Chapter 1165 Pre-Financing Valuation

News of Weibo's B round of financing spread quickly.

In 2008, few Huaxia Internet companies were able to raise funds, and even fewer companies had large-scale financing.

Weibo had a round of financing in the first half of 2008, and the financing amount was not small at that time.

Sequoia, IDG, Baidu, and Horizons Fund, accounted for 20% of the shares with US$240 million in cash and some technical support.

Based on cash flow alone, the post-financing valuation of Weibo is as high as US$1.2 billion.

However, Baidu is more about technology and channel support. According to the financing amount of Sequoia and IDG, the valuation of Weibo was actually as high as 1.4 billion US dollars at that time.

It has been less than half a year since the last financing success.

Converted into RMB, the funds raised by Weibo amounted to nearly RMB 1.7 billion.

It stands to reason that Weibo does not burn so fast. Even if the international version is launched, global channels are opened up, and Weibo’s domestic promotion and development will take less than 1.7 billion in half a year.

But because before the financing, Li Dong made an agreement with the other party.

He has to use 1 billion of the 1.7 billion raised in capital, which can be regarded as a loan with a term of one year.

Li Dong has not paid back the money now, at least until next year.

And the 700 million funds, to be honest, are sometimes really unnecessary.

Don't look at Weibo as if it's nothing. Many people think that simple maintenance is enough, and if you get dozens of people, you can just pay your salary.

700 million, it can't be spent in a lifetime.

But in fact, some things cost more money than everyone imagined.

Internet companies burn money, this is not empty talk.

Not to mention anything else, just for the development and launch of the international version of Weibo, the addition of domestic servers, the start of intelligent big data review, and the review by the manual team...

This series of cost management has burned more than 300 million Weibo.

And the rest of the money was burned domestically.

Weibo users can exceed 200 million, but it is not enough to rely on word of mouth.

Just to promote this piece,

PP, Yuanfang Portal, Yuanfang Mall, Celebrity Endorsements, Ground Advertisements...

This series of actions will also cost money, and it will cost a lot of money.

Drainage is not that simple.

It’s not difficult to have a few million registered users, just a little publicity, tens of millions of users, then it needs to be hyped, and if the number of users exceeds 100 million, it’s not just a matter of simple publicity, there are many other things to help.

Various activities, the development of various new functions, and the creation of some focus topics all require operations.

The remaining hundreds of millions of funds will be burnt out soon.

However, whether it is Baidu, IDG, or Sequoia, they are actually not satisfied.

Burning hundreds of millions is nothing!

value!

At the time of Weibo’s round of financing, Weibo registered users had just exceeded 100 million, and after burning several hundred million, Weibo users exceeded 200 million!

double!

Although the proportion of active users is slightly lower than before, the number of users has increased by 100 million, and these financing institutions can almost wake up with laughter.

According to the current market valuation method for Internet companies, the number of users is the most important thing for a self-media platform like Weibo.

The relationship between enterprise valuation and the number of users is proportional to the square.

What do you mean by that?

In other words, a website with 1 million users and a website with 10 million users of the same type, their valuation is not a difference of 10 times, but the square of 10 times, that is, a difference of 100 times!

A company with 1 million users is valued at 100 million, and a company with 10 million users can be valued at 10 billion!

Of course, this statement is not absolute, but it can also be seen that the number of users has an impact on the enterprise.

The number of Yuanfang Weibo users has doubled. If this calculation method is used, the valuation of Weibo can be squared on the basis of 2 times, that is, the valuation will increase by 4 times.

This calculation is obviously impossible.

But in any case, only 700 million yuan was burned, and in exchange for such a result, several investment institutions were naturally happy and lost their way.

Now Weibo has no money, and the 1 billion owed by Li Dong has not yet expired.

The second round of financing seems to be a little faster, but it is actually inevitable.

At least at this time, Weibo itself doesn't have many ways to make money, the main one is advertising revenue. If this profit is used to burn money, it won't last long.

With the launch of the international version, it is time to spend money, and Weibo needs to continue financing. Whether it is Sequoia or IDG, including the other two, they are all happy to see the success.

If it weren't for Li Dong's strong personal style and his own strong capital, I am afraid that several major investors would take the initiative to suggest it before he mentioned it.

For an Internet company, investment institutions have a great say in financing.

In order to ensure the safety of their own funds, the investor may propose to continue financing before the money is spent.

On the far side, no one mentioned it until this time. Seeing that there is no money on the books, it's not that Sequoia and the others don't want to, but it's useless to say it if they know it.

Who is Li Dong?

If you take the initiative to mention this to him, he might not even bother to look you in the eye.

If you have the ability, you can withdraw the capital. If you don’t want to withdraw the capital, then you have to listen to Li Dong.

If he wants to raise money, you can continue to raise money. He doesn't want to, you either get out, or continue to wait honestly. There is no third way to go.

Now that Li Dong has launched the B round of financing, although the internal plan has not yet been released, several major investment institutions have brought people to a faraway place, wanting to hear what Li Dong has to say in detail.

...

meeting room.

Xiong Xiaoge and Shen Nanpeng led the team in person.

Both Sequoia and IDG invested hundreds of millions of dollars in their last round of financing, which is not a small sum.

Now that Weibo is going to conduct a B round of financing, they don't feel worried about letting their subordinates come over. If they really want to let their subordinates come over, some things will be difficult to talk about.

Li Dong has always been relatively strong. If he offered some unacceptable conditions, without them present, he would not even have a chance to negotiate.

The facts were not as expected by a few people.

As soon as they came, Li Dong held a meeting, and as soon as the meeting started, the first condition was a little difficult for everyone to accept.

"For Weibo, I am going to redesign the total share capital and issue part of the share capital.

After financing, the total share capital of Weibo was 140 million shares, priced at US$10 per share.

Now the value of Weibo has skyrocketed, the international version has been launched, the number of users has doubled, and monthly active users have increased by 70%.

I gave a rough estimate in my heart, 2 billion US dollars.

So I am going to issue 70 million new shares, with a total share capital of 210 million shares.

Each share is still priced at US$10, Yuanfang holds 160 million shares, Sequoia and IDG hold 14 million shares, Baidu holds 10 million shares, and Victoria Harbor holds 2 million shares. "

After Li Dong finished speaking, he glanced at everyone and did not speak again.

According to Li Dong, some people may have doubts, isn't it 210 million shares?

But now, according to the ratio, everyone holds only 200 million shares in total. What about the remaining 10 million shares?

In fact, there is no need for Li Dong to point out this point. The remaining equity is regarded as short equity.

These shares, based on internal pricing, actually exceeded Li Dong's valuation of Weibo at US$2 billion.

And what are these 10 million shares used for?

Option incentives!

Yes, the stock option incentive does not mean that Li Dong must bear it alone, nor does the distant family bear it, but that everyone must bear it.

It stands to reason that it is not a big deal, it is an industry rule.

However, Li Dongduo issued 10 million additional shares. It seems that the value of the equity in their hands has not changed, and even the proportion of equity in their hands has remained the same compared to the far side.

But in fact, it took advantage of them.

10 million shares, according to Li Dong's price, that is 100 million US dollars!

And this 100 million US dollars, although it is not money now, can not be sold, but when Weibo goes public, it will also be included in the total equity.

When the time comes, it will be money.

Now 100 million US dollars is distributed, and when it goes public, it may be hundreds of millions or even billions of dollars.

The option incentives have nothing to do with investors like them, and are only distributed to remote employees and executives.

Everyone can accept a small amount of option incentives, because it is necessary.

10 million shares...

Well, if you really want to calculate it according to the ratio, it is actually not high.

However, the value of Weibo is very high, and the internal price is as high as 10 US dollars per share. In this way, the value of the option of 10 million shares is very large.

It is difficult for several companies to accept Li Dong's acquisition of so much equity for his employees at once.

Xiong Xiaoge and the others looked at each other, and after a while, Shen Nanpeng said with a smile on his face: "President Li, we have no objection to increasing the share capital.

Can take out 10 million shares as equity incentives, isn't it a bit much? "

Li Dong frowned and said, "Is it a lot? It's less than 5%. Tell yourself, is this a lot?

Weibo is not yet fully equipped with executives and employees have not yet reached their limit. It sounds like a lot. Wait until the last point, how much can you get?

I originally planned to increase the total share capital to 220 million shares, which is appropriate.

However, considering that Weibo currently has not many employees, and many executives have multiple positions, in order to reassure you, I changed my plans and plans.

Now you are still telling me too much, are you bullying me, Li Dong, who doesn't understand the market or something!

For domestic Internet companies, you don’t invest in one or two companies. You don’t know what the market is? "

After Li Dong finished speaking, everyone was slightly embarrassed.

As Li Dong said, the proportion of less than 5% is indeed not too much.

But because the value of Weibo is too great, it seems to be a big loss.

Capital institutions are all vampires. If they can get more benefits, they will naturally get more.

But since they can't get it, it's hard for them to talk about it.

Li Dong really wanted to forcibly allocate more, but they really didn't have a good way to stop them.

Just accept it when you see it, and everyone will stop talking about it, Xiong Xiaoge said with a smile on his face: "Mr. Li, don't get me wrong, Mr. Liu and the others have worked hard, and the employees are also hardworking. The stock option incentive is a must.

We have no objection to the additional issuance plan that Mr. Li just mentioned.

However, I am a little confused personally, and I still want Mr. Li to clarify our doubts for us. "

"you say."

"I heard that Weibo's option incentive plan covers the entire Yuanfang system. Is this..."

Xiong Xiaoge didn't finish what he said, but the meaning was very clear.

Weibo's internal employees have option incentives, so I won't say anything about this, as most of them are their own people.

But it involves the entire distant system. Isn't that using their money to buy people's hearts for Li Dong?

They don't want this kind of thing.

The brothers clearly settle the accounts, no matter how strong Li Dong is, it won't work if he treats them as a good guy with their money.

Li Dong had expected it a long time ago, and he was not surprised. Hearing the words, he said calmly: "Weibo is a subsidiary of Yuanfang Group, and the executives at the headquarters should be rewarded with stock options.

As for other subgroups, they are indeed different from Weibo.

I didn't say distribution without compensation. Out of the 10 million shares, 2 million shares will be distributed with compensation, and the funds will belong to Weibo. Is this okay? "

"Then the exercise price of these 2 million shares is..."

"$1!" Li Dong said bluntly, and the corners of everyone's mouths twitched.

The price of 10 US dollars mentioned earlier is just a reflection of the value of Weibo, and the exercise price is actually the real equity value, or the net assets per share.

Weibo is still in the stage of investing and burning money, the company is still in a state of loss, and the fair value of equity is generally negative.

Li Dong said that $1 is not too much.

In other words, if these 2 million shares are purchased by remote employees and executives, they can be sold for a total of 2 million US dollars, which is 10 times different from the current valuation.

If this is the case for internal Weibo employees, everyone has nothing to say.

But what do the other subgroups in the distance have to do with them?

It's not obvious that it's taking advantage of it!

Several people were a little dissatisfied, but they couldn't find any excuse for a while, because this is also the existing market, and many companies are actually doing the same.

Shen Nanpeng and the others looked at each other again, 2 million shares is not too much, and the distance actually still accounts for the majority.

It really doesn't make much sense to fight over this matter.

What's more, it's better than allocating it for free. The 2 million shares are not given to employees of other sub-groups, and Weibo itself has digested them.

Give a few executives a little more points, and they can't do anything about it.

Since the total allocated share capital remains unchanged, it seems that it is not a loss to get an extra US$2 million back.

Everyone discussed in low voices for a while, and finally several representatives nodded and said: "We temporarily agree with Mr. Li's plan, but the specific plan will have to wait until we go back to make a decision."

Even if this is done, if you agree here, there is no reason to object when you go back.

The process that should be followed still needs to be followed.

Li Dong didn't care, he smiled and said: "This is the best, and I would like to congratulate you all, there is no reason not to make money investing in distant industries.

The current Weibo is valued at 2 billion US dollars, which is not much.

In the blink of an eye, everyone's income has reached as high as 40%, but it hasn't been half a year yet.

When it goes public, everyone can make a lot of money. This is the way to win-win. "

At this time, everyone's faces were slightly happy. In less than half a year, it was true that everyone had made a lot of money as Li Dong said.

This is still under the premise of the financial crisis. Many companies have lost money this year.

Yuanfang Weibo not only did not lose money, but its valuation has also risen sharply, which is more gratifying than making money as usual.

But that's not the point, it's too early to talk about making money.

This is not the purpose of everyone coming today. As for the previous option incentive plan, it was all incidental. The real purpose of everyone is the B-round financing of Weibo.