RBCT Chapter 308: The World Is Both Vast and Small
Chapter 308: The World Is Both Vast and Small
November 5, 1993, outside the Department of Obstetrics and Gynecology, Ruijin Hospital, Shanghai.
Huang Xiaochuan, who rushed over, hadn't even had a chance to speak with his family when a call came in from Hong Kong onto his mobile phone.
"Mr. Huang, due to the lack of progress in the fourteenth round of negotiations between the central delegation and the Hong Kong British government, investors lost confidence, causing the Hang Seng Index to fall to 8400 points today. As per your request, we have completed the liquidation and settlement for you. After deducting leverage interest and handling fees, your profits have been deposited into your futures account. Congratulations!"
"Okay, I understand. Thank you for your hard work."
Soon after, Charlie Cao called to confirm that the profits from his short position on the Hang Seng Index were already in his futures account. This money required Huang Xiaochuan's signature to be transferred out, so Huang Xiaochuan only needed to confirm that the money had arrived. He would then take some time later to go to Hong Kong to transfer the money out of his futures account.
Tang Jianhua paced anxiously outside the delivery room, unable to sit down.
Yesterday was Zeng Hong's due date, and she started to go into labor this morning. However, after being taken to the hospital, she was still in labor from morning until afternoon, which made the whole family very anxious!
Huang Xiaochuan hung up the phone and was about to ask about his older sister's situation when his mobile phone rang again, as if joining in the fun. Huang Xiaochuan quickly smiled apologetically at his family and went to the stairwell to answer the phone.
The call connected; it was from Zhang Gaolei.
Because Zhang Gaolei was too excited, he spoke in a thick Central Plains Mandarin at such a fast pace that Huang Xiaochuan couldn't understand him.
Huang Xiaochuan, mimicking Zhang Gaolei's Central Plains accent, reminded him, "Old Zhang, what are you doing? Please speak Mandarin!"
After being reminded by Huang Xiaochuan, Zhang Gaolei reorganized his thoughts.
Goldman Sachs approached us and offered to invest in us.
"What the heck? Goldman Sachs came to you? Tell me the whole story first, don't just jump around in circles, you're confusing me."
Zhang Gaolei quickly and concisely told Huang Xiaochuan the whole story.
After Huang Xiaochuan invested $800,000 in the three of them, Trevor and his group immediately established Gaze Computer Networks Company, distributing shares equally in a 30:24:23:23 ratio. For future development, each of them also put 3 shares into an option pool to be given to future employees who join the company.
Because of their resources and connections, Trevor and Darwin's web browser was successfully launched in October, and within a week, it had 60,000 users. Now, it has more than 100,000 users.
It's worth noting that there are only 5.7 million internet users in the entire United States. In just half a month, the Gaze10 browser has gained over 100,000 users, which is an impressive achievement.
This unassuming little company immediately attracted the attention of major investment firms and other internet companies. Through screening and analysis, they concluded that Gaze was an internet startup with great investment potential.
Soon after, some venture capital firms contacted Zhang Gaolei and the other two founders of the company, expressing their intention to invest in them. Among them was the well-known Goldman Sachs.
The three men were overjoyed at this stroke of luck. Their main purpose in creating the company was to amass great wealth through technological innovation, and now they were about to see the light at the end of the tunnel.
In Europe and America, venture capital firms invest in promising startups with the aim of profiting from the sale of equity after the startup goes public. This investment approach, which involves small investments and high returns, is very popular in Europe and America.
However, venture capital also means high risk, and most of these investments end in failure. But major venture capital firms continue to make investments regardless, because if they succeed in just one case, they can not only make up for past losses, but also make a fortune, and even generate a steady stream of profits for several years.
Therefore, many young people enter the internet industry with dreams in mind, hoping to gain the favor of venture capital firms and make money from it.
Venture capital is generally divided into three investment stages: seed round, angel round, and venture round. The $800,000 that Huang Xiaochuan accidentally invested was actually in the seed round, which is the riskiest round with an astonishingly high failure rate.
At the time, Huang Xiaochuan just wanted to try out what venture capital was all about, and he was prepared to lose all of his $800,000 investment. He could afford to lose $800,000.
He just didn't expect that his company would attract the attention of venture capital firms so quickly. How long has it been?
After listening to Zhang Gaolei's account, Huang Xiaochuan asked him, "Did the people from Goldman Sachs and other venture capital firms mention what valuation they would give the company?"
"We haven't discussed that yet. They've only mentioned an interest in investing in us, saying they've already arranged for a professional team to conduct due diligence and will perform a comprehensive evaluation of our company. I guess that's what valuation is?"
Huang Xiaochuan scratched his head. Actually, he didn't understand either, as he had never been involved in this industry in his previous life.
"Let's see what they say!"
"Okay, that's what we were thinking too, but you'll have to come to the United States then."
"Let's see what kind of price these venture capital firms offer us first. If needed, I'll arrange for someone to go there."
After hanging up the phone, Huang Xiaochuan immediately thought of Zhang Yun. Wasn't Ms. Catherine currently in charge of investment at Goldman Sachs? He could consult her!
Suddenly there was a noise at the entrance of the delivery room. It turned out that a nurse was carrying a baby out.
Are Zeng Hong's family members here? Zeng Hong's family members?
Suddenly, a crowd surged forward, with Tang Jianhua at the front.
He raised his hands and shouted, "I am Zeng Hong's family member!"
The nurse looked at him and said, "It's a girl, weighing seven pounds and two ounces. The mother is currently undergoing postpartum cleaning and will be out in a bit. Family members, please get ready to receive her."
A group of people nodded in agreement and rushed forward to see the newborn baby.
Tang Jianhua wanted to hold the baby but didn't dare. It was her aunt who carefully took the baby from the nurse and looked at her with great joy.
At this moment, Huang Xiaochuan also arrived. He stood outside the crowd, craning his neck to see if she was his niece from his previous life.
Like displaying a precious treasure, her aunt carried her around and showed her to everyone, receiving countless compliments, the most common being that she was beautiful and quiet.
Huang Xiaochuan also looked at her, but he couldn't see anything about his newborn niece that suggested she was pretty or quiet. She looked like a little old man, with a wrinkled face, and was anything but pretty.
However, Huang Xiaochuan still remembered what his eldest niece looked like in his previous life; she was indeed quite beautiful when she grew up.
She must have cried herself to sleep in the delivery room. The little girl is sleeping with her eyes closed, occasionally swallowing a few times.
Huang Xiaochuan laughed as he looked at her. This girl was truly born with a silver spoon in her mouth.
A while later, Yu Xiang also arrived. She had just finished her afternoon classes and came to the hospital.
"Let me see!"
"Oh my! What a beautiful young girl!"
Yu Xiang stared at the little girl sleeping in the crib with obvious affection; it was clear that she really liked children.
Having given birth naturally, Zeng Hong had recovered a lot, but she was still a bit weak. It was no wonder she was tired after a whole day of this. At that moment, Tang Jianhua was feeding her fish soup.
On their way home, Yu Xiang asked, "Have you decided on a name yet?"
"Tang Ruixuan, Rui means auspicious, Xuan means propaganda, and her nickname is Xuanxuan."
Yu Xiang nodded: "It's a nice-sounding name, but it has a lot of strokes."
Huang Xiaochuan laughed: "Right! That's what I think too."
The next morning, Huang Xiaochuan went to his office and made an international call to Zhang Yun.
A voice came through the receiver: "Hi! This is Catherine. I'm not home. Please leave your phone number and name, and I'll call you back!"
Huang Xiaochuan had no choice but to hang up the phone and wait in his office, while also glancing at some newspapers that had been sent from Hong Kong.
At this moment, Gao Yue carefully pushed open the door and brought Huang Xiaochuan a cup of tea. She was currently doing odd jobs at the company, such as making tea, pouring water, and collecting newspapers and magazines.
She soon learned after arriving that the company's real boss was actually the young man sitting in the office reading the newspaper. She felt both grateful and admiring towards Huang Xiaochuan. She was grateful that he had given her such a good job, with very little work but such a high salary. She admired Huang Xiaochuan for running such a large company at such a young age, and couldn't help but regard him as her idol.
Huang Xiaochuan politely said, "Thank you!"
Gao Yue hurriedly said, "You're welcome! You're welcome!"
Huang Xiaochuan chatted with Gao Yue casually: "Are you settling in well at the company?"
"It's fine, but there's not much to do."
Huang Xiaochuan smiled; this little girl was quite honest.
"You could plan your future, like enrolling in night school to get a diploma and learn some professional skills, such as finance or secretarial work. You can't spend your whole life doing menial tasks, can you?"
"I've already enrolled in night school; I'm studying secretarial studies."
These words made Huang Xiaochuan look at Gao Yue with new respect: "That's right, learning more things is always helpful to oneself."
The ringing of the telephone on the table interrupted their casual conversation.
Gao Yue immediately left the office, knowing better than to be told during training that she should avoid the office unless specifically instructed to do so when the boss calls or when there are guests.
Huang Xiaochuan picked up the microphone: "Hello!"
"Huang Xiaochuan, what made you suddenly decide to call me? That's really strange!"
Zhang Yun's sarcastic remarks came through the microphone, coming from thousands of miles away. She sounded very resentful towards Huang Xiaochuan!
Huang Xiaochuan pretended not to notice: "Hehe, it's been a long time since we've been in touch, so I was thinking of giving Teacher Zhang a call to say hello."
Zhang Yun bluntly exposed Huang Xiaochuan's pretense: "Alright, you might fool some young girl with that. So, what do you want?"
Since that's the case, Huang Xiaochuan stopped beating around the bush and went straight to asking Zhang Yun for advice.
"Your questions are quite professional, aren't they? I'm telling you, no problem, but I'll be charging you! And it won't be cheap." After understanding Huang Xiaochuan's intentions, Zhang Yun didn't hold back and made an outrageous demand.
Huang Xiaochuan gritted his teeth: "Fine! Name your price!"
"Then when you come to New York, take me for a stroll down Fifth Avenue."
Upon hearing this, Huang Xiaochuan exclaimed, "Damn! I just wanted to ask you something, and you want me to go shopping with you on Fifth Avenue? Your spending power is truly astounding. No wonder you're still single. Can an average family afford to support someone like that?"
Huang Xiaochuan thought about it and figured he didn't have any plans to go to the United States anytime soon, so he decided to agree first.
"Fine! It's just Fifth Avenue!"
Seeing that Huang Xiaochuan had agreed to her conditions, Zhang Yun then explained to Huang Xiaochuan what venture capital was.
"The venture capital process generally consists of four stages."
These are the four stages: financing, investment, management, and exit.
Since your question doesn't involve financing, I won't go into that. I'll mainly talk to you about the other three stages.
The investment phase mainly revolves around where to invest the money; the purpose of investing is naturally to earn more profit.
Therefore, professional investment institutions typically go through a series of procedures, including project screening, due diligence, valuation, negotiation, term design, and investment structure arrangement, to invest in startups with huge growth potential. Currently, major US investment institutions are keen to invest in internet concept companies. Do you know what the internet is?
Seeing that Zhang Yun was about to talk about the Internet again, Huang Xiaochuan quickly interrupted her: "I know about the Internet, Teacher Zhang, let's continue talking about venture capital."
Zhang Yun was getting into the swing of things when Huang Xiaochuan interrupted her, and she was a little annoyed: "Hmph! Then I'll talk to you about the management phase next."
The management phase is about solving the problem of value creation. Since it is an investment, we certainly hope that the investment project will yield a return. This requires supervision and services for the investment target to help it achieve value creation.
The main content of the supervision is to participate in the board of directors of the invested companies and replace the management team when the invested companies fail to meet the performance targets.
The services mainly involve helping investee companies improve their business plans, corporate governance structures, and securing subsequent financing.
Finally, there is the exit stage, which is about how to realize the returns. Investment institutions mainly realize investment returns by assisting the invested companies in three ways: IPO, equity transfer, and bankruptcy liquidation.
In essence, it means, "I believe in you, so I'll invest money in you. It's not just about investing money; I'll also help you grow your company, and after it goes public, I'll continue to increase its value. Then, at the right time, I'll sell the stock or equity to realize a profit."
Huang Xiaochuan then asked, "Can you make money through bankruptcy liquidation?"
"Generally speaking, the relevant technology patents of these startups will continue to exist. Investment institutions, as creditors, can acquire these patents, and the patents can be monetized at any time. Do you understand what I'm saying?"
Huang Xiaochuan laughed. If you can't understand this, you're really an idiot.
Zhang Yun asked, "Why did you suddenly ask me this question? Have you decided on a project?"
"Haha! No, no, I was just asking for a friend. Professor Zhang, that's all for now. International calls are expensive, so I won't disturb your rest any longer. Goodbye!"
Huang Xiaochuan hung up the phone before Zhang Yun could respond.
After putting down the microphone, Zhang Yun suddenly smiled mysteriously and then went to take a shower.
Her briefcase contained a document about conducting due diligence on Gaze, which included the name of Zhang Gaolei, one of Gaze's founders.
The world is vast, yet sometimes it feels incredibly small.