Technology Bigshot

Chapter 7: Venture Capitalists

Translator: Atlas Studios

Editor: Atlas Studios

A prolonged silence came from the other end of the call. Ren Hong definitely knew the truth that money was capable of touching people’s hearts. And now, XlouS was a chunk of fatty meat. It was impossible for one to not be tempted to take a bite out of it.

The commercial promise of his software was self-evident.

“The school respects your decision. Do a good job, and remember to be realistic; don’t be blinded by greed,” Director Yu advised solemnly over the phone.

“I will keep that in mind! Thank you for your concern, Director Yu,” Ren Hong responded sincerely.

“By the way, IDG Capital1 obtained your company’s address from the school and should be on its way to you now,” Director Yu said with a smile.

“I got it, thanks, Director Yu,” Ren Hong replied.

In the Academic Affairs Office, Director Yu hung up the phone and muttered to himself. “Looks like things are about to get livelier around here,” he chuckled, before focusing his attention back onto his work.

Ren Hong returned to the classroom and continued to set up his work. Upon seeing his return, Zhou Hui said, “Boss, the number of visitors to our official website is climbing fast; we need more servers to handle the traffic.”

“Hmmm, in that case, prepare to rent a few more servers. After this period, I believe we will be able to purchase our own servers soon.” Ren Hong thought about it, before gazing at Chen Kai. “Do ensure that the relevant patents are registered properly. We can’t afford any slip ups.”

“Leave it to me,” Chen Kai said with confidence and patted his chest.

Ren Hong nodded in response. Everything in the company was currently running smoothly. However, a few minutes later, classroom 317 welcomed guests for the first time.

A man and a woman—both formally dressed—arrived.

“Excuse me! Is this the address of XlouS’s corporate office?” The man knocked on the door and asked from outside.

“That’s right.” Ren Hong put down his work at hand and got up to greet him, before looking back at Zhang Han and the others. “You guys continue working.” He walked to the classroom door and gazed at the man and woman. He figured that they must be the representatives from IDG Capital.

Sure enough, the man spoke with a smile. “Greetings! We are the people-in-charge of the Northeast Asia region of IDG Capital. My name is Li Taosheng. May I ask if the founder of XlouS is…”

“That will be me; I am the founder of XlouS, Ren Hong,” Ren Hong introduced. He was no stranger to the IDG Capital, which was founded in 1992 and was one of the first international investment institutions to enter China. It had also invested in more than 300 outstanding companies in the nation so far.

The company invested in over 70 portfolio companies, including Baidu, Sohu, Tencent, Ctrip, Qihoo 360, and many others.

IDG Capital’s investments targeted China’s emerging industries, including the internet, mobile internet, software, new media, consumer goods and services, healthcare, and clean energy.

This time, it was apparent that it was targeting XlouS.

Li Taosheng was delighted as soon as he heard Ren Hong’s reply. “It’s a pleasure to meet you! Mr. Ren, you are young, talented, and have already designed such excellent software before graduation.” After some flattering, Li Taosheng stated his purpose of visit: “I’m sure you’ve realized our intention, Mr. Ren. IDG Capital is very optimistic about your company’s product after learning about it. As a university student entrepreneur, IDG Capital understands that a shortage of funds is inevitable, which is why we would like to invest in your company. May we know what you think about our proposal, Mr. Ren?”

Ren Hong went silent for a moment. He looked at the formally dressed man without any excitement that typical companies displayed when investment firms handed money over. Despite the fact that he was a 19-year-old sophomore, he acted like a calm middle-aged man. After a moment, he calmly said, “Currently, the company is indeed facing immediate financial needs for expansion. I wonder how you intend to invest in us?”

Li Taosheng was a little surprised at Ren Hong’s reaction. And when he heard the latter’s response, he immediately spoke with an intention to probe: “IDG Capital is prepared to raise 60 million USD for your company, accounting for 49% of the shares. IDG Capital values XlouS at 120 million USD, so…”

Li Taosheng explained skillfully, while Ren Hong quietly listened. But the moment Ren Hong heard that 60 million would consume nearly half of the shares of XlouS, he turned around on the spot.

Bam!

The door slammed shut with a loud bang. Li Taosheng was stumped, and his assistant was also at a loss for words. Soon after, they heard an indifferent voice from inside the office. “XlouS has no plans to raise capital at the moment! Please leave, Sir and Madam.”

Li Taosheng returned to his senses, knocked on the door, and spoke urgently, “Mr. Ren! If the terms are not to your liking, we are still open for negotiations! Mr. Ren! Mr. Ren!”

“What’s going on?” Zhang Han watched as Ren Hong returned to his desk with a fiery look on his face.

“Venture capitalists.” Ren Hong said with displeasure, “My *ss, 60 million USD for 49% of my shares? Do they really think I’m just a code farmer with a head full of code? The more I think about it, the more pissed off I get.”

In Ren Hong’s mind, XlouS was priceless. The launch of Real-time Online Translator was just his first step, and it was this first step that would put XlouS among the top 10 Chinese internet companies—and that was his most conservative valuation.

“120 million! Dollars! What an astronomical number! Wow!” Ren Hong thought to himself and laughed in mockery.

“Say, Ren Hong, at any rate, they are a venture capital company. Our company can’t move forward at turtle speed like this, and we need funds to promote our products anyway, despite us knowing the value of Real-time Online Translator,” Chen Kai said as he looked at the door that was still being knocked on from the outside.

Ren Hong gazed at his roommates, held out one finger, and said in a loud voice, unafraid of outsiders hearing him. “One, it’s the venture capitalists who are coming to us now, not us going to them for their investment.” He extended a second finger. “Two, XlouS’s first product has no competition in the market, and I dare to say that for the next 10 to 15 years, this technology will only belong to XlouS.” The group watched as Ren Hong held out his third finger. “Three, I haven’t considered venture capital since the company was created.” He held up a fourth finger, “Four, someone will eventually send us a lot of money and help us promote it at the same time.” Finally, he said, “XlouS is a great high-tech company, so not only did that man insult my intelligence, but he also tarnished XlouS and Real-time Online Translator.”

The five roommates stared at Ren Hong, clearly at a loss for words.

“You’re so goddamn domineering that I almost fainted.” Zhang Han said with an enraptured expression.

“Hey, if you go on like this, you are gonna turn gay, if not transsexual!” Zhou Hui looked at Zhang Han with a disgusted face.

“Right, you said that someone will help us with promotion and also provide us funding—what does that mean?” Chen Kai asked, which also made the rest curious.

Ren Hong smiled, explaining. “Our thinking is different from that of foreigners. They think that a product should first consider its competitiveness and competitors. But we are not them; XlouS is not, so why do we need competitors for our products? If there is a rival, it is ourselves: our company’s ability to innovate!”