Huayu started as a substitute director

Chapter 585 Option Pool Financing

Companies must have spare funds to deal with crises. Crises are not only external, but also internal. For example, when TikTok suddenly becomes popular, how to stabilize the situation.

Hardware, software and personnel must keep up.

Gao Zhun reported the financial situation according to Fang Hong's request. Although Chang'e Technology is not as good as Alibaba and Tencent, it is also considered to be in the second echelon.

It’s just that many sectors are still developing rapidly and require continuous investment.

In today's Internet industry, apart from leading companies like Alibaba and Tencent, there are also Internet companies that make games. Other fields require continuous burning of money.

Companies like JD.com, Meituan, Ctrip, iQiyi, Tencent Video, and Kuaishou are all burning money.

Now is the era of expansion, and everyone is scrambling to seize the market. If you don’t spend money, your share will be taken away by others.

"In the early stages of development, we will have to face the risk of financial constraints. This is nothing, we just need to overcome it. There is no such thing as starting a business without challenges. If business is so easy to do, then everyone will do it, right?" Fang Hong said easily.

"Hehehe!" Everyone laughed softly.

The principal is like this, always giving them confidence and being able to deal with all kinds of difficulties with ease.

This is also the reason why they are willing to follow, because the principal can always stand up.

"Being radical doesn't mean being brainless. It means keeping up with the times, winning over competitors, and winning time."

As Fang Hong spoke, the people at the scene stopped laughing and expressed their understanding. The current market is changing rapidly, and if you are slow, you will be slow at every step. Losing the market means losing opportunities.

The market is very cruel and will not pity anyone.

Fang Hong looked at Zhang Nan and asked, "What is the current daily active users of Douyin?"

"The daily active users are around 8, and the growth is pretty good. There wasn't much content and creators at the beginning, and we have been perfecting the basic functions over the past two or three months," Zhang Nan explained.

This is the case with all new products. It is impossible for them to become popular as soon as they are launched on the market. After all, Douyin is a platform that needs creators on the market to fill it with content.

This requires some time for promotion!

Although the small broken site has content, there is not much that can be used, which does not match the positioning of Douyin.

One is that the small site only has medium and long videos, and the other is that there are few music-related ones. The full name of Douyin is music short videos.

“Then Douyin needs to invest a lot of R&D resources in video processing, recommendation algorithms, and content review, and continuously improve user experience and optimize product features, such as filters and special effects.

When people make short videos, you have to make sure the parents look good, otherwise no girl would dare to go abroad. We need to increase investment in technology and promotion in this area."

This is Fang Hong’s top priority and the key to achieving his three-legged strategic goal.

Without TikTok, Chang'e Technology will always be second-rate.

Some people at the meeting took note, some nodded silently, and Zhang Nan's expression brightened: "The principal's suggestion is good. We didn't expect the filters and special effects functions."

This reminded her that some people tend to feel inferior about their appearance when shooting short videos, so if they beautify their appearance and attract attention, they will become weak-minded.

She didn't know that Fang Hong was just saying it casually, and that's the impression Douyin gives people.

Zhang Nan said again: "We plan to invite celebrities to cooperate in promotion, through online advertising, social media marketing and offline activities to attract users to download and use.

By using subsidies and incentives to attract content creators and invest a lot of money to support high-quality content producers, this will undoubtedly involve a lot of music copyrights, which is also a considerable investment. "

Tik Tok is essentially a short music video format, in which music is an indispensable part.

Take YouTube in the United States as an example. It invests hundreds of millions or even billions of US dollars in music copyright every year. Fortunately, the copyright law in this regard in China is not very strict, so loopholes can be exploited.

But as the number of users increases and more creators emerge, hundreds of millions of RMB will still have to be invested.

It is impossible to use pirated products without any investment!
Zhang Nan’s promotion strategy is to directly take the experience of Chang’e Video and Bilibili. Chang’e Video supports creators, and Bilibili provides subsidies to motivate creators.

Using both of them on Douyin is equivalent to spending a lot of effort to promote this product.

"Don't be afraid to invest, just do it boldly and confidently. The commercial progress of each sector of Lidong must be accelerated." Fang Hong looked at Zhang Lidong.

"We have been doing it all the time, and the business has grown substantially. However, it is limited by traffic and external competition, as well as the different attributes of each sector. We cannot completely avoid losses." Zhang Lidong is in charge of business monetization.

External competition means that if others can choose WeChat, they will not want to choose Chang'e's products to advertise.

After all, they have large traffic and wide application.

In this meeting, Fang Hong's purpose was to let the top management of Chang'e Technology go ahead and do their work without hesitation, and just do it first.

If you move around, you'll always have money.

At least not everything is losing money. Toutiao is making a profit. Although other sectors are losing money, they still have revenue and it is growing. It is impossible that there is no revenue at all.

As long as there's running water, you can move things here and there!
"Product innovation, technological investment, and expansion cannot stop. Yiming, what do you want to say?" Fang Hong looked at Zhang Yiming, who was the CEO.

Zhang Yiming looked at everyone present and said, "The situation we face is still severe, and external threats still exist. Any decision must be driven by data to ensure product iteration and operational decisions. We cannot make blind judgments and must rely on data as support."

He is particularly superstitious about data, which may be the reason why he rarely fails. Even if he fails, he will immediately and decisively cut it off if the data is not good.

It’s all about looking at the data, vigorously developing big data, and continuously improving the recommendation algorithm through big data.

It is different from Fang Hong who knows the development direction and relies on vision as support. He has real strength as support.

Of course, the two complement each other. Fang Hong determines the general direction of what to do, but he is still the one who makes the specific decisions and deployments.

After Zhang Yiming told the executives about his decision, Fang Hong said, "I plan to set up an option pool and put 10 million shares in it. From high to low, each person will be limited to 20 to shares. Each person can increase the limit by % to % every year."

It depends on the level of position. Those with higher positions can get up to 10,000 shares, and those with lower positions can get up to 1,000 shares.

If you want to break this limit, you have to base it on your length of service. For every additional year of service, you can have 10% to 20% more options. If you want to accumulate more options, just work hard in this company.

This is more reasonable and can better bind and motivate employees.

The 100 million shares can basically benefit all employees who have worked at Chang'e Technology for more than one year. After all, there are nearly 20,000 employees at Chang'e Technology.

Of course, as time goes by, these 100 million shares are not enough. As the company expands, new employees will continue to join, and old employees will have more rights and interests. But as I said before, if you sell and buy again, the price will be higher.

One person is only allowed to own a maximum of 1 shares because Chang'e Technology's growth potential is too huge. How huge is it? Fang Hong remembers that in his previous life, one share was worth 1 US dollars.

Ten thousand shares are equivalent to 160 million US dollars, which is worth tens of millions. In addition, his length of service can directly achieve financial freedom, so he will not give out more. He would rather distribute it to more people and let tens of thousands of people benefit.

Yutu is just like that, and it can’t grow much further. Chang’e Technology is the giant!
"The option stock price is 1 US dollar, 1 million shares for 1 million US dollars, 7 million RMB." When Fang Hong said this last sentence, everyone at the scene was surprised and took a breath of cold air.

Isn't this a disguised way of raising funds from employees? 1 million shares equals 7 million yuan. This money can alleviate the problem of financial constraints caused by aggressive development, which is equivalent to the money being alive.

Where did the principal learn this trick? He has become smarter.

This was what his uncle Liu Tianxian taught him, but he never dared to use it for fear of making mistakes.

1 million shares are not a lot. If Chang'e Technology's current total share capital is 10 billion, Fang Hong only took out 10% and put it into the option pool.

The valuation is only 10 billion US dollars, which is not even as good as a rabbit's money, so very little is taken out.

"If we buy back like this, we'll have to pay a higher price, at least 14 billion," Gao Zhun said.

"It's okay. The deadline is one year. We'll talk about it after a year." Fang Hong was very calm.

Not everyone will sell their option stocks, but Yutu only sold 60% of them, which is equivalent to Yutu using the employees' money in advance without spending any money.

In other words, he can use the money in the option pool for a year. If the company wants to buy back the shares next year and not many people sell, it means the company has not paid any money, and the 7 million is still the same.

The calculation is complicated, but it is not a loss for a company in the development stage.

"I don't know if anyone will buy it. One dollar per share is a considerable expense." This is what Gao Zhun is worried about. She also knows that this will be good for the company.

It not only motivates employees but also gets money, which is almost perfect, but there is a problem of confidence.

1 dollar per share is 1 dollars, or about 7 yuan. Even people in low positions will have to pay several thousand or tens of thousands. Some people who have no confidence in the company will not buy it.

Afraid that the company will go bankrupt or have poor performance.

"It's okay, just send an email. I won't force you to buy it if you don't want to." Fang Hong said it indifferently and with full confidence.

There are always people willing to follow him, and he can always get back hundreds of millions. 1 shares are not a lot for a middle-level manager.

For low-level employees, 1 shares is just one month's salary.

1 US dollar is just a token of my appreciation.

Everyone was silent. Most startup companies do this, so it's not surprising. They were just surprised at the time.

I was surprised that the principal wanted to issue 1 million shares and raise 7 million yuan at once.

"This option is not for partners. Partners are prohibited from buying options. In addition, Zhang Nan, Gao Zhun, Yang Zhenyuan, Hua Wei, Liang Rubo, the five of you will become partners."

Fang Hong's words surprised everyone present again.

Everyone turned to look at the five people, showing envy to them. The five people also showed joy on their faces. They wanted to appear calm here, but they still couldn't help smiling. They felt very honored.

Being able to become a partner means that they are the owners of Chang'e Technology, can participate in decision-making and have a say, can get shares of Chang'e Technology, and enjoy profit dividends.

Zhang Yiming looked at his classmate Liang Rubo and patted him on the shoulder. Liang Rubo smiled shyly, with encouragement and gratitude in his eyes.

Liang Rubo is Zhang Yiming's assistant, responsible for product research and development, as well as advertising systems and user growth systems. He is also the technical director of Douyin.

Zhang Nan doesn't develop technology, she just operates it.

The five people also looked at each other, and they felt a sense of identity, acknowledging that they were all the owners of this company.

Although Chang'e Technology is still developing, it is generally stable because it is supported by two popular games.

Although "Honor of Kings" is competing with Tencent's "King of Glory", it has a large enough mobile user base to support the current size of Chang'e Technology.

Among the current sectors, except for Chang'e Video, Bilibili, Xiaohongshu, and Douyin which require money to maintain, Toutiao is the only one that can make money.

It doesn’t matter whether Qidian makes money or not. The scale is so small that it is enough to break even. Fang Hong has no intention of making money from this.

Qidian has been taken over by Wu Wenfei, who took office at the beginning of the year. Tencent did not keep him because they did not think he had much value as there are many people engaged in online literature.

So this enterprise is very promising.

"Okay, the partners stay, and the rest of the people can disband." Fang Hong clapped his hands, signaling the end of the meeting.

Those who were not partners stood up and walked out of the meeting room. After everyone had left, several partners held an internal meeting.

The meeting was also about the company's structural adjustment. Zhang Nan took over the position of President of Douyin and resigned as the Operations Officer of Bilibili. Bilibili was taken over by Liang Rubo, who was responsible for the organizational adjustment and business integration.

Gao Zhun is appointed Chief Financial Officer!

Hua Wei is still responsible for human resources, organization and mechanism establishment, as well as Fang Hong's assistant, so he can directly access any talent files.

He is also Fang Hong's internal spy. There is always someone watching who does what and reporting to him.

Yang Zhenyuan is also the technical president.

Zhang Lidong is also the vice chairman, responsible for commercialization.

Zhang Yiming manages the company's entire decision-making planning and technological development.

Everyone's shares are also different. Zhang Lidong's shareholding remains at 2%, while Zhang Yiming's shareholding has increased from 3% to 5%. After all, they are doing a good job. Fang Hong has no responsibility except to raise money to keep Chang'e Technology going.

Of course, being able to keep a company of this size going takes skill.

No one else holds 0.5% of Chang'e Technology's shares, which is equivalent to a total of 9.5%.

Even though the option pool and partners remain unchanged, Fang Hong still owns a large number of shares and has absolute control.

(End of this chapter)