My Age of Investment

  Chapter 323 Sky-high valuation

  Milner has been in the investment industry for so many years. Although he has not put out any particularly awesome projects, he has never extinguished the fire of ambition.

  He invested in Mail.ru, the only successful project, and his influence has always been limited to Russia.

  For this, he is far from satisfied, and has been trying to break through the status quo and bring DST to a higher stage.

  For this, he circulated among several oligarchs, raised funds for the company, and at the same time attracted powerful people;

  The heads of institutions such as Goldman Sachs and the hedge fund New Century Holdings in Russia were all drawn by him to join DST in order to open up the network and expand the business to the United States.

  Milner himself understands that Russia’s Internet economy has a clear ceiling, and it’s great to dominate the country.

  To vote for world-class Internet companies like Yahoo and Google, you have to turn your attention to the United States.

   Just when he was painstakingly managing contacts and preparing to enter Silicon Valley.

  A friend brought a message, saying that the CEO of Facebook was looking for him and wanted to talk to him.

  After simply confirming the identity of Xia Jingxing on the phone, he rushed to London from Moscow.

  For him, this is undoubtedly a pie in the sky, an excellent opportunity to break into Silicon Valley.

   chatted with Xia Jingxing for a few words, and after getting more familiar with it, Milner began to enter the subject.

   "I heard that Facebook just signed a US$300 million advertising order for Microsoft? Have you reached a strategic partnership with Microsoft?"

  Xia Jingxing nodded, “Yes, Facebook has been in development for more than two years, and it’s time to start advertising.”

  Milner said with a smile: “There are tens of millions of users on Facebook and YouTube. As usual, the annual advertising revenue will not be less than 200 million US dollars.”

  I have to say that Mi Bald head is quite accurate, and there are predictions in Facebook. It is almost as much as the other party said, and there is not much fluctuation.

  Xia Jingxing nodded secretly. Mi Baldou deserves to be the CEO of one of the three largest Internet companies in Russia, and he is very familiar with the Internet.

  The outside world only sees the ability of money, but ignores the learning ability and judgment of the other party.

  Milner continued: “But I guess that these revenues alone will not be enough to support Facebook to continue its fast-paced development.

  It may take two or three years to reach a revenue balance and even a profit.

  Furthermore, this is the conclusion drawn by eliminating the need to continuously increase the bandwidth of the tubing.

  Counting the oil pipes, Facebook may be completely profitable, and it will be two or three years later.

  A total of four to five years, five to six years, during this period, a steady stream of blood transfusions to Facebook are required. "

  Milner stopped and didn’t say any more.

  Xia Jingxing smiled, he must admit that this bald head has two brushes, and he can see the cheating of the tubing at a glance.

  In fact, if the oil pipes are excluded, Xia Jingxing has a way to make Facebook profitable in the next two to three years, while also ensuring that the expansion rate will not slow down.

  But video websites are far more expensive than social networks. To create a creator ecosystem, it is more necessary to carry out profit-sharing activities.

  All of these will put heavy financial pressure on the oil pipeline.

   "Yes, so we plan to conduct a round of equity financing this year."

  Hearing Xia Jingxing's own words, Milner's eyes lit up and said: "If Facebook wants to raise funds, can DST join it?"

"Can!"

A smile appeared on Milner's face, but Xia Jingxing's next sentence made his face gloomy.

  "A valuation of 10 billion U.S. dollars, no capital injection is accepted, only the transfer of old stocks can be accepted."

  Milner didn't get angry, and quickly forced himself to calm down.

  Before he came, he thought about why Facebook, the most promising start-up company in Silicon Valley, would look at their little-known Russian investment company.

What does    fall in love with them?

  I was waiting for myself here.

  In general, few investment institutions are willing to take over the old stocks transferred by unlisted companies, especially when the valuation has not been discounted.

  Of course, there are exceptions to everything.

  Excellent companies can do this.

  Unknown venture capital institutions cannot invest in top-level projects, so they can only go to the secondary market, which is a place that specializes in selling old stocks.

  Issuing new shares and taking over the transfer of old shares, there is not much difference in essence. They are all shares, and there will be no less rights to enjoy.

  With one exception, such old stocks are no longer preferred stocks after they take over.

  Preferred stocks means that when buyers want to buy them, when the IPO is listed, the shareholders holding the preferred stocks will sell them first, and then the founders will have their turn.

  Milner is very optimistic about Facebook, even if it is not a preferred stock, as long as he can get Facebook shares, he will be satisfied.

  It’s just this tens of billions of dollars in valuation. It’s too bad to bully the Russians and don’t understand venture capital?

   "Dalun, we can buy old stocks, but Facebook is valued at 10 billion U.S. dollars, isn't it a bit too high?

  Assuming that Facebook can really earn $200 million in revenue this year, the market-to-sales ratio has reached 50 times.

  Be aware that when Google went public, the market-to-sales ratio was less than 10 times. "

  "How can you compare with them? Facebook has just started commercial realization, and the user growth rate is also increasing, and many potential values ​​have not yet been revealed.

  If you look at it three years later, Facebook’s revenue volume can definitely catch up, or even surpass Google at the time of its IPO. "

  Milner chuckled, "Then can I invest again in three years?"

   "Yes, the investment in three years is not at the current price."

  Xia Jingshu spread out, "Investment, it is originally an investment in the future, the expected return of investment."

  Milner smiled, he understands the truth, but why you sell me Facebook at the valuation three years later, what have I made in the past three years? Make some air?

  Before investing in the Internet, Milner was in the investment banking business.

  What do investment banks do? It is to decorate a mass of garbage, change the concept, make things like environmental protection technology, recyclable resources, and sell them at a high price.

  Playing concept, selling air, he is familiar with it.

  Because of this experience, Milner pays more attention to mature companies. In his own words, it is called "late investment".

  Late investment, the most critical point is to see the value depression of assets and where the future growth is.

  Xia Jingxing’s tens of billions of dollars of valuation really made him retreat a bit.

  When valuing Facebook, professionals will use well-known Internet companies and listed companies in the industry as a reference.

  As a rising star, Google’s rising momentum is very similar to the current Facebook, and it has naturally become the first choice for reference.

  Google’s current stock price has doubled compared to last year’s issue price, and its total market value has approached $50 billion.

  If Facebook can grow to this level in the next few years, investment can also make some money.

  But the difficulty is very high. It is necessary to continue to maintain a proud position in the social network, and the revenue and profit level must also be improved.

  All these need to be repeatedly analyzed and researched by Milner.

  Xia Jingxing watched Milner thinking hard, and did not disturb the other person, but waited quietly.

  What the media said, "Milner decided to invest in Xiao Mazi in three minutes."

  That is purely fooling people, deliberately arranging some paragraphs to attract attention, so as to arouse topicality and achieve the effect of brand communication.

  Xia Jingxing knows that Milner is an investor who "invests money but not voting rights", but the valuation is related to the final return.

  The other party needs to weigh carefully, which is also the intention.

  10 billion U.S. dollars, not one hundred dollars, it is extremely normal to consider for a few months.

  (End of this chapter)