Author | Sakuragi & Kaeon
Edit | Tsukimi
Following the resignation of byte's first CFO, Zhou Receiving Capital, during the company's organizational restructuring in November last year, the CFO position has been vacant for five months.
This position finally welcomed a new person yesterday.
On the evening of April 25, ByteDance CEO Liang Rubo officially announced in an internal letter that Julie Gao, a senior partner at Skadden, will join ByteDance as chief financial officer (CFO) and will be based in Hong Kong and Singapore.
Senior Partner of Skadden Ll.M., Member of the Policy Committee of the Global Management Agency, Bachelor of Laws from Peking University, Doctor of Laws from UCLA, And has provided legal services to more than 100 companies including Meituan, JD.com, pinduoduo...
In the eyes of the outside world, these titles and figures all reflect high accuracy and excellent ability and competent qualifications. But in Liang Rubo's view, in addition to excellence, more importantly - familiarity with ByteDance.
In an internal letter, Liang mentioned: "Since 2016, Julie has worked with us on the company's acquisitions and financing projects, and is familiar with our mission, culture, team and business. Julie has a lot of experience and thinking about corporate governance and enterprise development, and has provided advice and help to many companies at different stages, and I believe that her joining will bring great help to the company. ”
Behind the lament that ByteDance has made up for the CFO, the market is more curious about whether this means that ByteDance is one step closer to the IPO? What is the purpose of appointing a legal professional as CFO?
01 High-precision = listing?
At the listing level, the comings and goings of CFO positions are often seen as signals for giants to move in and out of the capital market, but changes are inevitable, but few companies can calmly do the long-term lack of CFO positions in the structure.
The current byteDance CFO position, which is currently valued at about $360 billion, has always been a mystery.
ByteDance was founded in 2012 and did not have its first CFO, Zhou, until March 2021. So that whether it is Zhou Receiving Funds or Receiving Baton Gao Zhuan, for the long-term CFO position is dispensable, the two CFO appointments are directly regarded as a signal to sprint to the market.
At that time, when Zhou Shouzi was the CFO of ByteDance, he was given the mission of "leading byte listing" by the outside world. When he was the CFO of Xiaomi, the aura of the listing of Xiaomi has been imprinted in zhou's report card. Another source of expectation is that Zhou Shouzi successfully promoted the difficult Series B financing in today's headlines during his tenure as a partner in DTS China.
In his second month as CFO of ByteDance, ByteDance has submitted an underwriter's letter of employment to the Hong Kong Stock Exchange, initiated the listing process in Hong Kong, and will submit a listing application in the second quarter, but has since been indefinitely shelved due to unresolved cybersecurity data risk issues.
"Evil" is not a one-way street, but internal and external troubles are coming one after another. On the one hand, ByteDance's IPO plan was helplessly shelved, and on the other hand, it faced the vacancy of TikTok CEO. At that time, TikTok suffered a regulatory crisis in the United States, and Kevin Mayer, who had just been in charge of TikTok for 87 days, announced his departure, and TikTok's US general manager Vanessa Papas temporarily replaced. Zhou, who had just joined ByteDance for only one month, was appointed as the CEO of TikTok.
Being a Singaporean in its own right, coupled with a national investment background, is undoubtedly conducive to helping TikTok survive in a complex international environment. In November last year, Zhou Yuzi began to focus fully on TikTok, no longer serving as the CFO of ByteDance, and at this point, byteDance's CFO position was like the listing process, sinking under the water without any waves.
Until yesterday, as soon as the news of Gao Zhun's appointment as CFO came out, the listing process of Byte, which had been suspended for a long time, leaked the dawn of hope in the eyes of the outside world. However, zhou shouzi did not complete the byte listing mission, can high-precision complete it?
Judging from the origin of High Precision and byteDance in the past, it is no less than the contact with ByteDance during the DST period. High-precision has been deeply involved in ByteDance's acquisition of Musical.ly, Mu Hitomi Games, and several rounds of private equity financing, with transactions totaling more than billions of dollars.
Whether it is the acquisition of Musical.ly or Mu Hitomi Game Company, it is an important layout in the history of ByteDance's development. However, unlike Zhou Shengzi, who promoted ByteDance financing as a VC in DST and had a Xiaomi CFO background, although the experience of high-precision operation of Chinese stock IPOs was almost unmatched, in the process, high-standard mainly provided legal counsel services, which is also the strength of high-precision as a senior lawyer.
High-precision capabilities can undoubtedly help ByteDance expand its investment territory, but in January this year, ByteDance's strategy and investment department was dissolved. Zhao Pengyuan, who is responsible for the war investment, and some employees of the war investment office will abandon the investment business and merge into the strategic business; while the financial investment sector will be completely dissolved. This is also seen as a regulatory tentacle for ByteDance to recover in terms of investment.
02 Can a lawyer be a good CFO?
Hiring an elite law firm as a CFO, the role of high-precision is destined to be different from that of Zhou Shuzi.
Judging from Gao Zhun's resume, he has been involved in various businesses as a lawyer since his career in 1998, although he has been involved in IPO and financing mergers and acquisitions for many years. However, from the public information, Gao Zhun does not have a prominent financial background.
In contrast, among the domestic Internet giants, the executives of listed companies who can balance lawyers and finances, except for the former Ali No. 2 Cai Chongxin, almost no one can do it. Cai Chongxin, who graduated from Yale University, in addition to obtaining a doctorate in law, is also a bachelor's degree in economics, and at the same time, combined with many years of Experience in Wall Street investment banking, Tsai Chongxin is finally eligible to be appointed by Jack Ma as the earliest Ali CFO.
Incomplete statistics of CFO resumes of Internet companies (Source: New Entropy)
At the same time, comparing the CFO resumes of baidu, Didi and other listed companies, we can also find that it is almost difficult to support the CFO position of a listed company for a long time with a simple legal background.
So, after 5 months, why did you choose High Precision?
In the development process of review byte in recent years, the most important features are many products, many projects, and flexible organizational mechanisms. Behind the App factory, there is actually imperfect standards and rough financial management. On June 17, 2021, according to an internal material of ByteDance, ByteDance's revenue in 2020 reached 236.6 billion yuan, an increase of 111% year-on-year; Gross profit reached $19 billion, up 93% year-over-year. Despite doubling revenue, ByteDance posted a loss last year: an operating loss of $14.7 billion for the full year, partly due to higher expenses incurred by employees receiving stock-based compensation.
Some insiders commented that running too fast and not having a stable listed financial system has always been a recognized problem within Byte. Moreover, the reason for the suspension of the last listing plan was the issue of Internet information security compliance. The arrival of High-precision, if it is guided by listing, makes up for such a lack from the legal level, which is undoubtedly a timely rain for Byte.
On the other hand, from the perspective of the CFO itself, taking similar large companies as an example, its development direction is no longer the traditional perception of only financial management, financing and mergers and acquisitions. Ren Zhengfei once said, "A good CFO is a person who can take over the CEO position at any time."
One of the excellent cases is undoubtedly the former CFO of Taobao Daniel Zhang. Reviewing his brilliant achievements from taking over Ali Mall, operating the Double Eleven Shopping Festival, to taking over as chairman of Ali, his keen sense of smell and super execution subvert people's inherent impression of traditional CFOs. Ma Yun, who shouted "the sky is not afraid, the ground is not afraid, I am afraid of the CFO being the CEO" also had to accept the facts.
According to Deng Chuanzhou, deputy director of the CFO Research Center of the Shanghai National Accounting Institute, "About 1/3 of the CEOs of the Fortune 500 have served as CFOs and similar roles. ”
From a domestic point of view, Ning Min of Legend Holdings, Yu Liang of Vanke, Cao Guowei of Sina, etc., have also directly succeeded from the CFO.
Back to the byte itself, the lack of long-term CFO, hidden dangers have always been there.
In the case of the peak of Internet traffic and the lack of Byte's new growth curve, refined management is the only way for Byte to go in the future, and listing seems to be the only way.