My Age of Investment

"Daren, you should have a general understanding of our products now, right?"

Duffield smiled, "If you have any questions, just ask them directly, and I will answer them all."

Xia Jingxing basically understood that this is a company that provides SaaS (software as a service) for enterprises.

Enterprise software, of all kinds.

This company belongs to the category of vertical segmentation, focusing on human resource management.

Enterprises purchase software services on an annual basis, and use Workday software to help their companies do performance evaluation, salary planning, optimize employment costs, and so on.

For example: when performing performance analysis, not only can you see the link between employee performance and salary, but you can even trace the channel through which employees were recruited.

The US enterprise software market is booming. Even a small business with more than a dozen employees will purchase and use B-end software.

However, domestic small and medium-sized entrepreneurs lack awareness in this regard, and many of them are still using local methods to manage employees.

Large enterprises generally choose customized services and will not use SaaS services.

Therefore, compared with the United States, even after more than ten years in China, there have not been two decent enterprise software unicorns.

On the other hand, enterprise software companies in the U.S. market are living very well. Oracle and Salesforce are all large companies worth hundreds of billions of dollars.

Satisfied is satisfied, but Xia Jingxing still has to pretend to be picky, the promise is too straightforward, and the valuation will be difficult to discuss next.

"As far as I know, Oracle intends to let PeopleSoft continue its low-price strategy for a while until it kills you."

Xia Jingxing spread his hands, "If I'm not mistaken, the seed customers on weekdays must come from PeopleSoft's old customers, because everyone has a certain friendship.

But if PeopleSoft provides more mature and stable services and has an advantage in price, then the friendship will not stand the test. "

Duffield smiled, "You are right, no matter how good a friendship is, it cannot stand the test of interests.

But Darren, have you thought about it? Why is Larry Ellison so afraid of us? "

"Afraid of you?"

Xia Jingxing tilted his head and asked.

Duffield looked confident: "Yes, if he is not afraid of us, why is he engaging in low-price competition strategy and threatening investment institutions in the venture capital market?"

Xia Jingxing shook his head, "It's not necessarily because I'm afraid of you, but maybe because I want to eliminate all unstable factors?"

Although the old man was already old, his thinking was very quick, and he caught the flaws in Xia Jing's jargon, and said along the way:

"Like Darren, you have admitted that the workday is an unsettling factor for Oracle and for PeopleSoft.

If our unstable factor continues to develop, it may become a spoiler, and all of Oracle's 10 billion US dollars will be in vain! "

"I don't deny that the working day poses a certain threat to PeopleSoft!"

Xia Jingxing looked into the old man's eyes, and said very sincerely: "Because Oracle's acquisition this time is obviously not satisfactory. After acquiring the company's assets, they let go of the most valuable asset - talents."

Hearing Xia Jingxing's evaluation of Oracle's acquisition, the old man couldn't help showing a smile on his face: "Yes, Dai Lun, because it is a hostile acquisition, it is doomed that Oracle will not be able to accept everything from PeopleSoft satisfactorily.

What leaks through the fingers, it all flows into the workday, including talent, customers, and so on. "

Xia Jingxing waved his hand, "We don't need to argue about the threat of this company to Oracle, what I want now is an answer.

Please tell me, how do you deal with Oracle's crackdown?

This question is important and forms the basis of financing negotiations. "

"Oracle and PeopleSoft cannot monopolize the entire market. We are negotiating with several large companies. Winning them will serve as a weather vane."

Duffield asked Busri to bring a few stacks of documents and handed them to Xia Jingxing, all of which were intentional cooperation agreements.

Xia Jingxing went through it carefully, and can only say that the old man's prestige in the industry is indeed high. The company has only been established for a few months, and he has pried away PeopleSoft's big customers.

No wonder Larry Ellison is so crazy. He really wants to let his tens of billions of dollars go to waste and buy an empty shell.

"This kind of relational business is destined to be unsustainable for a long time. If we want to attract more small and medium-sized customers, we must focus on the product itself."

Xia Jingxing gently put the file back on the table and said calmly.

"Yes, so we recently held a meeting with the technical backbone of the organization to discuss a major upgrade of PeopleSoft's original human resource management software, so as to solve the original deficiencies or defects in one fell swoop."

The old man shrugged and said, "At that time, customers will know which company's products to choose."

At the moment, the concept of cloud computing has not yet become popular, and the Workday company obviously hasn't thought about it in this direction, or it's already working hard in this direction without knowing it.

Xia Jingxing also didn't want to go to pluck the seedlings to encourage them to grow, besides, he hadn't written anything about the investment yet, so it wasn't his turn to point fingers.

He asked a few more questions, and the old man answered them one by one.

"Okay, let's talk about valuation."

Duffield nodded, which was exactly what he wanted.

"Mr. Lin said, you want to raise $10 million at a post-money valuation of $200 million?"

Duffield said sternly: "Yes, when the company was first established a few months ago, Busri, Greylock and I invested a total of 15 million US dollars, and the company was valued at 100 million US dollars at that time."

Hearing this, Xia Jingxing's heart skipped a beat, feeling that the old man was a little dishonest and suspected of driving up the valuation.

Smiling, he said slowly: "Workday was established in March, it has only been less than half a year, and the product has not been officially launched to the market, so the valuation will not double, right?

Moreover, the A-round financing of Workday is not supported by actual products, and there are founders joining in. It is more similar to seed rounds and angel rounds of financing, right?

Mr. Duffield, although Vision Capital has been established for a short time, we are not ignorant of the industry. "

The old man looked calm, "Human resources software is a track worth tens of billions of dollars, and its market potential has been verified by PeopleSoft.

It is no exaggeration to say that there are currently 70 engineers in Workday, plus the industry experience of Busri and me, this can be valued at 100 million US dollars.

Coupled with the current semi-finished software, I think there is no problem at all with a valuation of 200 million US dollars. "

Xia Jingxing knew that no entrepreneur was willing to give in easily when it comes to issues such as valuation and equity dilution ratio, even if the conversation with the founder was harmonious.

After a verbal battle with the old man, neither one would give in.

Busri, who hadn't interrupted much, jumped out at this time and said: "Daren, how about this, let's make a concession and raise 20 million US dollars at a post-investment valuation of 200 million US dollars."

Duffield frowned on purpose, and sighed after a long while: "Hey, that's okay, Darren, you are an investor who understands the corporate market, and I had a good chat with you today. What a bad choice."

The two sang together, cooperated skillfully, and wanted to take down the young investor in front of them.

Xia Jingxing didn't accept this, and pointed a finger, "10 million US dollars, 10% of the shares, this is our final offer, please think carefully about it."

After finishing speaking, Xia Jingxing was about to get up and leave.

Seeing that the two of them had no intention of staying, Xia Jingxing had no choice but to play the trick to the end and really left.

…………

…………

For the next week, Duffield called Xia Jingxing every day to negotiate the valuation.

In the end, the two parties took a step back and reached an agreement with a pre-investment valuation of 135 million US dollars and a post-investment valuation of 150 million US dollars. Vision Capital invested 15 million US dollars in Workday, accounting for 10% of the shares.

The old man originally didn't want to dilute so many shares, but Xia Jingxing made some concessions on the valuation, so he thought about it and agreed.

Xia Jingxing was generally satisfied with this result.

He couldn't really push the old man into a corner, because the old man cashed out 600 million US dollars through Oracle's hostile takeover, and even after paying taxes, he still had 400 to 500 million US dollars.

The reason why he did not choose to inject capital by himself, but to raise externally, is that the old man does not have much confidence at present, and the company will definitely be able to make it.

Xia Jingxing clearly remembered that in the subsequent rounds of financing during the working day, the old man co-invested a total of 100 million US dollars, and he was still the controlling shareholder until the company went public.

Therefore, apart from this opportunity, after the official listing of the software later, there is basically no possibility of earning a lot of equity.

After the investment intention agreement was drawn up, Xia Jingxing also tentatively asked the old man: Based on the valuation of 200 million US dollars, is it okay to invest 40 million US dollars and obtain 20% of the equity?

This proposal was rejected by the old man without hesitation.

Because they raised more than 20 million U.S. dollars, it will not be of any special help to the working day. They have enough funds now to support the software until it goes public.

After the software is listed, if it succeeds, the valuation will skyrocket; if it fails, everything will return to zero.

Although you can get more funds in your hands, fight for the second time.

But the old man has his own ideas. If he really fails, he should retire completely and stop tossing, because the era no longer belongs to him.

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