The next day, Xu Xiaoming and Shen Beipeng came to the door together, and Zhang Yida received them in the office of Huimin Bicycle.
He Qingxuan made tea for the two investors, carefully exited the office, and locked the door.
Xu Xiaoming looked at Zhang Yida with a smile and said:
"You have a lot of good fortune, you have recruited young and beautiful female secretaries."
Zhang Yida shook his head repeatedly. This hat is too big and he cannot bear it. It is not good to leave a lustful impression to investors, as it will affect the overall evaluation of you as a person.
Investment means investing in people, and of course you will also evaluate the strengths and weaknesses of the founder.
Shen Beipeng adjusted his glasses and said:
"Your little girlfriend's family is not simple. Just take it easy."
Don't underestimate the investors' information channels. They have investigated many things about Zhang Yida, including his family background and his girlfriend...
Zhang Yida had a headache. Some time ago, he gave He Qingxuan a dozen companies to choose from, but she fell in love with Huimin Bicycle at a glance.
She majored in broadcasting and hosting. In addition to the R&D position at Yimin Bicycle, she also has an operation position and an offline dispatcher.
Neither of them were suitable for it, so I temporarily let her serve as his assistant.
Xu Xiaoming said to Zhang Yida seriously:
"When you become famous at a young age, you must not be arrogant! You must learn to restrain yourself! You are still young, so your focus should still be on your career.
When several of your companies have matured and gone public, no one will say anything about you no matter how cool you are."
Shen Beipeng said seriously:
"Don't look at the valuations of your current companies, which are in the billions or tens of billions. Before going public, these are just pieces of paper.
If you slack off midway, others will eliminate you. Starting a business is not just playing house, so you can do it yourself!"
Xu Xiaoming smoothed things over and said:
"Yida, don't blame us for talking too much. Beipeng's words are more straightforward, but they are also the truth.
If there is a fire in the backyard, there are not just one or two Internet CEOs who are ruined.
The reason why Tudou was acquired by Youku was not because of the divorce of the CEO and Youku being the first to go public.
It missed the best time to go public and ultimately could not escape the fate of being acquired.”
Zhang Yida knew about this incident that Tudou submitted the prospectus before Youku. As a result, the founder's divorce resulted in a freeze on the equity, making the VIE structure and company control unstable.
The divorce lawsuit went on for more than a year, and it took more than a year to go public.
When it went public, the market was not doing well, but after it went public, its stock price broke, and its market value was less than half of Youku’s. In the end, it became GG.
A large number of late-stage PE institutions that bet on Potato did not make any money because of this.
This incident has sounded the alarm to the majority of investors, and they are also paying attention to the spouses of the founders of invested companies.
Coincidentally, Boss Tudou’s ex-wife is also a broadcasting and hosting major at Beijing Communication University, and is He Qingxuan’s fellow senior...
Zhang Yida was a little speechless. He was a little thoughtful, but it was nothing more than that.
He thought so in his heart, but couldn't show timidity on his face. Zhang Yida smiled and said:
"She is my girlfriend's good friend and we are all acquaintances. It's not like you think!"
After Zhang Yida said this, Shen and Xu couldn't continue to dig deeper and started to return to the topic.
Shen Beipeng asked:
“I did some research on Huimin bicycles, and even found one on the street and rode it. After the experience, I felt it was very convenient.
What I am focusing on now is the upper limit of scale and the operation and management of bicycles.”
Zhang Yida said seriously:
“The establishment of this shared bicycle was also a result of my careful consideration. The bicycles have also gone through multiple rounds of testing from scanning the code to unlock, charging, and parking.
The product is already very mature and basically does not require major changes.
According to a survey on the scale of bicycles, the country can accommodate tens of millions of bicycles.
Riding a bicycle three times a day for 1 yuan each time can generate tens of billions of revenue a year.
In addition, the car body can also be used for advertising, and the APP can also be used for advertising after it has hundreds of millions of users. Advertising can also create billions in revenue.
As for operation management, we currently have a standard scheduling and operation system.
This system can be quickly replicated across the country, all that is missing is the funds to build bicycles."
Shen Beipeng nodded. Zhang Yida is becoming more and more mature in entrepreneurship. He has already considered everything from launching a new project to operational management and commercial realization.
Xu Xiaoming interjected:
"The operation and management of tens of millions of bicycles probably costs a lot. Have you calculated the costs?"
Zhang Yida had already thought about these words and said directly:
"The manufacturing cost of 10 million bicycles is 10 billion yuan. Depreciation is divided into two years, and the annual depreciation cost is 5 billion yuan.
There are approximately 30,000 to 50,000 dispatchers, with an average salary of 100,000, and salary costs of 3 billion to 5 billion.
These are the two biggest costs!
The headquarters' R&D investment and employee salaries are at most several hundred million a year.
That adds up to almost 10 billion in annual expenditures! Just the same as the fees charged for cycling.
The income from advertising is the net profit! In the later stage, we will also cooperate with Ruixiang and Yimin to carry out some financial cooperation, such as deposit financial management and guide users to invest.
Huimin Bicycle will be a relatively frequently opened APP in the future, and its advertising value is needless to say!"
Shen Beipeng and Xu Xiaoming were silent and began to think.
The blueprint drawn by Zhang Yida is very grand. It is a bicycle company, and it is also an Internet company. In the future, it may become an Internet advertising company and a mobile offline advertising company.
If there is a net profit of 2 billion a year, a price-earnings ratio of 20 times would be a valuation of 40 billion, and a price-earnings ratio of 30 times would be a valuation of 60 billion.
There is a chance to become a billion dollar company!
Shen Beipeng spoke and said:
“The blueprint is grand and it is indeed possible to achieve it. But how can we be sure that the final winner will be Huimin Bicycle Nan?
The model of Huimin Bicycle is too easy to be imitated. Just find a bicycle factory and build an Internet platform to start it.
Without any commercial barriers, it will be a subsidy war to attract followers.
Huayi Capital has also invested in Didi and Magnesium Group, and you must be very aware of their current situation.
Being caught up in this kind of subsidy war, let alone making a profit, it would be nice if we don’t burn billions a year.”
Shen Beipeng is indeed an old fox, as if he saw the future all at once.
But this is the current situation. All Internet platforms are burning money to grab the market. Huimin Bicycle can easily fall into this quagmire.
However, Zhang Yida was very confident, stretched out two fingers and said:
"Within two years, defeat all opponents!"
Shen Beipeng motioned for him to continue speaking, and Zhang Yida continued:
"We currently have a first-mover advantage of several months, and utilizing that properly will be our greatest advantage.
First, we obtain financing first, then we can build more cars and occupy more market share.
In this round of financing, I will build 100,000 vehicles and put them in three other first-tier cities.
By the time we finish the investment, the followers will almost appear. But it doesn’t matter, we will always be one step ahead of them.
My goal is to double the number of registered users and the number of bicycles in 3 months.
Then a round of financing will be launched in 3 months, with the valuation doubling in each round of financing.
Taking October 2014 as .asxs., another 200,000 bicycles will be manufactured by the end of December 2014.
In October 2015, the cumulative number of bicycles reached 2+10+20+40+80+160=3.12 million bicycles.
It is necessary to defeat all opponents through the continuous number of bicycles and the pace of financing.
It takes one year to determine the balance of victory and defeat, and two years to defeat all opponents.
When we have 10 million bicycles in two years, I believe no capital company will dare to spend another 10 billion to compete with us."
Shen Beipeng understood that this was a blitzkrieg, to occupy most of the market as quickly as possible. Then he would take the toughest stance to all types of capital, asking them to give up their unrealistic fantasies.
The method is a bit simple and crude, but it is indeed the most suitable for this industry, and Huimin Bicycle also has this first-mover advantage.
Xu Xiaoming grasped the key point and asked: "If the data doubles in 3 months, the valuation will double. This will test your operational capabilities!"
If you can do this step, no one will dare to compete with you in a year."
Zhang Yida smiled and said:
"As long as the ammunition supply can keep up, data doubling will only get faster and faster, not slower!"
Xu Xiaoming thought about it. As long as the amount of financing becomes larger and more bicycles are built, the average number of users per bicycle will only increase.
Shen Beipeng said:
"Tell me! How much should you melt?"
"The angel round raised US$2.5 million, and the post-money valuation is US$50 million. It's not too much for me to ask for US$200 million now!" Zhang Yida glanced at the two of them and said calmly.
Xu Xiaoming mused that the valuation has quadrupled in one month, which is not too much! However, considering the current popularity and future business prospects of Huimin Bicycle, it is not particularly excessive.
Shen Beipeng touched his chin. In fact, his psychological price range was between US$100 million and US$200 million. The pre-money valuation of US$200 million was in the higher range.
But in the future, Huimin Bicycle will become a financing machine. It currently holds 20% of the shares, but it may be diluted to less than 10% in a year. This is a bit unacceptable.
If you invest US$50 million now and hold 20% of the shares, according to what Zhang Yida said, the company's valuation will increase 16 times to US$3.2 billion in one year.
At that time, the shares will be diluted to only 8%, which is worth 250 million U.S. dollars. It can be regarded as a five-fold increase, but in terms of amount, he has earned 200 million U.S. dollars. The absolute value is not high.
At a valuation of US$3.2 billion, the value of Huimin Bicycle has been basically squeezed out, and there is not much potential for future growth.
Investing! It must be to maximize profits. So he was a little unwilling.
Shen Beipeng glanced at Zhang Yida and said:
"The pre-money valuation of US$200 million is acceptable, but I want anti-dilution clauses or expanding the scale of Series A financing."
"How much can we expand the scale to?" Zhang Yida asked tentatively.
"Let's say 30%!" Shen Beipeng was very worried. He planned to get more shares in the early stage without fear of dilution in the later stage. This is called maximizing investment returns.
Zhang Yida shook his head: "30% is too much, and we will have to go through multiple rounds of financing in the future. Now I will release at most 20%."
However, Zhang Yida added: "I can give you anti-dilution clauses, but only within the next one year. And it must be an AB share model."
Shen Beipeng smiled and said, "Of course."
What Zhang Yida thinks is that as long as it is an AB share model, it will be fine to maintain control. He does not care who owns the financing shares, and Heishi understands that he wants to maximize profits.
The three parties thus drafted an investment agreement.
Blackshirt Capital led the investment with US$40 million, followed by Zhenke with US$10 million, and invested US$50 million in Huimin Bicycle based on a pre-money valuation of US$200 million.
The shareholding ratio after financing changes to:
Zhang Yida:68%
Option pool: 8%
Huayi Capital: 4%
Blackshirt Capital: 16%
Zhenke Fund: 4%
The voting rights of Zhang Yida are 20 votes per share, and the voting rights are firmly controlled at 97.7%.
Unless the shares are diluted below 5% on any day, the voting rights will be lower than 50%.
This is also considering the crazy financing rounds in the future, so we have prepared in advance. 10 voting rights per share is not safe enough, so it has been abruptly changed to 20 votes per share!