In 1999, everything seemed so hopeless. Penguins received a thick letter from the United States.

The letter comes from lawyers at AOL, who are suing OICQ for infringing on their intellectual property rights and demanding that Penguin cease using it.

Pony Ma and his team gathered, and everyone understood they didn't have the money to fight a lawsuit. Nine months after its founding, OICQ had acquired ten million users, but Tencent had less than a dollar in cash left. At this point, Pony Ma only had two options: sell more assets and cut costs, or sell Tencent.

Pony Ma tried two paths: selling cars, buying houses, and even selling his shares in Tencent, but he encountered difficulties in selling Tencent.

Those interested in acquiring the company wanted to know how Tencent would make a profit, but they couldn't get an answer. It wasn't actually Pony Ma's problem; at the time, the internet environment was such that nobody knew how to make money. The internet was just emerging in China, and everyone was figuring things out as they went.

At one point, Tencent's valuation even included computers and office furniture. Pony Ma and his team hoped to sell it for 30 million RMB, but the highest bid they received was only 600,000 RMB.

So the team shifted its focus to selling assets and securing loans. A friend of Pony Ma lent him money, saying, "If you really don't have the money, you don't need to pay it back. I don't need your stock either." Their sales expert, Zeng Liqing, suggested they seek help from venture capital.

Those who still hold outdated views on IT cannot see the future. Zeng Liqing suggested that we need to find more ambitious people, those who not only see the company's current profit points but also its future. That's venture capital. This was the first time Xiao Ma (Pony Ma) learned about the concept of VC.

At the time, the most famous venture capital firm in China was IDG Capital from the United States. Zeng Liqing arranged a meeting with IDG through his contacts and prepared a 20-page business plan.

Pony Ma and Zeng Liqing met with Wang Shu of IDG. They seemed a little sad: "If IDG doesn't invest in us now, Tencent is finished. But even if you do invest in us, we can't guarantee the future." Wang Shu asked them what they thought of Tencent's future. Pony Ma replied, "I don't know." Years later, when Wang Shu recalled this moment, he said, "At that moment, I felt that he was a very down-to-earth leader, a trustworthy person."

When the deal for Penguin reached the top management of IDG's Beijing office, everyone asked the same question—"How will Penguin make money?" After being bombarded with questions about the company's profit model, Pony Ma simply said that he only knew many people were using Penguin, but he didn't know who he could profit from. He was very honest, because Pony Ma himself genuinely didn't know.

Ultimately, IDG invested in Tencent for two reasons: First, OICQ was indeed a popular product and people genuinely liked it. Second, they saw ICQ's successful exit—being sold to AOL—and therefore believed OICQ might be worth a try.

Tencent offered a valuation of $5.5 million. The founding team wanted to retain the majority of their shares, so they sold 40% for $2.2 million. Another investor was PCCW, the investment company of Richard Li, son of Asia's richest man, Li Ka-shing.

Penguin had spent its last penny when IDG and PCCW decided to invest. The two ultimately decided to invest $2.2 million, each owning a 20% stake.

If this investment had come even slightly later, Penguin would not only have gone bankrupt, but it might have died from the bursting of the dot-com bubble. In April 2000, the Nasdaq plummeted, and most of the market capitalization of the world's largest internet companies evaporated. Yahoo's market value fell from $93 billion to $9 billion, and Amazon's fell from $22 billion to $4 billion.

Penguin's $2.2 million has been burned through, and in desperation, Pony Ma and his four lieutenants are looking for someone to scam, hoping to find an unlucky victim.

Then Shen Fang appeared. Shen Fang came to Xiao Ma Ge. Xiao Ma Ge thought Shen Fang was easy to fool because he was so young, and wanted to ask for a high price, but Shen Fang ruthlessly exposed his true colors.

Little Ma blushed, inwardly sighing that things were hopeless and the penguin was doomed, but Shen Fangque looked at Little Ma with a smile.

Little Ma, do you want a wife or not? Hey, Little Ma, do you want money or not?

When Little Ma raised his head, his eyes, which had been dull and lifeless, suddenly lit up with a golden gleam.

Yes, yes, yes, check it out!

What are you doing about? ? ?

Shen Fang laughed and chatted with Xiao Ma for a long time, sharing his insightful opinions. He then directly invested 10 million yuan to acquire 10% of Xiao Ma's shares, telling him, "If you need money, come to me! I will always support you, Brother Ma, you are a man who can achieve great things!"

Little Ma was deeply moved, thinking that Shen Fang was a capable person. He dragged Shen Fang to cut off a chicken's head, burn yellow paper, and become sworn brothers.

If it weren't for Chen Fang, Penguin might really be doomed.

Ultimately, Tencent had to return the domains "OICQ." and "OICQ.net" to AOL. A Tencent employee overheard people talking about OICQ on a bus; they called it "QQ." Later, this endearing nickname became the product's new name.

Penguin raised funds to buy more servers and pay employee salaries, but the source of revenue remained a mystery. Soon after, they began looking for a buyer again. Penguin approached Sohu, Yahoo! China, and several other companies, but they all rejected them. At this desperate time, user numbers continued to grow rapidly. Ironically, QQ reached 100 million users, yet no one in all of China was willing to acquire Penguin.

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