After the cocktail party ended, Chen Wei found Lei Dongming who was about to leave and said, "Mr. Lei, are you free? I want to talk to you about something!"
Lei Dongming looked at the smiling Chen Wei and wondered what his intention was. Could he also follow Toutiao's example and clear out Huayi Capital's shares?
Ever since Huimin Travel started to launch taxi-hailing and ride-hailing services, the relationship between Chen Wei and Zhang Yida has become increasingly worse.
Huayi Capital has also been targeted, with many shareholders of Didi Chuxing clamoring for Huayi Capital to be eliminated.
Although Lei Dongming feels that Didi still has value-added potential, if the other party wants Huayi Capital to be eliminated, he can only accept this fact.
There is no way, from the beginning of its establishment, Huayi Capital has been deeply imprinted with Zhang Yida’s personal imprint.
Without Zhang Yida, Huayi Capital would not be what it is today.
Several successful investment projects in the early stages of fund operations, including Didi and Toutiao, were all found and approved by Zhang Yida.
Now it doesn't matter if he is out because of Zhang Yida, he has almost made enough.
It's just that Chen Wei hasn't made any move, and Lei Dongming has almost forgotten about it.
"Okay," Lei Dongming looked calm and looked around a few times, "can we talk here?"
"It's too noisy. Find a quieter place!"
Chen Wei found a quiet room in the hotel, considered his words, and said: "Didi has always had the ambition to enter the international market, but to develop on someone else's territory, we have to find two allies!
You also know that my equity in Didi is only a few percent, and if it is further diluted, it will probably become a decimal point."
Lei Dongming smiled and didn't say anything. He took a sip of coffee and thought to himself: Can you please be happy? Just talk about this and that.
Chen Wei felt a little angry when he saw that Lei Dongming was so calm.
I am forcing you to get off the bus, are you not worried at all?
Without Didi's shares, not only will you not be able to share Didi's future growth dividends, but you will also lose a successful investment case worth hundreds of billions of dollars.
No loss? No despair? No regrets?
"So we hope to sell some old shares, so that early shareholders can exit and obtain satisfactory returns while maintaining the management's shareholding ratio from declining."
"Okay, no problem," Lei Dongming nodded, "Based on the valuation of US$35 billion, Huayi Capital can sell all 1.49% of its shares."
Huayi Capital invested US$97.5 million in Didi in March 2014, acquiring a 7.5% stake in the latter. At that time, Didi’s post-investment valuation was nearly US$1.3 billion.
After that, Didi went through 9 rounds of financing and two rounds of mergers. Huayi Capital's shares were diluted by more than 80%, falling directly from 7.5% to 1.49%.
Of course, this is the result of Huayi Capital not participating in the investment and making additional investment.
It's not that Huayi Capital doesn't want to invest, it's that the Didi project is too popular and it can't get involved at all. Some top capitals are grabbing it.
For example: Penguin, Ali, CICC, CITIC, CIC, Anping, Temasek, China Life, Apple, Postal Service, Investment Promotion, etc.
Compared with these top-tier capitals, Huayi Capital is not qualified at all. It was good luck to get some shares in the early stage.
They will continue to expand financing in the future, and it will be great if you can get a share of the pie. If you still want to eat meat, just dream.
In addition, the equity transaction consideration for Didi's merger with Kuaidi was 52:48; the equity transaction consideration for the merger with Uber China was 80:20.
With these two mergers and acquisitions alone, Huayi Capital's equity was diluted by nearly 60%. Adding in nine rounds of financing, it is not surprising that the equity is only close to 1.5%.
The worst thing is Chen Wei. After 18 rounds of financing in Didi in his previous life, plus two rounds of mergers and acquisitions, Chen Wei only held 2.9% of the shares. Counting the shareholdings of other management, the entire Didi management only held a total of 5.88% of the shares.
.
"Multiplying US$35 billion times 1.49% is US$521.5 million, which we can accept."
Chen Wei looked at Lei Dongming, "But we also have a condition, that is, we hope that Didi's shareholding in Huimin Travel will be counted as part of the transaction consideration."
"Maybe this isn't enough?" Lei Dongming said lightly.
"It's not enough. Didi holds 1.82% of Huimin Travel's equity. Based on a valuation of US$8 billion, the value is US$145.6 million."
Chen Wei added: "We hope to transfer this 1.82% equity to Huayi Capital and use more than US$300 million in cash to make up the difference."
Lei Dongming shook his head and laughed, "Didi and Huimin's trip needs to be negotiated by yourselves."
Then he turned to look at Chen Wei, "Huayi Capital can withdraw from Didi, but we only need cash."
"Mr. Lei, are you not confident in Huimin Travel? Or do you think the valuation is too high?"
Lei Dongming shook his head, "Huayi Capital is a VC that focuses on early investment. We currently hold 1.76% of Huimin Travel's equity and have not made any follow-up investments.
Small-amount diversification is the operating logic of our fund, including investments in Toutiao, Didi, and Magnesium Group, which are all implemented in accordance with this rule."
"Okay, an all-cash transaction is also possible. Mr. Lei can come over tomorrow to sign the contract! Okay, that's it!"
Chen Wei stood up and wanted to leave. Before leaving, he looked back at Lei Dongming and left this sentence:
"Please tell Mr. Zhang that Didi wants to sell shares in Huimin Travel."
…
Huayi Capital Company.
"Lao Lei, yes! Two investments, 200 million U.S. dollars, in two and a half years, exchanged for 1.52 billion U.S. dollars!" Zhang Yida joked with a smile.
Huayi Capital made such a big move and recovered more than one billion US dollars in cash in a short period of time. So he came over for a meeting today and was going to discuss the money sharing with Lei Dongming.
"Mr. Zhang's leadership is good, and I will follow suit." Lei Dongming smiled modestly.
This is really not self-effacing. Huayi Capital raised US$250 million in the first phase and invested in a total of 4 companies, including TMD and Huimin Travel, each of which is well-known in the industry.
The investments in these four companies were all completed under the leadership of Zhang Yida, with Lei Dongming also helping out.
Although unicorns have emerged in the companies invested by Huayi Capital in Phase II and Phase III, they are far inferior to these four companies in terms of valuation and industry influence.
"You would be so humble now, if you hadn't helped Huayi Capital raise one-third of its investment funds in the early stages of starting a business.
Even if there are good projects, we can only watch from the sidelines!"
Zhang Yida did not feel that Lei Dongming was "making money" at all, although he made the greatest contribution in finding projects and also attracted two-thirds of the investment funds.
But Lei Dongming also contributed a lot to Huayi Capital, leaving aside his contribution to fundraising.
Equity investment funds include four links: “raising, investing, managing, and exiting.” Management and exit are also the responsibility of the other party to follow up.
In addition, Huayi Capital is also well managed by the other party.
Although it has never invested in any amazing projects, its development has been steady and fast.
Because most of the big fish in China’s Internet industry have been caught by Zhang Yida, even if Huayi Capital wants to achieve good results, it is estimated that it will not be able to find particularly good projects in a few years.
In addition, Huayi Capital's fourth phase of fundraising has also been completed. It manages a total of four US dollar funds and three RMB funds, and the total fund management scale has exceeded US$3 billion.
This scale of management is already very close to that of some well-established leading equity investment funds.
Of course, it is still far from the level of Gaoling Capital and Black Shirt Capital, which have a scale of tens of billions of dollars.
It is not as good as the previous ones but more than the inferior ones. In terms of the scale of fund management, it has basically crushed 98% of its peers.
According to statistics, excluding private securities investment funds, there are approximately 12,000 domestic private equity investment funds and venture capital fund managers, almost 27,000 funds under management, and an asset management scale of more than 6 trillion yuan.
In other words, the average fund size is less than 300 million yuan, and the asset management scale of a venture capital institution is about 500 million yuan.
Of course, this thing is just like the average salary, sometimes it feels too far off.
Because more than 87% of investment institutions have assets under management of less than 500 million yuan. The average data is driven up by giants such as Blackshirt and Gaoling.
In the same way, many people in China only have a monthly salary of two to three thousand yuan, but wealthy people have directly raised the average monthly salary to six to seven thousand yuan.
“Except for the four projects invested in the first phase, Magnesium Group and Huimin Travel, the other two major companies have all successfully exited.”
With a smile on his face, Lei Dongming concluded: "We still have a 0.58% stake in Magnesium Group, worth more than 120 million U.S. dollars; Huimin Travel also holds a 1.76% stake, worth more than 140 million U.S. dollars.
In total, the US$250 million invested by the first phase of the fund has now been returned to a total of US$1.78 billion.
In two and a half years, the return exceeded 7 times!”
"It's only 7 times! It's not much!"
Zhang Yida originally thought that he would earn at least one to twenty times, but the single-digit return multiple disappointed him somewhat.
"Mr. Zhang, 7 times is a lot!"
Lei Dongming smiled bitterly. This man really stood up and talked without pain. Do you really think that all equity investments can make money? And he made money several times.
"It's not bad," Zhang Yida said with a smile, "Except for Huimin Travel, we participated in the other three projects relatively late, either in the C round or in the D round."
"Isn't that right? Of the four projects, the one with the highest return is Huimin Travel. The initial investment of US$2.5 million has turned into US$140 million, an increase of 56 times!"
Lei Dongming added, "It's better to make early-stage investments to make money!"
"Wrong. The multiple looks high, but in fact it only made more than 100 million US dollars."
Zhang Yida chuckled twice, "If you look at the other three projects, Toutiao made more than 900 million U.S. dollars, Didi made more than 400 million U.S. dollars, and Magnesium Tuan..."
Zhang Yida then remembered that Magnesium Group seemed to have made more money than Huimin Travel, and asked: "What happened to Magnesium Group? The investment at that time was US$50 million. More than two years later, it has become US$120 million?"
"Um, Mr. Zhang, have you forgotten? Magnesium Group was already valued at US$3 billion when we invested."
Lei Dongming sighed, "Then Magnesium Group and Dianping merged in a 5:5 share exchange, and our equity was diluted by half.
In fact, Magnesium Group is now valued at US$20 billion, a large part of which was brought about by Dianping. It itself has not grown much.
This is also a bad habit! They merge at every turn. This is the case with the Magnesium Group, Didi, and the same is true with 58 and the others."
"Haha, if I can't defeat you, I will marry you!"
Lei Dongming gave a thumbs up, "That sums it up! That's it, we are all a family, so we can stop fighting and burning money. The investors feel very sorry for us!"
"Then should we give investors early dividends and exit now?" Lei Dongming asked.
"Divide it! The shares have been sold, and there is no reason to withhold investors' money."
Zhang Yida reminded again: "Calculate the annual compound return rate of our fund and see which level it is?"
"The annual compound return rate exceeds 240%, which is the highest level."
Zhang Yida was delighted, "Doesn't that mean we have to charge 50% of the investment income as a service fee?"
"Yes," Lei Dongming said again, "50% is a bit high! The industry practice is 2% management fee + 20% profit sharing.
In order to raise funds, some institutions with poor performance waive management fees and charge only 10%-15% for revenue sharing.
Our 50% is the highest in the industry!”
"A competent organization is naturally qualified to charge more." Zhang Yida knew what Lei Dongming was worried about, wasn't he afraid of scaring away customers?
However, when the LPs of the first phase of the fund were willing to sign this agreement, they felt that Huayi Capital could not achieve this compound rate of return.
Now that it's done, let's see what they have to say.
"I'm not afraid of anything. I'm just afraid that others will call us a black shop!"
Zhang Yida waved his hand, "Don't worry about whether it's a black shop or not, let's call the first-phase LPs for a meeting together! This is the first time our Huayi Capital has distributed dividends, so let's make it a little more grand."