Reborn Entrepreneurial Giant

Qu Li, Li Yinan, Zhou Shaoning and other Honor teams gathered in Beijin to formally launch the first round of financing. Due diligence was unnecessary. Lehman participated in almost the whole process of the procurement negotiations between Honor and T-Mobile, and he was very aware of the risks.

Apart from their team, Honor's most important asset is T-Mobile's purchase contract of 450,000 Honor G1 units, an order of about 200 million US dollars. This is the profit that can be seen, and the advantages are not limited to these. Qu Li has the sudden explosion of Shopee 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% of the channel fee, 5% of the patent licensing fee, 5% of other fees, and the net profit is about 15%. This order can earn about 3 tens of millions of dollars.

How do you avoid tax? The income of overseas companies is attributed to the Hong Kong subsidiary, or the US company increases the purchase price from domestic companies to reduce the tax rate. However, the domestic tax rate for high-tech enterprises is 15%. Glory may enjoy two years of exemption and three years of half. Hand over the achievements of the Honor mobile phone to the leaders of Zhongguancun, and presumably you can get a tax-free discount.

Honor's first mobile phone can control the cost and profit at this level, what else can venture capital ask for?

"Management, do you have a problem with me?"

"I mean, your main management is all Chinese, how do you deal with internationalization, and how do you manage overseas branches?"

"I don't know. Our executives can speak English and are still learning. We should first serve the operators well and do a good job in the e-commerce business, and then consider establishing a third-party offline sales channel in the local area. If a country establishes one after-sales maintenance 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..."

Uh, who is this, Shen Nanpeng or Xiong Ge touting him? Don't think that you will have a share in this way.

"That's all. The various financial relationships are very simple. We will raise funds this year to expand the team size from the current 100 people to 300 people..."

"I'm very satisfied with the situation of Glory Company. The problem is that in order to get the advance payment from T-Mobile, you signed a guarantee with your own reputation. What if something happens and you can't repay the money?"

"You can rest assured that Lehman is willing to provide guarantees for Qu Li's financial situation."

"You trust him that much?"

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

"Ahem, let me say it again, money alone is not enough, you must be able to provide me with resources other than funds, or use money to knock me out." Qu Li doesn't mind other people's opinions, he has actually ruled out IDG Between Xiong Ge 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 10 million barrels of oil, earns $20 per barrel, and is now worth $200 million. Qu Li's guarantee has an upper limit, and he can bear half of the loss of the $200 million order at most, which is $100 million.

He is usually not seen in Glory, but it is still very useful at critical moments. Qu Li used his actions to increase the trust of employees and reduce the trust cost of venture capital in the company. He has gambled all his fortune, what else do you want?

"300 million US dollars, 20 times higher than the 15 million when you were founded."

"Why don't you help me find a company like Glory, I'll invest 500 million US dollars, and I'll give you 1 million as a bonus."

"I invested $500 million." Someone from a venture capitalist said

Qu Li glanced at it, but didn't make a sound. According to the 30 million US dollars profit that Honor has already determined, even if it is calculated at 15 times the price-earnings ratio, the valuation is almost 500 million US dollars. But Honor is a start-up company, and this is just the beginning. The smartphone industry has a very high profit margin, and it may be able to subvert the entire mobile phone industry.

"Honor is a hardware company. Venture capitalists in Silicon Valley rarely make money from hardware companies. Once Nokia and other large mobile phone companies transform, they are likely to rely on their strong strength..."

"Nokia has not joined the Open Handset Alliance organized by Google. I talked with Kallasvuo. He seems to believe in Symbian more. At present, he has no such idea..."

Nokia is not Google's friend? This is a little troublesome, but Nokia's market value of more than 200 billion US dollars is not just for fun. They have many opportunities for change.

"Apple is on the same front as us for the time being. We are an alternative to Apple's iPhone, and Google's option..."

Before the Apple iPhone came out, no one thought that mobile phones could be made in this way. Google established the Open Mobile Phone Alliance in November 2007. HTC quickly followed up and launched the T-Mobile G1. After that, the Vietnam War became stronger and stronger. After Nokia surrendered, it became the iPhone. One of the biggest rivals, but after the iPhone 4 came out, Apple resolutely suppressed HTC. Once the sales ban came out, it seriously affected the cooperation between HTC and the operators in the United States. The arrogant HTC was abandoned by the domestic market. For a long time, the iPhone was the only one.

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 a large company is like a knife falling from the sky. Dare to take. Should Motorola not be acquired, how can Google Android protect its allies?

Qu Li couldn't have imagined it, and the VCs on the scene couldn't have imagined it even more. VCs have been avoiding investment in the field of consumer electronics products, but Glory is an innovative asset-light hardware company that adopts the foundry model. Technology business analogy.

"We're similar to companies like Apple, Nike, etc. We focus on product development and brand marketing, and supply chain management..."

Although it is said that Qu Li actually wants to have his own factory, he will not tell the truth to these venture capitalists, he will cheat the money first.

"What do you think the valuation of Glory should be?"

"Glory now has a total of 110 million shares, at $6.5 per share." Qu Li gave what he thought was a fair price. Apple's current price-earnings ratio is about 40 times. Honor has much more room for growth than Apple, and its price-to-earnings ratio is only over 20 times.

Qu Li deliberately ignored the cost of 50,000 spare machines. If it really counts, it will be the market's dream rate. How big the dream is, the valuation of Glory will be.

"Different from traditional functional mobile phones, which are useful when making calls and sending text messages, the advantage of smart phones is that they can 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 machine replacements around the corner, and feature phones will take 4 to 5 years, and the market size will increase out of thin air..."

"I agree!" Wang from CDH Investment actually stood up first

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

"..."

"No problem!" Ms. Zhou from Horizons Investment

Accidents, surprises, this round of financing is full of surprises!