After some discussion, He Zhengcheng finally understood that they planned to establish a limited partnership fund company, making him a general partner to do venture capital together.
What is a limited partnership? Just search it on Baidu; the explanation there is easy to understand: A limited partnership consists of general partners and limited partners. General partners bear unlimited joint and several liability for the partnership's debts, while limited partners are liable for the partnership's debts up to the amount of their subscribed capital contribution.
Limited partnerships achieve a separation of management rights and capital contribution rights, combining the advantages of enterprise managers and funders. Therefore, they are the primary organizational form for private equity funds abroad. Well-known entities like Blackstone Group and Sequoia Capital are all partnership-based enterprises.
He Zhengcheng had always thought Chao Yang was a trader, but he didn't expect him to be a CFO who enjoyed trading. "Damn it, can you be any more scummy? I thought you guys wanted to do a Hedge Fund."
He Zhengcheng kept muttering to himself. He was still very immature at this point, his observational skills needed improvement, and he had made many self-righteous, incorrect judgments. Venture capital? How fresh! This profession is so suitable for a reborn person; it's absolutely fantastic. If all entrepreneurs could accept his investment, wouldn't he make a fortune?
A general partner—no wonder they were so cautious. If a partner isn't reliable, everyone suffers. They had only known each other for a few days, yet they dared to make such a radical decision.
Could it be that under protagonist mode, he had activated a 'weak-intellect halo,' causing those around him to automatically believe and trust He Zhengcheng? If he hadn't confirmed Xu Xin was the capable woman from his memories, he would truly think these people were scammers, trying to make him the scapegoat in the end.
But then, on second thought, He Zhengcheng was a Hong Konger with a clean background, but his shallow experience was an undeniable fact. Would investors cast a vote of no confidence due to He Zhengcheng's appearance, leading them to not invest or reduce their investment?
But how can an ordinary person who knows nothing be a general partner? Does anyone know? Waiting online, urgent! Urgent! Extremely urgent!
Forget it, no one answered. The protagonist is just cheating.
Trust, trust is priceless. How could he easily betray the trust of others? Whether it was Duan Chao, the otaku, or He Zhengcheng, the novice, neither had yet been corrupted by society.
"What are your investment directions?" Although He Zhengcheng was touched, he didn't dare to agree easily.
"That will depend on your opinion; we'll make decisions together," said Ji Jiasheng.
That sounds good, but it just means they haven't started thinking about it yet.
"Absolutely no financial derivatives. Even if we do stock index futures, it must be for hedging risks," He Zhengcheng stated.
"I agree with that!" Chao Yang exclaimed.
"Uh!" He Zhengcheng looked over, surprised that Chao Yang, who was called a trader, would be the first to agree to this point. He had thought this person enjoyed high risk and excitement.
"I have no objections either!" Lv Lang added.
"So, do you want to be an investment bank intermediary, or do PE/VC and be direct investors?" He Zhengcheng asked.
"Of course, we want to do private equity investment. If we had the connections and background to be an investment bank, we wouldn't have waited until now," Ji Jiasheng replied.
What you said makes a lot of sense, but He Zhengcheng was also worried that these people had too much ambition.
"What about the investment direction? Oh, no, what about the profit distribution?" He Zhengcheng asked, getting to the core issue.
"Everyone's income is mainly composed of three parts: base salary, bonus, and project share. The base salary and bonus primarily come from the venture capital fund's management fees, which are generally 2% to 3% of the total managed capital annually. Project shares are usually distributed in the form of equity incentives, meaning a portion of the equity in the invested project is granted as an incentive, which can be cashed out upon exit.
Of course, this is not fixed; the specific form can be adjusted according to the company's situation, but the general framework is like this. Although our company does venture capital, it is considered a private equity fund, and for development, there will be some changes," Ji Jiasheng explained.
He Zhengcheng later learned that it wasn't just 'some changes,' but a complete overhaul. Most people would definitely not accept this change, but He Zhengcheng was not most people.
Without going into specifics, they would bear more responsibility, but after the investors' returns doubled, they could receive over half of the investment profits. How about that? Isn't it great? As for risks, they simply didn't exist for him.
As for the investment profit calculation method, forget it. His math wasn't taught by a physical education teacher; it was taught by a Chinese language teacher.
"Each of us is responsible for a portion of the capital, and that portion is invested by ourselves. Investment directions are not strictly limited; one person can manage a project, or several people can collaborate on one.
For the first-phase fund, if a project you're responsible for incurs losses, it must first be deducted from your earnings. You get half of the profit, and the others split the remaining half," Ji Jiasheng added.
After thinking about it, He Zhengcheng felt it was fair and nodded in acceptance.
"Let's talk about investment direction then. If you don't accept this, we still won't have a chance to cooperate," He Zhengcheng began. "You chose me, and I also need to choose you."
"You speak, we listen!" Ji Jiasheng said.
"I believe investment should be divided into three levels. First is investing in the industry, second is investing in countries and regions—that is, the market; and then it's about looking at entrepreneurs and founders—that is, leadership ability.
Undoubtedly, among these three, the industry's priority is first. If we were to invest in labor-intensive industries like textiles in the United States now, it's not that we would necessarily lose money, but investing 100 yuan might only earn one yuan after several years.
The market is second. While doing textiles in the United States might not be a good idea, in Daxia Country, textiles can be a viable business. In Japan, the textile business is clearly not a good choice. The same industry has different prospects in different countries. Even if we wanted to, it would be difficult for us to successfully invest in a large aircraft company in the mainland.
Finally, there's the entrepreneur. Even in the right market and with the correct industry chosen, differences in entrepreneurial ability can lead to vastly different results. However, even if an entrepreneur is a genius, if the industry he chooses is a sunset industry, it will be difficult for him to compete in wealth with a mediocre leader in a sunrise industry.
Based on the above discussion, we must first choose an industry. My choice is the information industry. Human society has experienced three industrial revolutions. The first industrial revolution can be said to be the steam revolution, the second the electrical revolution, and the third, without a doubt, is the technological revolution represented by information technology and new energy.
Among these, information technology is clearly the core, because like electrical technology, it can form the broadest connections with the world. So, what aspects does information technology include? Sensor measurement technology, communication technology, computer technology, and control technology.
If we can determine our investment in the information technology industry, then the next step is industry selection. One is the basic industries of information technology, such as sensors, Telecom equipment, chip design and manufacturing, computer hardware and software, and so on. The other is the application of information technology, such as China Mobile communications, the internet, and new media based on the internet.
These industries are our top priority, not only to align with the trends of the times but also because of the lack of competition. If this field has not yet formed a leader, we might be able to become one.
Having discussed industries, we must now choose a market. The largest global market is in the United States, followed by the European Union, then Japan, Korea, and Daxia Country. If we invest, the first priority is an industry leader, and the second is the greatest potential. So now the goal is very clear: first, invest in the United States, then Daxia Country...
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