Chapter 1206 Another Good Thing Came to Us

Goldman Sachs' investment in Alibaba is a heartbreaking story from the results.

Later, when people mentioned Alibaba, the first thing they thought of, besides the handsome and elegant Ma, was another famous short man, Masayoshi Son, a Korean-Japanese.

Everyone knows that he spent 6 minutes to finalize the $20 million investment in Alibaba in January 2000. What everyone doesn't know is that he led the investment in Alibaba several rounds later and persisted until the end, thus achieving an investment achievement that made Buffett look pale in comparison.

In fact, Goldman Sachs could have done better.

This well-known five major investment banks on Wall Street was the first venture capitalist to be optimistic about Ma and Alibaba.

Many successes seem to be accidental, but in fact they are inevitable. But sometimes, they seem to be inevitable, but they seem to be accidental when you think about it.

In March 1999, Ma, who had failed in several entrepreneurial ventures, led, or encouraged, or in fact, fooled the later famous "Eighteen Arhats" - most of whom were his students, to establish Alibaba in his own home in Hangzhou.

It should be said that his accidental choice happened to be a good time.

This year, Chinese Internet companies were extremely hot, attracting many international venture capital institutions including Tiger Fund to invest money recklessly.

Among them, Sina received an investment of 16 million US dollars from Walden International, and Sohu also received 6 million US dollars and more than 30 million US dollars in financing.

The optimism of international venture capital on the domestic Internet naturally led to the optimism of relevant domestic institutions in this field - at least at that time, our Internet companies generally adopted a follow-up strategy, and domestic venture capital, which was not strong, also followed the pace of international giants.

Although he did not make much of a name for himself in the Yellow Pages project before, the richest man Ma at that time was at least one of the well-known figures in the domestic Internet field, and was well-known to many people like the founders of the three major portals and Baidu, Tencent, and 3721.

Therefore, in fact, at the beginning of the establishment of the group, many investors threw olive branches to the richest man Ma, but he was cautious and did not immediately get carried away by this investment enthusiasm. He rejected as many as 38 mainland investors in a row. His goal was bigger and his vision was longer.

Ma hoped that Alibaba's first venture capital investment would not only bring money, but also bring more non-capital factors, such as further venture capital and other overseas resources.

Later, his wish came true.

The first cooperation between Alibaba and Goldman Sachs can be said to be very accidental, or it can be said to be very inevitable.

One of his founding team members was a venture capital manager, that is, CFO Joseph Tsai.

Before joining Alibaba, he was the vice president of InvestorAB, Sweden, and had close ties with the venture capital circle.

He soon brought good news to Ma. The Hong Kong investment manager of Goldman Sachs, who had met him once, revealed to him that Goldman Sachs also intended to enter the Chinese Internet market.

With his efforts, after a field investigation, in October of the same year, Goldman Sachs, together with Fidelity Investments, Singapore Government Technology Development Fund, InvestAB, etc., invested US$5 million in Alibaba, and the equity obtained was the same as the equity obtained by Yahoo's investment of US$1 billion in 2005 - 40%.

Compared with Alibaba's later performance, this investment is not worth mentioning, but it is very critical. It injected new blood into this startup company with only 500,000 yuan in founding capital in a timely manner.

Among them, Goldman Sachs invested 3.3 million US dollars and was the largest shareholder at the time besides the founding team.

However, until now, many executives and partners of Goldman Sachs are increasingly pessimistic about the prospects of this investment.

One of the main reasons is Taobao, which was founded by Alibaba this year.

Before that, Alibaba's platform actually developed well because it allowed many domestic companies to deal directly with international buyers - although it still did not make a profit.

However, the establishment of Taobao attracted the fear of eBay, an e-commerce giant that had already acquired Eachnet in China.

eBay is a company with a market value of tens of billions of dollars. They know that the best time to defeat an opponent is to not give him the opportunity to grow and expand, and to knock him out with one punch when he is new.

Therefore, they formulated a very targeted strategy this year: a small investment of 100 million US dollars to block Taobao from all aspects.

eBay's president has more than once confidently asserted that "it can only survive for 18 months at most."

The reason for his assertion is that they spend a lot of money everywhere.

This can be seen from the publicity.

They first signed a strict exclusive advertising agreement with the most well-known portal websites in China: they can only accept our advertisements, and never accept Taobao's.

Taobao was forced to spend money on pop-up advertisements with rogue nature on some small websites.

But soon even this way was blocked.

As soon as Taobao reached an agreement with a website, eBay immediately rushed over with a checkbook, "How much is your website's advertising income? I'll pay for it all!"

Later, Taobao could only be pitiful and helpless, and advertise in a very traditional way on subways, buses and billboards.

So we have the impression that Taobao's promotion was very down-to-earth at the time, haha, in fact, it was really a choice made under desperation.

How can such a traditional method compare with eBay?

In particular, at present, this is actually a competition about burning money. How can Taobao compare with eBay?

In particular, this happened when they had invested in Alibaba for more than four years, but still had no profit.

They had been incompetent for many years, and now they have provoked such a powerful opponent. Now, based on the current situation, those supporters within Goldman Sachs who used to promote "our investment in China is based on the long-term" have also backed off from Alibaba.

So during the year-end review, no one opposed this proposal.

Paulson looked at the head of the Asia region who asked the question from above his glasses, "When will our investment expire? Do they have a clear listing plan?"

Usually, each venture capital will set a deadline for each investment in advance, generally 3 years, and the longest will not exceed 5 years.

"Our investment will expire at the end of next year. As for the listing," the person in charge shook his head, "we don't see any hope at the moment."

He understood what the big boss meant.

The return on investment of venture capital generally comes from the sale of the shares held when the invested company goes public. Whether you can get dividends in the years of investment is not the key. The key is whether you can go public.

However, we all know that what is as well-known as the ability of the richest man Ma is his big mouth.

"How do they plan to go public?" Paulson asked. After all, there is still nearly a year before the expiration. If we withdraw from this side and the other side goes public right after? Wouldn't that be a very embarrassing thing?

"We and several other investors have discussed this issue with Mr. Ma many times. His opinion is that at least when his company can generate 1 million yuan in profits and taxes every day, it will be the right time to go public."

"RMB?"

"Yes,"

Paulson roughly calculated that it would take 365 million yuan in taxes, or about 45 million US dollars, to go public. It doesn't seem to be too difficult.

"What is their average daily revenue this year?"

"It's far less than 1 million per day. It is estimated that next year, the daily revenue can reach 1 million."

Paulson shook his head immediately. It will take until next year for the daily revenue to reach 1 million. But you told me that we have to wait until we pay 1 million in profits and taxes every day before going public. Now you have taken actions that provoke giants like eBay. Can we wait until that day?

"Sell," he said immediately, turning the page, "next item,"

"Okay, we will look for potential buyers immediately," the head of the Asia region continued to report. This was not a sad thing. The original investment could at least get several times the return if it was sold now. "If nothing unexpected happens, the SMIC we invested in will be listed on the NYSE and the Hong Kong Stock Exchange in the first quarter of next year."

This was good news, but Paulson was not too happy. He frowned, "Wait, the buyer of the previous investment," he thought for a while, "Are we the consultants for NEXTDOOR's acquisition of Netflix?"

Not to mention the previous one, Feng Yiping's acquisition of Netflix was still very pleasing to him. The young Chinese man was indeed a surprising guy.

"Yes, what do you mean?"

"Don't waste time, let the person in charge over there contact Yiping Feng first to see if he is willing to take over,"

"Okay,"

…………

In Shenzhen, Feng Yiping, who was about to fly to the capital and was having dinner with Tongcheng.com executives, Fu Yunning and Xiang Xiaofang, had a strange look on his face after hanging up the phone, with mixed feelings.

"What's wrong, Yiping?" Huang Jingping asked with concern.

"Nothing, come on, have a drink,"

He just mentioned the richest man Ma a few days ago, and now such a good thing has hit him on the head. He really can't believe it.

ps: Since uploading, many book friends have repeatedly taught, urged, and even scolded me, asking me to write the plot. Now it's finally time, so, dear friends, don't use money to express your support!