"Mr. Zhang, after many rounds of discussion and voting, our investment decision-making committee feels that Ruixiang's current valuation of $3 billion is still too outrageous, and it has been detached from the existing value of the target, and we cannot accept this price.

So, unfortunately, if Ruixiang insists on a valuation of US$3 billion, Temasek will have no choice but to abandon the partnership. I hope we can work together in the future!"

It was Temasek's Li Hengbo who called, and he began to put pressure on Zhang Yida.

"What is Temasek's internal assessment of Ruixiang?" Zhang Yida asked on the phone, rubbing his eyes.

"2.5 billion US dollars, you have to sign binding terms!" Li Hengbo also said very bluntly, and directly stated the conditions.

"It's too harsh, I'll think about it!" Zhang Yida frowned and said.

Then after a few words of greeting with Li Hengbo, he hung up the phone, and then dialed Shen Beipeng's phone and talked about Temasek's offer and a series of situations.

"$2.5 billion, and binding clauses?" Shen Beipeng muttered to himself on the phone, he actually felt that the valuation of $2.5 billion was not low, and as for the binding clauses, it was basically a necessary condition for large financing.

After thinking about it, Shen Beipeng directly suggested:

"This valuation is not low, and what Ruixiang needs most now is growth time.

It is necessary to take the $500 million before the giants of Leech Financial Services do not react.

Only when you have the financing can you use your talent and win the market quickly. Even if the giants consume it with you, you can afford it.

If these giants start to be wary of Ruixiang, it will be difficult to get financing.

Without funds, giants can easily strangle you in the cradle. Not to mention the follow-up development.

So don't worry about the valuation issue first, the money in your hands is the king!"

Zhang Yida was also pondering, Shen Beipeng was not only a venture capitalist, but also ran a business before, and his experience in all aspects was not comparable to himself.

His advice is also very pertinent, and this round of financing must be done quickly. This step will also lay the foundation for sharp take-off, and it will be difficult to become a first-class fintech company in the future, let alone compete with giants.

"Alright, let's finalize it as soon as possible! Zhang Yida agreed.

Shen then approached Temasek, and the two sides agreed on a pre-investment valuation of US$2.5 billion.

First of all, we will get Temasek as the lead investor, and the other three institutions, SBI, GGV, and Qiming, will be able to discuss as follow-up investors.

In the end, Black Shirt Capital, Zhenke Fund, plus 4 institutions of B round of venture capital, a total of 6 institutions gathered at Ruixiang Jinke Company, plus Ruixiang management, for a seven-party meeting.

The $2.5 billion pre-investment valuation has long been agreed upon by many parties, and the biggest problem is in the binding terms.

"First, it has the right of veto on major matters such as the use and distribution of large amounts of funds, changes in the company's equity or organizational structure, etc.

Second, Ruixiang will carry out a new round of financing, and the investors in this round enjoy the right of first refusal to prevent the decline of the shareholding ratio.

Third, Ruixiang should ensure that the investment price (Ruixiang valuation) of new investors shall not be lower than the investment price (valuation) of this round of financing.

If the price is low (the valuation has decreased), Rui Xiang management will compensate the investors in cash or equity.

This is a ratchet clause, an anti-dilution tool that benefits investors, and is the most commonly used form of anti-dilution protection for investors.

Fourth, if the management of Ruixiang intends to directly or indirectly transfer all or part of the equity to any third party.

The investor in this round has the right, but not the obligation, to sell the corresponding number of shares held by it to the third party to the proposed equity purchase under the same conditions, in priority over the management of Ruixiang.

This is a follow-up right, which means that if you want to cash out to the management, you have to bring us, and we have to cash out first. ”

In addition to these four articles, there are also some conventional binding clauses such as liquidation priority clauses, dividend priority clauses, information disclosure clauses and so on.

Among these clauses, what makes Zhang Yida most disgusted and vigilant is the first clause of "one-vote veto", and as long as the other clauses develop normally, there will not be much problem if they go uphill.

"I can accept the other terms, but the first one-vote veto is too harsh and I can't accept it.

What if Ruixiang wants to merge and acquire a promising upstream and downstream company, but is rejected, and is preemptively acquired by a competitor?

Since you believe in me and invest in me, you must give me the greatest authority to run the business. ”

Zhang Yida glanced at the circle of investors in the conference room, and then said very seriously,

"Mr. Zhang, after all, this is $500 million in financing, not 5 yuan. We're just adding an insurance policy to our investment.

We are very recognizable of your talent and management ability, but the $500 million is the investor's money, and the stakes are significant, so we have to be cautious. ”

Li Hengbo also looked serious and said with a very tough attitude.

"Ruixiang itself is an AB-share structure, and the voting power of our venture capital institutions is weakened. If there is no veto, how can we guarantee the rights and interests of our investors?"

It was Li Shilun, president of SBI China, who spoke, although he was more restrained, but it could be seen that people were very excited.

Concerning their own interests, Tong Shijie of GGV and Gan Renping of Qiming also spoke one after another to put pressure on Zhang Yida.

Although Shen Beipeng and Xu Xiaoming helped Zhang Yida speak, after all, they were not the leading investors in the B round, and it was useless to help.

Zhang Yida is very angry in his heart, but he can't be angry on such an important occasion now.

Originally, his age was very criticized, and if he was not mature enough, it would not reassure investors.

"Let's increase the number of seats on the board of directors!

Otherwise, I will add a performance bet, and I will not be able to agree to a veto anyway. ”

Zhang Yida said after thinking about it, in fact, these investors are still not at ease with Zhang Yida and are afraid that the company's operation will go wrong.

Gambling is a panacea, and if you eat it, you won't make a fuss.

"Yes, how to set the conditions for gambling still needs to be discussed by many parties. ”

Li Hengbo finally showed a smile, all he asked for was a guarantee, he couldn't get a veto, and it was okay to have a performance gambling promise as a guarantee.

Zhang Yida and Lin Zhenyang went out of the conference room to smoke a cigarette and gave the conference room to a group of investors as a place to discuss and gamble.

"What if they give our lion a big mouth?" Lin Zhenyang took a puff of his cigarette and said with a large cloud of smoke.

"They're all smart people, and they definitely won't mess around. It is nothing more than making revenue and net profit commitments for the next three years based on the P/E ratio. Zhang Yida said nonchalantly, he was still very sure of completing the bet.

"Okay, if you're sure. Ruixiang has been able to get to where it is today, and you have the greatest credit.

Do whatever you want! I support you unconditionally. ”

Lin Zhenyang smiled at Zhang Yida and looked at Zhang Yida with a sincere face.

Zhang Yida also felt very gratified, he and Lin Zhenyang have been working very happily since they started their business.

There is no intrigue of other entrepreneurial teams, all kinds of bullshit.

Some only have the mutual encouragement and trust of two dream-chasing youths.

patted Lin Zhenyang on the shoulder, Zhang Yida didn't say anything, everything was silent.

When the two returned to the conference room, several major venture capital institutions also discussed the VAM plan.

"Based on a price-to-earnings ratio of 30 times, Ruixiang must have an annual net profit of $100 million if it wants to support a post-investment valuation of $3 billion.

However, considering that in the next few years, the profitability of the entire group of Ruixiang Jinke will be used to support the mobile payment battlefield. It may not be possible to make a profit for the group as a whole in the short term.

Using a 5x price-to-sales ratio, Ruixiang's annual revenue must reach $600 million. ”

In the end, two sets of VAM schemes were formed:

Plan 1: Ruixiang's net profit in 14 years is not less than 100 million US dollars, and maintains a 20% month-on-month growth, with a net profit of not less than 120 million US dollars in 15 years and a net profit of not less than 144 million US dollars in 16 years.

Plan 2: Ruixiang has a revenue of not less than US$600 million in 14 years and maintains a 20% month-on-month growth, with a revenue of no less than US$720 million in 15 years and a revenue of no less than US$864 million in 16 years.

If any of the two sets of plans are reached, the VAM will be deemed to be completed.

If the VAM is not completed, the net profit difference between the three years will be made up by Rui Xiang management, and cash or equity compensation will be paid to the B round investor.

On behalf of Rui, Zhang Yida signed this Series B investment agreement with Jinke Group:

"The Series B financing of US$500 million was led by Temasek with US$250 million, followed by Blackshirt Capital with US$100 million, and followed by SBI and GGV, and Kaiming with US$50 million each.

Due to the small scale of the managed fund, Zhenke Fund did not choose to continue to add to the plate of tens of millions and billions, and allowed the shares to be diluted. ”

The share structure after the financing will be as follows:

Zhang Yida's Cayman company, Yizhou Overseas holds a 52.5% stake in Ruixiang Jinke Group;

Lin Zhenyang holds 6.67% of the shares through his own Cayman company;

Ruixiang Enterprise Management (employee stock ownership platform) holds 6.67%;

Blackshirt Capital holds 17.5%;

Zhenke Fund holds 3.33%;

Temasek holds 8.33%;

SBI, GGV, and Qiming each hold 1.66% of the shares.

Mr. Zhang's voting power also dropped, to 83 percent.

Lin Zhenyang's voting power has also decreased slightly, with 10.54%.

The two of them together have more than 93% of the voting rights, and the company's management rights are still stable.

In addition, Black Shirt Capital increased its holdings by $100 million in this round of investment, and its stake ratio increased by 0.5% compared with the previous 17%.

The US$500 million was disbursed in three phases, with the first tranche of US$200 million being disbursed immediately and the other two tranches of US$150 million being disbursed three months later and six months later.

After the agreement was reached, Shen Beipeng and Xu Xiaoming were both happy to die, and Ruixiang's valuation increased 10 times in just half a year, which will add luster to their investment career.

Zhang Yida has no joy or sorrow, and he is not shocked by humiliation. Thinking in my heart, which of the small TMD giants has not risen ten times or eight times in a year and a half, small scenes and small scenes, don't panic!

The seven-party talks on the B round of financing have come to an end, and the next thing is for the public relations department to arrange a financing conference to hype up the fame!

Zhang Yida doesn't care, just let the public relations department arrange it.