Although Ding Zhenglin came from Sequoia, he was very objective in his analysis of the problem.
For the Internet industry, Sequoia was indeed too awesome.
Not to mention anything else, just the number of companies that he had successfully gone public had exceeded 200. This ability could be said to be heaven-defying in the venture capital industry.
If a venture capital firm invests in a successful enterprise, it can be said that the venture capital firm has good foresight or is relatively strong. However, if the venture capital firm invests in hundreds of enterprises and most of them are successful, it must be because the venture capital firm itself is very strong.
First of all, if his strength was slightly inferior, how could he invest in hundreds of companies around the world?
Secondly, among the hundreds of companies, half of them could successfully go public, but do not think that the other half of the investments had failed. On the contrary, in the other half of the investments, most of Sequoia's investments had successfully made money and retreated.
Sequoia was not only good at playing long-term in the capital industry, but it was also good at doing short-term in the capital industry. For example: investing ten million in a company's Series A, holding 20% of the shares, valued at fifty million. By the time the company's Series B or Series C financing, Sequoia had already valued the company at five hundred million. Although the shares in its hands had been diluted for one or two rounds, it could still retain at least ten percent. At this time, if Sequoia was not optimistic about the company's prospects and wanted to get out, they could use their priority rights in the Series A financing contract to directly take tens of millions and retreat. Perhaps the company would have died before the next round of financing, and the venture capital funds that could not be withdrawn in time were all wasted. However, Sequoia could make tens of millions of profits from the company through its own short-term operations, timely cash out, and retreat.
Therefore, if the success of a project was measured by making money, Sequoia's success rate would be even higher. Half of the companies that he invested in could go public, and most of the other half would also make money. The overall success rate was extremely high.
This extremely high success rate could not be supported by luck and vision. It was completely dependent on strength.
As a veteran in the Internet industry for many years, Li Mu had heard of Sequoia's name. He even had some personal experience.
In his previous life, a company that he used to work for was invested in Series A and Series B by Sequoia. In the end, it was Sequoia who came forward, packaged the company, and sold it to a central enterprise group at a high price. After Sequoia successfully cashed out, it patted its butt and left. Li Mu's boss also cashed out and left, leaving behind a group of old employees. Originally, Li Mu did not want to resign, but he did not expect that after being incorporated by the central enterprise, the central enterprise would send a boss who did not understand the Internet to oversee the company. Every day, he would come up with all kinds of whimsical ideas. When he left, Li Mu could only take the initiative to resign. When he left, he did not even get a penny of compensation.
To some extent, Li Mu could be considered as someone who had been indirectly cheated by Sequoia. However, the more it was like this, the more he knew in his heart how amazing this company was. It could definitely play with the capital. Therefore, Li Mu was also inclined to take Sequoia's money.
However, inclination was only an intention in the heart. Although Sequoia was amazing, Li Mu still had to consider the strength of many venture capital institutions, the price they gave to Makino Technology, and the specific contract terms.
In Li Mu's view, any capital, including Sequoia, must meet a few preconditions to invest in Makino Technology. First, they must not interfere with the company's operation in any form. Second, they must not invest in direct competitors of Makino Technology in the industry in any form. Third, they must not cash out before the successful listing.
Therefore, Li Mu said to Ding Zhenglin, "You can choose Sequoia to come to talk. At the same time, you can also contact a few other overseas venture capital institutions. Tell them that as long as the market value of Makino Technology is more than 10 billion yuan, everyone can sit down and talk. If they don't agree, you don't even need to meet them."
In Li Mu's view, Makino Technology had such powerful resources in its hands. Its foundation was so good that it made people's hair stand on end. In the Hua Xia Internet industry, its advantage was even more obvious. With such a good foundation, if they did not agree with the valuation of 10 billion yuan, then there was really no need to meet with such capital.
Ding Zhenglin nodded and said with a smile, "I am most familiar with capital relations. I know more about the more well-known venture capital institutions. I can directly find the key person in charge. I will follow up on this matter. I will report to you immediately when there are results."
“OK。” Li Mu nodded slightly. "You are responsible for spreading the news to the capital industry. If there are any who meet the requirements, find me to meet with them."
Kong Lingyu saw that Li Mu was ready to meet with the capital industry, so he could not help but ask, "Boss, if our valuation is in the tens of billions, then what is the approximate scale of our financing?"
Li Mu said, "My plan is to sell 10% of the existing shareholders as a whole, so the scale of financing will definitely be more than 1 billion yuan."
Kong Lingyu asked subconsciously, "What do we need so much money for?"
As soon as this was said, everyone else looked at Li Mu.
Yes, what do we need money for?
Makino Technology's current team was very large, and the operating costs were not low. However, because of YY's value-added services and the money-making machine of Happy Farm, coupled with the income from YY's gaming hall, the overall cash flow was very healthy. Even without capital, everyone could still run this huge business well. So, if Li Mu wanted to raise funds at this time, what did he need money for?
Seeing that so many people were staring at him, Li Mu smiled and said two words, "Burn it."
"Burn it?"
"Yes, burn it!"
Li Mu said resolutely, "The scale of financing of more than 1 billion yuan will all be burned within a year. As for where to burn it, my current idea is: at least 50% globalization, 30% new business development and expansion, and 20% R&D team."
Once he said "at least 50% globalization", everyone understood in their hearts.
Li Mu's concept of globalization was the same as the battle against Teng Xun. The main purpose was to avoid the sharp edge and move secretly. As for how YY could achieve the goal of globalization, Li Mu had already decided on the core strategy, which was to use social games as a trump card. First, he would attract users in the overseas market, and then, through the medium of social games, he would subtly let users accumulate and develop their own connections.
The English version of Happy Farm, Town of Paradise, had now been developed. The next step was how to introduce this game to the overseas market.
When Kong Lingyu heard that Li Mu wanted to use at least half of the Series C financing funds to go global, he could not help but ask him, "Boss, since there is so much money being deployed, should we make some adjustments to our next step of globalization strategy?"
Li Mu shook his head. "It's better to use Happy Farm to open up the market. If there is more money, we can use it to invest in marketing and operations."
As he spoke, Li Mu explained in detail, "Marketing is the fastest way to burn money. If there is more money, we can put more online and offline advertisements in the overseas market. This is the most direct way of marketing. As for operations, everyone can think about how to use a certain amount of cost to achieve an effect far higher than the cost."
"For example, after our Happy Farm is listed in the overseas market, we can continuously organize competitions among players in the overseas market. We can let users work hard to develop their own towns. The one with the highest total points within a specified time will win. The winner will get a cash prize of tens of thousands of USD. Such competitions will be held every week."
"Another example is that we can organize some special missions and activities according to Western culture. For example, planting pumpkins for Halloween, raising turkeys for Thanksgiving, and planting Christmas trees for Christmas. Each special mission will have a specific competition prize. It can be a car, a family trip, or cash or other forms of reward. In short, as long as we have money, we can spend it without any qualms."
When Kong Lingyu heard this, he was secretly speechless. Li Mu was really too confident in Happy Farm. If that was the case, most of the funds would still be spent on Happy Farm. Could it really be stable?
At this time, Li Mu said, "Oh yes, there is one more thing. I have been thinking, can Happy Farm release a client? In the future, the structure of our game will become bigger and bigger. There will be more and more elements, and the various missions and plots will become richer. If we still use Flash as the medium, it will become more and more troublesome. The repeated loading of materials will also increase the bandwidth demand on our server. Instead of that, we should make it a client-side game. This way, not only can the overall quality of the game be increased, the speed of the game and the bandwidth demand can also be reduced. "
The current Happy Farm was a web-based game. In other words, it was a web-based game. To put it bluntly, there was no need to install any software or materials locally. All the materials could be downloaded from the server online. If the user often used the same computer, the cache could solve part of the problem. However, every time the user changed computers, they would need to reload the necessary graphics, sound, and special effects materials. As the number of materials in the game continued to increase, the bandwidth demand would become greater.
However, if the game was made into a client-side game, the biggest advantage was that a considerable portion of the materials could be installed locally through the installation package. If it was the same dungeon, when the web-based user entered the dungeon, all the elements in the dungeon would basically have to be loaded online before the game could start. However, when the client-side game entered the dungeon, most of the materials could be transferred locally. The bandwidth demand would be greatly reduced. If there was a game content update, the client only needed to complete a routine update and install the updated materials locally to solve the problem once and for all. It was extremely convenient.
Moreover, as web-based games were limited by bandwidth, cache, and internal memory, it was difficult to be detailed. If one were to compare the degree of detail, it would be much worse than most client-side games, let alone those extremely powerful large-scale games.
Due to Happy Farm's multiple revisions, additional properties, maps, friend transactions, and a large number of quest systems, it was no longer the basic Happy Farm that only allowed players to steal vegetables. It was now more like a networked, upgraded, and expanded version of Farm Story.
Because of this, the current content, content, and playability of Happy Farm were very large. It was enough to support it from web-based games to client-side games. Moreover, as Happy Farm was a chibi cartoon game, its requirements for graphics, sound, and special effects were not as high as those of large-scale games. In fact, under the premise that the graphics were guaranteed to be beautiful, the requirements were also much lower than those of normal games. After the client-side game was made into a client-side game, the size of the entire client and the performance requirements for operation were also considered to be lower than other client-side games.
Although client-side games would increase the user's usage costs, Li Mu knew very well that as long as client-side games were made, Happy Farm, or rather, Paradise Town, would be able to achieve a qualitative breakthrough in the future.
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