Reborn Entrepreneurial Giant.

Chapter 136 Glory Financing

Qu Li, Li Yinan, Zhou Shaoning and other Honor teams gathered in Beijin and officially launched the first round of financing. Due diligence was no longer necessary. Lehman participated in almost the entire purchase negotiation between Honor and T-Mobile, and was very clear about the risks.

Honor's most important asset, apart from their team, is T-Mobile's purchase contract for 45 Honor G1 units, an order of approximately US$2 million.This is a visible profit, and the advantages don’t stop there. Qu Li has Shopee, which suddenly became popular in the United States, which is a good exposure and sales channel.

A rough calculation: the production cost of Honor G1 is half of the selling price, 25% channel fee, 5% patent licensing fee, 5% other fees, the net profit is about 15%, this order can earn about 3 Ten thousand U.S. dollars.

How do you avoid taxes?The income of overseas companies is attributed to Xiangjiang subsidiaries, or the American company increases the purchase price to domestic companies and reduces the tax rate. However, the domestic tax rate for high-tech enterprises is 15%. Honor may be able to enjoy two exemptions and three half reductions.If you hand over the achievements of Honor mobile phones to the leaders of Zhongguancun, you will probably get tax-free discounts.

Honor can control costs and profits at this level with its first mobile phone. What else can venture capital ask for?

"Management, do you have any objections to me?" Unexpectedly, there are actually venture capitalists

"I mean, your main management are all Chinese. How do you deal with internationalization and manage overseas branches?"

"I don't know. Our senior management can all speak English and are still learning. We should first serve the operators well and do a good job in e-commerce business, and then consider establishing third-party offline sales channels locally. As for after-sales service, replacement and repair, Europe can If a country establishes one after-sales service center, the United States can establish three to five after-sales service centers..."

"Let me just say, Qu Li and the others have already thought about these things..."

Um, who is this, Shen Nanpeng or Xiong Ge, who is praising him?Don't think that you will definitely have a share in this.

"That's all. The financial relationships are very simple. We will raise funds this year to expand the team size from the current [-] people to [-] people..."

"I am very satisfied with the situation of Honor Company. The problem is that in order to get the advance payment from T-Mobile, you signed a guarantee with your own credibility. What if something unexpected happens and you cannot pay back the money?"

"Don't worry, Lehman is willing to provide guarantee for Qu Li's financial status."

"You trust him that much?"

"If Qu Li doesn't mind, we are willing to be the only investors." Andrew

"Ahem, let me say it again, money is not enough. You must be able to provide me with resources other than funds, or use money to knock me out." Qu Li didn't mind what others thought. He had actually ruled out IDG. Xiongge and Tiger Global, one’s influence is basically only in China, and the other is only in the name of Tiger Fund.

Qu Li holds 1000 million barrels of oil, earning US$20 per barrel, and is now worth US$2 million. Qu Li's guarantee has an upper limit. He will bear up to half of the loss on this US$2 million order, which is US$1 million.

Normally you can't see him in Honor, but he is still very useful at critical moments. Qu Li used his actions to increase the trust of employees and reduce the cost of venture capital's trust in the company.He has staked his entire fortune, what else do you want?

"$3 million is 1500 times higher than the $20 million when you were founded."

"How about you help me find a company like Honor, and I'll invest US$5 million and give you 100 million in benefits."

"I invested US$5 million." Some venture capitalists said

Qu Li glanced at it and said nothing. According to Honor's confirmed profit of US$3000 million, even based on a price-earnings ratio of 15 times, the valuation is almost US$5 million.But Honor is a start-up company, and this has just begun. The smartphone industry has very high profit margins, and it may be able to subvert the entire mobile phone industry.

"Honor is a hardware company. Silicon Valley venture capital rarely makes money from hardware companies. Once large mobile phone companies such as Nokia transform, they are likely to rely on their strong strength..."

"Nokia has not joined the Open Handset Alliance organized by Google. I have talked with Kallasvuo and he seems to believe more in Symbian and has no such idea at the moment..."

Nokia is not a friend of Google?This is a bit troublesome, but Nokia's market value of more than 2000 billion US dollars is not a joke. They have many opportunities for change.

"Apple and we are on the same front for the time being. We are another choice besides Apple's iPhone and Google's choice..."

Before Apple's iPhone came out, no one thought that mobile phones could be made like this. Google established the Open Handset Alliance in November 2007, and HTC quickly followed up and launched T-Mobile G11. After that, it became stronger and stronger. After Nokia surrendered, it became the largest iPhone maker. One of its rivals, but after the release of iPhone 1, Apple decisively suppressed HTC. Once the sales ban was issued, it seriously affected the cooperation between HTC and American operators. The proud HTC was abandoned by the domestic market. For a while, the iPhone was the dominant player.

After figuring out this timeline, Qu Li has a clearer grasp of the smartphone industry. It is obviously not a good idea to let Nokia persist for a longer time. The decline of large companies is like a knife falling from the sky. He will not Dare to take.If Motorola is not to be acquired, how can Google Android protect its allies?

Qu Li could not have expected it, and the venture capital on the scene was even more unexpected. Venture capital has always avoided investment in the field of consumer electronics. However, Honor is an asset-light hardware innovation company that adopts the foundry model. Obviously, it cannot compete with traditional companies such as Lianxiang, Dell, and Motorola. Tech business analogy.

"We are similar to companies such as Apple and Nike, focusing on product development and brand marketing, as well as supply chain management..."

Although Qu Li actually wanted to have his own factory, he would not tell the truth to these venture capitalists and would deceive the money first.

“What do you think Glory’s valuation should be?”

"Glory now has a total of 1.1 million shares, at US$6.5 per share." Qu Li gave a price that he thought was fair. Apple's current price-to-earnings ratio is about 40 times.Honor has much more room for growth than Apple, with a price-to-earnings ratio of only over 20 times.

Qu Li deliberately ignored the cost of 5 spare machines. If he really wanted to calculate it, it would be the city's dream rate. How big the dream is, how big the valuation of Honor will be.

"Unlike traditional functional mobile phones, which are only useful for making calls and sending text messages, the superiority of smartphones lies in their ability to meet almost unlimited user needs through application development. In addition, due to the natural defects of mobile phone batteries, every 2 to 3 years There will be a wave of phone replacements around the corner. Functional phones will take 4 to 5 years, and the market size has increased out of thin air..."

"I agree!" Wang from CDH Investment came forward first.

"I don't accept any bets." Qu Li added

"..."

"No problem!" Ms. Zhou from Victoria Harbor Investment

Surprise, what a surprise, this financing is full of surprises!