In a short period of time, Robin asked himself this question countless times.
Why was he, a top student in the United States, a pioneer in the field of computing, and a downright elite, defeated by a young man in his early twenties like Li Mu to the point where he could not even maintain his original level?
"I clearly have 80% of my strength. Even if Li Mu's strength is 800%, I should at least maintain 80% of my strength. But why does my 80% of strength have to be greatly affected by his strength when I encounter his strength?"
This feeling was depressing. It was like playing a game. Not only was the opponent's attack and defense much higher than his, but he also had a buff that reduced the enemy's damage and defense. What should he do? Robin was in despair!
Li Mu had already concluded that in negotiations, one must stand on the side of crushing the opponent's psychological defense. Even if one's strength was not enough to crush the opponent, one must crush the opponent in terms of momentum.
In fact, Robin could have said with a strong backbone, "Whatever you have, I'll take it. We'll meet again in the real world."
But he did not dare to do so because he was completely overwhelmed by Li Mu's momentum. He believed in Li Mu's threat and subjectively believed that Li Mu would definitely do so. At the same time, he lacked confidence in himself. If Li Mu spent money to poach people from Baidu and Google, and used his own resources to build a search engine, Baidu would soon be in shambles. If Li Mu really cooperated with Google, Google would not ignore this world-class Internet giant. If Google cooperated with Li Mu, Baidu would most likely not escape death …
Subconsciously, Robin had stopped thinking about how he should fight back. There was only one question in his mind. Li Mu wants me to sign my name. Once I sign my name, I'll be considered to have boarded his ship. That's not a bad thing. Everyone wants to be able to lean on a big tree and enjoy its shade. However, the key question is, how much is the ticket to lean on a big tree?
15% of Baidu's shares?
To be honest, that was too high.
Easy Listening Technology really didn't have that big of a future, especially after Li Mu had already separated himself from Tieba.
Baidu's valuation of 120 million USD was indeed not high, and the company's future was very promising. However, if Baidu diluted its valuation by 15% at this time, it would be too embarrassing for him and his team's future capital operation.
Jimmy was also worried. He was worried that if Baidu agreed to Li Mu's request, how would they give him the 15% shares?
Normally, if a shareholder wanted to sell 15% of the shares, then all the shareholders would have to sell their shares in the same proportion. De Fengjie currently held nearly 23% of the shares. If he wanted to sell 15%, he would have to take out nearly 3.5% of the shares. De Fengjie did not want to dilute his shareholding ratio.
He wanted to say something, but when he thought of Li Mu's poisonous tongue, he shrank back.
At this time, Robin said, "Li Zong, we need to discuss this again."
Li Mu said, "Sure, we can leave at any time and leave the conference room for you to discuss."
Robin nodded, "Okay, then please give us an hour to discuss it in detail."
Li Mu said, "I have another condition, you can discuss it together."
Robin hurriedly asked, "What condition?"
Li Mu said, "In addition to exchanging Easy Listening Technology for 15% of Baidu's shares, I personally want to invest 10% of Baidu's shares in cash. The price can be as you said, 120 million USD. You can sell 10% of the shares to me in cash, and you, the original shareholders, can get some cash out first."
Speaking up to this point, Li Mu looked at Robin and smiled, "Robin, you haven't had a chance to cash out since you started the company, right?"
Robin hadn't recovered from Li Mu's exorbitant demand. When she heard Li Mu's question, she subconsciously nodded, "Not yet."
How could it be so easy to cash out?
Capitalists like De Fengjie would monitor every penny they gave to Baidu. Although they wouldn't monitor every penny, they would also require all the money to be used for Baidu's own operations. How could Robin put all the money into his own pocket? Even though Baidu's valuation was over 100 million USD now, he could only get a monthly salary! He was really only getting a salary! The shares were there, but the capitalists wouldn't allow him to cash out!
In fact, this couldn't be blamed on the capitalists. If the capitalists invested in a team or a project, and the valuation was 10 million USD, and they gave them 1 million USD and 10% of the shares, the 1 million USD would be used to run the company, not for themselves. Otherwise, if they split the 1 million USD, the company would still have no money to run the company. After a few days, the company would go bankrupt, and the capitalists would be the ones to take over the company.
Therefore, almost all the capitalists would set clear requirements for their investment targets, and they wouldn't be allowed to cash out. Unless the capitalists invested in the project, the project had already received several rounds of financing, had a good foundation, and had room for development, and the investors had the right to speak. Only then would they ask the capitalists for the amount of financing and cash out.
Just like Li Mu, when he was financing Series C, he made a clear request to Sequoia. The shareholders had to cash out 10% of the 3.3 billion USD that came in, which meant that 330 million USD of the 3.3 billion USD was taken by the shareholders.
At this time, Li Mu struck the iron while it was hot and said, "I will invest 12 million USD in Baidu, and it can be considered as buying your shares directly. You can cash out freely. I have no objections."
Robin was surprised by Li Mu's generosity. Li Mu allowed them to cash out 100% of the investment. This was a very tempting offer. Everyone had started a business for so long, and they had a net worth, but they had not made any money. On the road of entrepreneurship, everyone wanted to get a large sum of money to reward themselves. If 12 million USD came in, and if they cashed out half of it, then the founding team would have tens of millions of RMB to share, and this would allow the core members to get out of poverty and become rich.
But then again, Li Mu wanted 10% of the shares, and this was too much.
If Yi Ting came in and took 15%, and Li Mu took 10%, then a quarter of Baidu's shares would be gone. If they agreed to Li Mu's request, then all the shareholders would have to dilute their 25% shares. De Fengjie would have to take out about 5.75%, the founding team would have to take out 15%, and the remaining small shareholders would have to take out 4.25%.
At that time, Robin's own shares would shrink to only a little more than 25%, and Li Mu would become the second largest shareholder of Baidu.
With so many shares being diluted, Robin inevitably felt the pinch, so he proposed to have a discussion within the team first. Li Mu respected his decision, and led everyone on his side out of the meeting room.
Before leaving, Li Mu looked at Robin and asked him, "Robin, how many shares does De Fengjie have in Baidu?"
Robin said, "About 23%."
Li Mu nodded. "What about voting rights?"
Robin said, "The same shares have the same rights."
Voting rights meant the actual management power of the company. Whoever had more voting rights could actually control the decision-making and development direction of the company. Sometimes, investors have the same rights for the same shares, which means they have the same voting rights. Sometimes, investors would give up their voting rights and hand over the voting rights to the company's founder, and then they would follow the founder to get rich. This way, they could also win the founder's favor.
Capital rarely gives up voting rights for a startup. Capital will only make such concessions when investing in a mature company. For example, when the Russian investment guru Yuri-Milner invested in Facebook, not only did he give up voting rights, but he also gave up his seat on the board of directors. This was to show goodwill to Mark Zuckerberg, telling him that he only wanted to follow him to make money, and he would respect his decisions. He would not go against him at any time.
However, Robin did not have the same fate as Mark Zuckerberg when he was at his peak. Although he was not willing to give up the same rights for the same shares, he had not found a suitable opportunity to take back his voting rights.
Li Mu smiled and said to him, "Although you have the same rights for the same shares, your team still has more than half of the voting rights. So I suggest that you don't care too much about De Fengjie's attitude. In this matter, they should respect your decision unconditionally. If they threaten you with the follow-up funds, then I can guarantee you with the contract that as long as you accept my conditions, in addition to giving Baidu 12 million USD of investment, I will unconditionally lend Baidu 8 million USD of interest-free loan within a month. The repayment period will be 3 years, and if it is not enough, I can extend it for another 5 years. If it is still not enough, I will lend Baidu another 10 million USD next year."
Speaking up to this point, Li Mu added, "If you accept, I will sign a concerted action agreement with you. I will entrust all of my voting rights to you, and I will not interfere with Baidu's operation and development. I will give you enough respect."
Although this was what he said, Li Mu knew very well that it was impossible for him not to interfere with the future development of Baidu. Otherwise, if it went astray again, he would have to bear the responsibility. However, even if he got 25% of the shares, and they had the same rights for the same shares, he would not have the absolute right to speak. When the time comes, if he really wanted to interfere with the future development of Baidu, it would not make much of an impact. Therefore, it was better to give up the 25% and use other means to interfere and restrict the future development of Baidu.
After Li Mu showed off his muscles to Robin, he was ready to throw a clear recruitment signal to Robin. There was not much meaning in following De Fengjie. In fact, De Fengjie's future still depended on Baidu to grow. Therefore, Li Mu wanted to give Robin a guarantee, a guarantee that allowed him to ignore De Fengjie. All Robin was worried about was money. As long as he agreed to Li Mu's terms, De Fengjie would only become more and more marginalized in the future. He would not have enough voting rights, and Robin also had the concerted action agreement signed by the owners of the shares. In other words, Robin still had the absolute right to speak.
This made De Fengjie's Jimmy a little uncomfortable.
If he was really ignored by Robin, then he was very likely to agree to Li Mu's request. At that time, De Fengjie would have to dilute his shares.
In fact, De Fengjie did not object to diluting his shares. It was just that Li Mu was asking for too much! They originally wanted to reduce the cost of acquiring Easy Listening Technology's shares to 10%, but not only did Li Mu not agree to it, but he also asked for an additional 10%, which made De Fengjie very uncomfortable.
However, Robin was enlightened by Li Mu's words. If he had a new capital guarantee, then there was really no need for him to always be under De Fengjie's control. You're an investor who earns money by investing. You should just follow others and make money. Don't meddle in other people's business!
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