Chapter 899 The Brightest Star
Before the Chinese New Year, Zhang Chaoyang went to the Chinese Literature Society.
"How come you have time to come here?" Lin Weimin poured him a cup of tea.
"No one comes to visit you for no reason!"
Zhang Chaoyang took out a document from his bag and said, "Teacher Lin, the company has made more than 2 million yuan from advertising in the past six months, but we have spent more. Not only have we spent all the money we made, but we have also spent most of the money we raised. I plan to raise more money."
Lin Weimin flipped through the business plan Zhang Chaoyang had written and asked, "What's up? Have you let it go? Are you not worried about the shares anymore?"
"There's nothing to worry about. Sitonglifang hasn't achieved anything yet, and Wang Zhidong only has 13% of the shares left. What should I worry about?" Zhang Chaoyang said with a relaxed expression.
His confidence and ease are certainly not given by Wang Zhidong, but are brought about by the rapid progress of Sohu in the past year.
It is no exaggeration to say that China's Internet in 1998 belonged to Sohu.com. Since the launch of Sohu.com webpage at the beginning of the year, Sohu.com has been leading the domestic Internet industry in terms of user growth, popularity and influence, and can be said to be a leader.
After a year of development, Sohu has initially established the prototype of a large-scale portal website. As long as it continues to develop steadily according to the current trend, within three years, Sohu's influence will be comparable to any provincial satellite TV platform in the country.
As China's Internet continues to develop and the number of users continues to rise, Sohu's influence will further expand.
Zhang Chaoyang even imagined that one day in the future, Sohu's influence and coverage would reach the scale of a national media.
So under this situation, Zhang Chaoyang’s first consideration is no longer how many shares and equity he personally owns in Sohu.
One step faster, every step faster, making Sohu always one step ahead and becoming the number one stock in the domestic Internet industry is Zhang Chaoyang’s top priority now.
"Just think it through." Lin Weimin agreed with Zhang Chaoyang's idea and asked, "Who are the financing targets? Who is willing to invest?"
"Goldman Sachs is interested in continuing to invest, Intel is also interested, and there is also Ye Keyong of ChinaNet, but our investment in this round is too large, and his funds are not enough, so I declined."
Zhang Chaoyang introduced several potential investment institutions with a suppressed sense of pride on his face.
Intel ignored him back then, but now seeing the development of Sohu, it changed its tone and begged for investment in Sohu. How could such a counterattack and slap in the face not make Charles Zhang Chunfeng proud?
"And on your side, I wanted to ask you if you want to invest more." Zhang Chaoyang said.
Lin Weimin shook his head with a smile on his face, "We didn't invest last time because we were afraid that we would have too many shares. You have an idea, but I'm afraid we can't afford to invest this time."
His words warmed Zhang Chaoyang's heart. Zhang Chaoyang smiled and said, "The valuation this time is indeed much higher than before. It's not cost-effective to invest again."
In fact, among the potential investors Zhang Chaoyang mentioned just now, only Goldman Sachs has the real ability to invest heavily in the fourth round of financing.
"This should be the last round of financing before Sohu goes public. After this round, you will prepare for the IPO. It is natural that the price is high. Sohu is worth this price now. The title of 'China's No. 1 Internet Stock' is worth a valuation of 200 million US dollars."
Zhang Chaoyang was so proud of what Lin Weimin said that he couldn't help but smile, "You have a good eye. The people from Goldman Sachs contacted me before and were very sincere. They offered a valuation of 200 million right from the start of this round."
“Too low!”
Lin Weimin took a sip of tea and said, "I said that the title of 'China's No. 1 Internet Stock' is worth 200 million US dollars, but that doesn't mean that Sohu's round of financing is only worth 200 million. The Nasdaq market is very hot right now. You have to think that Sohu becoming the first Chinese Internet company to be listed on Nasdaq is not only good for Sohu itself, but also a huge help to the performance of the investment company..."
Hearing this, Zhang Chaoyang's eyes immediately lit up!
He is indeed a cunning old man. Mr. Lin’s angle of thinking is so tricky. How come he didn’t think of this?
"China's Internet industry has been booming in the past two years. Sohu is almost the only one in the domestic market. As long as they can talk to you, they will never choose others easily."
Zhang Chaoyang suddenly thought of what Lin Weimin had said to him before. It was not until today that he understood the true meaning of this sentence.
This is like the sale of second-hand houses. There are 100 houses listed for sale in a community, all of which are priced at 1 million yuan, but only one house is priced at 900,000 yuan.
Then, before this house worth 900,000 yuan is sold, the houses in the community will never be sold.
Zhang Chaoyang couldn't help but admire that Teacher Lin had already understood and explained the problem clearly a long time ago, but he only realized the profound meaning of it today.
Zhang Chaoyang suddenly felt a little fortunate in his heart. On the development path of Sohu, it was a blessing for him and Sohu to meet an investor like Mr. Lin who was both a teacher and a friend!
"Four hundred million! How do you feel about four hundred million?"
Zhang Chaoyang decided to ask for as much as possible.
Lin Weimin joked: "You have quite a big appetite!"
“I learned this from you!”
Lin Weimin groaned and said, "It should be fine. But we will still need the help of Goldman Sachs for the listing, so we don't have to be so stubborn."
At this stage of Sohu, listing on NASDAQ has become a must, but a successful listing also requires the help of financial giants such as Goldman Sachs.
The two parties complement each other. Zhang Chaoyang opened his mouth wide and Goldman Sachs was willing to join in, also for the greater benefits after Sohu went public.
Zhang Chaoyang nodded, "I understand."
Lin Weimin then added: “After getting the fourth round of financing, we still need to push for listing as soon as possible, preferably in the first half of the year.”
Hearing this, Zhang Chaoyang was a little surprised.
If we follow the assumption just now, Sohu only received the fourth round of financing during the Chinese New Year, so it is not short of money at all. Going public in the first half of the year means that it is planning to go public right after receiving the fourth round of financing, which is too hasty no matter how you look at it.
"I heard that Sina is in contact with Softbank, DCM and Goldman Sachs recently. It is said that the amount of their financing in this round may exceed 20 million US dollars. If they get this money, Sina's take-off is just around the corner.
If Sohu doesn't act fast, it's still unclear who will win the title of 'China's first portal website' or 'China's first Internet stock'!"
Zhang Chaoyang was shocked when he heard this.
Sina is the new company formed by the merger of Sohu.com and Huayuan Information. Although the merger was just completed in December, the strength of the two companies should not be underestimated. Moreover, there is the shadow of American financial capital behind them. After the merger, if the two companies can get tens of millions of dollars in financing, they will almost be Sohu's biggest competitor in the domestic Internet industry. Sohu will inevitably face fierce competition from Sina in the next few years.
Zhang Chaoyang’s first reaction was that he should not allow Sina to successfully obtain financing, but then he denied his idea. This was not something he could decide.
Since it is impossible to disrupt Sina's financing, the best way now is to maintain its position and establish Sohu's leading position in the Chinese Internet and on the Nasdaq in the United States.
Before he knew it, Zhang Chaoyang already had a plan in mind.
"The valuation of this round of financing can indeed be more flexible. What do you think about me attracting a few more venture capitalists and getting an exclusive investment agreement?"
Lin Weimin immediately understood what Zhang Chaoyang meant.
Nowadays, there are not many foreign investment institutions willing to invest in the domestic Internet industry. Assuming that Sohu can attract several large companies to Sohu and sign exclusive agreements, even if Sina can raise funds, the scale will be very limited.
This is equivalent to slowing down Sina's development. The Internet industry is slow at every step. It will be more difficult for Sina to catch up with Sohu.
Lin Weimin shook his head. "It's not worth it. Sina has money, connections, and resources. Even if you can stop them from raising funds this time, you can't stop them from raising funds next time. The Chinese Internet market is so big. Unless Sohu can become the only dominant company, how can you stop it?"
And if you want to sign an exclusive agreement, what can you do with those investment companies? How many shares do you have to give up to impress them?"
Zhang Chaoyang was awakened by Lin Weimin's words. He knew that his idea was a bit wishful thinking. He said seriously, "You are right. Then hurry up to raise funds. During this period, we must spend money non-stop. After the New Year, we will prepare for the listing and strive to ring the bell at Nasdaq in the middle of the year."
After speaking for a long time with great earnestness, Lin Weimin felt relieved when he saw that he had finally convinced Zhang Chaoyang.
He then instructed: "You have an urgent task right now."
"What mission?"
"Sohu's portal news business has developed very well in the past six months, but it is still skirting the line. Before going public, you must formalize your news business. The most important thing is to obtain the qualification to publish news approved by the State Council."
Portal websites are a new thing in China, and the time they focus on news is even shorter, so there is a blank area in terms of supervision.
But if Sohu wants to go public, there can be no gray areas and everything must be legal and compliant.
Most media organizations must first obtain the qualification to publish news. Since Sohu wants to engage in news business, this procedure cannot be skipped.
Zhang Chaoyang was a little troubled when he heard this. "I'm afraid this is not easy to do. We at Sohu don't have the resources in this area."
As he spoke, he looked at Lin Weimin for help.
Lin Weimin sighed, "Come on, we are also shareholders of Sohu. I'll give you a heads up on this matter!"
Zhang Chaoyang was delighted, "Thank you, Mr. Lin, you are the guiding light of our Sohu!"
"It goes without saying that I need to thank you. Taking Sohu public as soon as possible will be the best reward for me."
"Don't worry, Sohu will definitely go public in the first half of the year. I'll give you a military order!" Zhang Chaoyang said firmly.
"There's no need to issue a military order. With Sina chasing after you, I believe you'll be very motivated." Lin Weimin said with a smile.
Zhang Chaoyang couldn't help but laugh. What he said was right. Sometimes competition from peers is the most powerful driving force for entrepreneurs.
Three days after communicating with Lin Weimin, Zhang Chaoyang called.
Sohu's fourth round of financing has been completed, led by Goldman Sachs and followed by Intel Capital. In this round, Sohu's valuation was US$380 million, and 18% of its shares were released. Sohu therefore received US$68.4 million in financing.
The financing was completed in just three days. Zhang Chaoyang's decision was decisive and his actions were swift and resolute.
After the news came out, it quickly set off the domestic Internet industry and financial circles.
The financing amount of 68.4 million US dollars and the valuation of 380 million US dollars set a financing record for China's Internet industry. Before Sohu, no Chinese Internet company had been able to reach such a height.
Before the Lunar New Year, Sohu became the hottest and most promising company in China's Internet industry. Everyone was sure that Sohu would become the first Chinese Internet company to be listed on NASDAQ.
As the helmsman of Sohu, Zhang Chaoyang became the brightest star in China's Internet industry before the new century under the attention of countless media and the public.
(End of this chapter)
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