Chapter 9 Sequoia Capital "Attack"
In 1986, Microsoft went public. Henry witnessed first-hand the rise of this great software empire. Stockholders, the NASDAQ and Wall Street have gone crazy, and Microsoft's stock is soaring like a rocket! At this moment, the youngest billionaire in the United States has been born!!
Microsoft stock is like a stripping beauty, which is warmly sought after by investors and stockholders, and even Henry is greedy when he looks at it (hehe, the "capital" is a little smaller, and he can only be greedy). But with Henry's current strength, he can't afford to buy a large number of Microsoft shares, and Bill Gates is like a conservative nun, holding the stock tightly and not wanting to sell it at all. Of course, this is a unique vision, believing that Microsoft will be stronger in the future, and the stock price will definitely rise!
Since the founding of Microsoft, Bill Gates has rarely sold shares. Even if you sell shares, you are seeking technical support from the other party.
Selling shares for the sake of technology, obviously, Bill Gates' ambitions are huge!
Henry felt that he should learn from Bill Gates. Be sure to keep the stock tightly covered, and never sell it cheaply!
Cisco's development is very gratifying, but due to financial constraints, the company's pace of development has been steady. Henry was embarrassed to raise the capital again, and if he refinanced, the shares of the Bossaks would be further diluted, and finally they would be reduced to working for Henry. However, Sequoia Capital, a capital giant, took the initiative to come to the door.
The track of history does not seem to have changed with Henry's arrival. Sequoia Capital is still the first investment company to be very bullish on Cisco, and it has sent an executive director to talk to it in person.
When Henry heard the news, his heart moved.
Although Henry didn't like venture capital companies, history has shown that Cisco can quickly become a giant, and Sequoia Capital has played a lot of role in it. Anyone who knows Cisco knows that the history of Cisco is a "barbaric" history, and the reason why it is called barbarism is because, in the course of Cisco's development, it has acquired countless companies before and after, and it is well deserved to be called the "king of acquisitions"!
Sequoia Capital is in it, which plays a matchmaking role. For example, if Cisco has its eye on a company or a competitor's company, but it comes to the door to buy it, the effect will definitely not be good, and even others will not sell. So, Sequoia Capital went up. As a venture capital institution, Sequoia Capital will have poor vigilance on the other side. Sequoia Capital then completed the control of the company through a series of financial means, and finally sold it to Cisco. On the one hand, Cisco can get the company's technology to strengthen itself, and on the other hand, it can eliminate competitors who threaten it, so that Cisco has always maintained its leading position!
It would be nice if we could control Sequoia Capital!!
Henry didn't know why such a thought suddenly flashed in his heart, but when he thought about it, he felt funny, now that others are capital predators, don't let it eat itself, and still want to control it?
On May 1st, the members of Cisco's board of directors (Henry and Bossak) officially met with Sequoia Capital.
Ford Brooke, executive director of Sequoia Capital, was momentarily stunned when he met Henry, Cisco's majority shareholder. The major shareholder of such a potential high-tech company is actually a child?!!Oh, my-god!!
Henry smiled in front of him, "Welcome, Mr. Ford Brooke. My name is Henry, Henry Williams! Hehe, you may have heard of my other identity - Henry Williams, the author of "Harry Potter"!"
Ford Brooke was stunned for a moment, but quickly reacted, and he suddenly realized: "Harry Potter? Oh, the genius of the United States, of course I have heard of you!! but I didn't expect that you are still the majority shareholder of Cisco!"
Henry laughed, "It's nothing. Uncle Posack and I were neighbors, and he was also my computer teacher. Then Mr. Bosak wanted to start a company, so I stole some money into it. ”
"Oh, I see!" Ford Brooke couldn't help but sigh, this kid is really lucky, it's almost jealous!! Ford Brooke sighed with emotion, but also secretly glad in his heart, the majority shareholder of this company is a child, thinking that his acquisition plan must be smooth sailing! Ford Brooke couldn't help but laugh on his face.
At this time, Henry also laughed. Sequoia Capital wants to get a stake in Cisco this time, and it is impossible not to bleed!!
The two sides have not yet formally negotiated, but sparks have already been sparked. But the Posacks were the only ones who didn't realize that the war had begun. They also don't see the true value of Cisco, and if they still look at the situation in their previous life, they will definitely be killed by Sequoia Capital. Sequoia Capital bought one-third of Cisco's stock for only $2.5 million, which is crazy!!
After everyone was seated, Ford Brooke made his intentions clear: "Sequoia Capital is a very good investment firm in the United States, and it aims to help some innovative high-tech companies grow. And Cisco is one of them! So, on behalf of Sequoia Capital, I formally proposed financing to Cisco. This is our proposal, please take a look at it!"
Henry took the plan handed over by Ford Brooke, opened it, and read it carefully. This plan mainly describes the benefits of Sequoia Capital's investment in Cisco, in addition to the financial aspect, but also in management, networking, promotion and many other aspects to help, and then help the company go public. The plan was well written, but there was only one thing that upset Henry: Sequoia Capital invested only $5 million and wanted to get 45% of Cisco's shares!
After reading it, Henry frowned and did not speak.
Ford Brooke began to introduce the strength and influence of Sequoia Capital, he said: "Founded in 1972, we at Sequoia Capital have focused on the venture capital industry for more than ten years, and have invested in high-tech companies such as Apple, Oracle, and 3com to help them grow and grow. In the United States, Sequoia Capital has a lot of partners, such as IBM, General Electric, Compaq and other large companies, I believe that Cisco will be able to grow rapidly with our help!"
Henry shook his head in his heart, but he had to sigh that Sequoia Capital's vision is very unique, appl, oracle are very awesome companies, 3com is also a famous network equipment company in the United States, their founder is the inventor of Ethernet, just this patent, the rise of the Internet in the future, not crazy!
"Mr. Brooke, Cisco has no financial pressure, so we don't need financing!" Henry was very dissatisfied with the conditions offered by Sequoia Capital, so he decisively refused.
Ford Brooke smiled and said, "But you don't have too much money to develop the market, do you? You know, before there are competitors in the industry, it is particularly important to take the lead in seizing the market and establishing its hegemony." And what we Sequoia Capital want to do is to come and help you achieve this goal!! we have the funds, we have the channels, and you have the technology, the two cooperate, invincible!"
Grass! It was almost to Henry's heart, and the Bosss were excited. Obviously, Ford Brooke had made a lot of preparations before he came here!
"Mr. Brooke, what do you think will be Cisco's market value in the future?" In fact, Henry also values Sequoia Capital more. But it's not about its money, it's about its influence, and it's about helping Cisco in many ways, such as connections, management skills, etc., which is obviously not something that a newly established company can do. However, if the price given by Sequoia Capital is not suitable, Henry would rather Cisco develop slower than take advantage of Sequoia Capital!
"Cisco's development potential is still there......" Brooke smiled, pretending to think as he said, "But according to the current market situation, Cisco's market value will definitely rise in the future, but it will not increase much." As for the specific amount, it depends on the future development of Cisco. However, Cisco's current market capitalization is less than $10 million. So, we invest $5 million, as long as you have 45% of the shares!"
"Mr. Brooke, since you say so, I'm afraid we won't have to talk about it!" said Henry.
"Oh, so how much does the little genius writer think Cisco should be worth?" Ford Brooke asked with a smile, he didn't think that Henry would be his negotiating partner, and he thought that Henry was young, and his knowledge and experience were very lacking, so he thought that the amount of market value proposed by Henry would definitely not be too high, up to $100 million! Ford Brooke was confident. Before coming, the board of directors conducted a very detailed and careful analysis of Cisco, and unanimously agreed that Cisco has great potential for development and will set off a huge cyber storm in this era!!
Because Sequoia Capital has been committed to investing in high-tech companies such as computers, they are far more sensitive to routers and networks than ordinary people, and they are far more aware of Cisco's future prospects than other companies. This time, the board of directors gave an order, no matter what, it must take the shares of Cisco!
Even if Henry said that Cisco's future market value is 100 million, he will admit it!! and then, at most, he will invest another $10 million or 20 million on his side, anyway, just try to get as many shares as possible.
But Ford Brooke didn't expect that even the Bossaks were stunned. Henry said an astronomical amount to them.
"More than 500 billion ......," Henry said casually.
Burst!!!
Ford Brooke squirted out the water he had just drunk when he heard the number.
**, more than 500 billion !! Ford Brooke was dumbfounded and couldn't believe it.
"Are you kidding?" asked Ford Brooke.
"I never joke because my jokes aren't funny at all. Henry shook his shoulders and said, "I know you don't believe it, but that's what I expect from Cisco, and I think it's worth the price." Therefore, I will not sell Cisco shares easily, if you Sequoia Capital are not sincere enough......"
Henry didn't say anything to death, and left a line for Ford Brooke.
Of course, the negotiations fell apart.
After Ford Brooke left, Henry called Mr. and Mrs. Bossak over in order to prevent Sequoia Capital from taking the "couple route"!
"Uncle Bosak and Aunt Lerner, don't you believe what I said?" asked Henry with a smile.
"This is simply impossible! The company with the largest market capitalization is only more than 100 billion dollars now, how can Cisco be worth 500 billion dollars?!!" Bossak shook his head, and Lerner also looked incredulous.
"If I wasn't a traverser, I wouldn't believe it!" said Henry.
Although the Bossaks didn't believe their words, it didn't matter, the key was that they didn't sell their shares cheaply, so they had to give them some advice: "Sequoia Capital takes a fancy to Cisco, which shows that Cisco has unlimited development potential." I believe that even if Cisco's market capitalization is not 500 billion dollars, there must be billions, tens of billions of dollars. You must not sell the shares casually, and even if you want to sell them in the end, then sell them to me!"
"Don't worry, we won't just sell our shares!" Lerner said casually, touching Henry's head.
Henry was still not at ease, and then persuaded a few more words, but it seemed that they didn't care much at all. In desperation, Henry finally signed an agreement with them, the terms of which were simple, Henry had the right of first refusal to buy their shares in Cisco. If the Bossaks want to sell their shares, they can sell them to someone else unless Henry doesn't want them, or can't afford the price!
Seeing the black and white words, Henry smiled and said secretly, now he is finally relieved.
Hehe, just wait for Sequoia Capital to come and see how you "cut him"!
(No one has voted yet?can't you still read happily, everyone doesn't vote!)