cloud network hunting note: “equity ratio is not the most important, the first one is control, you must learn to control your business. In addition, you take your business to make a huge, great business, so even if you only a few (equity) ratio, also does not affect you to become China and even the world’s richest man “. Jingdong group founder and CEO of liu in 22 when taught in the school of “dark horse” to make the above statement.
in liu’s view, entrepreneurial companies have high valuation is a good thing, but if the valuation is too high, can bring fatal to subsequent financing problems. It suggested that entrepreneurs in the process of financing, don’t spend time on set the stake. “If investors willing to give you money,” their money as soon as possible, “dumb money now very much, you should take more money, because the dumb money will soon be gone”.
here is liu transcript:
liu: the black brothers, good evening, I’m liu.
every black students often on various occasions to hear the speech of chicken soup type, this is my most are not good at. Today, I want to talk about my ideas about enterprise equity control point. Often someone again and again make peace with you venture equity related things, entrepreneurs, try all means to find out all the investors, is wants to let you have a high valuation.
with high valuation originally is a good thing, but also has a fatal weakness. In general, most of these start-ups before listed at least through three rounds of financing, or even four, five rounds of financing. If you one round of valuation is too high, it will bring the back of the financing is very fatal problem.
if your valuation is too high, when performance tripled, the need to refinance, once the market is not good, the new investors will not accept, old investors are hard to follow up, and can actually make you follow-up financing problems. So, I hope you in the process of financing, don’t spend too much time on the set the stake.
take home all the success of the Internet companies, most of the listed company, the founder of the equity ratio is below 20%. But, I want to say, of the stock is not much here today will not be affected black entrepreneurs after three to five years to become China’s richest man, even if you only teens and 20 s equity is enough.
big companies such as BAT, for example, founder of more than 20% stake in listed companies was almost, but after dilution behind, now is less than 20%. Ma business has 18 arhats, there are a lot of shareholders, but this does not affect his became the richest man. Tencent is the same. Stake, therefore, is not the most important, first one is control, you must learn to control your business. In addition, you take your business to make a huge, great business, so even if you only a small proportion, does not affect you to become China and even the world’s richest man.
I do in this industry for ten years, witnessed the three dial the growth of the capital market ups and downs of change, so I also hope all the entrepreneurs, if investors are willing to give you money, the money as soon as possible. Today there are many entrepreneurs only tens of millions in revenue, estimated at $500 million valuation. Dumb money now very much, you should take more money, because the dumb money will soon disappear. Some say not ah, although said silly money very crazy, after the winter may also make a lot of money. But it’s only a few, in 2011 the two years time, just to get the financing of electric business enterprise of a 46, but to the few successful today, 90% of the electricity had almost died. Later, everyone has careful investment in electricity, “talk about electricity color change” for several years. With jingdong, ali list this year, everyone again shine up enthusiasm, electricity investment boom. Successful enterprise is, of course, is bound to appear, but success is minority after all, so I suggest you can take money to get money. Finally, I gave sentence: black college and all black entrepreneurs in China’s current social environment, the whole Internet industry still exist many problems actually. Our country, the society needs more entrepreneurs, under the protection of the laws and regulations, making money, that will make society better. Thank you all!