Before meeting Eric.Hanks, Li Mu successively met with representatives from two Silicon Valley venture capital institutions in the office Lin Qingya prepared for him. However, during the meeting with these two venture capital firms, Li Mu did not discuss the financing details. The conversation was too in-depth. In the limited time, most of the time was spent talking to the representatives of the two companies.
Li Mu does not doubt that most Silicon Valley VCs can get more than one billion US dollars, nor does he doubt that most Silicon Valley VCs will be willing to invest in Makino Technology, but now he is choosing partners, and Makino Technology has brought in Series C financing Capital is very important. Money alone is far from being a partner for Makino Technology in the next strategic stage.
After chatting with the representatives of the two companies for too long, the representatives of the two companies were a little unable to hold back and tried to ask Li Mu for the business plan for Makino Technology’s Series C financing.
A normal business plan will not only state the company's current development scale, business progress, revenue, core team resume, but also the intended valuation of corporate financing. Getting a business plan is equivalent to getting Li Mu The target price for this financing.
However, Li Mu did not prepare a business plan for Makino Technology’s Series C financing at all.
In other words, Li Mu does not have a target price that can be written on paper. His target valuation is more than 20 billion U.S. dollars, but this valuation needs to be supported by several subsequent major actions, otherwise it will be taken now. If this target price is set, all venture capital investors will be shocked. If the premium ratio is too high, the market will think that it is over-inflated.
Therefore, after being questioned by representatives of the two companies, Li Mu roughly gave an entry condition, namely: Makino Technology's ideal valuation is more than 17 billion U.S. dollars, and the guaranteed valuation of 17 billion U.S. dollars must first be recognized. After that, let’s sit down and talk in depth.
Talking about US$17 billion, this incredible asking price really frightened the representatives of the two companies. Makino Technology has indeed experienced great development in recent times, but Makino Technology has completed the split after all and is now booming. "Paradise Town" has been separated from Makino Technology on the books, so the turnover of "Paradise Town" cannot be directly used to calculate the valuation of Makino Technology, even if it is calculated in the valuation of Makino Technology, "Paradise Town" There is absolutely no room for such a high premium for the additional influence of "Town".
The market currently gives Makino Technology a relatively calm valuation, probably between 15 and 16 billion US dollars. The reason why there is a floating space of 1 billion US dollars does not mean that the valuation of 16 billion US dollars is relatively low. Calm down, but because the valuation of US$16 billion requires YY to make a breakthrough in its recent business.
If YY can have greater development in the near future, or PayPal can have greater breakthroughs, then the capital side will increase the valuation of Makino Technology accordingly. There is room for an increase of one billion US dollars. In the United States, where the Internet bubble has just burst, , which is enough to show how optimistic these venture capital investors are about Makino Technology.
But as soon as Li Mu opened his mouth, he raised the threshold for admission to 17 billion U.S. dollars, scaring the other party.
At any time, capital is cautious. Behind every seemingly large investment, there are many in-depth investigations and discussions into the bones of the company and industry. Investors not only need to measure the current scale and revenue of the company, but also In-depth analysis of the company's future development space. The most important thing is that they need to estimate risks and control risks. Even though everyone knows that Makino Technology has a high chance of success, everyone is worried that the company will take detours in the decision-making process, and even more worried about the industry. Suddenly encountered a cold.
What the Internet industry sells is concepts. One company after another with high market value, a large part of the market value is supported by concepts. If there is another tragedy like the bursting of the Internet bubble, then no one in the market will pay for concepts. By then, these high-value companies will Internet companies with market value are bound to collapse, and even Makino Technology will not be immune.
When the twenty-minute meeting time was up, the representatives of the two companies left with deep shock. With the threshold of 17 billion US dollars, they needed to report back to the company as soon as possible to see how the top management made a decision.
After seeing off two groups of people, Li Mu took a short rest in the office. At 10:25, Lin Qingya knocked on the office door and said, "Mr. Li, the people from Sequoia are here."
Li Mu nodded: "Please come in."
Under the guidance of Lin Qingya, Eric.Hanks walked through the long corridor to the door of Li Mu's office. Eric.Hanks, who has been in the field for a long time, has played an important role in countless large and small investments, and has long been familiar with these meetings and negotiations as if they were commonplace. , but what even he didn't expect was that at this moment, he actually felt a little nervous.
There are many people in Silicon Valley who can make companies worth more than 10 billion US dollars, but Chinese people and Chinese Internet companies have never reached such heights, let alone those who can do this at the age of twenty. He had never seen a single person, regardless of race or country, and sitting in the door in front of him was such a legendary young man, so Eric.Hanks couldn't help but feel nervous, because Subconsciously, he felt that he was about to witness history.
Lin Qingya opened the door of the office, brought Eric Hanks in, and said to Li Mu: "Mr. Li, this is Mr. Eric Hanks, the vice president of Sequoia Capital."
After that, Lin Qingya said to Eric.Hanks in English: "Mr.Hanks, this is Mr. Li Mu, the CEO of Makino Technology."
Li Mu stood up from his desk, walked out, and said to Eric Hanks in English with a smile: "Nice to meet you Mr. Hanks."
After saying that, he walked to Eric.Hanks. Li Mu stretched out his hand and shook his hand. Eric.Hanks responded politely: "Mr. Li, I have admired your name in the United States for a long time and have been looking forward to meeting you. Thank you. I took some time out of my busy schedule today.”
Li Mu smiled slightly and said: "Mr. Hanks, there is no need to be so polite. The reason for our meeting is to have the opportunity to develop together, so there is no need to thank you."
Eric.Hanks nodded and said with a smile: "Mr. Li is right, common development is the core concept we pursue together."
Li Mu invited him to sit down in the reception area, and then said: "Mr. Hanks, I should have taken the time to visit him in person, but I am new here and I haven't had time to deal with many things. Please forgive me."
Eric. Hanks knew that Chinese people love to be polite when speaking, but he didn't expect to be so polite. He hurriedly said: "Mr. Li is coming to Silicon Valley for the first time. Sequoia has been established in Silicon Valley for many years and is considered a half host. Naturally, he has to take the initiative to visit. Originally, I was here yesterday. I hope to invite you to dinner. Although Silicon Valley is full of high-tech industries, there are several very good specialty restaurants near Stanford University. One of them is said to have the best roasted pork ribs in the state. If you are interested If so, we can make an appointment to have a try.”
Li Mu nodded and said with a smile: "Okay, if you have time, we must go over and try it together."
As he spoke, Li Mu sighed softly and said, "But it may be quite busy these days. Makino Technology has just started in the United States. It takes a lot of time and energy to build the team, operate the product, and develop the market, so eating Please forgive me if the matter may have to be delayed further."
When Eric.Hanks saw Li Mu taking the initiative to talk about work, he smiled quietly, and then immediately followed Li Mu's words and started a formal topic: "Mr. Li, Makino Technology's performance in the US market has impressed the entire Silicon Valley. With Makino Technology's With our strength, I believe that one day we will eventually become the world’s top Internet company, it’s just a matter of time.”
After Eric.Hanks said this, he paid attention to Li Mu's expression. Seeing that Li Mu was smiling, he continued: "Mr. Li, expanding territory is very important for any company. Many times, expanding territory is the most important thing for any company. The time required to build soil is inversely proportional to the money spent. The more money is spent, the shorter the time required, and vice versa. Our development philosophy at Sequoia Capital is to help all companies become better Exchange money for time, and the shorter the time spent on development, the greater the development space of the enterprise will naturally be.”
Li Mu smiled and said: "That's natural. Sequoia's reputation is praised by countless companies in the industry. You have helped many Internet start-ups to develop rapidly and made great contributions to the development of the Internet industry."
Eric. Hanks said: "Contribution is not a big deal. Everyone is doing what they need. We don't have an actual project operation team. Because of this, we can only look for potential projects and teams everywhere, invest in them, and let them Better development will also bring us better financial returns.”
With that said, Eric.Hanks looked at Li Mu and said seriously: "Mr. Li, Sequoia has been paying close attention to your Makino Technology and Taobao. We also know that you have been looking for suitable partners for Makino Technology's Series C financing. We As a senior venture capital firm in the Internet industry, we very much hope to be your two companies’ partners in the capital field, and please believe that Sequoia can bring you not only strong financial support, but also the U.S. capital market With endless resources, even when you plan to list in the United States in the future, Sequoia can provide you and your business with strong support."
Li Mu nodded seriously and said with a smile: "I believe everything you said. Makino Technology is indeed preparing for Series C financing. I am also looking forward to establishing cooperation with your company."
Upon hearing this, Eric.Hanks' expression relaxed a little and said with a smile: "In this case, I think we can have a deeper discussion on this issue. I wonder if Makino Technology has prepared a business plan for Series C financing. ?”
Li Mu shook his head and said calmly: "We have not prepared a business plan. I believe you are very aware of many situations of Makino Technology. In order to save time and improve communication efficiency, we need to first discuss with you before in-depth discussions. Let’s establish a consensus.”
Eric.Hanks said hurriedly: "Please speak."
Li Mu said: “For Makino Technology’s Series C financing, the company’s valuation must be more than US$17 billion. If you agree with this, then we will arrange a more in-depth discussion; if you do not agree with this, then we will In order to save time for both parties, there is no need to continue discussions on this issue.”
(End of chapter)