Case Files 013

Chapter 99: What Makes a Venture Capitalist?

Lin Dafa came from Luo Bei City which was at least 1 day away from Dong Xing City. It had been 4 years and one wondered if Lin Rong was still staying in Luo Bei City. However, we were certain that Lin Rong must have known that her father escaped from prison 3 years ago. We were unable to leave Dong Xing City so we had to rely on the police at Luo Bei City to find Lin Rong for us. Gu Chen stayed with the tobacco boss while Xiao Liu guarded beside Elder Liu. The only people who could move freely were me and Guan Zhenglin. No one knew where Jessie's team had disappeared to, ever since we parted at the underground parking lot, we hadn't seen them. Perhaps they had found a new lead of their own.

That night, the kidnappers didn't call again, but as I was just about to lie down to sleep when Xiao Liu's call came. On the phone, he told me that Liu Yinyan finally remembered what he had done and he wanted me there instantly. Based on his tone, it sounded like something serious and I had no time to lose. Guan Zhenglin was already asleep so I didn't wake her, instead I drove to Liu Yinyan's bungalow alone. Even though night had already fallen, Dong Xing City was still busy. The people at this city never seemed to rest, they were like worker ants of a colony. I drove into the bungalow compound, and parked right before the bungalow itself. The place was lit up as if waiting for me to arrive.

I walked into the bungalow and saw Liu Yinyan and Xiao Liu seated in the living room. The butler and several bodyguards surrounded them. When Liu Yinyan saw me, he said, "Please leave us, I have something to discuss with Officer Wu. Officer Liu, do you mind giving us some privacy too?" The rest nodded and turned to leave. Then Liu Yinyan told me a story about him. This story happened 33 years ago when Liu Yinyan was only 35. At the time, Liu Yinyan only joined Rong Ding Corporation for not too long. The company was still new and during the first few years, no one dared to take this unknown company on as their investor. Even though Liu Yinyan had plenty of ideas and proposals, no one believed him. After all, in this business, there was no right or wrong, only matters of accuracy. Before the investment was made, no one could guarantee it would result in profit. People instead relied on the company's experience and reputation. For a company as new as Rong Ding Corporation, it meant that no one was willing to put their trust in them. That day, the founders of the company sat together to discuss this issue. One of the shareholders said, "If this year we do not accept new capital, with just a few of us, we won't be able to keep this company running anymore. In other words, we'll break up in another half a year. I guess we'll treat this as a learning lesson. We can seek employment elsewhere, we're still young." The others nodded. They were only in their 20s but Liu Yinyan was 35 already. He was at least 10 years older than them. And that was not just in age, it also meant that Liu Yinyan entered the business at least 10 years later than them. If this company failed, this industry would have no place for Liu Yinyan anymore.

Young people had the chance to make mistakes, 2 years were nothing for these young people but for Liu Yinyan, it was a period of his life that he couldn't waste. He was 35 and he didn't even have a home or a girlfriend yet. As mentioned earlier, these young people were the cannon fodder for this industry and no one had high hopes on them.

"I guess this is it. We'll clean up the space and request for bankruptcy." The few founders agreed. If this company closed down, then Liu Yinyan would end up with nothing. He had no savings and had even sold one of his kidneys, this was his only chance. "There's no need to rush." Liu Yinyan stood up. Among the founders, he was the oldest and also the most capable. These younger founders knew that. They believed that if Liu Yinyan was given a chance, he would become a great legend in this industry, that was something they understood from working with Liu Yinyan for 2 years. But unfortunately, no one was willing to trust Liu Yinyan and provide him with the investment capital.

Liu Yinyan had remained silent until now. Everyone waited for him to continue. Liu Yinyan looked around and said confidently, "We still have half a year right? Leave everything to me in this half a year. If we succeed, we'll share the profit according to our current percentage of shareholdings; if we fail, I'll take on all the responsibility myself." They looked at Liu Yinyan and saw a great future in his eyes. Therefore, they decided to trust Liu Yinyan. However, they never saw Liu Yinyan again for the next 3 months. Where was Liu Yinyan? Naturally he was out looking for capital.

As long as he had the capital, Liu Yinyan had confidence he could triple them within a year. In the first month, Liu Yinyan ran all over Dong Xing City and knocked on the doors of all the millionaires, but the answer was expected. No one was willing to invest in a company who was facing bankruptcy.

"If you were me, what would you do?" Inside the large living room, only Liu Yinyan and I were left. His voice was soft, like he was whispering. A fleeting smile appeared on his face, his eyes were filled with regret and helplessness. He crossed his palms on the top of the staff and leaned forward. I thought for a while and shook my head, "I don't think I'd have any idea. Probably I'll borrow money from my family and friends, but my conscience won't allow me to gamble with other people's money."

Liu Yinyan sighed, "That's why you'll never be a venture capitalist. I've been invited to many lectures and I always ask people, what do they think is the most important aspect of a venture capitalist? I have been given all sorts of answers like a wealth of capital, a sharp business acumen, a strong analytical mind."

I was curious, "Then what do you think is the most important aspect?"

Instead of answering me, he continued his story. No one was willing to give Liu Yinyan any money. As long as he had capital, no matter how small it was, Liu Yinyan was confident that he would turn a profit. But once he lost this opportunity, his documents and analytics would lose their timeliness and become waste paper. Therefore, Liu Yinyan came up with a method that would allow him to acquire a large amount of wealth in a short amount of time. This incident happened 35 years ago. It had been so long that Liu Yinyan had forgotten about this most important thing, how he acquired his first bucket of gold. People say the basis of capitalism is accumulation of gore and blood. People had different interpretations of it but for Liu Yinyan, it was undeniably true. Liu Yinyan was a genius, he came up with a perfect solution.

One of the company founders had a relative who owned a gold trading shop. Liu Yinyan found him and stayed at the gold trading shop for a month before he left. No one knew what he did there, but after he left, he never returned to that shop. Half a year later, Liu Yinyan managed to find quite an amount of money, he invested all of them into an interweb company which was just in operation for 3 years and acquired 35 percent of their shares. Soon Ding Rong Corporation did go bankrupt but all the shareholders had shares of this interweb company.

When Ding Rong Corporation returned, it was 3 years later. In these 3 years, the interweb company soon became the lynchpin of the internet and telecommunication industry. The value of the share had flipped so many times that the people with its shares could live a comfortable life without doing anything ever again. The interweb company's founder started to buy back the share from Ding Rong Corporation and each of the original shareholders now found themselves with several ten million RMB. To own more than ten million before 30, that was the dream of so many people.

When Rong Ding Corporation returned, the original founders joined without any hesitation. This time, Liu Yinyan was officially the main shareholder of Ding Rong Corporation. From then on, Liu Yinyan's name also spread around Dong Xing City and the capital kept coming.

"But how did you get that first capital?" I looked at Liu Yinyan with confusion. "What did you do at the gold trading shop? Was it a loan from the boss? But why would they loan someone they don't know and who had nothing, several millions just like that?"

Liu Yinyan stood up and took in the spacious living room. His mouth twitched. "Wu Meng, look around you. How much do you think this bungalow costs?"

I shook my head and guessed, "I don't know, several millions?"

"Several millions?" Liu Yinyan laughed. "You must not be planning to buy real estate in Dong Xing City soon. Do you know how expensive the land is now? The price near the city centre is about 60000 RMB one cubic meter and at the city centre, it's about 200000 RMB one cubic meter. With several millions, you'll only be able to afford a small studio apartment." He was right, I wasn't that interested in the real estate market, that was so far into the future for me. I never planned to marry and buy a house. But I suddenly understood why Xiao Liu would buy lottery tickets every day. The chance of winning first place in the lottery was about the probability of getting struck by lightning. But why did so many people still buy lottery tickets every day? They knew how low the chance of winning was but they also knew, even if they worked their whole life, they wouldn't accumulate several millions. The chance of winning the lottery was low but it was bigger than 0.

Noting my silence, Liu Yinyan chuckled and answered his own question, "3 hundred million RMB! Do you understand how much that is?" I honestly could not. I couldn't imagine owning ten million much less 3 hundred million.

"One 100 RMB note weighs around 1.15 grams, 3 hundred million RMB would weigh 3450 kg!" Liu Yinyan stood up. "What is the most important aspect of being a venture capitalist?!" Liu Yinyan stressed word by word. "It is knowing to grab at opportunities. Opportunity does not come easily but once you grab hold of it, everything else will come"