Due to Li Mu's toughness and the growing status of Makino Technology in the Internet industry, Sequoia predictably gave up on the routine pre-financing due diligence work and directly signed a contract with Li Mu at Makino Technology!
Three hundred and three billion US dollars, the dust has settled!
Li Mu's strength has put great pressure on Sequoia and the entire venture capital circle. However, in the field of capital, whoever makes money is the father, and Li Mu happens to be the one who makes the most money.
When Mark Zuckerberg founded Facebook, it was quite difficult to get hundreds of thousands of dollars in financing. But after he pushed Facebook into a formal business, overseas wealthy people flew to the United States to beg him for high premiums. Investing in Facebook and voluntarily giving up all voting rights is a change in status in the capital industry.
This contract finalized the valuation of Makino Technology at US$33 billion, and also confirmed the largest financing in the world's Internet industry at the end of 2002.
However, the valuation at this time is much higher than the previous valuation. After all, no matter how high the previous valuation was, no shares have been successfully transferred at that valuation price. However, it is different now. Sequoia’s The contract has cost US$3.3 billion, affirming Makino Technology’s valuation of US$33 billion.
After the contract was signed, the entire Makino Technology was in a state of excitement.
Both my colleagues in the United States and those in Yanjing are all excited about the company's soaring valuation and the huge amount of financing. The atmosphere is much more exciting than during the Chinese New Year.
Although Makino Technology did not receive the money immediately after signing the contract, the entire Internet industry and the venture capital circle exploded.
I knew that Makino Technology was very powerful now, that YY had more than 200 million users, and that YY had begun to develop toward "centralization," but I didn't expect that YY's valuation could reach such a high level.
Three hundred and three billion dollars! This is already a record high valuation for Chinese Internet companies, and it ranks among the best in the entire U.S. Internet industry.
However, capital statistics are relatively rigorous. Although Sequoia gave Makino Technology a valuation of US$33 billion, no media has yet included Makino Technology in the market value rankings of Silicon Valley and the world's Internet companies, because those who are really on the list The companies on the list are basically all listed companies, because to the media, companies only have the concept of "market value" after they go public.
Generally speaking, the market value has the highest gold content, followed by the valuation after actual financing. Makino Technology's valuation of more than 30 billion US dollars has completely placed it at the top of the world's Internet industry.
The world's media are paying attention to Makino Technology's financing, just like in the previous life when Alibaba was listed in the United States, the world was paying attention to its market value exceeding 200 billion and 300 billion US dollars.
Overnight, numerous media published large-scale special reports on Makino Technology and Sequoia’s Series C financing, instantly turning Makino Technology into a global hot topic.
The world's major media have different views on Makino Technology's valuation of US$33 billion. Most of the views are shocking, a small number of views are taken for granted, and a very small number of views believe that Makino Technology's bubble is too big and scary. If one day The bursting of the bubble will become the biggest news in the Internet industry, and may even trigger a chain reaction, leading to a new round of Internet bubble bursting.
However, no matter what kind of sound, it can’t cover up the brilliance of Makino Technology at this moment. The whole world has turned its attention to Makino Technology. In Asia alone, more than one billion people are paying attention to every step of Makino Technology’s financing. step.
The Chinese people are the most excited about Makino Technology. In China, the attitudes of the more than one billion people are highly unified. They have nothing but pride.
At the same time, the Chinese people's respect for Li Mu once again reached a new high.
Li Mu hopes to be the business card of China's Internet industry, or even China's national business card. Now it seems that he has achieved his goal.
Li Muren has not returned to China yet, but domestic reports on him are already overwhelming.
Since his speech at Harvard University, Li Mu's every move in the United States has been closely watched by the Chinese media, and every detail has been followed up and reported. As a result, Li Mu's current exposure in China is even greater than that of the entire entertainment industry.
Just when everyone hoped that Li Mu would stand up and speak out, Li Mu, who was still in Silicon Valley, came to Lin Qingya to discuss remotely with Kong Lingyu in Yanjing about matters related to the new round of financing.
However, Li Mu first shared his core ideas with the two of them: "This time we will not discuss corporate development and strategic planning, but only two issues. First, employee cash rewards; second, employee option pool preparation."
After the financing is successful, the valuation of Makino Technology will continue to rise soon. If there is a major strategic development in the next one to two years, then you can basically consider launching an IPO. Once the company's IPO is successful, then it will be up to the company's shareholders and employees. When picking fruits, core employees now have certain shares. Although the financing is slightly diluted, the overall market value is still very gratifying. However, this is only for core management personnel. Although ordinary employees currently have various complete welfare benefits, The issue of options has never been prepared, but now it seems that the time has come.
Li Mu's idea is that before a company goes public, it should prepare a certain proportion of shares as an option pool and complete the distribution before going public. In this way, once the company goes public, employees' options are converted into company stocks, and they can trade in the stock market on their own. Right to cash out.
Kong Lingyu and Lin Qingya have no objections to Li Mu's option pool plan. They have been working with Li Mu for more than a year and are now billionaires with a theoretical worth of over 100 million. Their blind worship of Li Mu has almost reached its peak.
So, Li Mu probably made a plan. Currently, he holds about 70% of the shares of Makino Technology. After diluting it by 10% this time, there will be about 65% left, so he is willing to put 5% of the shares into the options. Pool, this 5%, according to the current valuation, overall exceeds 1.5 billion US dollars.
Be it Song Liang, Chen Ze, or Xu Jiaming, they are all investors in Makino Technology. With capital coming in, there is no problem for them to be diluted on an equal basis, but the option pool Li Mu knows that he can no longer look to them to carry forward his style, and Lin Qingya, Kong Lingyu and others have The shares in the company are already very small, and it would not be fair to them if they were asked to donate some more.
That's why Li Mucai decided to set up an option pool with 5% of his own shares, and then split the 5% of the shares into 5,000 shares each with 10 million original shares. Ten million original shares, 50 million original shares will be the employee option pool of the entire Makino Technology for a period of time in the future.
After setting the total number of option pools, Li Mu asked Lin Qingya to take the lead in formulating an option allocation rule, which should be based on each employee's joining time, level in the company, contribution to the company, KPI assessment, special contribution and other dimensions. Formulate and clarify how many corresponding options can be obtained if different conditions are met, as well as the time required for option exercise.
Fifty million original shares is not a small number, so Li Mu made a request to Lin Qingya: "Currently we have only more than a thousand employees, so you have to reasonably allocate the options in the option pool. You can't spend them all in one go. Just like saving money, you need to have control.”
Lin Qingya nodded: "Don't worry, Mr. Li, I understand this."
Li Mu said: "My idea is to take 10% of the option pool at this stage, which is five million shares, and distribute it to our current more than 1,000 employees. When our employees exceed 3,000, we will take it again. Put out 10%, break through 5,000, and put out another 10%. Before we go public, we will put out another 20% and divide half of the option pool. The remaining 50% will be slowly distributed to later participants after the company goes public. new colleagues.”
Kong Lingyu said in the video conversation: "Boss, five million shares for one thousand people is already very high. The current value of each share is 33 US dollars, which should be around 270 yuan. Even if one employee is allocated one thousand shares, this It’s also over 200,000.”
Li Mu smiled slightly and said, "Lingyu, that's not how the value of options is calculated."
Both Kong Lingyu and Lin Qingya in the video looked at Li Mu.
Li Mu smiled and said: "Look, although we are currently valued at US$33 billion and split 5% of the shares into 50 million shares, each share is indeed US$33, but before we go public, options are not allowed to be exercised. Yes, all employees who want to cash out have to wait until we go public, and after we go public, the value of this option will definitely exceed US$33."
With that, Li Mu explained: "Although each original share in the option pool is worth 33 US dollars at this stage, its actual value is not measured in money. You have to remember that according to our determination, then The actual value of each original share is one billionth of the actual value of the company.”
"If our future valuation continues to increase, before we go public, the market value may reach 80 billion U.S. dollars, and after our IPO, the company's market value may exceed 100 billion U.S. dollars. By that time, It is the window for employees to cash out their options. Each original option share is equivalent to a company stock worth one thousand US dollars. For example, if our stock price after listing is US$20, then the actual value of each original option share is one thousand US dollars. U.S. dollars, after we go public, every original share held by employees will be directly converted into 50 shares of the company's stock."
Kong Lingyu nodded, laughed at himself, and said, "Boss, I come from a wild background. To be honest, I don't know much about how options work, especially after it's listed."
Li Mu smiled and said: "It doesn't matter if you don't understand. Just do the business you are responsible for well. This area does not necessarily have to follow the rules of the industry. We can make our own decisions."
Lin Qingya asked at this time: "Mr. Li, if we allocate 50% of the option pool, what will happen to the remaining 50% of the option pool after we go public? Can it also be directly converted into the company's stocks?"
Li Mu nodded and said: "Yes, we give employees options before going public, and we will directly give them stocks after going public. In the future, according to the assumption I just made, our total share capital after going public will be 5 billion shares. Then the options The remaining 2.5% in the pool will directly become 125 million company shares."
After that, Li Mu added: "After we go public, in order to attract talents, we will set a stock quota for mid-to-high-end talents after they enter the company. For example, when P7 technical talents come in, in addition to their salary, we will give them five One thousand shares of company stock, five thousand shares may be worth tens or millions, but the exercise of these five thousand shares must be time-limited and exercised over several years, thereby binding talents to the company for a longer period of time. .”
Lin Qingya nodded and said: "Understood, Mr. Li, we will set the total exercise period to three years. Employees can have one opportunity to exercise their rights one year after they officially join the company. The total number of exercise rights shall not exceed three-thirds of the total number of shares held." One-third; one-third will be exercised after two years; and the remaining one-third will be exercised after three years.”
…
PS: I’m so exhausted that I owe everyone a chapter tonight, so I’ll try to make up for it tomorrow.
(End of chapter)