Entertainment: Starting from joining Kugou Video

After the huge success of "Heart Signal", Tanglou had a little more free time, and this period presented a very good investment opportunity.

Xiaohongshu is planning a Series C+ funding round, aiming to raise $1 million.

At its current stage, Xiaohongshu is still in its early stages and is also in the early stages of the "grass planting" economy.

With over a billion yuan in hand, Tang Lou decided to go all in.

Xiaohongshu CEO Mao Wenchao is seeking funding. After receiving a call from Tanglou, he took Tanglou, who has a strong background with Coolcat, very seriously.

In the past few months, Tanglou has become very famous in the industry thanks to its outstanding performance on KuMiao Video.

Mao Wenchao was somewhat anxious during this period, which coincided with the impact of the "April 8th New Policy". According to the new policy, cross-border e-commerce goods are taxed as goods, which has caused a short-term setback for maternal and infant products and health care products, resulting in a shortage in the supply chain. Self-operated warehousing and distribution costs accounted for 25% of revenue.

It can be said that this is a matter of life and death for Xiaohongshu. Only if it can successfully secure C+ funding and come up with a solution can it turn the tide.

This time, when meeting Tang Lou, Mao Wenchao was not only interested in the funds Tang Lou had, but also in how Tang Lou viewed Xiaohongshu, or rather, how much he understood the cross-border e-commerce sector.

Only by demonstrating sufficient professionalism and insight can Tang Lou persuade him to cooperate with him.

Given Xiaohongshu's current industry standing, although it suffered some setbacks due to the "April 8th policy," its GMV has reached over 2 billion yuan, second only to Tmall Global and NetEase Koala.

Moreover, it is the only cross-border e-commerce platform that has created a closed loop between product discovery and order placement, and its community interaction rate is more than five times that of JD Worldwide.

There are still many opportunities to secure funding.

When Mao Wenchao finally met Tang Lou, he was somewhat surprised, because Tang Lou was so young.

However, after a real conversation with Tang Lou, I was surprised to find that Tang Lou had a keen insight into the situation and a positive outlook on the future of Xiaohongshu.

In response to the current difficult situation, Tang Lou even brought out the most classic "Red Friday" plan from his previous life's Little Red Book!

It is also the first in the industry to create a closed loop of "content pre-heating - social fission - timely conversion"!

Directly converting customers through product recommendation notes has defined a paradigm for social e-commerce promotions.

This classic case was also included in the "2017 China E-commerce Operation White Paper"!

After Tang Lou brought it up, Mao Wenchao felt an overwhelming sense of enlightenment.

"Mr. Tang, I didn't expect you to have such a profound understanding of e-commerce. This Red Friday marketing plan is truly amazing."

"Mr. Tang, could you please design a slogan for us?"

In response to Mao Wenchao's expectations, Tang Lou directly invoked the slogan from his previous life: "A better life for the whole world!"

Upon hearing this concise yet profound slogan, Mao Wenchao's eyes lit up.

Of course, this is just a concept; Tanglou's sincerity goes far beyond that.

The most important aspect of this plan is the promotional videos featuring top celebrities, which target 90% of young female users on Xiaohongshu.

The selection of top celebrities is crucial to gaining their trust and following.

Tang Lou happens to have access to the hottest celebrity resources of the first half of this year.

"I can arrange for all these wildly popular female celebrities to come to you at once, including Dilraba, Yang Mi, Zheng Shuang, Jing Tian, ​​Song Huiqiao, and Yang Chaoyue."

Tanglou offered Mao Wenchao an irresistible lineup of stars.

With this core lineup of celebrities, we have the most solid foundation for subsequent user growth.

Afterwards, Tang Lou explained the steps and procedures of the entire plan to Mao Wenchao one by one.

At this point, Mao Wenchao had been completely conquered by Tang Lou.

"Mr. Tang, if you weren't already in such a high position at KuMiao, I would really like to invite you to work with us at Xiaohongshu."

"With your plan and your investment, Xiaohongshu will definitely be able to weather this crisis and rise against the tide!"

After accepting Tanglou's investment of 10 billion RMB, Mao Wenchao also began to work on the specific investment agreement.

With the investment experience gained from Jiaxing Media, Tanglou now has a satisfactory team of professional investment advisors.

Soon, Tanglou came up with a perfect investment plan: based on the C+ round valuation, he would acquire 12.5% ​​of Xiaohongshu's equity for 10 billion RMB.

Furthermore, Tanglou and Xiaohongshu have signed an anti-dilution clause, which stipulates that if the next valuation is lower than $12 billion, the equity will be automatically reduced to 15%.

The transaction structure employs a two-pronged approach, utilizing both domestic and international pathways, to optimize taxation.

Ultimately, through a Shanghai Free Trade Zone SPV, the company directly invested in the domestic operating entity, holding a 7.5% stake (in compliance with foreign investment access restrictions).

By subscribing to preferred shares of the Cayman parent company through a BVI company, the company holds a 5% stake (enjoying dividend rights under the VIE structure).

Due to Tang Lou's brilliant plans for Xiaohongshu's future and his ingenious "Red Friday" campaign, as well as his access to top female celebrities, Mao Wenchao was impressed by Tang Lou and agreed to the core terms.

Tang Lou obtained one board seat (out of 5) and has veto power over major matters such as financing and mergers and acquisitions.

Secondly, a performance-based incentive was set up: if the GMV in 2017 is ≥ 20 billion RMB, the company will compensate the underperformer with 1% equity.

It also includes an exit preference right, requiring the founding team to repurchase shares at an annualized rate of 8% if the company fails to go public within 5 years.

In summary, this plan offers controllable risks, flexible exit options, and triple protection through existing share transfer, IPO, and redemption rights. Tanglou simply needs to wait for a substantial return!

After Tanglou and Xiaohongshu signed an investment agreement, Xiaohongshu also began preparing for the Red Friday event.

Tang Lou also began to fulfill his promise, persuading the female celebrities he had worked with to collaborate with Xiaohongshu as the core of the Red Friday event, and to begin shooting and producing related videos.

After settling everything on Xiaohongshu and completing the allocation of funds, Tang Lou began to focus on his current task.

The most important things, of course, are the filming and production of the later episodes of "Heart Signal", the creation of the Mist Theater, and the filming of "The Hidden Corner"!

These two things were done in an orderly manner despite being busy.

On Jiaxing Media's side, after Yang Mi received Tanglou's invitation to join Xiaohongshu's Red Friday program, she also learned that Tanglou led Xiaohongshu's C+ round of funding.

They immediately followed in Tang Lou's footsteps and raised 50 million yuan to invest in Xiaohongshu.

Out of respect for Tanglou and Yang Mi's popularity, Mao Wenchao accepted Yang Mi's part of the investment, which was neither necessary nor unnecessary.

Feeling that Tanglou's business was booming recently, and that Jiaxing Media's market value was somewhat inflated, Yang Mi made a special trip to visit Tanglou.

Hopefully, Jiaxing Media will be able to profit from the upcoming Coolcat project.

Of course, Yang Mi was also well aware that Tanglou had now cashed out and left, and had basically severed ties with Jiaxing Media in terms of interests.

So, if they want to collaborate in the future, they will definitely have to rely on themselves, Dilraba and other artists to have in-depth exchanges with Tanglou.

Yang Mi is ambitious, has good vision, and is very decisive, so she is prepared to take a gamble and deepen her relationship with Tang Lou.

The kind of thing where you'd pay any price!