Chapter 22 Listed IDG turned around and left

Like all Internet companies, capital and technology were once Tencent's biggest problems. When Tencent was first established, there were five founding shareholders, Ma Huateng, Zhang Zhidong, Zeng Liqing, Xu Chenye, and Chen Yidan.In the beginning, Ma Huateng, Zhang Zhidong, and Zeng Liqing worked full-time.They collected a total of 500,000 yuan, of which Ma Hua vacated 237,500 yuan, accounting for 47.5% of the shares, Zhang Zhidong contributed 100,000 yuan, accounting for 20%, Zeng Liqing contributed 62,500 yuan, accounting for 12.5%, and the other two contributed 50,000 yuan each. million, 10% each.With the continuous growth of QQ, Ma Huateng decided to expand the shares proportionally, changing the company's total market from 500,000 to 1 million.Even so, for the fast-growing QQ, 500,000 is still a drop in the bucket.

1999 was destined to be a frenzied and restless year in the history of the Internet.That year, the moment Wang Juntao, the president of 8848, was washing his hands in the bathroom, he raised a seed fund of 2 million US dollars; CDC went public on NASDAQ.Internet companies have become the darlings of venture capitalists. In the following February, Sina.com announced that it had obtained 25 million US dollars in overseas venture capital including Goldman Sachs; on July 14, CDC was successfully listed on Nasdaq, the first time. Public offering of 96 million US dollars, creating the concept of Chinese Internet stocks.

"A history of venture capital in China is a history of China's Internet", many Internet bigwigs are deeply impressed by this sentence.In the United States in the 1980s, if the success rate of a venture capitalist (VC) entrepreneurial project was controlled at about 10%, then he was very successful.In China, for quite a long time, venture capitalists wandered between two extremes, either deified or demonized.In the early memory of China's Internet, venture capital is, to some extent, "dumb money".In the cafe, there are many people who hold a few pages of proposals and tell vivid stories to venture capitalists, and there are many people who have received millions or even more dollars in a few weeks, and this is not a fantasy.The principle of investment is: Entrepreneurs occupy the main shares, and the investment money must be spent within a period of time, which is incredible for people in traditional industries.The more important point is: Nasdaq has no requirement for listed companies to be profitable.

When the story of venture capital was written here by Ma Huateng, the demonized elements seemed to have been downplayed.After Ma Huateng prepared 6 versions and more than 20 pages of business plans, he began a long journey to find foreign venture capital.Round after round of negotiations not only made Ma Huateng's tongue dry, but also made him more and more worried about the fate of QQ.In the process of Tencent's financing, the urgency and anxiety of Ma Huateng and the entrepreneurial team cannot be understood by outsiders.According to media reports, during this process, Ma Huateng underwent two lumbar operations.After the second operation, I was lying flat on the bed, holding a notebook aloft to work.

One day in 2000, Ma Huateng, Zhang Zhidong, Xu Chenye, Chen Yidan, and Zeng Liqing gathered in Ma Huateng's office with serious expressions.For several months, everyone has been raising funds for the company, but having a large number of users and high profits are two different things, so no one has thrown an olive branch to Ma Huateng.If no more funds can be raised, Tencent will have to go out of business.During the high-tech fair, Ma Huateng took the business plan to find two investors to discuss, but the other party did not dare to vote for Tencent because they did not understand instant messaging. "IDG (International Data Group) and PCCW (Hong Kong PCCW) don't know what's going on," Ma Huateng said.

It was this sentence that reminded Zeng Liqing.According to the memories of the Tencent team, Zeng Liqing suddenly patted his thigh, and everyone around him was taken aback by him, "IDG, I have a friend named Liu Xiaosong who has something to do with IDG, I'll go find it. "It was Zeng Liqing's idea that the development of Tencent seemed to be showing signs of improvement in an instant.Liu Xiaosong was very optimistic about Tencent, and he actively recommended this new company to American Data Group. Later, under the recommendation of Zeng Liqing, a friend who was engaged in the communications industry in Hong Kong, Hong Kong PCCW was also very optimistic about Tencent.

It seems that at that moment, opportunities favored this group of young and passionate entrepreneurs.Like winter jasmine flowers in early spring, the pink and yellow colors show off the bleakness of early spring. Lin Dongliang of IDG was very impressed with Ma Huateng. He asked Ma Huateng, "What do you think is your core value?" Ma Huateng replied, "Israel's ICQ has sold hundreds of millions of dollars, and how many users does it have. How many users do I have now?" , so I am worth so much money.” Lin Dongliang recalled a few years later that he invested in Tencent because of this sentence.At that time, two investors, IDG and Yingke Digital, each invested US$1.1 million and each held 20% of the shares. Ma Huateng and his entrepreneurial team retained 60% of the shares.After receiving the financing, the first thing Ma Huateng did was to buy a 200,000-megabyte IBM server for the company. "I put it on the table at the time, and I didn't mention how beautiful it was," Ma Huateng later recalled to the media.Although there is a sum of money, there is no worry about life and death for the time being.However, the number of OICQ registrants continued to grow with a steep curve, but the profit model of OICQ is still not found. In fact, ICQ, the pioneer of OICQ, has never had a profit model.

The second half of 2000 was a very bad year for the Internet industry. Sina was listed on April 13, 2000.On the day of listing, the stock price rose to about US$20 a share, and then briefly touched the first line of US$55.However, from May onwards, it began a long and never reversed decline.By June 1, the day before the board meeting, the stock had fallen to $1.60 a share.Open the Sina stock price chart, and what you see is a downward curve. Statistics show that in the first quarter of 2000, venture capital has grown at an annual rate of about 90 billion US dollars.And a dollar of venture capital can stimulate 3-4 times the number of patents that a dollar of a company's own R&D expenses stimulates.In the second half of 2000, the entire Nasdaq was extremely bleak, first Amazon, then Yahoo, eBay, then Intel, Microsoft, the index in Nasdaq fell sharply, from 5000 points to almost below 2000 points .And Sina, Sohu, and Netease were not spared.Sina's share price fell to $1.06, Sohu fell to 60 cents, and NetEase fell below the issue price, only 53 cents.Statistics show that in 2000, a total of 210 .com companies closed down in the United States.The winter of the Internet is coming. In this situation, there are two rumors about Tencent for a time: one is that Tencent will charge fees; the other is that Tencent will be sold.Both rumors have to do with funding.At one time, Tencent said that it was "almost out of money", and the argument for "almost out of money" was that OICQ software stopped free new user registration.

In fact, Ma Huateng, who has raised funds, is facing a new embarrassment under the general situation of the poor external environment.At a time when the entire Internet industry is freezing, Tencent's entrepreneurial team needs a second fund for Tencent to survive the winter.At this time, IDG and PCCW made a decision that they would regret later.In the absence of profitability, they are unwilling to pay for the crazy growth of users.With the approach of the Internet winter, IDG has been busy finding a home for Ma Huateng's company after the investment. I went to Tencent to take a look. In the spring of 2001, Ma Huateng went to Sina to meet Wang Zhidong and Wang Yan, but there was no news after that.

"In terms of suffering, the most difficult time for me to start a business is during this period. I don't like such delays, but at that time Yingke didn't talk about buying or selling, and left us alone. It was already June 2001 when we finally decided to sell At that time, the NASDAQ was about to collapse." Regarding that period, Ma Huateng thought it was extremely tormented, and he used these words to describe his state of mind.On the one hand, the external environment is not good, on the other hand, investors are not firm, coupled with Tencent's crazy increase in users, Ma Huateng's pressure can be imagined.By the middle of 2001, the number of new registrations of Tencent reached more than 900,000 people every day, making Tencent overwhelmed.At this time, in the international instant messaging market, AOL's ICQ and Microsoft's MSN formed a fierce competition. Both sides used free software as a means to attract users. Under such circumstances, IDG chose to turn around and leave.