My Age of Investment

In the evening, Kristina and Xia Jingxing returned home to Palo Alto after get off work at Facebook.

After entering the house, Christina took off her coat and handed it to the servant. Then she sat down on the sofa angrily, folded her hands on her chest, and said with a straight face: "You shouldn't mention it at the meeting today. The IPO thing.”

Xia Jingxing walked over with a smile, sat down next to Kristina, put his arm around her shoulders and said, "What's wrong? Isn't everyone looking forward to the IPO for a long time?

I am now giving a clear timetable, just to appease people's minds. "

Kristina said angrily: "Then you shouldn't have brought it up today! Now, Vision Capital will acquire the options from employees, and then announce the resumption of listing plans.

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

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

This price is quite a lot, very fair.

There are big question marks as to whether Facebook can reach a market value of US$100 billion when it goes public in the future, and whether it will still have a market value of US$100 billion when employees cash out.

Now there is an opportunity to cash out at a one-time valuation of US$50 billion. 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 procedures are very compliant, but don't others think so?"

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

But no matter how we do this, someone's interests will be harmed.

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

Kristina raised her head in deep thought, and after thinking for a long time she said quietly: "Maybe you are right, you have seen through the essence of the matter.

Is this what the Chinese idiom "desires are hard to satisfy" refers to? "

Xia Jingxing burst out laughing, "Yes, your Chinese skills are almost surpassing mine."

Kristina smiled slightly, "Don't make fun of me. I will never be able to surpass you in my lifetime of learning."

“Oh, by the way, Darren, after multiple rounds of financing dilution, Facebook’s original 10% option pool only has 7.1% left.

Next, Vision Capital acquired 2% of it, leaving only 5.1%, 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 bit too small.

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

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

Even if the company has been listed, equity and option incentives cannot be stopped unless it no longer wants to develop.

In addition, using options to offset workers' wages is also a magic weapon to save corporate cash flow. It also binds employees, and the set exercise price can also mobilize employees' work enthusiasm.

Xia Jingxing said: "Wait for the board of directors meeting in two days and propose it together. Let's dilute 5% of the shares together and inject them into the option pool to add some fuel to Facebook's plan to go public.

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

If Facebook wants to obtain a higher IPO pricing, its financial reports must be better-looking.

How can we make good financial reports? In addition to hiring a professional accounting firm, employees also need to be motivated. "

Kristina nodded seriously and replied: "Yes, in the past, the slogan of going public was shouted year after year, and the employees were a little numb.

Just shouting slogans is useless. This year we must take active actions to let employees feel the company's determination. "

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

…………

…………

Two days later.

Larson, Axel Breyer, Principal John, Andrew, DST Yuri Milner, Masayoshi Son of SoftBank, 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 shares.

Also attending the meeting were the three founders Xia Jingxing, Xiao Quan and Kristina, as well as Vision Capital representative Abel.

The first topic discussed at the meeting was Envision Capital’s acquisition of 2% employee options from Facebook.

All shareholders voted in favor of the resolution.

Even Yuri Milner, whose plan failed and was intercepted by Vision Capital, did not jump out to speak out, which surprised Xia Jingxing.

Then, while discussing the second issue, disagreements arose among the shareholders.

"I don't think it's necessary to issue 5% more equity to add to the option pool," Breyer said.

Now that the plan to restart the listing has been decided, I believe Facebook will be able to enter the capital market no later than two years at the latest.

In such a short period of time before listing, there is no need to grant 5% options, 3% is almost enough. "

"Yes, if there are not enough reserved options in the option pool in the future, you can still wait until the listing to issue more!"

"I agree! When Facebook went public, a new group of shareholders were added. More people will dilute the equity together, which means we can dilute less."

"A simple calculation, assuming that Facebook goes public and issues 10% of new shares, and then collectively dilutes 2% of the shares and injects them into the option pool, our current shareholders can dilute 0.2% less. Based on a valuation of US$60 billion, it can save a full 120 million. Dollar."

…

The shareholders showed off their financial literacy and mathematical calculation skills one after another, chattering like sparrows and arguing non-stop.

It can also be seen from here that Facebook has indeed grown into an Internet behemoth. The smallest shares are worth hundreds of millions of dollars, which is worthy of a war of words among shareholders.

Xia Jingxing listened to everyone expressing their opinions with a calm expression. It was not until the scene completely quieted down that he said: "As the largest shareholder of Facebook, if I dilute my equity more before going public, it will be the biggest loss for me.

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

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

There is no need for us to reduce the number of options granted just because of a small profit.

On the contrary, I believe that Facebook will increase its option granting efforts compared with the past few years.

Shareholders are looking forward to Facebook's IPO because of the huge rewards of going public.

Employees should not be spectators, they should participate in this wealth feast together.

The people responsible for user growth are employees, the people responsible for expanding advertising merchants are still employees, and the people responsible for developing a website that can host 800 million users around the world are still employees!

When thousands of people strive for the same goal, the power that breaks out is amazing!

For every 100 million additional users and $100 million in net profit that Facebook gains, converted into market capitalization, there may be an additional $10 billion.

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

Kristina watched Xia Jingxing "educate" shareholders with a smile on her face. This was the plan they stayed up until midnight to discuss.

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

Some venture capital institutional shareholders may sell their Facebook shares and exit immediately after the listing. Naturally, they value short-term interests more and do not want to see the equity held by their institutions diluted before the listing.

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

Xia Jingxing continued: "In short, I think the issuance of 5% additional equity is not much at all.

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

In as little as one year or as slowly as two years, we will all witness the birth of an epic technology IPO. "

The shareholders were silent for a while, but finally compromised in front of the IPO pie drawn by Xia Jingxing and agreed that Facebook would issue 5% more new shares and inject them into the option pool.

After the meeting, the shareholders left one after another.

Yuri Milner was not in a hurry to leave. He found Xia Jingxing and expressed that he wanted to talk.

:,!