Guan Yifeng hurriedly knocked on the door, walked into Chen Pingjiang's office, and handed the file in his hand to Chen Pingjiang.
"Chairman Chen, the information you wanted to check has been found."
Chen Pingjiang raised an eyebrow, took the file Guan Yifeng handed him, and began to read through it.
Guan Yifeng's voice continued from beside him:
"At the beginning of the month, Cheng Binghao resigned from Sina, reportedly refusing the position of Sina's CTO, insisting on his departure. After resigning, he led a 5-person technical team to establish 'BJ Kaixinren Information Technology Co., Ltd.'"
"Alright, I understand. You can go back to your work now."
After Guan Yifeng left, Chen Pingjiang fell into deep thought.
First, Xiaonei.com started a new round of financing ahead of schedule, then Cheng Binghao resigned early to found Kaixin.com.
Not a single opponent was missing, but under the flapping of the butterfly's wings, they all advanced their next moves.
In his previous life, Xiaonei.com should have undergone two consecutive rounds of financing in March and April of next year, particularly securing a $430 million investment from SoftBank at the end of April.
Chen Pingjiang and SoftBank had not reached an agreement, so he was not surprised by SoftBank leaning towards Xiaonei.com again.
Cheng Binghao's situation was interesting; Kaixin.com should have been founded in February of next year, but unexpectedly, it was advanced so much.
There's a term in Go called "flying knife," which refers to an unexpected and complex move.
Chen Pingjiang had already prepared one for Cheng Binghao.
— The Real and Fake Kaixin.com.
Presumably, Cheng Binghao would be very "happy" then.
In his previous life, Chen Yizhou had severely disgusted Cheng Binghao with this very move.
The background at the time was—
Early on, when Kaixin.com was founded, the Kaixin domain name was registered by an American, who offered it for about 200,000 RMB.
However, due to Kaixin.com's tight finances at the time, they registered the Kaixin001 domain name, which ultimately left a hidden danger.
Fu Zhengjun, CEO of another domestic social networking site 9158.com, seeing Kaixin.com's development momentum, bought the domain name back from the American.
According to an internet insider who also wanted to buy the domain and revealed to Sina Tech, Fu Zhengjun's purchase price was approximately 1 million RMB.
Fu Zhengjun then proactively contacted Kaixin.com, hoping to exchange the Kaixin domain name for a 2% stake in Kaixin.com, with no cash demands, but was rejected by Kaixin.com.
According to Kaixin.com's market value at the time, the Kaixin domain name was worth over 4 million RMB.
Soon after being rejected by Kaixin.com, someone with great sincerity for the Kaixin domain name appeared, repeatedly seeking to negotiate with Fu Zhengjun and offering a considerable price.
However, Fu Zhengjun did not know that the other party was Chen Yizhou.
Chen Yizhou purchased the Kaixin domain name through an intermediary, claiming at the time to be a gaming company that did business similar to Kaixin.com, but more entertainment-oriented.
It was only later that Fu Zhengjun learned the true identity of the funding party.
Rumor had it at the time that Chen Yizhou spent 6 million RMB to buy the Kaixin domain name.
What did Chen Yizhou do after acquiring the domain name?
After his attempt to acquire Kaixin.com failed, Chen Yizhou counter-established a "fake" Kaixin.com that was almost identical to the "real" Kaixin.com in Chinese name, service functions, website layout, page settings, and even the domain name.
Because it was difficult to distinguish between the two Kaixin.coms at first, the "official" Kaixin.com saw a significant slowdown in the upward trend of registered users, and a large number of users were misled into joining the "fake Kaixin.com."
The "real" Kaixin.com had 34 million registered users hijacked by the "fake" Kaixin.com, all of whom were eventually transferred by Chen Yizhou to Xiaonei.com.
In the subsequent lawsuit, Chen Yizhou only paid 400,000 RMB in compensation.
However, both of these individuals are now juniors.
Since Chen Pingjiang had seized Chen Yizhou's Renren.com name, he could naturally also pull a trick on Cheng Binghao.
Chen Pingjiang handed this matter over to Miao Bingwei, and solemnly instructed him to follow up, ensuring absolutely no mistakes.
Miao Bingwei was a bit bewildered, looking at Chen Pingjiang and asking,
"Is the Kaixin.com domain name very important to us?"
Chen Pingjiang did not hide it from him.
"It's very important. The domain name should be in an American's hands right now; go and buy it. Then, based on the website layout and page settings of Kaixin001, create a clone. Do not launch it online; keep it hidden. I'll come to you when necessary. The most crucial thing is to keep this matter confidential."
Everyone is smart; some things don't need to be stated too explicitly.
Miao Bingwei's mind spun, and he roughly understood Chen Pingjiang's intention, compelled to give a thumbs-up:
"Boss, you're truly cunning."
Chen Pingjiang pursed his lips:
"The business world is like a battlefield."
What you think business warfare is VS what real business warfare is.
Real business warfare is often unpretentious.
After a certain group's CFO was dismissed, he forcefully broke into his office with a long sword and locked himself inside for 3 days.
After a certain online company founder divorced his wife, he reportedly rushed into the office to snatch the company seal and slept with it tucked into his waistband.
A former chairman of a certain group scaled a wall and snuck into a competitor's factory premises to "secretly photograph."
A sixty-year-old chairman of a certain office building swung a hammer and injured the company's general manager.
In addition, there were cases of scalding a competitor's money tree to death with boiling water; replacing a competitor's God of Wealth with Ultraman; sabotaging a competitor's coffee machine; swapping a competitor's work lunch for West Lake Vinegar Fish; using honey traps for both men and women; defecating at a competitor's entrance for several consecutive days; and slashing a competitor's bicycle seat.
There's nothing you can't do, only things you haven't thought of.
In the afternoon, news came from Shu Mang's side.
Sequoia Capital's first installment of $20 million arrived.
It's necessary to explain here that large sums of financing are rarely paid to companies in a single lump sum.
Investment institutions need to control phased capital injections based on the company's business progress and actual capital consumption, to achieve the goal of risk control.
Put simply, it's given in stages according to budget and execution; even if your company goes bankrupt, unspent money must be returned.
The investment agreement signed by Chen Pingjiang and Sequoia Capital clearly specified the payment terms and schedule for the financing funds to ensure their smooth arrival.
Chen Pingjiang needed to seize the opportunity to catch Xiaonei.com and QQ Zone off guard before they could react, so he had to secure a bit more financing.
Such a strong fundraiser like Chen Pingjiang is rare.
Generally, venture capital institutions, for their own benefit and to reduce their own risks, will set up various repurchase methods.
For example, a live streaming platform started by the son of a certain richest man triggered repurchase conditions, and because he signed personal joint liability, he had to pay compensation even after it collapsed.
Many companies in their Series A financing already include repurchase clauses conditioned on "completing a qualified IPO/M&A within a specified period" or "achieving specific business progress/operating performance conditions."
Of course, the feasibility of repurchase clauses in early-stage financing is another matter; the specified period for repurchase clauses may also be repeatedly postponed with increasing financing rounds.
Those who cannot wait for an IPO/M&A exit or repurchase can exit by transferring old shares.
When designing repurchase clauses, most investors try to include founders within the scope of repurchase obligors, as only by tying down founders can they prevent founders from "shedding their skin" and starting anew one day.
For repurchase clauses that bind founders with unlimited repurchase liability, whether such clauses are implemented in specific projects depends solely on which party has stronger leverage.
In this round of financing, Chen Pingjiang clearly belonged to the stronger party.
If Sequoia Capital didn't invest, there were still 79 others waiting in line.
Even a weak party like Liu Qiangdong in his early entrepreneurial days did more than just make bets with investment institutions.
Indeed, some investors like to gamble, but with no personal ties, why would investors be willing to bet real money on you?
Do you have flowers on your face?
Many entrepreneurs naively believe that their projects are good, with high returns, low risks, and a high success rate, so investors will definitely be willing to bet on them, or even that investors should be willing to bet on them.
But the reality is quite the opposite.
From an investor's perspective, since you are so confident, since you believe your project is foolproof, then even more various additional clauses should be added.
Performance commitments, valuation commitments, dividend commitments, IPO commitments, appointment of directors and supervisors, equity pledge, joint management of seals, licenses, and U-shields, one-vote veto rights, principal plus return repurchase, joint liability guarantees from your parents, wife, children, and entire family, and mortgage and pledge guarantees on all movable and immovable properties of your parents, wife, children, and entire family—add them all.
Since you claim to have absolute confidence in your project, then in your eyes, the project certainly won't have problems.
As long as the project doesn't go wrong, these clauses, even if written, won't be triggered, so why not write them?
Therefore, the essence is that investors are not very likely to make concessions on terms just because your project is good.
This is especially true for earlier-stage projects and for less familiar investors.
Of course, strong fundraisers are not nonexistent.
For example, in DJI's 2018 financing round, they openly and strongly demanded all potential investors participate in several rounds of bidding, and investors also had to pay a deposit.
They forced all investors to compete against each other, and then they chose the one with the strongest capabilities and best terms to sign with.
But even though Chen Pingjiang was so assertive and rejected various demands from Sequoia Capital, considering such a high financing amount for a Series A round, basic repurchase clauses were inevitable.
However, he didn't even want to consider personal joint liability; Chen Pingjiang would not sign it.
There were a total of two investment agreements: a capital increase agreement and a shareholder agreement.
The former mainly covered content related to capital increase, including valuation, pre- and post-investment equity ratios, and closing conditions.
The latter primarily outlined the rights enjoyed by investors as shareholders.
It stipulated tag-along rights, meaning that when the company's overall sale reaches a satisfactory price or condition, investors, as minority shareholders, hope to exit through that overall sale.
It stipulated repurchase rights, if an IPO was not completed within 5 years or if the company or shareholders committed a serious breach of contract (which is actually difficult to trigger).
Additionally, both parties also signed anti-dilution clauses, pre-emptive rights, liquidation preference clauses, founder restriction clauses, and most-favored-nation clauses, and stipulated board seats.
In summary, this $50 million was not a free gift from Sequoia Capital; Chen Pingjiang, as the founder, also needed to fulfill many obligations.
No matter how strong you are, rules must be followed, or else who will want to do business with you in the future?
(End of Chapter)