From November 30th to December 2nd, the 2017 Chuangbang 100 Future Leaders Summit & EntrepreneurshipBang Annual Conference was held at the National Convention Center, and Wu Hai, founder and CEO of Orange Crystal, delivered a keynote speech entitled "Who Kisses Whose Ass - On the Relationship between Investors and Entrepreneurs".
In the speech, Wu Hai said, I hope everyone can do a thing, it doesn't matter if you can't do it, start again, at least when you are old, you can say, Lao Tzu has done it, it is better than not doing it.
"The good loser does not die", seriously study failure, and will be closer to success. Startup Bang focuses on serial entrepreneurs and hopes that next time, you will be more perfect. This article is the 8th report in the original column of "Entrepreneurial Failure".
"I'm happy now, when I found a door closed and suddenly a lot of windows opened." After 9 months, Wu Hai was obviously relieved to sell the orange crystal.
Today, he not only serves as a senior vice president in Huazhu Group, responsible for the management of mid-to-high-end brand strategy, making some investments, and has a lot of time to spend with his family, as well as two sons who are more than 6 months and 3 years old.
But the sadness of the past is still fresh in my mind. In February this year, China Lodging acquired a 100% stake in the Orange Crystal Hotel for 3.65 billion yuan, and when it was sold, the occupancy rate of Orange Crystal reached more than 90%. On average, it is full 323 days a year.
At that time, Wu Hai was really depressed for a while, not only published an article "In fact, I am only a surrogate mother" on the night of the sale, but also quickly brushed the screen and poured out his reluctance and grievances.
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In August this year, because he was in a bad mood, he drank broken pieces, slept on the side of the road in Beijing, and lost two teeth.
Looking back now, Wu Hai said that Orange Crystal did do wrong at several key nodes, "At that time, it should be a franchise store, I insisted on not doing it, if it was done, it would definitely be worth 10 billion", missed the listing, as early as the sale to Huazhu a long time ago, Orange Crystal met the conditions for listing in A shares, but because Orange Crystal accepted foreign investment, if it was listed in China, it would involve capital withdrawal and other issues, so it was ignored by Wu Hai, until Carlyle wanted to quit, he had to choose a new way out, It's too late to go public.
The orange crystal was eventually sold, and there was never a key word: "investor".
In this acquisition, investors have always respected Wu Hai's opinion, hoping to find financial investors to take over, but at that time it was difficult to choose two interested investment institutions, but because of the price problem, Wu Hai turned to consider Huazhu, and later Wu Hai wanted to leave the orange crystal through the way of mbo (management buyout), behind which there are also oceanlink, Goldman Sachs, Ctrip, CITIC, Transatlantic Fund and other support, but in the end because Huazhu put the price too high, considering the interests of investors, Wu Hai chose to compromise.
But Wu Hai's "love" eventually gave back to him, and after selling the orange crystal, many investors told Wu Hai that they supported what he wanted to do.
Today, Wu Hai has also set up an "old buddy fund", which he calls the old colleague fund, investing in some small projects, continuing to assume the responsibility of being a "big brother" and helping old colleagues make money, although, selling orange crystals, they have also made a lot of money. "I want to be able to make money, find good projects to make money, and help my colleagues live a good, selective, dignified life." I hope that they from the countryside will really feel that their parents will really feel that they are honoring their ancestors when they return home, which is my goal in life at this stage, and this is what I am doing at this stage. Wu Hai said.
In the speech of the 2017 Startup State 100 Future Leaders Summit and startup State Annual Conference, Wu Hai also summarized his various thoughts on the relationship between entrepreneurs and investors, the following is the full text of the speech, without the confirmation of the other party, there are deletions:
"It's not easy to be an investor"
When I first started my business, I really thought it was very difficult, I thought that rich people are uncles, they must shoot people's ass, how to shoot do not know, especially envious of people who can talk. Later, I had the opportunity to make some money and make some small investments, so I began to contact many people, and I had a good relationship with investors, helping them earn some money.
Chatting with them, I found that one of the stories was very interesting, there was a company called Qi Yi Capital, his founding partner Du Jiang originally invested in a larger institution, that institution had an investment committee system, there were several projects that did particularly well at that time, but each vote was 4:1, each of his projects was not over, very angry, so he came out and made an angel fund, and each fund did 20 million shares.
Last year, the fund invested in 6 projects, all of which entered the A round or B round, and when the last project entered the A round or the B round, he sent a note: "My last project finally entered the a round and the b round", and more than a hundred "misses" and "mommy" liked it. He said almost all of his projects were held at nighttime talks. Why did he do this? In fact, it is not to say that these investors want to do anything, just a way of communication, he respects those entrepreneurs, and nightclubs can create a more relaxed atmosphere, from this point of view, it is really not easy to be an investor.
I have a good friend named Lin Xinhe (DCM managing partner), Vipshop, 58 City are all invested by him, he also invested in my company: Orange Hotel. We will eat together every month, pinch feet, he pays the bill, we often talk, when we talk about a project, has been listed, after the listing, one day the boss of this listed company called him, said I have something to find you, you come, he fart upside down and ran over, after that the boss said he had a meeting, wanted him to wait for a while, and when he went in, the listed company boss stood by the window of the office and said, Lin Zong you see how beautiful the scenery outside, how beautiful, the result is nothing to talk about, Maybe he just wanted someone to talk to today. Therefore, it is not easy for investors.
"The project is not good, and licking your ass is useless"
We also do investment ourselves, others also know that we do investment, some entrepreneurs invite us to look over, some companies are quite formal, on the company's big screen written "Welcome Mr. Wu and his party to come to guide", this is not called licking ass, is the respect for you. But from another point of view, I thought to myself, you write or not write in fact, it doesn't matter, if your project is not good, kill me will not vote, this kind of thing, I think there is no problem of who licks who's ass.
Lin Xinhe discussed this with me, "kiss ass" I said it was a pat on the back, he is lao mei, translated as "licking ass", I think it is more image, and it is also said on the outside. He said that when the company is doing well, the investor licks your ass; when it does not do well, you lick the investor's ass is useless.
Therefore, I think that between investors, your own project is good to say, you just communicate more, and you don't need to lick your ass.
I'm going to talk about the lessons learned over the years to see if it helps you, and it's also about the relationship between investors and individuals.
The first is fiery passion and cold responsibility.
Every entrepreneur has passion, instant passion may not last long, and the reality is more bone, you have a lot of responsibilities, very cold responsibilities, how do you deal with it?
Some time ago, I was really uncomfortable, drank and drank broken pieces, slept on the street, knocked out two of my teeth, how to break did not know, the next morning I got up with a toothache, went to the hospital to pull out my teeth. When you really sell it, you really don't want to sell it because you once had passion, or feelings.
When I sold the company, if I tried hard, I might not be able to sell, at that time we did mbo (management buyout), behind it was Goldman Sachs, transatlantic funds, etc., they were all supporting me, I could take it down, but then Huazhu continued to rise in price, when it rose to a certain extent, I felt that I could not move anymore. Although I am a small shareholder, the major shareholders respect me more, one is because I have been good to them for so many years; the other is that selling the company needs me to cooperate after all. If I buy it myself, I am tired or not, the old shareholders will definitely make less money, they help me a lot, and I have the responsibility to do so (consider their interests).
Later, a friend advised me, he said, you want a thing, you have been working in this company for 10 years, the brothers have been with you for 10 years (our company has more elderly people, it is a company that pays more attention to feelings), holding a blank piece of paper, after each financing, you can probably calculate how much this white paper is worth, but it is still a blank piece of paper, if you take down this company, in three or five years it has not been listed, or a blank paper, your financial situation can be, but they are not necessarily (like when my assistant followed me, the university just graduated , now in their 30s), by the time they're 40, how do you feel?
My responsibility is too big, there are a lot of cold responsibilities, from the perspective of investors, he invested for a long time, calculate the rate of return, if the market value is not high, and then 10 years later, the return is not enough.
Which one do you choose between your own passion and cold responsibility? Of course, I want to invest in passionate entrepreneurs, but passion also has to be responsible, can not ignore the interests of themselves and their brothers for the sake of passion, fortunately, my investors are very good, if I am a kind of bastard, maybe I will start fighting, so I am luckier, I am standing and talking without waist pain.
Second, don't be an asshole.
We sell the company, many shareholders are very good to us, when the last sale, some of the balance has to be paid, those mature investors say it does not matter, and finally how many people come to share. A few immature investors, just say how your company is doing during this period of time, I don't know, I am a minority shareholder, as long as something happens, it should be responsible for your team. I won't say who it is out there, but I'll never deal with him again in my life, and if my friend talks to him, I'll definitely say you be careful.
What about making a jerk and you make money? Knowing that this person can't do it, I still go up, so that there is not much point in living. As entrepreneurs, as investors, don't do jerks on both sides.
Third, it is better to speak clearly.
It's not a bad thing to be tough and make it clear. No matter how bad the investor is, he invests in you, he must want to make money, so from the starting point, there is no problem, but maybe his personal opinion or people have problems, so sometimes it is better to speak clearly.
We have encountered many crises in business, and sometimes, when we encounter crises, we always want to carry ourselves, and finally the mines explode and cannot be carried. Especially in the beginning, it doesn't matter if you lose people, make your words clear, don't be embarrassed to settle accounts, there is no need to leave all the difficulties behind, and accounting is not a shameful thing, and it will make the back a little smoother.
In addition, respect each other and help each other.
Between investors and entrepreneurs, it is really a matter of helping each other, and only mutual respect will do better.
Of course, don't run into real jerks, it's useless to do it well. The good luck of me is that some of the investors I met are really better, not long ago I heard a lawyer in Carlyle did the Orange Hotel project, he said, never seen anyone who did this project, when Carlyle wanted to reduce the price, the founder (that is me), take out all their options and mortgage them, let them not reduce the price, if the goal is completed, this option I keep, if not complete the goal, the option I do not want.
In fact, the reason at that time was relatively simple, because it was the European debt crisis in 2011 and 2012, they wanted to reduce the price, I also felt very normal, I also felt that I was not doing well, investors and us for many years, what should I do for them, at least on paper valuation should not fall. Plus my brothers are all options, at least to help them be more valuable on "paper", so I did just that.
From another point of view, when I was doing MBO in the later stage, many old shareholders supported me, although they had losses in interests, but they were willing to follow me, which is a relatively good interaction between everyone.
There is also something more touching is that Carlyle for various reasons, the fund is about to expire to sell the shares of Orange Crystal, of course, I am reluctant to sell, want to do MBO, in the process they really understand. There are a lot of companies that sell ugly, asking for money, and will say to the founders how much you have to give me, otherwise how do I deal with it, this kind of thing is too much.
I am lucky, there are people I meet who are assholes, there are also people who are not assholes, many people who are not assholes ask Wu Hai what you are doing, I continue to vote for you, the bastards ask me again, I will never touch you again.
I know that a lot of people are entrepreneurs, really respect you very much, I myself am a person, really very hard, I hope you can do a thing, it doesn't matter if you can't do it, start all over again, when you are old, at least you can say that Lao Tzu has done it, it is better than not doing it.
Zhen College is the Zhen Foundation to help entrepreneurs improve the chances of success, the dean of the dean of the design based on the Stanford Business School in Silicon Valley has been used in Silicon Valley for more than 40 years to help tens of thousands of successful people immersed in the science learning system, through the practice to help entrepreneurs improve self-awareness, avoid the blind spot of failure.