Reborn Russia as an oligarch

Chapter 917 Overseas Companies
Hearing that Wang Ye didn't mean to blame himself, Sergey was secretly relieved.

He said sincerely: "In terms of business, of course I am still far behind you. Can you please tell me what should Facebook do next in order to quickly and effectively open up overseas markets?"

This is not flattering Wang Ye, but Sergey's admiration from the bottom of his heart, because Wang Ye's achievements in business are indeed beyond the imagination of ordinary people!
In terms of technology, Sergey can surpass Wang Ye by a few blocks, but in terms of business operations, he and Wang Ye are not at the same level at all.

You can understand this by looking at so many giant group companies under Wangye.

In addition to Wang Ye's special status, his understanding of overseas markets is definitely far from what Sergey can compare. Because of this, Sergey really wants to get effective advice from Wang Ye.

He is now a little suspicious of his own company management ability...

Wang Ye smiled slightly, and said calmly: "This is what I'm going to say next, and it's also what I plan to discuss at the shareholder representative meeting. The introduction of new strategic partners will facilitate our expansion into overseas markets!"

Sergey was a little confused. He remembered that Wang Ye had just said that he would start a new round of financing and introduce new strategic investors. Why is he a strategic partner now?

Is there any difference between these two words, and what does the introduction of new partners have to do with expanding overseas markets?

Knowing that Sergey didn't know much about these things, Wang Ye patiently explained:
"Facebook is different from ordinary Internet companies, it has stronger media attributes!
And it can be regarded as creating a new era of personal media or self-media!

You should understand that no country will let the media loose and let you, a foreign-funded company, enter the local market to do business casually.

Even though many places have not yet imposed restrictions on Facebook, as Facebook's influence grows, those countries will sooner or later notice this and impose restrictions on Facebook.

The reason why I propose to introduce new strategic partners is to plan ahead and make preparations in advance.

Moreover, these new partners introduced will be leading companies in the Internet industry in the host country, which will also help Facebook to localize as soon as possible, adapt to the local market as soon as possible, and be able to promote it quickly.

There is even an invisible benefit, that is, it can prevent these powerful new collaborators from creating a Facebook competitor alone.

Do you understand it? "

Of course Sergey is not stupid. Although he is not proficient in business operations, his mind is still very flexible. After being explained by Wang Ye, he has already understood the reason.

Yes!

Why Facebook has repeatedly encountered setbacks and malicious competition in overseas markets, in the final analysis, is because you are just an "outsider".

It's a newcomer, and it's not a raptor who crosses the river. It has crushing strength, so it won't be bullied by local Internet companies...

There is no reason for them to hand over the "territory" to you!

But if, as Wang Ye said, he directly cooperates with the most powerful local Internet companies and introduces these companies as shareholders of Facebook!

At that time, you don't need to spend much energy on your own, and those partners will have enough resources to make Facebook land smoothly and promote it.

However, there is still a key problem, that is, how to contact those leading Internet companies and get them to agree to buy shares in Facebook, so that everyone can establish a branch together!

Of course, Wang Ye also gave an answer to this question.

"This is my plan. The overseas business is divided into two parts, and two companies are established, namely the North American company and the Chinese company.

One thing to note here is to set up a company directly, not a branch.

In terms of functional authority, the two overseas companies have a parallel relationship with the Moscow company.

In the future, the Moscow company will be responsible for the business operations in Eastern Europe, that is, the Russian Internet.

Chinese companies are responsible for business operations in mainland China.

And the North American company is responsible for all regions other than this! "

Hearing this, Sergey couldn't bear it anymore, and these words were uttered by Wang Ye.

If it were another person, he would have jumped up long ago!
Because if you do it like this, it is tantamount to directly overhead the Moscow company, restricting the development on the Russian Internet, and assigning the business in all other regions to two overseas branches!
"Mikhail, the Moscow company is the head office..." Sergey reminded tactfully.

Of course Wang Ye understood what he meant, and said with a faint smile:

"Don't worry, we will set up a new holding company to control the Moscow company and two overseas companies, and the new holding company will be the head office in the future.

Our shares and the like will also be converted into the holding company.

Sergey, you may not quite understand why I am doing this.

But you have to know one thing, that is, if you don’t do this, Facebook will never think about truly developing and growing, let alone occupying the European, American and Asian markets.

I can tell you clearly that we will not even control the shares of these two overseas companies, but let our partners control them.

In the future, these three companies will go public as a whole depending on the situation, or they may be listed separately. "

Only then did Sergey understand what Wang Ye meant.

According to his original intention, Sergey did not want to "split" Facebook into three companies.

But rationality told him that perhaps Wang Ye's approach was the most correct. Once any business becomes larger and the business is transnational, it is not just a business, but many political factors must also be considered.

Obviously, in this regard, Wang Ye is a real expert, but he doesn't understand anything...

…………

Seeing that Sergey was contemplating, Wang Ye did not urge him, but picked up the coffee cup and waited for Sergey to think clearly while drinking coffee.

After all, Facebook was also founded by Sergey. Even though he doesn't hold many shares now, Wang Ye still hopes to reach an agreement with him.

After all, Sergey will still be managing Facebook as a company in the future, so Wang Ye has no time to intervene in the specific affairs of the company.

Sergey didn't think about it for too long, Wang Ye raised his head before he finished half a cup of coffee.

Looking at Wang Ye, he said sincerely: "Mikhail, if you think this is good for the future of Facebook, then do it. After all, this company, without your support, might not have will really appear in front of the public.”

That's right, when Sergey started this thing just for fun, he didn't take it seriously at all.

He was still thinking about studying abroad at that time, and he didn't focus on Facebook.

It was Wang Yehao who threw millions of dollars and directly helped Sergey set up a formal company and built Facebook.

Later, when Facebook did not make a big improvement and continued to expand its funds, it brought in two "taken advantage" of Hovchenko and Abramovich, and raised a round of funds at a super high valuation.

This allowed Facebook to get sufficient funds to start a crazy expansion on the Russian Internet.

It can be said that the initial stage of Internet companies is the most difficult, and it is also the time when the death rate is the highest.

The vast majority of Internet start-up companies die before the angel round or the first round of financing, because they simply cannot attract venture capital.

At that stage, the product only had a prototype, and there was no clear future at all.

Therefore, very few venture capital funds dare to make heavy bets on such projects.

A Facebook like Sergey can get $100 million in the angel round, and hundreds of millions of dollars in the first round of financing. To be honest, this is extremely rare in the Internet industry around the world.

Maybe one or two cases every year...

Sergey also knew in his heart that during the first round of financing, the two oligarchs, Hovchenko and Abramovich, did not even bargain. It was directly because of the valuation reported by the company, and they paid according to this valuation.

Does that really mean Facebook has a particularly bright future?
Or do you think you are a once-in-a-thousand-year genius, so you are willing to spend hundreds of millions of dollars to bet?

Of course not!

The reason why the two paid so generously was because Mikhail recommended this project to them!

As Mikhail, the weight of his words is worth the price!

Therefore, Facebook can have today and become one of the largest companies on the Russian Internet, with thousands of employees, and is even actively expanding overseas markets.

All of this is not because of how talented I am or how good Facebook is, but because the company's major shareholder is named Mikhail...

If there is no Facebook, as long as Mikhail thinks, there may be other alternatives, and the scale will not be inferior to the current Facebook.

But without Mikhail, there would be no Facebook...

…………

Wang Ye smiled gratifiedly. The company has achieved this scale, and Sergey can still be so clear-headed. He understands why Facebook can get to this point so smoothly, and he is not at all arrogant.

This is also very rare, and the founders of many Internet companies cannot do it.

Internet companies are completely different from companies in traditional industries because they develop too fast and scale too quickly.

This will lead to a consequence, that is, the company's founder's ability or structure cannot keep up with the company's development...

Perhaps in just one or two years, an Internet company can reach a market value of billions of dollars from the start!

And the founder of the company has also turned from a poor and white college student to a billionaire.

Most people can't recognize themselves at this stage. They feel that they are peerless geniuses, and the company can't exist today without them.

But they didn't see how much money was burned during the company's expansion...

And that money, after round after round of financing, was taken out by major venture capitalists.

The founders of the company think they are indispensable, but in the eyes of capital, perhaps at a certain stage, the founders of the company become an obstacle to the continued development of the company!
Then the capital will kick the company founder out of the company without hesitation and replace it with a better professional manager.

Apple's Joe's is a great example...

He was kicked out of Apple by the shareholders for a long time, and then he returned to Apple again. He didn't have any shares in Apple, which is basically equivalent to returning as a professional manager.

Fortunately, Sergey is relatively sober, and he didn't really think that it would be impossible for Facebook to leave him, and he was willing to respect the opinion of Wang Ye, a major shareholder.

Otherwise, Wang Ye might have to learn from Apple's shareholders...

…………

In the general direction, after the two have reached an agreement, the issues to be discussed below are also very important.

That is how to design a reasonable equity structure, which can not only protect the interests of existing shareholders, but also maintain enough attractiveness for new partners.

Of course, it was still Wang Ye who spoke and Sergey listened.

"The Moscow company will maintain the current shareholding structure without changing it, and there is no need to add new shareholders, just maintain the status quo.

As for China, the situation is a little more complicated.

I plan to join forces with Penguin and bring in an investment company with more background to form a new company, which will be responsible for Facebook's operations in mainland China.

And according to the regulations there, the company must operate independently in the local area, and the servers and data must be located locally. However, Penguin can help us solve this problem.

Therefore, Facebook holding company can only hold 30% of the equity of the mainland company, and the remaining 70% is divided among the two Chinese partners.

The same is true of the shareholding structure of North American companies. The holding company only accounts for 30%, and the bulk is reserved for new partners.

In North America, Google is my selected partner, and the remaining one may be given to a Wall Street capital. It is not sure which one it will be, so I will choose it at that time.

With Google's technical strength and its influence on the English-language Internet, it is not easy to promote Facebook.

......"

Wang Ye explained his thoughts in an orderly manner, and Sergei couldn't stop nodding.

In fact, Wang Ye's plan is a key point, that is, the real "localization"!
After the establishment of the North American company, except for the technical authorization of the Facebook holding company, all other operations, data, etc. of this company are 100% North American local company models!
The same is true for companies in mainland China. If you don’t check the shareholder relationship behind it, you may think that it is a local Chinese Internet company!
This is what Wang Ye wanted.

The major shareholders of North American companies and Chinese companies are local companies or capital, and the operating rights are also in the hands of local partners.

Then when the situation becomes complicated in the future, no one should target Facebook...

…………

After Wang Ye finished speaking, Sergey raised his hand without hesitation and said straightforwardly:

"I fully support this plan!

Since Mr. Mikhail, you can attract excellent companies like Google and Penguin to be our partners, then I have enough confidence in the development of Facebook in the local area.

As for the shares, just distribute them according to what you said, I have no objection. "

(End of this chapter)