msmithbooks Chapter 91 Exploiting Capital
Chapter 91 Exploiting Capital
Chapter 91 Exploiting Capital (3k)
[Eric]: "Based on our in-depth discussion and shared understanding of the project's prospects, let's now talk about the valuation of Ele.me."
[Eric]: "Your business plan states that you are raising 100 million yuan in funding, giving up 20% equity, corresponding to a pre-investment valuation of 400 million yuan."
"10,000, 5 million post-investment, right?"
[Zhang Xuhao]: "Yes, Mr. Eric."
Zhang Xuhao tried to keep his voice steady, but his palms were already slightly sweaty as he held the phone.
Eric: "To be honest, I'm not very satisfied with the financing plan you've proposed."
These words were like a bucket of ice water, suddenly poured on the hearts of the three people who had just been burning hot.
Were all those understandings, resonances, and blueprints just sugar-coated bullets?
In the end, will we still have to be just like other investors, haggling over every penny when it comes to money?
Sure enough, all capital is the same!
Zhang Xuhao quickly glanced left and right and saw that Kang Jia and Wang Yuan's faces were also filled with astonishment and disappointment.
He gritted his teeth and took a deep breath.
[Zhang Xuhao]: "Mr. Eric, how much can Arctic Capital invest, and what is the valuation they're offering?"
Eric: "I think your current promotion pace could be more aggressive. Funds should be focused on two things: first, immediately upgrade the technology system, which is the cornerstone of efficiency; second, prepare for rapid replication across campuses and even cities."
[Eric]: "Based on this, Arctic Capital is willing to invest $100 million in exchange for a 30% stake. What do you think?"
boom--!
100 million US dollars? That's close to 700 million yuan!
A 30% stake means that Ele.me's post-investment valuation instantly soared to over 20 million!
The amount raised was nearly seven times the original plan, but the equity diluted was only half again as much! This is no investment, it's practically like gold falling from the sky!
The mood that had just hit rock bottom rebounded with even greater force.
Wang Yuan couldn't help but cover his mouth with his hand, his eyes wide open, nodding frantically at Zhang Xuhao.
Kang Jia silently shouted with exaggerated mouth movements, "Agreed! Agreed now!"
Zhang Xuhao was the one who could hold his nerve the best among the three, but even he felt his heart pounding in his chest.
He forced himself to weigh the options quickly for about ten seconds.
The sale of 30% equity was far from his expectations and plans, but he remembered that Geng Zhi had said that their "Jiaotong University Matchmaker" was selling 30% equity, and he felt relieved.
[Zhang Xuhao]: "Mr. Eric, we agree to this plan!"
Eric: "Great. I'll initiate the internal process immediately and try to send you a detailed Term Sheet within 48 hours. After that, we'll arrange due diligence, final agreement signing, and payment."
[Eric]: "The legal terms in the TS are quite technical. If this is your first time dealing with this, I strongly recommend consulting a lawyer. When I or one of our Arctic Capital partners come to Shanghai to sign the agreement in person, we will explain each clause to you."
[Zhang Xuhao]: "Okay, okay! Thank you very much, Mr. Eric!"
The 75-minute call ended.
"Yes! It's done! Brother Hao! It's done!"
The three of them jumped up suddenly, excitedly bumping fists and high-fiving each other. Wang Yuan even jumped up and down twice, releasing his suppressed elation.
"One million! US dollars! It's US dollars, Brother Hao, Brother Jia!" Wang Yuan's face turned bright red as he kept repeating the number, as if it would fly away if he didn't say it out loud.
"This Arctic Capital—it's completely different." Zhang Xuhao let out a long breath, his face beaming with the radiance of immense recognition. "They're more knowledgeable and more magnanimous than all the investors I've ever met combined!"
Those who have been rejected too many times understand the true value of "knowing what's good for them".
"He's more than just an expert!" Kang Jia's eyes gleamed with excitement. "Eric's mention of order fluctuations and capacity allocation, the balance between asset-light and experience-focused strategies, and the vision for future algorithmic scheduling—it's like opening a door to a whole new world!"
"Yes, yes, right now all I can think about is our daily orders exceeding 100,000 and our delivery drivers running all over the city in their uniforms!" Wang Yuan quickly added.
"Technology for good! Isn't this exactly what Boss Geng meant by a company with warmth?" Kang Jia couldn't help but praise.
The wave of euphoria gradually subsided, and reason began to return.
The three sat down again, their hearts still pounding, but their minds were already racing.
"Brother Hao, after talking like this, I think the investor that Boss Geng is talking to is definitely Arctic Capital!" Kang Jia analyzed.
"Yes, it's highly likely." Zhang Xuhao nodded. "So we must hurry and sign TS as soon as possible to avoid any unforeseen complications."
Kang Jia recalled the details of the phone call and asked, "Brother Hao, I understand that the other party wants a board seat. But what exactly do those 'liquidation preference rights,' 'preemptive rights,' and 'repurchase rights' in the term sheet mean? They sound a bit complicated."
"I've only heard of his name," Zhang Xuhao honestly admitted. "But Eric specifically reminded us to find a lawyer, unlike some agencies that would love for you to know nothing."
"Yes, Arctic Capital is very reliable and trustworthy."
"By the way, Hao-ge," Wang Yuan thought of a practical problem, "Eric said it might take another two or three months of processing from signing the term sheet to the final payment. Will the little money we have in our account last that long?"
Zhang Xuhao pondered for a moment: "Since Arctic Capital has a clear intention to invest, I will go and communicate with my family to get some support. The transition period should not be a big problem."
As they were discussing, Zhang Xuhao's phone vibrated, receiving a new text message.
He picked it up and glanced at it, a mixture of surprise and amusement appearing on his face.
"It's Zhu Xiaohu," he said, waving his phone. "He said he's coming to Shanghai and wants to chat with us while he's here."
"Huh? We've already reached such a good agreement with Arctic Capital, why are we still talking to Jinshajiang Venture Capital?" Wang Yuan quickly said.
"I think it wouldn't hurt to chat," Kang Jia said, sounding even calmer. "After all, Arctic Capital hasn't cashed in yet. Contacting another company provides more options and comparisons, which can't hurt. What do you say, Hao-ge?"
"I agree with A-Kang." Zhang Xuhao nodded. "There's no reason to turn away investors who come to us on their own initiative."
Let's have a chat, consider it as gaining experience, and it might also give us some leverage in our negotiations with Arctic capital.
"When did Zhu Xiaohu say he was coming?"
"He didn't set a specific time, and told me to wait for his notification," Zhang Xuhao shrugged.
In the Nordic Doctor Garden, Geng Zhi hung up the phone with Zhang Xuhao, breathed a sigh of relief, and leaned back in his chair.
The conversation went quite smoothly, but there was one time when he almost let something slip, which sent a chill down his spine.
Role-playing is definitely not something humans can do. Someone as straightforward as myself is really not good at it.
"I should try to reduce the number of times I appear in public in the future, or I might be exposed one day," Geng Zhi muttered to himself.
We've already made contact with Zhang Xuhao's team as planned, and judging from the reactions of the three people on the phone just now, they seem quite satisfied.
Once the term sheet is signed and the exclusivity agreement takes effect, the goal of snatching Ele.me's Series A investment from Zhu Xiaohu will be largely achieved.
The next step is to draw Zhu Xiaohu's attention to the "Jiaotong University Matchmaker" project and secure investment from Jinshajiang Venture Capital.
Getting him to come to you is ten times more effective than you going to him and begging him.
I just don't know if Mu Yan's influence on Zhu Xiaohu is strong enough? Can it reignite Zhu's interest in "Jiaotong University matchmaker"?
If Zhu Xiaohu doesn't take the bait, we'll just have to find a new investor to fleece.
Geng Zhi rubbed his temples, thinking carefully about which other investment institutions he could recall had a particular fondness for the social networking field.
Qiming Venture Partners? Matrix Partners? They both seem to have invested in dating and marriage-related ventures.
Sequoia Capital, Matrix Partners, and Ali Investments have all invested in Momo — Morningside Venture Capital, Tencent, and Yuanjing Venture Capital have all invested in Soul —
Ring ring ring—!
Just as Geng Zhi was pondering this, his phone rang.
Geng Zhi glanced at the screen; the caller ID read: Zhu Xiaohu.
Hey!
Speaking of Cao Cao, that traitor Cao Cao has actually arrived!
He sat up straight instantly, the tired and thoughtful look on his face vanishing, and he answered the phone in an extremely enthusiastic tone.
[Straightforward]: "President Zhu! Hello, hello! It's been so long since I've heard your guidance!"
[Zhu Xiaohu]: "Geng Zhi, now that you've grown wings, you dare to use our Jinshajiang Venture Capital's name to swindle and deceive people?"
Hearing Zhu Xiaohu's half-complaining, half-teasing words, Geng Zhi immediately understood that Mu Yan had indeed contacted him, and the message must have reached him.
[Straightforward]: "Hehe, Mr. Zhu, what you're saying is true—my little skills are all learned from seniors like you, just the tip of the iceberg."
[Zhu Xiaohu]: "—Bullshit! When did I ever teach you that?"
[Straightforward]: "Just kidding, Mr. Zhu, you're so magnanimous. It's mainly because your organization has such a prestigious reputation; borrowing it has yielded immediate results. I wonder if Mr. Mu—believes it or not?"
[Zhu Xiaohu]: "I believe it."
[Straightforward]: "That's good, that's good."
His tone was straightforward and frank, without any sense of guilt.
[Zhu Xiaohu]: "————"
After exchanging a few casual words, Zhu Xiaohu got down to business.
[Zhu Xiaohu]: "Your 'If You Are the One' event has generated quite a buzz. When do you plan to enter the white-collar market next?"
[Straightforward]: "Replying to Mr. Zhu, preparations are already underway. We plan to closely follow the trend of Jiangsu TV's 'If You Are the One'..."
To capitalize on the momentum of the TV program's premiere, a large-scale special event for white-collar workers was launched simultaneously.
Geng Zhi didn't know if Zhu Xiaohu knew about the "If You Are the One" TV program, so he brought it up to try his best to pique Zhu Xiaohu's interest.
Upon hearing this, Zhu Xiaohu raised an eyebrow slightly.
This kid's offline expansion is happening faster than he anticipated. His ability to leverage existing trends is truly impressive.
[Zhu Xiaohu]: "So now, do you still think capital's money is dirty?"
[Straightforward]: "President Zhu, how is this possible!"
[Straightforward]: "Just as Mr. Zhu previously taught, business itself is the greatest form of charity! Good capital investment aims for a win-win-win situation for investors, users, and entrepreneurs. Jinshajiang Venture Capital's money is clean and upright, it's very attractive!"
Zhu Xiaohu:
'
Having said all that, the time was ripe. Without waiting for the other party to ask, Geng Zhi took the initiative.
[Straightforward]: "We're actually discussing financing right now. I have a strong connection with Mr. Zhu, and if he's interested, we, the matchmakers at Jiaotong University, are willing to give priority to Jinshajiang Venture Capital!"
[Zhu Xiaohu]: "Okay, I'll be going to Shanghai soon, then we can talk."
[Straightforward]: "Mr. Zhu, I'm flying back to Lanzhou the day after tomorrow to take the postgraduate entrance exam. How about we schedule it for next Thursday?"
Zhu Xiaohu: "Okay."
[Straightforward]: "President Mu has already scheduled a time with me. If President Zhu doesn't mind, could the three of us chat together then?"
Zhu Xiaohu: "??"
The call ended.
After arranging a time with Geng Zhi, Zhu Xiaohu sent Zhang Xuhao another message, setting the meeting time for next Wednesday.
The day after tomorrow morning, Geng Zhi got up early and took a taxi to Hongqiao Airport to prepare to fly to Lanzhou to take the postgraduate entrance examination.
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