My Age of Investment

   Chapter 1235 Fuel for the sprint to market

   In the evening, Christina and Xia Jingxing returned to their Palo Alto home after get off work from Facebook.

After entering the room, Kristina took off her coat and handed it to the servant. Then she sat down on the sofa angrily, folded her arms over her chest, and said with a stern face, "You shouldn't have mentioned it at the meeting today. IPO thing."

  Xia Jingxing walked over with a smile, sat down next to Christina, put one arm around her shoulder and said, "What's wrong? Weren't you all looking forward to the IPO?

   I now give a clear timetable, just to reassure people. "

   Kristina said angrily: "Then you shouldn't have brought it up today! That's it! Envision Capital purchased the options in the hands of employees with the front foot, and then announced the restart of the listing plan.

  What do you think? Maybe they will call you a vampire behind your back, you are so rich, and you are still calculating the little options in the hands of the employees. "

  Xia Jingxing laughed, "I'm not buying options from them at a low price, at least I will give Facebook a valuation of $50 billion.

  This price is already quite a lot, very fair.

   Whether Facebook can reach a market value of 100 billion US dollars in the future, and whether there is a market value of 100 billion US dollars when employees cash out, these are all big question marks.

   Now there is an opportunity to complete the cash out at one time at a valuation of 50 billion US dollars. Where can I find such a good thing?

   Many unlisted startups cannot provide such an exit channel. "

   "Of course I know the price is fair and the procedure is very compliant, but others don't think so?"

  Xia Jingxing caressed Kristina's back and said affectionately: "Okay, I know you are worried about my bad reputation.

   But no matter how we do this, some people will be hurt.

   Since some people have to get off the bus early, naturally they cannot get the victory prize for reaching the finish line. "

  Christina raised her head in a contemplative state, and after thinking for a long time said quietly: "Maybe you are right, you have already seen the essence of the matter.

   The Chinese idiom "Desires are hard to fill", is this what you mean? "

  Xia Jingxing laughed out loud, "Yes, your Chinese level is almost better than mine."

  Christina smiled, "Don't make fun of me, I can't surpass you in my life."

   "Oh, yes, Darren, after multiple rounds of financing dilution, Facebook's original 10% option pool is only 7.1% left.

  The next 2% is acquired by Vision Capital, and there will be only 5.1% left, which is far less than many Silicon Valley startups founded at the same time as us. "

  Xia Jingxing nodded lightly, the employee shareholding ratio was indeed a little too small.

  The option pool of each Internet startup company is set differently, but generally it accounts for about 10%-20% of the total share capital of the company.

   If the option pool bottoms out, shareholders also need to collectively dilute their shares and refill the pool together.

  Even if the company has been listed, the equity and option incentives cannot be stopped, unless it does not want to develop.

   In addition, the use of options to offset the wages of employees is also a magic weapon to save the cash flow of the company. At the same time, it also binds the employees. The exercise price set can also arouse the enthusiasm of the employees.

  Xia Jingxing said: "Wait for the board of directors to be held in two days, and come forward together. Let's dilute 5% of the shares together and inject into the option pool to add some fuel to Facebook's impact on the listing.

   One or more rounds of large-scale and wide-ranging option grants are conducted one or two years before listing.

  If Facebook wants to get a higher IPO price, the financial report must be good.

  How can I make a good financial report? In addition to hiring a professional accounting firm, the enthusiasm of employees also needs to be mobilized. "

  Christina nodded earnestly and replied: "Yes, the slogan of listing in the past has been shouted year after year, and the employees are a little numb.

   It is useless to just shout slogans. This year, we must take active actions to let employees feel the determination of the company. "

   This night, Xia Jingxing and Kristina discussed for a long time, all the way from the living room to the bed, and finally came up with a mature solution.

  …

  …

   Two days later.

  Waterfall Investments Larson, Axel Breyer, President John, Andrew, DST Yuri Milner, SoftBank Masayoshi Son, and representatives from Morgan Stanley and Goldman Sachs all gathered in the Facebook conference room.

   These eight individuals and institutions are shareholders holding more than 1% of Facebook’s shares.

   Also present at the meeting were the three founders of Xia Jingxing, Xiaodog and Christina, as well as Abel, the representative of Vision Capital.

The first topic discussed at the    meeting was that Vision Capital acquired a 2% employee option on Facebook.

   All shareholders voted to agree to this resolution.

   Even Yuri Milner, who was cut off by Vision Capital, did not jump out and sing the opposite, which surprised Xia Jingxing.

   Then, when discussing the second issue, a disagreement occurred among the shareholders.

  Brayer said: “I don’t think it’s necessary to add 5% equity to the options pool.

   Now that the plan to restart the listing has been decided, I believe that Facebook will be able to land in the capital market within two years at the latest.

   In such a short time before listing, there is no need to grant 5% options at all, 3% is almost the same. "

   "Yes, if there are not enough reserved options in the option pool in the future, you can wait for additional issuance after listing!"

   "I agree! When Facebook went public, it added a group of shareholders, and more people diluted the equity together, which means that we can also dilute a little less."

"Simple calculation, assuming that Facebook issues 10% of new shares, and then collectively dilutes 2% of the shares and injects them into the option pool, our current shareholders can reduce the dilution by 0.2%, which can save 120 million according to the valuation of 60 billion US dollars. Dollar."

  …

   Shareholders showed off their financial literacy and mathematical calculation ability, chattering like sparrows and arguing non-stop.

   It can also be seen from here that Facebook has indeed grown into an Internet behemoth, and its shares are worth hundreds of millions of dollars, and it is worth fighting for a while among shareholders.

  Xia Jingxing listened to everyone expressing their opinions with a flat expression, until after the scene completely quieted down, he said: "As the largest shareholder of Facebook, I diluted the equity more before going public. For me, the loss is the biggest.

   But I still insist on diluting 5% equity into the option pool!

   This is because this and next two years will be the sprint period for Facebook to go public.

   There is no need for us to cut the number of option grants for a small profit.

   On the contrary, I think Facebook is even more aggressive in granting options than it has in the past few years.

   Shareholders expect Facebook to go public because of the huge returns.

   And employees should not be spectators, let them participate in this wealth feast together.

   The person responsible for user growth is an employee, the person responsible for expanding advertising merchants is still an employee, and the person who develops a website that is enough to carry 800 million users around the world is still an employee!

  When thousands of people are working towards the same goal, the power that erupts is amazing!

   For every 100 million more users and 100 million US dollars in net profit, Facebook may increase by 10 billion US dollars in market value.

  You can calculate this account first, and then make a decision. "

   Kristina looked at Xia Jingxing with a smile on her face to "educate" the shareholders. This was the plan they came up with until midnight.

  If you want a horse to run fast, you must feed the horse grass.

  Some VC institutional shareholders may sell their Facebook shares and exit after going public. Naturally, they value short-term interests and do not want to see the equity held by their institutions being diluted before going public.

   And they plan to run Facebook for a long time, focusing on long-term interests.

  Xia Jingxing continued: "In short, I don't think it is too much to issue an additional 5% equity.

   And if nothing else, this should be the last round of equity dilution before Facebook goes public.

   One year fast, two years slow, we will all witness the birth of an epic technology IPO together. "

  The shareholders were silent for a while, and finally, in front of the IPO pie drawn by Xia Jingxing, they compromised and agreed to Facebook to issue an additional 5% of new shares into the option pool.

After the    meeting, the shareholders left.

   Yuri Milner did not leave in a hurry, he found Xia Jingxing and expressed his desire to talk.

   Thanks for the 50,000 points rewarded by Xichen book friends, 5 chapters are added, and 15 chapters are still owed.

   People are a little tired recently, so I try to write as quickly as possible, and finish and add more updates as soon as possible.

   (end of this chapter)