Perfection of Rebirth

Chapter 224 Xiaonei Network A round of financing

Tang Wenwen has been talking with Softbank, IDG Capital, Sequoia Capital and other venture capital for almost a month after obtaining Jiang Hui's authorization.

Over the past month, Xiaonei has continued to develop steadily. The number of domestic users has reached 1000 to 200 million, and the number of international users has also exceeded 150 million.The average daily income is about 500 million, which is equivalent to 4000 million per month. Excluding various expenses, there is a balance of nearly [-] million per month. Of course, it has reached this level in the last month, and it must have been earlier It can't be achieved, but basically there should be no less than this in the future.

The current main income of Xiaonei.com is still the item income of games such as "Fishing Game", plus a part of advertising income, etc. Considering the importance of the game to the group at this stage, Jiang Hui arranged for the personnel of Guanghui Games to continue to develop the defense radish, etc. Web games, and at the same time, in order to change the image of Brilliant Games that can only do web games, Jiang Hui built the framework of King of Glory in advance, allowing the company's employees to use this as an opportunity to develop the first online game of Brilliant Games.

The market performance and financial performance of Xiaonei.com are very good. After many contacts, various venture capitalists have a deeper understanding of the actual situation of Xiaonei.com, and the valuation is constantly being adjusted.After all, for a company with an estimated annual profit of [-] million yuan, it is unreasonable to only value it at [-] to [-] million yuan.

In the end, Softbank gave a valuation of 19 billion, IDG Capital gave a valuation of 16 billion, and Sequoia Capital gave a valuation of 22 billion.

After discussing with Jiang Hui many times, Tang Wenwen decided to take out 15.00% of the shares for the first time in financing, and separately financed from Softbank Tianchao and Sequoia Capital.

Although after negotiations, Softbank finally accepted the same valuation of 22 billion as Sequoia Capital, but Jiang Hui only gave Softbank 5.00% of the shares for financing, and gave Sequoia Capital 3.3% of the shares for financing. The capital is 10,000 million RMB.Among the financing amount, [-]% are allowed to cash out by shareholders. Except for Jiang Hui, Bai Xue, and He Ling, everyone else took advantage of this opportunity to cash out part of the funds.However, the shares of other people are not many, and only [-]% of the financing amount is allowed to be cashed out, so the actual cashed out amount is not much, only ranging from [-]+ to hundreds of thousands.

According to the financing agreement, Sequoia Capital sent a deputy general manager and deputy legal minister to the company, and Softbank sent a deputy finance minister and marketing deputy minister to the company. These two also joined the company's board of directors.

Taking advantage of this opportunity, Jiang Hui adjusted the personnel structure of Xiaonei.com. He no longer served as the general manager, but only retained the position of chairman of the board of directors, and promoted Tang Wenwen as the general manager of Xiaonei.com.He Ling no longer served as the head of the Finance Department of Xiaonei, and promoted Lin Muxia, the deputy head, to be the head of the finance department.

Jiang Hui had carefully studied the terms list of the venture capital agreement, and the pre-emption rights and anti-dilution clauses in it were all reasonable.

The right of first refusal clause is actually very easy to understand. It requires that when the company conducts the B round of financing, the current A round investors have the right to choose to continue to invest and obtain at least the number of new shares corresponding to their current shareholding ratio, so that the A round investors have the right to invest in the company. The proportion of equity in the company will not be reduced due to the issuance of new shares in the B round of financing.In addition, the right of first refusal may also include the transfer of the shares of the current shareholders, and the investor has the right to be transferred first in proportion.

Anti-dilution clauses, or price protection mechanisms, have become standard clauses in most VC investment agreement term sheets.This clause is actually to determine a new conversion price for preferred shares, and does not issue more preferred shares.Anti-dilution clauses can be mainly divided into two categories: one is to prevent the value of shares from being diluted in terms of equity structure, and the other is to prevent the value of shares from being diluted in the subsequent financing process.To put it bluntly, it is a clause for VC to avoid being bullied by major shareholders in the subsequent development of the company and damage its own interests.

There are also some other clauses. The entire agreement has [-] to [-] pages, and basically lists everyone's rights and obligations and how to deal with various situations in the agreement.In fact, this is also good. If everyone acts according to the agreement, many unnecessary fights can be avoided.

The news that Xiaonei raised 22% with a valuation of 15.00 billion quickly spread throughout the Internet world on the day the agreement was signed. The financing amount of 3.3 million is basically a very high value in recent years. Although it is incomparable with the hundreds of millions of dollars in corporate financing more than ten years later, in 2004, as an Internet company that had just been established for half a year, A The round of financing raised 3.3 million yuan, which has a very strong impact on everyone.

……

Penguin.com report: Yesterday, the well-known Internet company Xiaonei.com announced that it has completed the A-round financing of 3.3 million yuan. This financing amount is the largest Internet financing this year.Xiaonei now has more than 400 million domestic and international users. How can Xiaonei, which has only been established for half a year, achieve a valuation of 22 in a short period of time?The editor specifically interviewed. . .

Du Niang news report: Xiaonei, a new star in the Chinese Internet industry, raised the first batch of funds of 3.3 million yuan yesterday. It is reported that Xiaonei will use this financing to start the construction of the data center.As an SNS website based on the college student market, Xiaonei has firmly locked the hearts of more than 1000 million college students in China with a market share close to [-]%. . .

……

a forum.

"Damn it, Xiaonei is so awesome, it's worth 22 billion just half a year after its establishment."

"3.3 million, a lot of money, how to spend it."

"Upstairs, this money doesn't belong to your family, so what are you worried about spending it on?"

"I also went to study computer, instead of studying mechanical design and automation, and the money from IT is too fast."

"Bill Gates wasn't as awesome as the founder of Xiaonei.com back then."

……

A start-up company.

"Brothers, if you work overtime, we will be another Xiaonei network in the future."

"But we don't even have 400 users now, and Xiaonei already has [-] million users."

"Don't be afraid, the road is made step by step. We stand on the shoulders of Xiaonei to build a campus SNS website, which will definitely be more popular than Xiaonei."

"But we have been established for more than a month, and there is no sign of popularity at all."

……

IDG Capital
"Sequoia Capital has always been the industry's investment vane. They dared to give a valuation of 22 billion, while our judgment is 16 billion. Why is there such a big difference?".

"Each company's valuation algorithm is different. It is normal to have differences. It is strange that they are exactly the same."

"You have to review whether the advantages of Xiaonei.com have not been considered by us. If we want to learn from this lesson, we are always unwilling to make progress. We will be left behind by Softbank and Sequoia."

……

(End of this chapter)