The news of Weibo's Series B financing spread quickly.
In 2008, there were very few Hua Xia Internet companies that could raise funds, and even fewer that could raise funds on a large scale.
Weibo had a round of financing in the first half of 2008, and the amount raised was not small.
Sequoia, IDG, Baidu, and the Victoria Harbour Fund used 240 million US dollars in cash and some technical support to hold 20% of the shares.
In terms of cash flow alone, Weibo was valued at 1.2 billion US dollars after the financing.
However, Baidu provided more technical and channel support. According to the amount raised by Sequoia and IDG, Weibo was valued at 1.4 billion US dollars at that time.
It had been less than half a year since the last successful financing.
Weibo's financing, converted to RMB, was close to 1.7 billion RMB.
Logically speaking, Weibo would not burn money so quickly. Even if the international version was launched, global channels were opened, and Weibo's domestic publicity was developed, it would not need 1.7 billion in half a year.
However, Li Dong had already discussed this with the other party before the financing.
He would use 1 billion of the 1.7 billion capital. It was considered a loan, and the term was one year.
Li Dong had not returned the money yet. He would have to wait until next year at the very least.
And to be honest, the 700 million capital was not enough to last for long.
Weibo did not seem like much. Many people felt that a simple maintenance was enough. It was just a matter of paying a few dozen people.
700 million was more than they could spend in a lifetime.
But in reality, some things cost more than anyone could imagine.
Internet companies burned money. This was not an empty saying.
Everything else aside, just the development of the international version of Weibo, the addition of a domestic server, the activation of intelligent big data review, and the manual review team …
This series of operations had burned up more than 300 million on Weibo.
And the rest of the money was burned in China.
Weibo's user count had exceeded 200 million. It was not enough to rely on word of mouth.
In terms of publicity alone, PP, Far Away Portal, Far Away Mall, celebrity endorsements, ground advertisements …
This series of actions would also require money, and it would require a large sum of money.
Drainage was not a simple matter.
A few million registered users was not difficult. They just needed to advertise it a little. Tens of millions of registered users would require extensive advertising. Breaking 100 million users would not be a simple matter of advertising. There were many other things to support it.
All kinds of activities, the development of all kinds of new functions, and the creation of some hot topics needed to be managed.
The remaining funds of a few hundred million were quickly used up.
However, whether it was Baidu, IDG, or Sequoia, they were all extremely satisfied.
What's the big deal about burning a few hundred million!
Worth it!
During Weibo's first round of financing, Weibo's registered users had just exceeded 100 million. After burning a few hundred million, Weibo's registered users had exceeded 200 million!
Double!
Although the proportion of active users was slightly lower than before, the increase of 100 million users was enough to make these financing institutions smile.
According to the current market valuation method for internet companies, platforms like Weibo valued the number of users the most.
The relationship between a company's valuation and the number of users was square.
What did that mean?
In other words, a website with one million users and a similar website with ten million users would not have a difference of ten times, but the square of ten times, which was a difference of 100 times!
A company with one million users would be valued at 100 million. A company with 10 million users would be valued at 10 billion!
Of course, this statement was not absolute, but it showed the impact of the number of users on a company.
So far, the number of Weibo users had doubled. According to this calculation method, Weibo's valuation could be quadrupled from the base of two times, which meant the valuation had increased by four times.
It was obviously impossible to calculate it that way.
But no matter what, they had only burned 700 million RMB in exchange for such results. The few investment institutions were naturally overjoyed.
Weibo was now out of money, and the one billion Li Dong owed was not due yet.
The second round of financing seemed fast, but in fact, it was inevitable.
At least at this time, Weibo itself did not have many ways to make money. It mainly relied on advertising revenue. This bit of profit could not be used to burn money for long.
With the launch of the international version, it was time to use money. Whether it was Sequoia, IDG, or the other two companies, they were all happy to see Weibo continue financing.
If it was not for Li Dong's strong personality and his own strong capital, the few big investors would have taken the initiative to suggest it before he even mentioned it.
If it was another internet company, the investment institutions had a lot of say in financing.
In order to ensure the safety of their own funds, the investors would probably suggest to continue financing before the money was spent.
So far away, no one had mentioned it until now. Seeing that there was no money in the accounts, it was not that Sequoia and the others did not want to, but they knew that it would be pointless.
What kind of person was Li Dong?
If you took the initiative to mention it to him, he might not even bother to look at you.
If you had the ability, withdraw your investment. If you did not want to withdraw your investment, you had to listen to Li Dong.
If he wanted financing, you could continue financing. If he did not want to, you could either scram or continue to wait patiently. There was no third way.
Now that Li Dong had started Series B financing, even though the internal plan had not been released, the few big investment institutions had brought their people to Far away eagerly to hear what Li Dong had to say.
…
In the conference room.
Xiong Xiaoge, Shen Nanpeng, and the others had personally led the team.
Sequoia and IDG had invested hundreds of millions of US dollars in the previous round of financing. This was not a small amount.
Now that Weibo was going through Series B financing, they were not at ease to let their people come over. If they really let their people come over, it would be difficult to negotiate.
Li Dong had always been more domineering. If he made any unacceptable conditions, they would not even have a chance to negotiate without their presence.
The truth was just as they had expected.
Once they arrived, Li Dong called for a meeting. As soon as the meeting started, the first condition was already difficult for them to accept.
"On Weibo's side, I am preparing to reformulate the total share capital and issue additional shares.
Previously, after Weibo's share capital was raised, the total share capital was 140 million shares, valued at 10 US dollars per share.
Now that Weibo's value has skyrocketed, the international version has been launched, the number of users has doubled, and the number of active monthly users has increased by 70%.
I have a rough estimate in my mind, 2 billion US dollars.
Therefore, I am preparing to issue 70 million new shares, with a total share capital of 210 million shares.
Each share will be valued at 10 US dollars. So far away will hold 160 million shares, Sequoia and IDG will hold 14 million shares, Baidu will hold 10 million shares, and Victoria Port will hold 2 million shares. "
After Li Dong finished, he looked at everyone and did not say anything else.
Based on what Li Dong said, some people might be confused. Wasn't it 210 million shares?
But now, according to the ratio, everyone only held 200 million shares. What about the remaining 10 million shares?
Actually, Li Dong did not need to point this out. The remaining share capital was considered as short shares.
According to the internal valuation, these shares had actually exceeded Li Dong's 2 billion US dollars estimate for Weibo.
What were these 10 million shares used for?
Option incentives!
Yes, option incentives did not mean that Li Dong was the only one to bear it. Far away was not the only one to bear it. Everyone had to bear it.
Logically speaking, this was not a big deal. This was the rule of the industry.
However, Li Dong issued an additional 10 million shares. It seemed like the value of the shares in their hands did not change. In fact, compared to Far away, the ratio of the shares in their hands did not change.
But in reality, they were taking advantage of them.
10 million shares. According to Li Dong's valuation, that was 100 million US dollars!
Although this 100 million US dollars was not money now and could not be sold, when Weibo was listed, it would be included in the total share capital.
When that time came, it would be money.
100 million US dollars was given out now. When Weibo was listed, it might be hundreds of millions or even billions of US dollars.
As for option incentives, they had nothing to do with the investors. They were only given to the employees and executives Far away.
Everyone could accept a small amount of option incentives because it was necessary.
But 10 million shares …
Well, if they were to really calculate it in proportion, it was not high.
But Weibo was very valuable. The internal valuation was as high as 10 US dollars per share. Based on this calculation, the value of the 10 million shares was very high.
Li Dong had suddenly obtained so much share capital for his employees. It was hard for them to accept.
Xiong Xiaoge and the rest looked at each other. After a while, Shen Nanpeng said with a smile, "General Manager Li, we have no objections to the additional share capital. But isn't taking out 10 million shares for equity incentives a little too much? "
Li Dong frowned and said, "Is it too much? It's less than 5%. Tell me, is this a lot?
Weibo's executives are not fully staffed yet. The employees have not reached the limit. It sounds like a lot, but how much can we get in the end?
My original plan was to increase the total number of shares to 220 million. That would be more appropriate.
But considering that Weibo does not have many employees now, and many of the executives have multiple jobs, I changed my plan to make you feel better.
Now you're telling me that it's too much? Are you trying to bully me, Li Dong, for not knowing the market?
You've invested in more than one or two domestic Internet companies. Don't you know the market? "
Everyone was slightly embarrassed after hearing Li Dong's words.
Just as Li Dong had said, a ratio of less than 5% was indeed not much.
But because the value of Weibo was too high, it was a big loss.
Capital organizations were all vampires. If they could get more benefits, they would naturally take more.
But since they could not get it, they could not say anything.
If Li Dong really wanted to forcefully distribute more shares, they had no way to stop him.
Since it was time to stop, everyone stopped talking about it. Xiong Xiaoge said with a face full of smiles, "Director Li, don't misunderstand. Director Liu and the rest have worked hard, and the employees are also conscientious. We have no objections to the plan that General Manager Li just mentioned. But I have some personal doubts, and I would like General Manager Li to clear them up for us. "
"Go ahead."
"I heard that Weibo's option incentive plan involves the entire Far away system. Is this …"
Xiong Xiaoge did not finish her sentence, but her meaning was clear.
Weibo's internal employees had option incentives. This was not a big deal since they were all on the same side.
But when it involved the entire Far away system, wouldn't that be using their money to buy people's hearts for Li Dong?
They were not willing to do such a thing.
Even if Li Dong was strong, he could not take their money and act like a good guy.
Li Dong had expected this and was not surprised. He said calmly, "Weibo is a subsidiary of Faraway Group. It is only right for the headquarters' executives to receive option incentives. As for the other sub-groups, they are indeed different from Weibo. I did not say free distribution. Out of the 10 million shares, 2 million shares will be distributed with compensation, and the funds will go to Weibo. Is this okay? "
"Then the exercise price of these 2 million shares is …"
"One dollar!" Li Dong said straightforwardly. Everyone's mouths twitched uncontrollably.
The 10 US dollar valuation previously was just a reflection of Weibo's value. The exercise price was actually the real value of the shares, or the net assets per share.
Weibo was still in the investment phase, and the company was still in a state of loss. The fair value of the shares was generally negative.
Li Dong's 1 US dollar was not too much.
In other words, these 2 million shares could only be sold for 2 million US dollars if they were purchased by the Far away staff, which was 10 times the current valuation.
If this was done to Weibo's internal employees, everyone would have nothing to say.
But what did the other sub-groups Far away have to do with them?
Wasn't this taking advantage of them?
The few of them were somewhat dissatisfied, but they could not find any excuses. This was because this was the current market, and many companies were doing the same thing.
Shen Nanpeng and the rest looked at each other again. 2 million shares was not a lot, and Far away was still the majority.
There was not much point in making a fuss over this matter.
Moreover, it was better than distributing all the shares for free. These 2 million shares were not given to the employees of the other sub-groups, and Weibo itself had already digested them.
They could not do anything even if they gave more shares to the senior executives.
Since the total share was not changed, it did not seem like a loss to get 2 million US dollars back.
Everyone discussed in low voices for a while, and finally, the representatives nodded and said, "We agree with General Manager Li's proposal for now. However, we have to wait until we go back to make a decision on the specific proposal."
Even if they agreed now, there was no reason for them to object when they went back.
They still had to go through the necessary procedures.
Li Dong did not mind. He smiled and said, "That's for the best. Also, congratulations to all of you. Far away businesses are always profitable. The current valuation of Weibo is 2 billion US dollars, which is not a lot. In the blink of an eye, everyone's returns are as high as 40%, and it has not even been half a year. When it is listed, everyone will be able to make a lot of money. This is a win-win situation. "
Everyone's faces lit up with joy. In less than half a year, just as Li Dong had said, everyone had made a fortune.
This was under the premise of the financial crisis. Many companies were losing money crazily this year.
So far away, Weibo not only did not lose money, but its valuation had also soared.
But this was not the main point. It was still too early to talk about making money.
This was not the purpose of everyone's visit today. As for the option incentive plan, it was just in passing. Everyone's real purpose was Weibo's Series B financing.
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