Seventh Avenue: The double lesson of equity and voting rights

What was the unknown story between founder Cao Kai and the tour after being acquired? The most important reason for Cao Kai's introduction of the tour is the listed article | Lingwenting May 2, Cao Kai took the things that had been packed and walked out of Seventh Avenue. He was in a bad mood. As the tour has just announced, it has signed an agreement with the original management shareholder of Seventh Avenue to acquire all 28.074% of the management shareholder's equity. The acquisition ended with a 71.926% per cent stake in the company, and Seventh Avenue will become a wholly owned subsidiary. Cao Kai submitted his resignation to the board on the day before and was granted approval. In other words, although as the founder of Seventh Avenue, but the company has no relationship with Cao Kai. 10 days later, I saw Cao Kai in Shenzhen. He was calm and relaxed, and occasionally smoked a cigarette in the gap of conversation. But before deciding whether to leave Seventh Avenue completely, he had insomnia every day. After dangerous to the Seventh Avenue of "Pinball Hall", "The Divine Comedy" and so made the national resounding page tour, he was reluctant to leave. And even if the introduction of swimming, let out control, he did not want to leave. 2011, the acquisition of a seventh Avenue 68.258% equity, trading on the price includes 68.26 million U.S. dollar fixed cash and up to a maximum of 32.76 million U.S. dollars floating extra cash on the price. Under the agreement, if Seventh Avenue performance meets agreed standards and Seventh Avenue completes its initial public offering in Nasdaq, NYSE or Hong Kong by 2014, its uncontrolled shareholders have the right to sell their holdings to a cruise at an agreed price, and the put option expires in 2014. In other words, there is a gamble behind this merger. The content involves two aspects, one is the income, second is the listing. Cao Kai told "Entrepreneurial state" that the actual revenue on Seventh Avenue was more than a little higher than the requirements of the tour. The results of the 2013 Q1 also showed that Seventh Avenue Q1 contributed 216 million yuan for the tour, accounting for about 21% of the total revenue. Clearly, performance is not a problem. As for the listing, there have been reports that Seventh Avenue had been sent to Nasdaq in secret form in 2012. Cao Kai confirmed this, and revealed that the whole process of the listing has been completed, on the Nasdaq ring Bell this step. Everything stopped short. Seventh Avenue did not have an independent successful listing, on the contrary, the two sides agreed to a period of one year, and the gambling agreement is not fully implemented, the tour ahead of the completion of the Seventh Avenue of all acquisitions. Cao Kai soon have their own new whereabouts, starting again, starting a game to do the old line, or a page tour. Why sell to swim? March 2009, "Pinball Hall" on the line, the first month of water 180,000 yuan, after the account, withholding duty, the real hand only 80,000 yuan. Cao Kai hurriedly first give everybody wages. This is his first venture since November 2007, from the failure of the university campus virtual Community project after the transformation of the money earned. Cao Kai is still short of money. In April, he met angel investor Wangyuan through a friend, Wangyuan gaveThey are 100,000 dollars, accounting for 15%. At that time, the stock in Cao Kai eyes is not something valuable, let the company live, this thing can continue to do, this is the most important. He went to the Shenzhen Entrepreneurial competition, only for 500,000 Yuan prize. A few months later, Zeng Liqing also came in, is Wangyuan introduced. He traded 4 million yuan for a 20% stake. When the turn to Pine wo Capital and Shenzhen Innovation investment, 10 million yuan accounted for 10% of the shares. It's all happening in a year, when Seventh Avenue was only a game of Pinball Hall, the speed of the company's growth was staggering. Vietnam has a company to come to the door, to Agent "Pinball Hall." The back two VC money has been lying on the account, Seventh Avenue has no need to worry about money. The company develops well, Cao Kai the idea that lets the enterprise go public. The first time this idea was in October 2009, when there was a domestic gaming company listed on the A-share gem, Cao Kai that this is an opportunity. But unexpectedly, the company after the listing of PE significantly shrink, gaming companies in the domestic market window gradually closed. But the seventh Avenue has been taken are RMB funds, that is, pure domestic companies, to be listed only at home. And the trouble is that the company's shareholders have swelled to 10. Including Cao Kai, the company's management has 4 shareholders, Wangyuan, Zeng Liqing and two VC, in addition to thank the introduction of the Wangyuan friend, Cao Kai gave him 3% of the shares; Wangyuan before introducing Zeng Liqing, also pulled in an angel cast 400,000 yuan. Cao Kai is the largest shareholder, holding 40%, the rest of these people accounted for only 10% of the shares, the difference is not much. A lot of people, everyone to the company listing this matter attitude is different. and Cao Kai's judgment is, "everyone has a lot of projects, not particularly all-out efforts to promote the Seventh Avenue to the listing." Cao Kai at that time has two targets, one is to do a listed company, the second is in Shenzhen building block, called Seventh Avenue. Maybe it's the internet all the time, and he always feels like he's dealing with the virtual world, and there's always something left in life. "There is a building of my own, with my logo on it, all our thoughts in it, that feeling is very good." "But the Shenzhen land is not easy to take, this goal and he is drifting away." The listing is not out of reach. He began to consider the introduction of capital with overseas backgrounds, and the Baofan of Huaxing Capital assumed the role of FA. In fact, there are not many alternative routes left for them. It makes sense to move renminbi funds to dollar funds, but most funds are less interested in Seventh Avenue. So they focus on the introduction of mergers and acquisitions, giants, perfect are considered objects. Finally, Cao Kai chose Sohu's tour. "Seventh Avenue is very similar to the idea of swimming. We are all based on research and development, talent, human nature, special value product experience. "2011, April 25, Cruise announced the acquisition of 68.258% of the Seventh Avenue Equity." At that time, "Pinball Hall" in the domestic is one of the web game, was translated into 9 languages, in Vietnam, Taiwan, Brazil and other countries and regions operating. Monthly incomeTens of millions of dollars, but also in the year to become the first monthly income of hundreds of millions of page tour. This makes up for their short boards, which have always relied on the end of the trip. For the old shareholders on Seventh Avenue, this is also a good exit opportunity. Cao Kai said: "With Seventh Avenue, or in the Seventh avenue of the shares, not a loss of money, are all earned." Wangyuan initially invested 100,000 yuan, more than a year time has become 70 million yuan. As for Cao Kai and Seventh Avenue, he felt himself getting closer to the dream of listing. The swimming behind is Sohu, the domestic two times in the overseas listing successful enterprise rare, this lets Cao Kai very excited. "They have a lot of experience, rich resources, investment banking and investor relations." Frankly speaking, we find Sohu and swim investors said, willing to buy some of our stocks, it is not difficult. Because Seventh Avenue is not to say that a tens of billions of-dollar plate like Facebook is going to be a few billion, the pressure is not great. "Everything seems to be moving towards the ideal, and Cao Kai is indifferent to the terms of the lock-up period and the shares that were conceded." Because he didn't want to leave. "The team that worked so painstakingly from 5 people to seven hundred or eight hundred people, why did you go?" "I'm not fit to work" Cao Kai, born in 1982, is often labeled "hardcore players". He began to play games at the age of 5, from TV, arcade, Palm machine to online games, hand tour, self-taught, quickly. In junior high School, he self-taught the Microsoft System Engineering Division MCSE and Cisco's network engineer. However, his work experience is not in the game. Very simply, he has always felt that the game is simply a hobby, did not want to make money from it. After graduating from university, Cao Kai's first job was in Liu Xiaosong's A8, doing business development, 2500 dollars a month. At that time A8 's main business was the SP, not the music story that went on the market. Then he jumps to a company that does Peer-to-peer downloads and music. Cao Kai at that time with A8 a colleague to interview, the result of each other think both of them are very good, they left. Cao Kai also has a heavy financial burden, he will send home 1000 yuan a month for his sister to read, the other side out of the monthly salary of 7000 yuan so that he can not refuse. At that time Cao Kai was only 23 years old, is the head of the design department, with 20 supposedly people under his hand. The third job in Eschde for Cao Kai accumulated the start-up funds for the later start-up. The foreign company has branch offices in Beijing, Shanghai and Guangzhou, and Cao Kai is the COO of Guangzhou branch. Also this job let him thoroughly understand that he is not suitable for working, can not work again. "My working experience has not been very smooth, I have always been marginalized, but also by my direct leadership." "At that time, the company was Samsung mobile phone's China's total agent." In other words, all Samsung mobile phones have entered China, before their hands. Take the box apart, plug in a downloaded thing, and then cover the box, also do sp. Cao Kai is responsible for nationwide promotion, he put Jiangxi, Shanxi, Zhejiang Province, three provincial satellite TV time to be done, freePlay their product and then split it up with each other. On one occasion, the chairman of the group came to the meeting and sat at the head of the long bar to see the projector. Cao Kai just sat on the other side, and all the reporting colleagues played his PPT next to him. He saw everyone's hands almost trembling, "may be a few of their departments do not make money," Cao Kai not the same, emboldened relatively hard. As a result, the boss gave the others a pass, but praised the Cao Kai a few words. Since then, his direct boss's attitude reversal, intentionally and unintentionally limited Cao Kai-"Talk to me every day." "As a result, Cao Kai out of his own business. Similar things, Cao Kai also met in A8. As for the reason, he also has an analysis: "At that time I was young, always want to get other people's approval, recognition of my ability, so feel more performance, in order to get more opportunities." Then others feel terrible. "These experiences allow Cao Kai to be firmly divided into the category that is not suitable for working." "The process is too tortuous, cause I am afraid, insecure." "From another point of view, Cao Kai is a product-driven talent, so he also admits that he is very paranoid, strong, but the number, income is very indifferent." "Early Seventh Avenue in order to make money, in the game made some incorrect decision or design, poor afraid." "Pinball Hall" when the second version of the time to do a number of interactive design. We don't want to do these things to make money, but to think more about the player's experience. "Pinball Hall" is in the "Crazy Tank", "Adventure Island" on the basis of innovation. The character design is more exquisite, the painting wind is more refreshing. "Do the product to achieve the limit, do not give yourself room, this thing is endless, to die to do, do not know how to do it, they are fast collapse, have seen no problems, this time how to do?" Look for someone else to find more people to help me find problems, improve problems, and endlessly fix. Not to make it perfect, it's better. "Cao Kai said. There is also a small matter to support his harsh and paranoid products. The 2011 Tour holding, the management team sold some shares, Cao Kai to achieve financial freedom. He bought his first house for his family-he had been renting it before, but he hasn't been there yet. The renovation lasted for two years and was delayed for completion. The reason is that Cao Kai requirements are too harsh, feel that where imperfect will be pushed back again. Cao Kai energetic. He played 5 jobs at the university because of his family's financial difficulties. Even now, he still sleeps only 5 hours a day is enough, 2 points to sleep, 7 natural wake up. Daily life is very simple, the morning from the library to drive directly to work, at one or two o ' clock in the library. "No exaggeration to say, I do not know where to open the door of the first floor, did not walk." His favorite sport is playing basketball. A friend evaluates him as a born entrepreneur. A mistake? After a cruise to Seventh Avenue in 2011, the latter remained largely independent of operation and management. There were no senior executives in the swim, and the Seventh Avenue team was basically stable, and the staff saw Cao Kai still working overtime to one or two points as before. There was no change before and after the merger. Cao Kai told the team: "WeChoose to swim, swim choose us, the goal is to go public. "It's no longer a challenge for them to gamble with the performance of the cruise, they have been fulfilling their original commitments and they have surpassed their original goals." Open the board is very simple, quick, open the report, looking at the rise of the curve, we are satisfied to say: "Well, let's go to dinner." "At the end of 2011, the Seventh Avenue also launched a second product," the Divine Comedy, which is a magic game, and "Pinball Hall" is completely different style. In addition, in these two years, they are doing the preparation of the listing. prospectuses, looking for investment banks, ICEC Securities and Futures Commission, etc., including roadshow have been done. Finally, the boss of Nasdaq's US headquarters came over and held Cao Kai's hand and said, "Nasdaq welcomes you." "Everything is ready, only to the Nasdaq to ring the bell." But the wind was abrupt, Cao Kai changed his mind and he didn't want to go public. There are two reasons. First, after the listing of the company's performance requirements, not like now with a swim to gamble so simple, this will let the company into the endless pursuit of interests of the circle, and contrary to the original intention of the game-just want to make everyone happy. Second, he has lost control of the company, even if the listing is successful, Seventh Avenue is also a tour rather than the founding team. "So I will become a professional manager of the shares, and become a part-time job, I said I can not work, not suitable for working." "Cao Kai said. The problem is, the fact that Seventh Avenue is being held in the 2011 is a certainty that Cao Kai didn't realize at the time? He said there was a misunderstanding. "We were in contact with investors, they finally went, Seventh Avenue or our, so the first acquisition of Seventh Avenue, we also think so." "In other words, Cao Kai thinks the tour is just a resource-backed dollar fund investor who knows more about the game." They signed a merger agreement, the reason for the first trip to buy 68.258% of the equity, is to ensure that after the dilution of the listing, the swimming still have to hold. Because the swim has been stressed that the listed companies should be and table, this is not a problem for Cao Kai. "and the table merge table, holding also belong to the holding, then give me the right to vote." "They also have a bet, which in Cao Kai seems very normal, to do a good job, through practical action to reflect the value." "We did it and their investment should be rewarded, and they gave us back the company," he said. Around September 2012, Cao Kai that the time had come to talk about the issue of "returning control". This must also be done before the IPO. During the 2011 merger, the 3:2 per cent vote was in the management of Seventh Avenue, so Cao Kai demanded a second vote, which was crucial and decisive. Obviously, the swim will not agree, and there is no reason to agree. Cao Kai Suddenly, the original swim is a control in the end, will not go, "people are going to own this company." In this way, Cao Kai don't know what to do. Everyone sat down to discuss the solution, Cao Kai proposed a number of options, including he wanted to buy back some stocks, but did not passHave。 Until one months ago, the tour proposed the current plan, complete the acquisition ahead of time. Their starting point is also very simple, since Cao Kai already have other ideas, the heart is not, afraid of the things behind do bad. In order to ensure the stability of the company and the team, the founder left is the most rational solution. May 2, Seventh Avenue employees received a cruise announcing the purchase of Seventh Avenue Management's remaining stake and Cao Kai's departure from the mail. Tour President Chen Deven will be the Seventh Avenue Chairman, Deputy CEO, the original COO Meng continue to remain in office. "This thing to now, may not be a swim to believe, talk to others and no one believed." I really thought so. You see my behavior to know, if not so think, these two years I spell so why? Is it because it's your company? " Cao Kai said. Of course, for the whole thing, he has no opinion about swimming. On the contrary, it is lucky to swim, in the whole acquisition, the other party to fulfill the promise. And he did not sign a business agreement with him, that is to say, he left Seventh Avenue in any industry. "The responsibility for this matter rests mainly with me, which was not stated in the agreement." "Leave Seventh Avenue, Cao Kai is preparing his new company, or a page tour." He did not want to say much, felt that things had not been done, and everything was empty talk. He still plays basketball whenever he has time, but his play is different from the previous one. "Before scoring is the most cool, feel a sense of accomplishment, very enjoyable." Not now, I think passing is the most fun. I don't have to throw it, but my teammates can throw it in and I don't score. "Cao Kai acquisition experience sharing can not completely say that the choice of the object will be able to succeed, because this thing is too variable." Two team merge, do not look at other, is to look at people. People are the most complex individual, biological, a group of people to be together, this thing will have a lot of possibilities, not necessarily because of what, people's temper, habits, values, are possible. 1, the acquirer must fully trust the merged team. Buy it and believe it, don't change it. Independence is very important, you mustn't take care of it. 2. Complementary. You buy the best thing you also understand, is not to buy you do not understand, the merger and acquisition side is a certain tacit understanding, do not be irrelevant, this is difficult to do. 3, or to have performance requirements, is to gamble. Although I do not value this thing, I have never doubted my team, but there should be one such request. Phased goals are also important. 4. Respect. The acquirer must fully respect the opinions and ideas of the acquirer, and do not impose some of its own things on it.