2003: Starting with Foreign Trade

Chapter 492 "A True Billionaire!"

The "division of spoils" is complete.

In Orange Technology's actual shareholding structure, Cheng Hao's and employee shareholdings remain unchanged, while Tan Jincheng's shareholding has decreased to 32.6% and Gu Qingqing's shareholding has decreased to 5%, with their combined shareholding decreasing from 57.6% to 37.6%.

Sun Tongyu holds 10% of the shares, becoming a new shareholder of Orange Technology after the Series C financing. Qiming Venture Partners' shareholding has increased to 13%, Tencent's to 14%, and the most powerful Sequoia Capital's shareholding has increased to 15%, becoming the second largest shareholder of Orange Technology.

Gu Qingqing's shareholding decreased the most, dropping from the second largest shareholder to the second-to-last largest shareholder, only higher than Cheng Hao.

Orange Technology now has eight shareholders, including the founder, employees, technical talents, and investment institutions responsible for providing funds and paving the way for the IPO. The listing requirements are all in place.

After the Series C funding round, there were only eight shareholders, including the founders, which isn't a lot. Orange Technology's shareholder structure is relatively simple.

Having reached this point, Tan Jincheng has paved the way for Orange Technology.

By generating revenue through social mini-games and future in-app mini-games, Orange Products will also engage in e-commerce to ensure the company's cash flow. Simultaneously, it plans to raise funds through an IPO to provide cash flow for big data research and development in the field of future intelligent vehicles.

In this way, Orange Technology will transform from an internet-driven company into a high-tech enterprise, making it more valuable.

Physical manufacturing combined with cutting-edge technology – that's the kind of intelligent manufacturing enterprise I envision.

"Alright, the shares have been distributed. Now it's time to talk about valuation. Get ready to send me the money, brother, I'm broke," Tan Jincheng said with a smile.

This is what he cares about most. He was in a hurry to complete the Series C financing two years ago, partly because Orange Technology was short of money, and more importantly because the internet valuations were high at that time, and it was a hot investment period, so it was easy to get money.

Valuation, while supposedly based on a system, is largely arbitrary. With the financial crisis coming next year, valuations will be at least halved, and many investment institutions will be hesitant to invest.

If you don't cash out now while valuations are high, are you going to wait until next year?

As for whether these individuals will complain about Tan Jincheng cashing out from them when valuations were high next year, there is absolutely no need to worry about that. First of all, they are professional investment institutions, and also among the most outstanding talents, possessing highly professional judgment.

At this moment, they would only think that they had gotten a good deal, which can be seen from the fact that they were scrutinizing every half point of their shares. There was no reason for them to doubt Tan Jincheng.

The global financial crisis of 2008, or the subprime crisis, was actually quite unexpected. Even from the very beginning, many countries did not expect it to have such a wide impact.

The risks triggered by the US subprime mortgage crisis eventually spread globally, evolving into a global financial crisis. In fact, there were signs of this as early as April of this year.

In April, New Century Financial Corporation, the second-largest subprime mortgage lender in the United States, went bankrupt, exposing the risks of subprime bonds. However, the Federal Reserve responded quickly, launching a series of policies starting in August to inject liquidity into the financial system and boost market confidence.

The US stock market quickly stabilized under the stimulus of these policies and has remained at a high level ever since.

This gave the market confidence that the US would solve its domestic subprime mortgage problem. Almost all professional financial institutions maintained a relatively optimistic attitude and rarely thought about a financial crisis or a global financial crisis.

Even in the first half of 2008, this risk was not particularly prominent.

Until the bankruptcy of Lehman Brothers.

If Tan Jincheng were to confidently assert that a financial crisis would occur next year, it would certainly make him a laughingstock. Therefore, even if he were to swindle them, he would feel perfectly justified in doing so.

In short, even if I don't trick them, they'll just give it to someone else anyway, so I might as well trick them instead.

Take Kuang Ping for example. The company he invested in, Touch Media, seems to be involved in some kind of smart advertising for taxis. Tan Jincheng didn't quite understand the specifics, but in the future, he didn't seem to have heard of it. It's estimated that this investment wasn't anything special.

There are also companies like Jiayuan.com, which, although they have survived, are just so-so.

As for Vancl, which Kuang Ping also wanted to invest in, it has always been ridiculed as a major disgrace in Lei Jun's investment career. No one knows how much money he invested or how many times he tried to save it, but he just couldn't save it.

It can only be said that Mr. Chen, the boss of Vancl, is indeed Mr. Lei's true love.

By the way, Lei Jun is about to step down as CEO of Kingsoft and enter a period of uncertainty in his life. Kingsoft has already announced this news. Also, Wang Xin of Xiaonei.com launched HaiNei.com on November 16.

Xiaonei.com was being repeatedly defeated by Kaixin.com, but Wang Xin had no intention of starting a food delivery business yet. His entrepreneurial focus remained on social networking sites, including Xiaonei.com, the newly launched HaiNei.com, and Fanfou.

Interestingly, this future food delivery tycoon had been trying to get his fellow townsman Zhang Yiming to start a business together, but Zhang, who only graduated in 2005, clearly didn't think much of him, or perhaps he wasn't very interested in his social networking sites.

After graduation, Xiao Zhang joined KuXun.com as an engineer. KuXun.com is a travel website, and its style is roughly a combination of Qunar and Wofeng.com.

Tan Jincheng is actually more concerned about this person than Wang Xin, a competitor he occasionally encounters. His big data system is truly impressive and should provide a good experience when applied to the field of intelligent vehicles.

It has to be said that a truly capable person is capable no matter where they are; even at work, they are far more capable than the average office worker.

Within a year of joining Kuxun.com, he was promoted to senior technical manager. Due to his new technological breakthroughs, 24-year-old Zhang Yiming was promoted to chairman of the technical committee.

Kuxun.com provided him with a 40-person development team to work on technology research and development as well as backend technology.

Although he was only responsible for product technology, he was more professional than anyone else when it came to user product experience issues. He often helped his colleagues solve problems in this area and was frequently taken by the company's director to meet clients.

He even takes charge of training and explaining to new employees.

Earning one salary while doing three jobs, and doing them all well, she's practically a role model for post-80s newcomers to the workplace.

Tan Jincheng really wanted to get to know him if he had the chance, but since the Flash Group hadn't ventured into the tourism business, it would be difficult to make contact through official channels. It seemed he would have to find a way through Wang Xin.

These two fellow villagers had known each other for a long time. Although Zhang Yiming was not willing to work with him, the two had a good relationship.

If Renren.com can't hold on any longer, then let Orange Technology acquire it. We'll see if we can get to know Zhang Yiming then. As for Wang Xin, Tan Jincheng knows him.

It's a pity that such a brilliant person is destined not to be recruited. Brilliant people are inherently restless, like Wang Xin, who hasn't stopped stirring things up since returning to China. Zhang Yiming is currently working a regular job, but he won't be able to settle down for long. Working a regular job is out of the question.

Even for someone like Sun Tongyu, Tan Jincheng could only allow him to join Orange Products Club in a cooperative manner. After a certain period of time, just like Lei Jun leaving Kingsoft, he would also leave.

"The valuation we discussed is 32 billion for Orange Technology as a whole, 22 billion for Orange Products, and 10 billion for the Kaixin.com project. Do Mr. Tan and Mr. Sun have any objections?"

Although Sun Tongyu holds the most shares, in reality, the publicly announced investment was led by Sequoia Capital. As soon as Tan Jincheng finished speaking, Shen Nanpeng announced the valuation.

This shows that they had already calculated the valuation in private. In Shen Nanpeng's plan, if it weren't for Sun Tongyu's appearance, he would have wanted to join forces with Tencent to take over this round of financing according to the normal financing process.

Sun Tongyu clearly has his own valuation for Orange Technology, which is mainly due to the difference in valuation between Kaixin.com and Orange Products. Overall, the values ​​are not too different.

"Only 1 billion on Kaixin001? Mr. Shen, are you dissatisfied with my previous work?" Gu Qingqing interjected.

The Series B funding round did take advantage of the Orange Products project, resulting in a relatively high valuation. However, since the valuation of 7.6 million was accepted, it means that Orange Technology's value at the time was recognized. It makes no sense that the valuation would only increase to 10 billion when games like Happy Farm became increasingly popular and generated more and more cash flow.

"That's not what I meant. It's just that the investment at the time included Orange Products' plans. After all, the space for social mini-games is limited, and a valuation of 10 billion is not low."

"That's true, but Mr. Shen is abroad, so he should have heard of app development for Android and iOS systems, right? And everyone here should have used an Apple phone."

The CEO, who hadn't spoken much before, took over the reins from Boss Tan and started firing on all cylinders.

"Everyone is surely familiar with the 3G network currently under construction in China. The iPhone is a stunning product, and it's only a matter of time before it enters the Chinese market. I believe Mr. Sun and Mr. Ma are also familiar with APP development."

"Currently, Orange Technology has completed the iOS development of some mini-games such as Happy Farm. In addition, we have many more mini-game development projects for smartphone systems in the future."

After a pause, Gu Qingqing glanced at Tan Jincheng and said with a smile, "By the way, these mini-games all come from Mr. Tan's inspiration. They're the same as the Happy Farm series. Mr. Ma knows better than I how profitable mini-games are."

"So, do you all still think that Kaixin001's business doesn't have much market potential?"

Jin Cheng was renowned as an outstanding product manager. The ideas for a series of projects at Orange Technology, including the Orange Products Club project, all originated from him. The market's response left the group speechless.

"But it will take several more years for smartphones to enter the domestic market. Who knows what will happen in those few years?"

"But we can make games and export them overseas. If we can't release them domestically, we can do them overseas first. I think everyone agrees on that."

Tan Jincheng then interjected, "Everyone, don't forget that all my businesses have export plans, whether it's physical or online, and the overseas expansion plan for games has always been in progress."

Pony Ma (Ma Huateng, founder of Tencent) knows best how profitable the gaming industry is. Without gaming, after losing China Mobile as a major client, Tencent would have struggled to survive, let alone join the ranks of BAT (Baidu, Alibaba, Tencent).

"But 10 billion, including the overall valuation of 32 billion, is really not low. President Gu should know that Orange Technology is a small company, and President Tan's vision for Orange Technology is also small but beautiful."

"Your valuation of Orange Products is indeed very generous, and I thank you on behalf of all the employees of Orange Technology. However, we should not overlook the efforts of our Kaixin.com project team and all the backend developers."

"A valuation of 32 billion is not low, but it can be higher. Moreover, since Mr. Tan and I have released so many shares at once, everyone should give us some return. You should know that Mr. Tan has always valued shares very much."

Kuang Ping has a say in this matter. He wanted more but they refused to give him anything. To be honest, he felt a little awkward sitting across from them now. He should have just held a video conference in the hotel.

"Don't be so stingy. You're all people who aren't short of money. A valuation of 32 billion is indeed very sincere, but if you give us a little more, we can burn even more money. We won't ask for more, 35 billion will do, how about it?"

32 billion is definitely not their bottom line. Both Tan Jincheng and the others know this. Who would state their bottom line price right away?

"Adding 300 million at once, Mr. Tan, you're really boastful," Sun Tongyu chuckled.

He acquired 10% of the shares. For every additional 1000 million yuan in valuation, he would have to pay an extra 100 million yuan. This one-time price increase by Tan Jincheng would cost him an extra 3000 million yuan.

He's not short of money, but compared to these lavish venture capital firms, he's still far behind. If they increase the investment too much, he really won't be able to handle it.

"Haha, Mr. Sun, don't be in such a hurry. It's true that you are an investor, but you are also the future CEO of Orange Products. You have to stand up for Orange Products and even the entire Orange Technology."

"How can you use your own money to pay for something? You've taken away 3000 million of my money. Is this what you call paying to work?"

"Then name your price, anything a little more than 32 will do. Don't try to come up with a fixed price. Like Mr. Gu said, I've transferred so many shares, you should at least give me some face, right?"

The video conference had already exceeded the original planned time due to the arguments, and there was no point in continuing to argue about some cash-related disagreements. The valuation was definitely inflated, but it would have been normal in 2007.

If we can achieve an overall valuation of 20 billion after the financial crisis breaks out next year, we'll be lucky.

Ultimately, Orange Technology's overall valuation was set at US$4.5 million, equivalent to approximately RMB 34.2 billion, representing a 4.5-fold increase compared to its Series B round valuation!
Tan Jincheng was not dissatisfied with the result; the total value of the shares transferred by the two individuals was RMB 6.84 million, amounting to RMB 34.2 billion.

Series C funding is always the period when founders are most willing to cash out, and Tan Jincheng doesn't need to be coy; after all, he's giving up so many shares for the money.

After deducting outstanding debts and funds reserved for the company, Tan Jincheng and Gu Qingqing cashed out a total of 2.89 million yuan, with Tan Jincheng cashing out 1.69 million yuan and Gu Qingqing cashing out 1.2 million yuan.

Since starting his business in 2004, although he claims to have a net worth of over a billion yuan, Li Tanjincheng's account has never had much money.

How to put it? We've always lived a very frugal life.

Now, his account balance has finally exceeded nine figures, making him a true billionaire!

"Damn it, this is too difficult. These people aren't as well-dressed as I imagined. When they haggle, they're no different from the aunties at the market."

(End of this chapter)