Reinventing the Millennium

TSMC’s prosecution of SMIC has caused huge waves in the entire domestic semiconductor industry. People related to the industry and leaders in charge of this field are all aware of the huge impact this matter may have.

Among them, Mr. Bingxin's tears of worry about the future development of the industry are just a small tidbit. More people are paying attention to what kind of response SMIC will make and whether TSMC's lawsuit will succeed.

There are a lot of articles in the industry, but there is not much movement outside the industry.

With the development of the country's economy, all walks of life are very lively. The semiconductor industry is certainly important, but its money and resource threshold are destined to have only a few people with ideas, and those who are really willing to get involved are taking less from less.

Fang Zhuo occasionally looked at Sina's report on the SMIC incident. The first article had quite a lot of clicks and comments, but the number dropped rapidly after the second article.

After all, the distance between wafer foundries and the general public is far away, and there are no annoying bottlenecks at the moment, so this behavior is normal.

SMIC was sued, but life and work had to go on.

Fang Zhuo postponed his flight to New York, planning to wait until the end of the second board meeting before going over to work on Yike's listing.

If the first meeting of the Ice Core Board of Directors was to express its stance and show firm ties, then the second meeting was to take some substantive actions.

Goldman Sachs, Deutsche Bank, IDG, and DCM, these four companies are all well-known. If you want to go without any trouble in the future and if you want to be truly friends, your attitude in one meeting cannot be completely successful.

Fang Zhuo had no intention of paying lip service but not delivering on the promise. He was really considering the pros and cons for them after being tied up.

Just before Bingxin held its second board meeting, Fang Zhuo once again received news about SMIC and couldn't help but sigh with regret.

One week!

For a whole week, SMIC has not yet formed a team of lawyers to respond to TSMC's lawsuit!

This is definitely a failure of internal processes or a lack of awareness from top management.

If it were you, what would you do if this happened?

On the one hand, you need to find someone to deal with it, whether it is administrative power or a partner, you have to exert influence anyway.

On the other hand, they immediately sought out the best business lawyers in the United States at all costs, lobbied the ITC, searched for strong evidence, and dragged this lawsuit to ten years or eight years. If necessary, other factors were introduced, such as SMIC’s transgender status in the United States. LGBT employees.

In short, according to Fang Zhuo's intuition, there is room for maneuver in this lawsuit.

For example, Cadwalader, the law firm that Yike cooperates with in New York, handled a class action lawsuit. The content was that several customers who purchased Apple IPOD initiated a lawsuit because of the problem of battery life that did not match the promotion.

Judging from the feedback Fang Zhuo received from lawyers, Apple can easily delay this lawsuit for four to five years, or even longer if the other party wants.

Of course, the legal process of this lawsuit is not that important, and the relative publicity that Yike received from it may be a little bit more important.

However, Fang Zhuo does feel that SMIC can be more familiar with the laws within various American rules to deal with the current problems.

November 30th, the last day of this month.

Bingxin held its second board meeting. Before the meeting, Fang Zhuo had direct communication with Xu Kaiwei of Goldman Sachs in the conference room about SMIC's response. He wanted to persuade Zhang Rujing to do more work through this SMIC shareholder.

"I'm afraid SMIC doesn't want to make a big fuss for the time being. The legal process will go through, but according to their resolution, they should keep a low profile as much as possible. This is what they meant after the board meeting."

“Their focus now is to get it on the market as soon as possible, the sooner the better.”

"SMIC's financial confidence is not strong enough. Their first round of financing has long been spent, and they still have long-term and short-term loans. The board of directors is also worried that the longer it delays, the harder it will be to go public."

Xu Kaiwei hesitated for a moment and said tactfully: "In addition, Mr. Zhang's acting style is different from Mr. Fang's."

Fang Zhuo understood that after all, Mr. Zhang Rujing was in the technical field, and his business operations were sometimes conservative. Moreover, SMIC's internal shareholdings were complicated, which might cause some constraints in decision-making.

There is no other way. With such a life-and-death and development issue at stake, it is impossible to do without the determination to burn the boat.

After Xu Kaiwei and Fang Zhuo completed their additional communication about SMIC, the two talked about Bingxin's board of directors again and reached an agreement in advance.

Fang Zhuo temporarily lost the trust of IDG Xiong Xiaoge, and seeing that Xu Kaiwei was more capable, he first made some necessary references to the board of directors.

It's still ten o'clock.

The meeting process this time was relatively straightforward.

Fang Zhuo proposed a supplementary agreement.

First of all, among these four institutions, only Goldman Sachs and Deutsche Bank signed ratchet clauses when investing, which are clauses used to adjust valuations and prevent the next round of financing from losing shares due to poor business performance.

Colloquially, it's called an anti-dilution clause.

Fang Zhuo didn't know why there was no such clause in the contract between IDG and DCM at the time, so he simply brought it up at the meeting and signed it together.

The expectations that Bingxin currently faces may indeed require such a constraint. From an investor's perspective, it is a blessing among misfortunes.

IDG's Xiong Xiaoge and DCM's Connor listened to Bingxin Legal's narration, and saw Fang Zhuo, Xu Kaiwei, and Zhang Hongli who had no expressions on their faces. They suddenly felt a little bit ashamed.

what happened? What went wrong?

Are there flaws in your own business processes? Why did those two companies sign contracts before?

The legal story is over.

"As for this ratchet clause, Lao Xiong and Connor shouldn't object, right?"

"This is for your good, but after much thought, it's not the best."

“The ratchet clause is not a panacea and only takes effect when the next round of financing is valued.”

Fang Zhuo simply said these few words, then turned to signal his legal affairs department to continue talking about the core content of today's preparation - the Valuation Adjustment Mechanism (VAM) of the gambling agreement.

VAM is relatively famous in later generations and is widely used.

But now, it is a new thing that capital combines with domestic conditions in the field of equity investment.

Last year, Morgan Stanley invested in Mengniu, using the company's profits as a bet for the first time, creating VAM.

What Fang Zhuo now proposes is to combine the valuation of VAM and ratchet clauses, agree on a time limit, evaluate the valuation at maturity, and set up equity redemption.

Because the ratchet clause involves the next round of financing, but VAM does not need to do this, it is an on-site statement of legal affairs.

This kind of creation also takes into account that it is difficult for semiconductor projects to make quick profits, so it is more appropriate to talk about valuation.

"In five years, a 50% increase in valuation can be regarded as a guarantee of harvest despite droughts and floods."

"Do you have any other questions?"

Fang Zhuo allowed time to digest, and when the basic techniques were discussed in the conference room, he asked aloud.

"Mr. Fang, it took you five years to achieve a 50% improvement. Don't you have too little confidence?" Connor raised an objection. He felt that the time was too long and the target was too small.

When venture capital makes equity investments, their goal is to increase the value by at least several times.

Now it takes five years to achieve 50%. Again, it would be better to use this money to invest in other projects.

Fang Zhuoyan expressed his sincerity in a concise and concise manner: "I tried my best. I won't sign if I like it."

Connor felt the sincerity of the young president, so he put away his temptation, tried his best, and signed whatever he lost his temper.

This VAM comes from Bingxin's implementation of the bottom-line clause in the contract. Compared with the current situation and general expectations, it has shown its sincerity.

According to Connor's understanding, this is an exchange between the two parties. The stock promotion at the last meeting has become binding. Otherwise, if he helps to raise Yike's stock, this guy will cash out and run away...

By then, the money he had cashed out would have been more than the money he had invested in the ice core.

Now at least I can ensure that I have a better exit mechanism.

Even Connor was convinced, and the other three families naturally had no objections.

Now I can think about it optimistically. Even if Mr. Fang cashes out his shares, he will still be able to enjoy some soup without losing his money.

In this way, you can already make a lot of money.

80% of the content of the second Bingxin Board of Directors was the legal interpretation of the contract terms, and 20% was the negotiation and consent of the presidents.

In just two hours, the board of directors came to an end, and subsequent supplementary terms will follow the normal process.

Hang Lung 23 has set up a lunch reception, but Fang Zhuo will not participate because he has to go to the airport immediately to fly to Luzhou. He needs to communicate with the local government about the recent ice core assessment of the future. In addition, he also wants to communicate with the University of Science and Technology of China. The treatment of Hu Zhengming.

The teams from Goldman Sachs and Deutsche Bank stayed for lunch, and Su Wei, Vice President of Yike, attended the reception.

DCM's Connor has been somewhat subtle since he learned about the tacit understanding, and he doesn't want to participate in additional communication.

IDG's Xiong Xiaoge also had work to catch up on, so he and his team took a flight back to the capital in the afternoon.

"Mr. Xiong, Bingxin's agreement this time is really sincere and he has put in a lot of effort."

Liao Yu, who was traveling with him, expressed his opinion after getting on the plane. Well, he would not be thrown off the plane.

"Liao Yu, you think Fang Zhuo is sincere, right?" Xiong Xiaoge asked.

Liao Yu nodded without hesitation: "Yes."

"Then let's take a longer look at the timeline of this action. Fang Zhuo was generally optimistic about SMIC's listing. He invited Qiu Ciyun, SMIC's senior vice president, to work on a new project together, and everyone invested in it."

"When the project was launched, all funds were in place, and all contracts were signed, something happened to SMIC, and the prospects took a turn for the worse."

"At this time, Fang Zhuo stood up and said, don't be afraid if you leave your money with me. I will sign a redemption clause for you, but you have to leave it for five years. In these five years, we will work together to complete the project."

Xiong Xiaoge opened the magazine: "Liao Yu, do you think the sincerity you feel is a bit insincere?"

"Mr. Xiong, I don't think so." Liao Yu gave a negative answer, "Mr. Fang's sincerity may only be 60%, but how can you demand 80% sincerity in the business field from the beginning?"

Xiong Xiaoge sighed: "Fang Zhuo probably thinks so too, so he is extremely confident."

Liao Yu shut up. If he continued speaking, it would be time for Mr. Xiong to drive him away again.

Five minutes later, Xiong Xiaoge, who had not even finished reading the first page of the magazine, suddenly said: "Investing in ice cores may be the most failed investment operation in my career."

Liao Yu was slightly shocked. He knew that Mr. Xiong had always regretted Tencent's investment, but when he thought about it, the money invested in that investment was far less than this one.

He was thinking about how to respond to his boss's sentiments.

However, Xiong Xiaoge continued talking to himself: "But if Fang Zhuo is there, maybe this investment may be the most successful operation since I started my career."

Liao Yu was shocked. This was Mr. Xiong’s general evaluation of the other party!

He felt that he had learned a lot from both Mr. Fang and Mr. Xiong this time, and said with emotion: "Investors and project parties just compromise with each other and help each other, which is difficult to say and easy to say."

"It's quite easy. We help each other." Xiong Xiaoge paused. "It's indeed quite difficult. It's a unilateral compromise."

Liao Yu: "..."

Emotion is emotion, reality is reality.

Nothing wrong.

The four members of IDG arrived in Beijing in the evening.

They came back in a hurry because there were two investment projects that had already been negotiated and they were in a hurry.

That night, the company worked overtime, and four people had to communicate with a local entrepreneurial project in Beijing.

At seven o'clock, Xiong Xiaoge, who had taken a short break, sat in his conference room and listened to the entrepreneur's description of the project.

Entrepreneur Sun Maoqi spoke passionately for a whole hour.

It can be seen that this entrepreneur is very eloquent and has a certain ability to draw blueprints. However, through the project book and asking some questions, not only Xiong Xiaoge, but also the other three people can see the rough intentions of the other party.

I couldn't help but compare this rough ice core project with the ice core project I had just come across. The difference between the two is like putting jade and stone together.

Liao Yu thought about how to tactfully reveal that something was wrong with this entrepreneur, because this person was introduced by connections in Beijing.

Unexpectedly, Mr. Xiong, who had been silent for a while, opened his mouth and stunned everyone.

Xiong Xiaoge asked gently: "Can you cry?"

"Ah?" Sun Maoqi was confused, "What?"

Xiong Xiaoge repeated patiently: "Can you cry? Just do it now."

Sun Maoqi looked at Xiong Xiaoge, then turned to look at the other three people. For a moment, he didn't know what was happening in front of him. The investor's request made him confused.

He said slowly: "Mr. Xiong, does this have anything to do with the project?"

"You know Fang Zhuo, President of Yike, right? He has a strong emotional appeal, and this ability brings him great leadership charisma." Xiong Xiaoge said solemnly, "So, we investors have also begun to examine this ”

Outrageous projects go well with outrageous demands.

Sun Maoqi's eyes lit up: "I admire Mr. Fang very much. I'll give it a try."

One try, two tries.

Facts have proved that under the watchful eyes of several pairs of eyes, not everyone can just say this.

Xiong Xiaoge stood up with a smile and shook hands with this entrepreneur who was too weak in skills.

Sun Maoqi was not too disappointed. He already knew that such a request was a rejection of himself.

On the contrary, he asked curiously: "Can Mr. Fang of Yike really cry whenever he wants?"

"Mr. Fang is the one who has the best grasp of his emotions among all the entrepreneurs I have ever met." Xiong Xiaoge replied, "Part of his personality charm lies in what kind of emotions he expresses on what occasion. Therefore, he has always Very trusted by investors.”

Sun Maoqi left full of yearning.

"Is this person a liar?" Liao Yu thought it was funny, "Mr. Xiong, you always thought that Mr. Fang was also a liar because of the registration website."

"No, a big liar is not a liar, this person is too bad at tempering." Xiong Xiaoge shook his head, "Fang Zhuo said last time that he would take me to invest together. I thought about it later. He has such a keen sense of smell. If nothing else, At least you can spot a liar very well.”

Liao Yu was surprised. Mr. Fang also wanted to invest? That's no longer a companion.

But saying that I want to invest with Mr. Xiong is really a bit too much.