2007: Opening up a new world
Jingdong's transformation into e-commerce is not early or late. Unlike 8848, become a martyr; It is also not like Dangdang, who cultivates the barren land for many years before waiting for the land to be fertile. SARS in 2003 was just a small opportunity for e-commerce to rise. What really puts e-commerce on the cusp is China's Internet dividend, and China's Internet, which experienced the bursting of the Internet bubble at the beginning of the 21st century, has begun to flourish again; China's Internet user population continues to grow; It is the consumption dividend brought by the take-off of China's economy. Especially after 2007, China's e-commerce has entered the era of great leap forward, the market is good, capital support, and the worst companies can achieve 100% growth.
JD.com's pace of development is getting faster and faster, and Liu Qiangdong realizes that he is looking for money. On the forum, he was advised to go to venture capital. In October 2006, at 10 p.m., Liu Qiangdong met with Xu Xin, founder and president of Today Capital Group, at Shangri-La Beijing. Xu Xin's first impression of Liu Qiangdong is that this buddy is quite honest and ambitious, only the first in his heart, not the second, and is determined to do a career. She had a strong feeling that she had found a horse. In addition, what makes Xu Xin's eyes shine is that if the penny advertising is not hit, JD.com's monthly sales revenue has increased by more than 10% compared with the previous month, which is obviously the model to the point.
After ending the chat at two o'clock in the morning, Xu Xin immediately bought a ticket for the next day and rushed with Liu Qiangdong from Beijing to Shanghai - the city where today's capital is located by plane at 9 a.m., so that Liu Qiangdong would not have the opportunity to meet other investors, and she did not want to let go of this horse.
Chang Bin, then the investment manager of Today's Capital (on November 1, 2013, Chang Bin joined JD.com as the vice president of JD.com in charge of investment) began to do due diligence, he saw that JD.com was scolded badly on the forum, and the online view is that if it is a white-collar worker, go to Newegg, if it is a student pursuing cheapness, go to JD.com, the advantage is that there is no need to go to the place where people are crowded in Zhongguancun, be pitted by profiteers, and even beaten. The idea of today's capital is that a large number of deficiencies that netizens believe can be improved.
Chang Bin called 30 users to learn about JD.com, and the feedback from users was that it was convenient, cheap and professional. At that time, there was a group of people on the Internet who were keen on computer DIY (do-it-yourself) and were very loyal to JD.com. At that time, JD.com's feature was "Moon Black Wind High Lao Liu Special Session", and in the middle of the night, it used the strength of breaking through the bottom price to sell CPUs, hard disks, motherboards, etc., which required heavy users of JD.com to find themselves on the page. He also called 10 suppliers to find out the situation, and the supplier said that JD.com took few goods, but the team was scrappy, and felt that he was particularly energetic, and there was a feeling of "I am different from you".
Jingdong company is very small, the team is not perfect, the finance is not very professional, the financial system is not standardized, the ERP system is designed by Liu Qiangdong himself, Liu Qiangdong mainly grasps inventory, sales volume, cash flow. Today's capital spot-checked inventory and cash situation, and they are all right. They also did due diligence with the old employees and found that everyone respected Liu Qiangdong from the bottom of their hearts, had high loyalty, ordered and forbidden, worked hard, and had strong execution.
Zhang Qi recalled his years at JD.com, and the time when he felt the most pressure was the due diligence of the financing in 2007, and he thought to himself, if he said the wrong thing, would he screw up this financing? This is a decisive financing for JD.com's life and death. He called Liu Qiangdong and asked, don't you talk? In the office, he faced four or five people from Today's Capital alone, chatted for an hour or two, the other party asked him about his experience after joining the company, asked him his personal impression of Liu Qiangdong, asked him whether he had confidence in the company, asked him if there was a problem with the company, he answered carefully, nervous and sweaty, not knowing which of his words was right and which sentence was wrong.
When discussing within today's capital, some partners proposed that DIY is no longer playing, and the future market belongs to the whole computer. Some partners asked, if the business does not make money, how to calculate the valuation? But according to the survey, the conclusion is that consumers love JD.com's service and scold it because they love it. If you invest money to make the company improve its services, it can also make the business bigger. Xu Xin clapped and did it.
Liu wants to raise $2 million. Xu Xin said, 2 million US dollars is enough, when the category opportunity comes, you have to sacrifice your life and run wildly, quickly become bigger, and become the first brand, so you need 10 million US dollars. The valuation was set by Liu Qiangdong, and Xu Xin immediately agreed and did not counteroffer.
There was another episode when the agreement was signed. Before finding Today's Capital, Liu Qiangdong once raised 5 million yuan from a domestic private enterprise, and after the private enterprise gave 1 million yuan, he wanted to withdraw his investment, because JD.com always lost money. Today's capital is afraid that there is a bomb in the agreement between JD.com and the private enterprise, and it is proposed to look at the agreement. At this time, you can see the trustworthy and shrewd side of Liu Qiangdong, who forcefully refused the request, citing the signing of a confidentiality agreement.
In Xu Xin's words, "He is particularly stubborn, people have broken the contract, what effect does the confidentiality agreement have?" "People at Today's Capital speculate that maybe the terms he signed with that private company were very strict. Why speculation? Because, today's capital still did not see the terms in the end, Xu Xin gave in, today's capital did not look at it, let the lawyer see, the lawyer only needs to tell her whether the agreement has a bomb that threatens today's capital. The lawyer said there was no problem, and the two parties signed the agreement. Today's capital immediately made a bridge loan of 2 million yuan to JD.com, of which 1 million yuan was returned to the private enterprise, and 1 million yuan was used to pay wages - at that time, JD.com was already stretched thin, and even the salary was almost unable to be paid.
Liu Qiangdong and Xu Xin agreed that in the next few years, they could run wildly without considering profits, grab market share, and come up with 18% options to reward the team. In the agreement between JD.com and Today Capital, there is a target incentive clause (the outside world is said to be a gambling agreement, and it is also the only gambling agreement in the history of JD.com, but Today Capital insists that it is a target incentive clause, because there is only incentives, no penalties, and today's capital is adopted here). In order to set the goal, Chang Bin called Liu Qiangdong and asked him to give a business forecast for the next three years. Liu Qiangdong sent a fax, 350 million yuan in 2007 and 1 billion yuan in 2008. At that time, Jingdong's sales in 2006 were 80 million yuan, Chang Bin looked at it, next year to 4 times, the year after next year will increase to 3 times on the basis of next year, are you teasing me?
Today's capital is worried that the goal is too high to be completed and affect morale, so it discussed with Liu Qiangdong and set a reasonable 4-year business goal: annual sales growth of 100%, the fourth year requires profitability, if the goal is achieved, Today Capital will take out a part of the option to reward the JD team. This clause is written into the contract.
In fact, JD.com's actual transaction volume in 2007 was about 360 million yuan, and in 2008 it was about 1.3 billion yuan. Looking back, although the target prediction given by Liu Qiangdong was simple and crude, it was all exceeded. He has a particularly keen grasp of business and leaves himself a safe perimeter. Later, when I asked Liu Qiangdong, he said that the goal they set was "can be done with your eyes closed, why not sign it?" ”
On August 28, 2007, JD.com and Today Capital held a press conference at the China World Hotel, Beijing, announcing that Today Capital invested 10 million US dollars in JD.com. This was the only press conference in JD.com's history to hold news of the financing, because Xu Xin wanted JD.com to quickly promote the brand, and after getting $10 million, JD.com began its first marketing - at that time, they did not have a marketing department, and even marketing consultant Xu Lei (now senior vice president of marketing at JD.com) was recommended by Xu Xin. According to the path of white-collar life, JD.com advertised on subways, buses and radio stations in Beijing and Shanghai, and its popularity immediately rose.
In the past, the only way to promote JD.com was to discount users, that is to make today's money; Advertising is making tomorrow's money. Liu Qiangdong was not used to it at first, and he saw that the user growth was very vigorous, but when he saw that advertising would cost so much money, he felt very heartache.
In January 2007, JD.com registered 100,000 users and consumed 10,000 users that month. Put on the Chinese Internet, is a very inconspicuous data, at that time JD.com employees are grassroots origins, and the temperament of Internet companies that are mostly returnees and famous schools is very different, in the Internet circle, JD.com looks out of place and outlier. Unlike many Internet companies that cherished the dream of changing the world and changing human history at the beginning, JD.com followed the traditional business and the intervention of venture capital opened the door to a new world to Liu Qiangdong, opened his vision, and pulled Liu Qiangdong, who was immersed in the retail world, into the Internet world. In 2007, Liu Qiangdong was ignorant of the Internet, he was hungry and shameless to ask, as long as it was information that he felt was valuable, he would quickly write it down in a notebook.
2008: The ordeal of capital winter
In 2008, the capital market winter came.
JD.com, which launched its second round of financing in this year, began to decline in valuation from $150 million, $120 million, $100 million, $80 million. At the $60 million mark, a well-known fund promised to invest in JD.com, but Lehman Brothers declared bankruptcy, this time, the market is even worse, the fund also shrinks the front, its partner saw Liu Qiangdong, cut the valuation to $30 million, was rejected by Liu Qiangdong.
This stage of financing was Liu Qiangdong's most torturous day, meeting thirty or forty funds, sometimes two or three a day, but no one was willing to invest. Every investor is asking, how do you make money as a company? What are the advantages of your model compared to Taobao? What are the advantages of cost compared with Gome and Suning?
Many investors tend to prefer to believe the stories of those who have already succeeded, rather than listen to the stories of those who have not.
When he was most sad, Liu Qiangdong drank alone at Nova Coffee next to Yinfeng Building to relieve stress. Later, talking about this history, Miao Xiaohong, assistant to the president of JD.com, asked him why he didn't tell her, and he replied, afraid that employees would lose confidence after they found out and leave the company.
In the matter of financing, Liu Qiangdong has always only let Miao Xiaohong and Chen Shengqiang (now the CEO of JD Financial Group) know. He built a firewall to control the financing in a very small area, segregating the vast majority of employees, and employees only need to focus on the business and execute well.
At that time, the company's capital chain was tight. Once, Wang Xiaosong, vice president and general manager of the communication business unit of Jingdong Group, took a payment slip to Chen Shengqiang, and the supplier said that he would not pay and would not give the goods. Every time he asked Chen Shengqiang for money before, the two would argue for a long time, and Chen Shengqiang said that this could not be out and that could not be out. This time, Chen Shengqiang was surprisingly calm, glanced at Wang Xiaosong and said: "Xiaosong, tomorrow I will pay the employee, after this money is paid, the salary will not be paid." Wang Xiaosong didn't say anything more, took the payment slip and turned to leave.
Wang Xiaosong recalled: "Lao Liu would share JD.com's plan, which made people's blood boil, we believed him, and felt that he was not aggressive, and every time he couldn't pay, he wondered if the boss was bragging." But it's really like a miracle, money comes in at the most difficult times, and I admire his ability to raise money. Liu Qiangdong never exposed his anxiety in front of employees, he was always full of confidence, he always told everyone that the money was coming soon, and kept all the pressure to himself. When the employees were downcast, as soon as he spoke to everyone, morale immediately lifted and he continued to go to the battlefield.
At the saddest time, today's capital gave JD.com four or five bridge loans, and they also panicked. In November 2008, Today Capital held an annual meeting and invited LPs (limited partners) to participate, as well as Liu Qiangdong. Liu Qiangdong's introduction of his company on stage attracted the attention of Liang Botao, a well-known Asian investment banker and founder of Peregrine in Hong Kong, and Xu Xin also introduced Liu Qiangdong to Liang Botao, and specially arranged Liu Qiangdong next to Liang Botao at the dinner. Liang Botao feels that Liu Qiangdong is very passionate and confident, and through the story of how he earned his first pot of gold and how he switched from offline to online, it can be seen that he understands both retail and the Internet. He agreed with Liu Qiangdong's strategic view, China's retail efficiency is too low, middlemen eat a lot of profits, if you can subvert the intermediate links, the benefits are shared with social users, it is a good model.
Liang Botao already had the intention to invest at this time, but he planned to find another fund to do due diligence and invest together. He was looking for Li Xufu of Xiongniu Capital, his apprentice with Peregrine, and Xu Xin had also been a subordinate of Liang Botao at Peregrine. Bull Capital has not made a single investment since its inception in October 2007.
Li Xufu once served Suning. When Huang Guangyu was at his most prosperous, he acquired Dazhong and chartered a plane to fly directly to Nanjing to negotiate with Zhang Jindong, and Li Xufu sat next to Zhang Jindong. Chang Bin took Li Xufu to see Liu Qiangdong, chatting about how good JD.com is, Li Xufu asked, why doesn't such a good company make money? Do you think everyone can do it with electricity?
After meeting and chatting with Liu Qiangdong, Li Xufu sent a text message to Chang Bin and decided to invest in the company. At that time, JD.com demanded that the money be called within 21 days, because it was almost the end of the year, and Liu Qiangdong had to repay the loan of Today Capital.
Li Xufu and Chang Bin also had an interesting conversation. Li Xufu told Chang Bin that he felt that this company would make him 8 times more money, and Chang Bin said that you would definitely be able to earn 8 times. A year later, Chang Bin admitted his mistake to Li Xufu, who thought that today's capital can earn 8 times, and Xiongniu Capital can only earn 4 times. Li Xufu laughed at him: You see how blind you are, do you see how much I earned in the end?
Liang Botao said: "I believe in Li Xufu's vision, and he also trusts me. I am optimistic about this industry, and I am optimistic about this person, people are more important than business models, and the model of startups is not accurate. Many investors look at whether the company is making money, do not look at cash flow, in fact, the most important thing is cash flow, cash flow is positive, you can survive, negative can not survive. Losses are bleeding, but if you can generate cash flow to replenish blood, you can still survive. ”
In the process of JD.com's financing, Miao Xiaohong found that investors who had talked many times could not succeed, and they had only met once or twice. As an angel investor, Liang Botao personally invested 1 million US dollars in JD.com in 2008, and finally obtained a return of more than 100 times, he said: "I deserve to help JD.com in the most difficult time." ”
The financing experience in 2008 left a profound lesson for both JD.com and today's capital: if there is a financing opportunity, we must seize the time to do it. The departure of employees, the dismantling of competitors, and the decline in performance may not necessarily make the company go out of business, but it will definitely go out of business without money.
After raising $27 million in 2006, it didn't raise money in either 2007 or 2008 (it didn't make a big move in the capital markets until it went public in December 2010), and another competitor, Amazon, cut its budget because its U.S. headquarters was affected by the 2008 financial crisis. At that time, Liu Qiangdong also regarded Dangdang and Excellent Amazon as the big brother in e-commerce, full of respect, claiming to be a new player. However, after receiving continuous financing, this new player began to embark on the road of full-category expansion and self-built logistics, which is the key point of JD.com's rise.
When Mr. Liu received his first investment from Today's Capital, Amazon was strong, surpassing the $3 billion mark for the first time in the first quarter of 2007, and the stock rose 240%.
The idea of many investors investing in Chinese Internet companies is to take the successful cases in the US market to look at the targets in their hands and choose the targets that are closest to the successful cases. This kind of thinking has proven feasible on the Chinese Internet. Investing in JD.com does not mean that if you vote for you this year, you will see profits next year. Investors carefully studied Amazon, analyzed the annual development status, financial statements, to compare JD.com. The conclusion is that China must have Amazon, so what should China's Amazon be like now? What should I do next? After sifting around, it was found that JD.com is the closest company to Amazon. The assessment of JD.com is also to see whether JD.com is in accordance with the development of Amazon. In the case of competitors shrinking during the same period, JD.com is more valuable. Without the success story of Amazon, how can JD.com convince investors that I still have to burn money for another 5 years, or even lose money?
JD.com stood out, investors recognized Liu Qiangdong's thinking, gave him a lot of money, burned the market to sky-high prices, and still supported him to continue to move forward. The player who ranks first in the market does not think about making money, but chooses to burn money, and the competitors behind are even less likely to earn money, and they have to burn money. When the market is good, investors have a good mentality, so they invest in more companies, and when the market is bad, they are cautious and do not consider companies outside the top three in the market. JD.com's strategy is, I am the boss, I have money, you have no money, we will consume, when the market is not good, you have to die if you have no money.
Liu Qiangdong said: "Our model is very heavily invested and has a lot of capital needs. In the past, I had no principle in taking money, and I couldn't sober up when the market was extremely crazy and irrational. But in many industries, the first to wake up and the first to die. When everyone is irrational, I have to follow irrationality, which requires enough money. Fortunately, JD.com got enough money and supported it for a long enough time when everyone still couldn't understand it. Now look, everyone is rational, damn it is almost dead. ”
After receiving $20 million in financing, JD.com did large-scale brand expansion, determined to quickly occupy the market and crush other competitors. At that time, open Baidu search, and the ads on the right were almost all JD.com's. Open the news website and you can also see countless JD.com advertisements. It just so happened that this year of the financial crisis, portal advertising is difficult to sell, the price is cheap. JD.com and Vancl Eslite both get a lot of traffic at a cheap price, plus low prices and fast delivery, and these two websites are very fast. In the next 4 years, JD.com and Vancl Eslite became the two most popular B2C e-commerce companies.
2009: The e-commerce boom is coming
In 2003, because of SARS, Liu Qiangdong began to test e-commerce. That same year, Ma founded Taobao, a C2C-model outside of Alibaba, and a competitor entered eBay in China through the acquisition of eBay. Jack Ma, who knows China well, beat eBay with a ferocious, free-to-play model, and Taobao is doubling in a year. Taobao's operational capabilities are very strong, and it is especially good at combining with offline merchants to make the website very lively. After defeating eBay, Taobao grabbed land in C2C, a market with no rivals.
During this time, the most dazzling of Chinese e-commerce is Taobao, and the brilliance of B2C is much weaker. In 2000, when the B2C barren land worked hard, by 2006, people in the Internet industry began to realize that all vertical fields can do B2C, and the next 3 years are the peak period for the creation of vertical B2C e-commerce websites, such as the century electrical network (later renamed Kuba.com, 2006) that sells major appliances as the starting point, Jingdong's direct competitor Yixun.com, which focuses on 3C, and Vancl in the fashion field (2007), Letao (2008), Hollemai (2007).
After the financial crisis passed in 2008, the investment community found that China was not affected, consumption was still very hot, and began to consider what the next investment hotspot of China's Internet was. They thought that China's consumer domestic demand can be combined with the Internet, which is e-commerce.
It is already difficult to create another Taobao, and Taobao's ecosystem is thick enough to shake its foundation. But the JD model can be referenced: independent websites, spending money to buy traffic, selling cheaply, and delivering quickly. Money is flocking into vertical e-commerce. In 2009, almost the top three vertical e-commerce companies in various categories were almost invested, and the top 100 Taobao brands were also scanned with the eyes of investors. For the investment community, this is the beginning of a disaster, e-commerce has used money to spoil the market.
In order to please customers, some e-commerce sites give away towels worth 6 yuan for every product purchased for less than 30 yuan. In order to pursue user experience, the packaging cost per single item is also very high, and there is even the problem of excessive packaging. Coupled with the fact that in order to acquire users, the price of traffic purchases is getting higher and higher - some people joke that Baidu's good development is the credit of e-commerce and the venture capital behind e-commerce.
E-commerce needs to solve three problems: buy cheap, buy conveniently, and buy with confidence. Taobao solved the first two, but did not solve the third problem, Jingdong emphasized the genuine licensed goods, with losses for scale, with a very fast speed to get enough users, brand building is also good, but its cost of maintaining services is very high, continue to invest in the construction of warehousing, distribution team, compared to Taobao, Jingdong's operation of the crowd is weak, the activities on the homepage are dry, unlike Taobao, Valentine's Day, Singles' Day or something, play a lot, lively.
JD.com began to expand its categories in 2007, from IT products, mobile phones, small household appliances, department stores to books, etc., and the user conversion rate is relatively high. When JD.com traded losses for scale, it kept users on JD.com for a long time. However, many vertical B2C are exchanged for traffic at a loss, and users are like locusts, going wherever there are discounts. The cost of entering the market should not only acquire traffic and sales, but acquire users, if the conversion rate is too low and unsustainable, the e-commerce company has no long-term development value. Some users of e-commerce websites make one-time purchases and go to this website to place an order when they find a bargain. Websites can spend 50 yuan to buy users, not 50 yuan to buy 100 yuan for sales. The marketing fee should be to acquire loyal users, let the good customer experience stimulate him to keep making repeat purchases, to dilute the advertising investment of the initial acquisition of users.
In 2009, Tiger Fund gave a valuation of $200 million, and Liu Qiangdong discussed with shareholders, saying that he would try to raise the price to see if people could not accept it. He shouted a price of $250 million, only shouted once, and the other party immediately accepted it. At this point, they all know that the price is low, and the expectations of the Tiger Fund must be higher than this.
Here's another story. A fund also wanted to invest in JD.com, and the investor flew from Hong Kong to Nanjing, and then rushed from Nanjing to Suqian, braving heavy snow to come with the contract. The fund is valued at $300 million, while the tiger fund is valued at $250 million. If the fund's valuation is accepted, JD.com's shares are less diluted. At that time, Miao Xiaohong and Chen Shengqiang were entangled, and the other party also said that the tiger fund was a verbal promise, and the failure to sign the contract did not count.
Miao Xiaohong suggested to seize the lot, but Liu Qiangdong refused, he said: To keep promises, if you don't keep it, how to lead the company? In the end, JD.com accepted the investment of Tiger Fund.
The Tiger Fund also knows this. In return, they also mentioned buying some shares at a valuation of $700 million. Liu Qiangdong said that JD.com was not short of money and told them to find old shareholders to buy it. Money is still a small matter, and the Tiger Fund has given Liu Qiangdong great support in many decisions.
In 2008 and 2009, some people encouraged Liu Qiangdong to drive out today's capital, make the valuation low, and issue shares to Liu Qiangdong himself. Liu Qiangdong's answer is that the most difficult time is that today's capital has helped me, I can't do that, the contract signed, I recognize. Liu Qiangdong himself never said these things in front of today's capital, but today's capital heard it, and they realized that the person entrusted was right.
The gentleman Turannuo, the five mountains are light.
Xu Xin once said to Miao Xiaohong, I would just earn 10 times. Miao Xiaohong forwarded these words to Liu Qiangdong, and Liu Qiangdong replied, no, I want her to earn at least 100 times. In 2014, JD.com went public, and today the return on capital is more than 150 times. Why do investors believe in Liu Qiangdong? Because his promise has been fulfilled every time, he can do it every year, he will do what he says, and his trust in him will continue to increase.
2010: Hundreds of billions of dollars worth of bureaus
In 2010, Macaulin, China's first B2C e-commerce company, went public in the United States, opening the door for China's e-commerce listing to allow venture capital to be rewarded and exited. From 2010 to 2012, it was the golden age of e-commerce in China, with billions of dollars pouring into the industry. In December 2010, when Dangdang went public in the United States, the company raised $40 million at an offering price of $17 per share, rising to $25 that day and $30 a few months later. At that time, a $40 million investment to make a $2 billion company was a good example.
Since 2010, many vertical e-commerce companies have received tens of millions of dollars in investment. The wind of e-commerce is up. Like Tiger Fund, these are global investments, the whole industry bets, when he invests, JD.com he also invests, Vancl Eslite, Letao also invest. They didn't just buy the runners, they bought the entire track.
Looking back at 2010 to 2012, it was the golden age of e-commerce and the medieval dark age of venture capital. Many people think that money can buy users, buy market share, buy core competitiveness, and later, mourn is everywhere. Consumers benefited, buying products and services for very little money, but it was venture capital that paid for them.
China's e-commerce industry is a 100 billion dollar bureau, entrepreneurs are insiders, venture capital is also insiders. The essence of venture capital is a valuable force to promote the development of society and technology, and has made a lot of contributions to the progress of e-commerce, but it cannot break the 100 billion dollar bureau of e-commerce. It can only be said that after completing the mission of the times, silently retreat. They, like those failed e-commerce companies, are forgotten characters in the evolution of the times, but their contributions are indelible. Chinese society lacks respect and sympathy for losers, no matter what they have done or what heights they have achieved. Because of this coolness, the back of the loser appears even more bleak.
Who can see clearly when they are in the middle of the game? For JD.com in 2010, happiness came a little fast. In April 2010, Hillhouse Capital invested $265 million in JD.com at a valuation of $1 billion, the largest investment in China's Internet that year, and later added $50 million. Many companies have raised $200 million or 300 million in initial public offerings. Zhang Lei, chairman and CEO of Hillhouse Capital Group, is that if you want to gamble, you must gamble.
Zhang Lei's investment company is different from others, he requires that there must be a founder's control clause, and if the founder cannot control the company, he will not invest. After studying the history of many companies, he concluded that the founder's control of the company may not necessarily succeed, but the founder will not succeed if he does not control the company. He is also concerned that some shareholders invest less money and are easily tempted to sell. He calls this risk "neighbor risk."
Zhang Lei asked Liu Qiangdong, how much financing is needed? The figure reported by Liu Qiangdong is 50 million ~ 75 million US dollars. Zhang Lei told him, I either don't invest a penny or invest $300 million. Liu Qiangdong refused, 300 million US dollars is enough to make Zhang Lei the largest shareholder of JD.com, the result of the negotiation is 265 million US dollars, Liu Qiangdong has control of the board of directors, and implements super voting rights.
Zhang Lei and Liu Qiangdong hit it off, "We are both very simple, he and I have always been very frank and straightforward."
At the end of 2009, Zhang Lei and Liu Qiangdong met at a forum, with Zhang as the audience and Liu as the speaker. They were all graduates of the National People's Congress, and Zhang Lei took the initiative to find Liu Qiangdong and asked him if he needed financing. Liu Qiangdong said that he definitely needed money, but he didn't like to talk to venture capitalists, and he talked a lot, but no one understood him. Zhang Lei and Liu Qiangdong chatted for two hours in the office of Hillhouse Capital and decided to join JD.com. Many Internet entrepreneurs raise funds, pick investors like to hear, most of them will say that the company is asset-light. But Liu Qiangdong said that JD.com is an asset-heavy and only asset-heavy can guarantee customer experience. This confession moved Zhang Lei.
In 2007, JD.com began to ask PricewaterhouseCoopers to do the audit, the annual sales were only a few hundred million, but for the audit paid millions of yuan, all financial data are truly presented in front of investors, before investment has full communication and exchange. Liu Qiangdong said: "Many problems come from not daring to tell the truth in order to take investors' money before investment, not disclosing a lot of information that should be disclosed, always fooling others, and then doing things that investors don't know after getting the money, so contradictions arise." ”
Chen Shengqiang, former chief financial officer of JD.com Group (now CEO of JD.com Financial Group), talked about financing, saying that if you meet with investors, if you talk about operations, you can talk about everything; If the investor comes to talk about finances for the first time, he will not meet again for the second time. Because investors who only look at numbers are worthless, companies need investors who truly understand the business. Some investors were worried about data fraud, there was no audit report at that time, Chen Shengqiang would send a report on last week's data to Liu Qiangdong every Monday morning, Liu Qiangdong would let investors pick a random week and forward the week's report to him by email. It is impossible for the company to falsify every day 365, nor can it be to falsify the data sent to Liu Qiangdong. Investors can take the weekly report data to the system to adjust the data and check it at will. "You can only do this step, don't bother me further, otherwise I will kick you out."
The next section [Liu Qiangdong-"Chuangjingdong" - Strategy] is more exciting, so stay tuned
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