Reborn, back to a small county town to become a wealthy family

Chapter 650: Prepare to Burn Money
After half past two, Song Wan arrived at Luo Yang's office on time.

"How was the conversation with the investor this morning?"

Song Wan was supposed to accompany Luo Yang on today's inspection of four universities, but because she had an appointment with an institution that had investment intentions in the shared bicycle project, Xiao Wei accompanied him instead.

"I made an appointment with you this afternoon, and I planned to report together."

As Song Wan spoke, she tapped the table next to the teacup with her fingers, indicating that it would only be 80% full.

"Well, tell me, how many investment institutions have come to our door so far?"

Luo Yang put down the teapot and said, "I asked Xiao Wei this morning. The funds in Edifier's account are barely enough to expand into the Shanghai market. If we want to expand shared bikes to several cities in the Yangtze River Delta, we must conduct a round A financing, and the time must be early September."

"So far, I have contacted a total of five investment institutions."

Song Wan nodded and reported, "There is no need to say more about Sequoia Capital. They are also willing to continue to follow up. In addition, there are four other institutions including IDG, Junhai Investment, Guohua Venture Capital and Yonghua Capital."

"I know IDG, but I haven't heard of the other three. What are their backgrounds?"

IDG Capital, full name IDG Technology Venture Capital Fund, is an investment company headquartered in Seattle, USA.

The company was the first to carry out venture capital business in China in 1993, and has accumulated rich investment experience in venture capital, private equity and industrial development.

IDG Capital focuses on technology, advanced manufacturing/new energy, consumption, and healthcare. Its investment scope covers early-stage, growth-stage, industrial development and other stages, accompanying entrepreneurs in their growth throughout the entire cycle.

In addition to providing funds for corporate development, IDG Capital also provides professional support, experience and resources in many aspects such as brand building, marketing, channel development, talent introduction, financial management, global expansion, etc., to help invested companies achieve long-term development.

The people who contacted Song Wan were actually senior executives from IDG Greater China.

"Junhai Investment is a long-established investment institution in Shanghai. Although it is not as well-known as giants such as Sequoia Capital and Hillhouse Capital, this investment institution is still very strong, especially in the Yangtze River Delta region, where it has invested in many projects."

Although Song Wan didn't have any information, she gave a very detailed introduction: "Guohua Venture Capital is an investment institution in the north with state-owned assets. What is revealed on the surface is just the tip of the iceberg. In fact, the company's main business is in the industrial field, and venture capital is just a very small part of their business segment."

“An investment institution with state-owned assets actually took a fancy to our project.”

For Luo Yang, the shared bike project is a game of pass the parcel, and he cannot necessarily control who will end up with the bike.

But we introduced an investment institution with state-owned capital background so early. What if we cheat them? Will there be trouble later?

"As for Yonghua Capital."

Song Wan didn't know what Luo Yang was thinking, so she continued to explain, "My company is also optimistic about the prospects of this project and plans to participate."

Ok?
Luo Yang looked at Song Wan in surprise.

He remembered that he had said that Song Wan's family could be allowed to enter in the B round, so why did they want to get involved in the A round of financing?
"Mr. Song, now is the time for the shared bike project to move out of Shanghai and expand to several major cities in China where universities are concentrated. It requires more than just capital. It can even be said that capital is only a secondary threshold for entry."

Luo Yang did not hide anything and said directly to Song Wan: "What we need now is support that can help us open the doors of some well-known universities in the three cities of Jinling, Jiangcheng, and Hangzhou. When it comes to the B round, we will look at the relationship between the investment institutions and the city. This is our need to move out of the universities and into the urban areas."

The famous universities he mentioned are concrete, such as Nanjing University, Southeast University, Jiangnan University, Huazhong University of Science and Technology, and Zhejiang University. Only such universities are representative and can expand the reputation of Edifier Technology Co., Ltd.

These universities, which often have a vice-ministerial or director-general structure, are really difficult to deal with if you don't have any connections.

"My family can get an agreement for Zhejiang University to move in."

Song Wan showed her trump card: "Besides, my family can also help a lot in the market development of colleges and universities in Hangzhou."

Luo Yang instantly understood the hidden meaning in her words.

When the shared bicycle project still needed university resources, Song Wan's investment institution could play a role, but when it came to the B round, or even the round that completely considered capital investment, his family had no advantage.

"If you want to participate in the B round of financing, I don't think your family can get much equity."

There was no need to hide anything from Song Wan. Luo Yang said frankly: "For this round of A financing, I plan to release 25% of the equity. If three to four investment institutions are shortlisted, your family will only get about 5%."

During the A round of financing, due to valuation reasons, the amount of money required is relatively small.

When rounds B, C, and D begin, unless your company continues to invest, your equity will only be diluted less and less.

"It doesn't matter. My family will be leaving the market soon after the D round."

Song Wan also emphasizes sincerity, saying whatever she wants to say without considering the decision of her family.

Or maybe this was something her family had planned long ago.

"Okay, as long as you don't mind."

Luo Yang's words were equivalent to agreeing that Yonghua Capital could participate in the A round of financing.

"Mr. Luo, during the angel round, Sequoia Capital directly invested 1000 million yuan, accounting for 25% of the shares, which is equivalent to pushing the valuation of the shared bicycle project directly to 4000 million yuan."

Song Wan asked with a little curiosity: "Mr. Luo, what do you think the valuation will be before the A round of investment?"

"At least around 2 million."

Luo Yang paused and said, "After September, we will expand the market in three or four cities at once, which will require at least 9 to million yuan in funds."

This calculation is correct. To raise 25% of the equity, you need to get 2 to million yuan in funds, and the valuation must reach about million yuan.

Song Wan nodded and agreed with Luo Yang's expected valuation.

"By the way, when will the capital send a team from the marketing department?"

Although it was decided at the meeting not to enter the capital market for the time being, Luo Yang did not give the specific reasons.

"As far as I know, there are at least two or three similar companies in preparation now. Perhaps they will all pop up in September when the school starts."

Song Wan frowned and suggested, "There are so many universities in the capital. If we don't expand and occupy them, it will be a big disadvantage for the B round of financing. Especially in the capital circle, they always flatter the high and trample the low. If Peking University and Tsinghua University are seized by other companies, the consequences will be very serious!"

"Do you know the principle that if you take one step slower, you will take all the steps slower?"

Luo Yang smoked his cigarette leisurely, looked at Song Wan with a smile and said, "How do you know that the college market in the capital is not a trap I dug for others?"

As soon as these words came out, Song Wan was stunned.

"Dig a hole?"

"Yes, I left a pit for my competitors!"

Luo Yang nodded with a smile.

Song Wan suddenly didn't even bother to drink her tea. She stared at Luo Yang with a curious expression, hoping to get an answer.

"You should know what one of the main tasks of our earliest project in colleges and universities is." Luo Yang asked himself and answered: "In addition to improving the application software bugs, the most important task is to collect data on the density of bicycles and the relationship between bicycle usage frequency and regional deployment. These data will play a very important role in the later stage."

Once shared bicycles leave campuses and are deployed in urban areas, changes in various data will increase exponentially, and the difficulty of management and monitoring will increase significantly.

For Edifier Technology Co., Ltd., colleges and universities are indeed a big market, but definitely not the main market.

Colleges and universities are more of an experimental site, responsible for data collection.

Therefore, in Luo Yang's opinion, it is sufficient to have so many universities in Shanghai, Jinling, Jiangcheng and Hangzhou to undertake the above functions.

As for the market in the capital, especially Peking University and Tsinghua University, which are regarded as the king of universities by everyone, the shared bicycle companies that follow suit will definitely try their best to seize it. During this period, the time and energy required will definitely not be a little bit.

Instead of investing so much energy in seizing the market, it would be better to find a fourth or fifth tier city to conduct experiments.

Yes, Luo Yang has decided to conduct an experiment in Yang City first, using the entire urban area to simulate a street area in the Magic City, so as to collect data and improve management experience.
After completing the A round of financing in September, part of the funds will be allocated for promotion in Yangshi urban area.

After a transition period of three to four months and the completion of the B round of financing, it will be gradually promoted in the urban area of ​​Shanghai.

After hearing this explanation, Song Wan fell into deep thought.

"Chairman, you are really thoughtful."

After a long time, Song Wan looked up at Luo Yang and said, "I have to admit that you are using limited funds to maximize your market exploration and seize the market!"

“This is also a money-burning project.”

Luo Yang was not obsessed with Song Wan's praise. Instead, he sighed: "When it is fully promoted in super first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, capital will fully intervene in this track, and then you will see the money-burning model."

By then, it will be just like the group buying platforms during the war between thousands of groups. If they cannot raise funds, they will have no way out!
The conversation with Song Wan lasted until almost four o'clock.

Almost at the same time as she left, Wen Wan came in to report something.

"Dong Xing from Yongcheng Bank contacted me more than an hour ago and mentioned the cocktail party tomorrow night. I have sent Sun Wei to contact him. According to your request, all expenses will be borne by our company."

Wen Wan is quite serious while working.

"120 people. Does it need to be this large?"

Even if the fund size expands to 1 million yuan, since each share is 100 million yuan, there are only 100 shares in total, and some people buy two or three shares at a time, why do we need to invite so many VIPs?

"Dong Xing is responsible for inviting about 60 distinguished guests."

Wen Wan replied: "She used this as a reference and thought that even if you have fewer people, including internal staff, you still need about 60 places."

“I don’t have that much here.”

Luo Yang estimated in his mind that He Maosong and his group would only have about thirty people at most.

Even if we include the people on our side, the total number is only over 40.

"In fact, I think it would be okay to expand the scale of the reception a bit."

Wen Wan also found out what was going on during her phone call with Dong Xuan. She did not blindly agree with her boss, but instead put forward her own suggestions logically.

She said calmly, "In addition to the VIPs who purchase fund products, the boss can also invite some friends in your circle to attend. You want to build a circle. Isn't this a good opportunity to show that your network is expanding? At the same time, it also shows that you have benefits to share. Why not do it?"

Eh?
After listening to Wen Wan's suggestion, Luo Yang felt his eyes brighten.

"In that case, let's just make it bigger."

After a brief thought, Luo Yang said, "Let's hold a cocktail party that can accommodate 150 people."

He planned to use this cocktail party to sort out the circle of friends around him and invite everyone he could, including several presidents and vice presidents of the Yang City Chamber of Commerce.

Just like Wen Wan said, if you can bring benefits to the people around you, why can't you let everyone know?

"Okay, boss!"

Seeing that her suggestion was adopted by the boss, Wen Wan smiled.

"Have you adjusted Chu Jing's salary?"

Just as Wen Wan was about to turn around and leave, Luo Yang suddenly asked.

"Well, she and Sun Wei are in a separate class."

Wen Wan replied: "The basic salary + various subsidies are roughly 25K, and there is also a special allowance of 30K per month. This number will increase with years of service."

Special allowances
Ok.

Luo Yang didn’t know how to continue, so he waved his hand and signaled Wen Wan to leave.

After the office quieted down, Luo Yang thought of another thing.

Should we invite Jiang Yuanshan to this cocktail party?
Although he was tactfully rejected by his father-in-law during the phone call yesterday, it does not mean that he does not want to integrate the resources around Lao Jiang.

This kind of cocktail party tomorrow night is far better than thousands of words of persuasion.

As for some minor problems, they can be avoided as long as you pay a little attention.

Thinking of this, he picked up his phone again and called Jiang Yuanshan.

"Dad, is it convenient to talk now?"

After the call was connected, Luo Yang said directly: "There is a cocktail party tomorrow night, hosted by our company. We have invited some friends from the bank, as well as some bosses from Shanghai and Zhejiang East Road. We also plan to invite several presidents of the Shanghai Yangshi Chamber of Commerce. Do you have time to attend?"

Jiang Yuanshan knows his son-in-law too well.

As soon as he finished saying this, he knew what Luo Yang was talking about.

"It seems like you are determined to develop fund products?"

Jiang Yuanshan was silent for a moment on the phone and then said, "How much do I need to share?"

"Dad, I don't need you to share the burden."

Luo Yang smiled and said, "We have already booked all the clients from Zhedong Road and Shanghai. I invited other guests to facilitate my integration of resources."

There was a sudden silence on the other end of the line.

(End of this chapter)