locally. Silicon Valley is really a Luohan Temple.

After personally sending Xie Jingxing to the car and leaving, Yuan Zheng returned to the company and passed by the slightly fat programmer and patted him on the shoulder: "Work hard, and I will find you a wife next year."

"Come on, hire an assistant first. A few days ago, that old lady asked me to help pour water, but today this girl actually asked me to help her print an investment letter of intent." The chubby programmer pretended to be dissatisfied.

Yuan Zheng's smile froze slightly: "What did she ask you to print?"

"Letter of Intent for Investment. She said she had just come from China and was in a hurry so she didn't prepare anything in advance. This institution is really bold... Can this template of letter of intent for investment really be used at will..."

The slightly plump programmer chattered about what happened while opening the investment letter template saved in the folder to show Yuan Zheng.

——Horizons Ventures, September 9.

Yuan Zheng walked to the window in two steps. Outside on the street, a Maybach slowly drove away with its window lowered. A slender, white, bony hand stretched out and waved gently. He kept smiling and nodded slightly in greeting.

In the midday sun, the watch with the entire Milky Way on it sparkled.

"On September 9, ZOOM signed an investment letter of intent with an institution called 'Horizons Ventures', which is still in effect."

In the car, Song Anli looked a little excited: "Wikipedia says that the owner of this organization is Li Ka-shing, the tycoon from Hong Kong Island."

"Why do you think this way?"

Xie Jing Xing withdrew his hand and asked calmly, looking through the rearview mirror at Yuan Zheng who was standing by the window with a smile on his face.

"Feel?"

Song Anli thought about it and added uncertainly: "I think he is a little eager to bargain with us. He is different from the investors I met before."

"It's a good habit, keep it up." Xie Jingxing gave an ambiguous compliment.

The "Letter of Intent to Invest" is an important step in the early stages of the venture capital project process. Usually, the venture capital institution and the invested enterprise have a rough valuation agreed upon after a discussion, and the venture capital team enters the market to conduct in-depth due diligence.

The formal investment agreement can only be signed when there are no problems with the finances, business operations, etc. of the invested enterprise and the specific valuation and investment and financing ratio are determined.

During the in-depth due diligence process, venture capital institutions have invested manpower and material resources, and the invested companies are required to disclose confidential data of the company's operations, so both parties must sign an "investment letter of intent" to ensure the rights and interests of both parties.

One of the more important general terms is that the letter of intent is exclusive. During the effective period of the letter of intent, the invested enterprise cannot sign a letter of intent with other venture capital institutions at the same time.

Many low-end venture capital firms like to use this to trick first-time founders with little experience by setting the effective period of the letter of intent to two or three months.

As long as the founder signs the letter of intent for investment in a fit of rage, the subsequent financing price will be infinitely suppressed. Two or three months is life for a startup in the early stages. It has to choose between being suppressed or being dragged to death.

Yuan Zheng is unlikely to make such a low-level mistake. Based on what he said about giving a reply after the Mid-Autumn Festival, it can be inferred that the deadline for the letter of intent to invest is in these few days. It also means that Li Ka-shing’s Horizons Ventures has completed an in-depth due diligence on ZOOM, and the two parties may sign a formal investment agreement at any time!

Thus, the answer to his eagerness to bargain was found.

The emergence of Grapefruit Capital was a pleasant surprise. Yuan Zheng tried to get a better price, but the talks with Horizons Ventures had already reached the final step, leaving him with little time to bargain with Grapefruit.

Song Anli keenly associated this aspect with his performance. The idea itself cannot be said to be good or bad, because the founders have different personalities. Some are more confident and strong, and like to talk about strategic development and price with investors.

This involves the question of how to use the raised money, which is a key point that every financing project cannot avoid.

Xie Jingxing is also willing to chat with the founders in this way. It is not uncommon for everyone to discover new highlights through the exchange of ideas and invest more money.

However, Song Anli's ability to find ways to verify immediately after having doubts is very outstanding. She is skeptical and curious about everything, and has an instinctive desire to explore and execute. This is a habit that countless investors have found difficult to develop even after years of deliberate training.

Xie Jing Xing stared at her face, examining it inch by inch, as if he was admiring a rare and beautiful flower seedling: "Why did you think of verifying your idea by looking for a 'letter of intent to invest'?"

"I couldn't think of any good solution in the short term, so I thought it would be worth a try." Song Anli shrugged.

Xie Jingxing nodded and continued to ask: "There are dozens of employees working in the public office area. Why did you ask that fat programmer instead of asking others?"

"Yuan Zheng does not have an assistant, and his workstation is closest to Yuan Zheng's independent office."

"What would you have done if you hadn't found the clue in the programmer's computer?"

"I'll ask you after you finish talking to Yuan Zheng."

Song Anli blurted out as a matter of course, and after feeling something was wrong, she paused and said, "I think you also noticed that something was wrong with him... right?"

"He seems to be too focused on the pace of financing." Xie Jingxing did not give a direct answer.

Song Anli blinked her big eyes and fell into deep thought. The core of financing for start-ups is development rather than solving difficulties. However, development is often limited by difficulties, and the two are easily confused.

An example of a good financing rhythm for a startup should be something like ZOOM, where the company itself runs a business model and develops rapidly in the existing market, and seeks to introduce investors in order to enter a new market (TOB end). From this perspective, Yuan Zheng asked investors to have marketing resources right from the start, and his cognition was very clear and he had a very good control over the financing rhythm.

Xie Jingxing patiently taught: "Their company has more than 12 employees, not counting outsourcing. The average annual salary of Silicon Valley programmers is currently $. ZOOM's last round of financing was at the beginning of the year, raising $ million. If you were Yuan Zheng, wouldn't you have to calculate the financial accounts for this round of financing first?"

"ZOOM company is running out of money, but he doesn't care at all and is only pursuing the financing rhythm for strategic development, which proves that there is someone to back him up." Song Anli reacted and took over the conversation.

Xie Jingxing smiled with satisfaction: "I didn't guess that ZOOM and Horizons Ventures had already signed a letter of intent for investment, but from the moment he started bargaining, he was sure that we must have competitors."

"Then what should we do now? Go back to him?" Song Anli was very interested in competing with the venture capital firm under the name of the richest man Li.

“What is our greatest strength?”

Xie Jingxing asked disapprovingly. Song Anli was about to speak after considering it, but he spoke first, "Speed. I can make an investment decision in one second. No one in the entire venture capital industry can do this, not even Li Ka-shing."

Even if Yuan Zheng offered a valuation of one billion US dollars, he could decide whether to invest in one second, while other colleagues could only decide not to invest in one second, and it would take at least two days to make a decision to invest.

Xie Jingxing is really not worried about competing with Horizons Ventures. Instead of worrying about the success or failure of a project, he might as well spend some energy on building the framework of Grapefruit Capital (USA). This is also the real purpose of his visit to the United States this time. The layout of enterprise services and cloud computing is just a superficial appearance.

…………

Sand Hill Road, Menlo Park.

Xie Jingxing revisited the old place after more than a month, and was still accompanied by Jim Goetz. The last time they walked on this street, they said they wanted to make friends, and the subsequent developments fulfilled their promise.

The former is now a genius representative in the traditional financial field, and the latter is a leading figure in the emerging financial field.

This may sound a bit awkward, but M&A business is indeed a traditional financial field, compared to which venture capital is still very young.

"I'd say you're lucky you're not on Wall Street."

Jim Goetz was walking and eating a simple sandwich in his hand. This was his lunch, along with the cup of coffee in his left hand.

Xie Jingxing raised his eyebrows: "Don't be like this, we are a group (Our crowd)."

"Cough cough cough, Shit, this joke is not funny at all, you scared me." Jim Gotz almost choked to death on his coffee.

Our Crowd is the slogan of the Jewish people in the American financial circle, which is similar to the "one drop of blood" principle of black people. It is a bit scary for Xie Jingxing, a yellow-skinned man, to say this.

He smiled and patted Jim's shoulder: "Okay, but I have to say that although I worked on Wall Street for a few days, I am now obviously a Silicon Valley-style venture capitalist."

The conflicts between the traditional bankers led by Wall Street and the emerging financial groups in California are deep-rooted. As a yellow-skinned outsider, Xie Jingxing has no need to get involved.

If he were on Wall Street now, he would say, "I studied at Columbia University and interned on Wall Street. I am a tough Wall Street guy." The same is true in reverse. He had his debut battle here. This land made him. He loves Silicon Valley so much. He is a Silicon Valley wolf warrior.

"OK, that's it. This is how you can make more friends in Silicon Valley." Jim Goetz nodded repeatedly with a look of surprise on his face.

Xie Jingxing raised his chin and looked towards the office building on the side of the road: "So can I have an office on Shaqiu Road now?"

"Of course, you're welcome."

Jim Goetz finished his sandwich and raised his glass with coffee instead of wine, saying, "How much do you want?"

"Starting at 200 million US dollars." Xie Jingxing had already made plans.

Jim Goetz frowned slightly and raised his wrist to check the time. "I think you shouldn't have too high expectations. Why don't you meet with your friends tonight? I have a meeting and I'll leave first."

After he finished speaking, he hurriedly walked towards the Sequoia headquarters office building not far away. When he completely disappeared from his sight, Xie Jingxing turned around, took the brown paper bag from Song Anli, and took out a calorie-filled hamburger and fried chicken from it and stuffed them into his mouth.

Sitting on the roadside, enjoying the breeze while finishing two burgers and a box of chicken nuggets, the warm midday sun caresses my forehead, making me want to do nothing but lie down and take a nap.

Xie Jingxing yawned and said, "Let's go back to the hotel and catch up on some sleep."

"Do we need to prepare something in advance?" Song Anli suggested hesitantly.

Xie Jing Xing suddenly smiled: "How are you playing Texas Hold'em?"

"It should be okay." Song Anli didn't have much confidence.

"That's good. We are fully prepared and will try to win 200 million US dollars tonight."

Xie Jingxing was very confident in his card skills. He could play both Texas Hold'em and Pai Gow. To be more precise, the market trend determined what he would do.

The mobile Internet era is booming, and China's market with a population of more than one billion is attracting countless people's attention. Since American companies cannot enter this market in person, they can try a different form and let the U.S. dollar, which flows like water and penetrates every pore, come in.

As a result, the "dollar fund" soared on the spot. American capital with strong financial strength entered the country through finance, and invested heavily in various fields, mostly concentrated in the Internet industry. Basically, every top Internet unicorn has the shadow of a dollar fund behind it.

Science has borders but capital does not. As long as there is money to be made, Japanese companies in the last century dared to resell America's advanced machine tools to the Soviet Union. In this century, American capital dares to ship banned industrial technology equipment to China.

The same is true for the Internet industry. US dollar funds invest in Chinese Internet companies in the primary market and subsequently help Chinese Internet companies go public and exit in the United States. Today, a complete chain of interests has gradually been formed.

During this process, Texas Hold'em, which fits the overseas background of US dollar funds, became all the rage. If you couldn't play a few hands, you would be embarrassed to say that you were in finance.

Xie Jingxing's plan was simple. His American counterparts were "stupid and rich" and had a lot of money they wanted to throw into China. He could try to set up Grapefruit Capital (USA) to raise US dollar funds to invest in China.

Before returning home after completing the WhatsApp project, he met with Jim Goetz to discuss this matter. The other party promised to introduce him to a group of powerful investors, which led to the quick meeting this afternoon.

However, Xie Jingxing felt that if the first phase of the fund could not even reach 200 million US dollars, it would not be attractive to him. After all, he wanted to use the money of American investors to burn it where it should be burned, such as Didi, Luckin Coffee, and shared bicycles, rather than really preparing to help American investors make a lot of money...

Obviously, less money is not enough, so $200 million is the starting price.

(End of this chapter)

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