Chapter 66: 064 Angel Investor

Yu Xing returned to Jin Ling and immediately contacted Song Yufeng to obtain his guest pass for the internet conference and confirm his speaking time.

September 24, 2008, 4:30 p.m.

The second thing he planned was to visit his teacher again.

But before he finalized the appointment, Liu Wan contacted him again.

To Yu Xing’s surprise, this potential angel investor sent a famous quote.

Liu Wan: Keynes said, even if humanity remembered every single mistake made over the past two thousand years, the moment a hundred pounds appeared before them, they would instantly forget everything.

Yu Xing: Did you sell your stocks yet?

Liu Wan: The essence of financial regulation should be to crush the sprouts of greed, always staying vigilant against the greed behind financial innovation.

Yu Xing: Didn’t sell yet? What are you waiting for?

Liu Wan: But finance isn’t isolated—it’s backed by people, and human nature can’t be avoided.

Yu Xing: In my view, cut the losses decisively.

Three messages exchanged, each speaking their own mind.

Liu Wan stopped texting and angrily called directly: “Yu! You’re enjoying this, aren’t you!”

“Hey, Sister Ying, why do you misunderstand me so much? I’m truly sorry for you—if you’d invested in me earlier, you could’ve avoided some losses.” Yu Xing explained, “I care about you, but since you’ve started reflecting on financial innovation, I’ve got an idea: quit Bain, and sell this kind of motivational junk—might not be bad.”

Liu Wan scoffed, then sighed: “This has become a full-blown crisis—I might even get laid off. Our Shanghai project’s already been paused. When the economy was booming, we did consulting, acquisitions, mergers, or built organizational capacity for future strategy.”

She paused, then continued: “Now we’re consulting on organizational optimization—restructuring and workforce cuts.”

Yu Xing feigned concern: “If you get laid off, can you still find work? If not, come join our endlessly promising Guo’ai Network.”

Liu Wan laughed bitterly—so now she was supposed to join Guo’ai Network, the company about to be sold?

She sighed: “You’re truly cold-hearted.”

“Like you yourself said, projects are tools, people are tools too—in this tide of the times, small entrepreneurs like me get swept up unexpectedly, and elites like you are no different.” Yu Xing grew more serious, “All we can do is stay calm.”

Liu Wan fell silent for a moment, then asked: “Did you really sell?”

Yu Xing gave an enthusiastic suggestion: “If it were my money, I’d hate to sell—but since it’s not mine, I’d definitely cut losses.”

Liu Wan: “...”

Yu Xing asked: “Do you mind me being this blunt?”

“At first, it made me angry,” Liu Wan thought, “but after thinking it over, it makes me even angrier.”

“Sister Ying, this isn’t just about investment—or rather, investment is just a small part.” Yu Xing earnestly recruited, “If you’re unhappy at Bain, or if you’ve considered leaving lately, I’ve got the perfect role for you. I’m building a short-selling firm, and I need you.”

Liu Wan was stunned—she’d heard Yu Xing mention this once before, never expecting to hear it again.

She paused, then confirmed: “You’re serious?”

Yu Xing replied simply: “Of course.”

Liu Wan asked, baffled: “Do you even understand this?”

Yu Xing shot back: “If I understood it, why would I need you?”

Liu Wan had no reply, feeling the man on the other end was delusional.

“But I think grasping short-selling logic isn’t hard,” Yu Xing remained serious. “Find a weakness, borrow shares and sell them, attack the weakness, buy shares back, and return them—right?”

He was describing the common short-selling practice of securities lending: “finding a weakness” meant investigating anomalies and conducting research; “attacking the weakness” meant publishing reports to the public to drive down the stock price and secure profit.

Liu Wan fell silent for ten seconds, then replied: “Roughly, yes—but...”

“It’s not easy to research, and you need some influence,” Yu Xing analyzed himself. “I think it’s worth trying. As a grassroots entrepreneur, I believe we shouldn’t just ‘find weaknesses’—we can also ‘create weaknesses.’”

What if there’s no weakness?

Create one anyway!

As he envisioned, giants’ positions are always shifting; as time progresses, one can profit by muddying the waters.

“Yu Xing, I’ve been thinking a lot lately about your ‘Bai Xiaosheng’ positioning,” Liu Wan suddenly brought up an earlier topic. “Do you know what I’m thinking?”

Yu Xing guessed: “Thinking of cutting losses?”

Liu Wan ignored his cruel joke and gave the answer: “I’ve been thinking about your ‘Penguin Has a Stance’ project. The more I analyze its nature and the internet industry’s dynamics, the more I think... Yu, how did you even come up with this?”

“Because how giants should develop has become an issue the entire industry must consider,” Yu Xing mused. “Penguin now leads in traffic—its weapon works too well, so it keeps using it. Alibaba and Baidu have narrower businesses, but they too must confront similar questions in their core areas.”

“In this era, anyone entering the internet industry must directly or indirectly face the giants.”

“Guo’ai Network is a living example—who could’ve imagined NetEase, a major internet company, would have a dating business?”

“NetEase is just a microcosm. Alibaba, Baidu, Penguin—they’ll all keep expanding into wildly unexpected businesses.”

“The professional field remains largely undeveloped. From a startup perspective, this is a perfect market for vertical segmentation.”

Yu Xing gave a comprehensive description of his idea.

Liu Wan, listening, imagined the giants’ tentacles—capital, business, traffic—spreading downward from the industry’s peak.

She paused, then said: “I’ve decided to cut my losses.”

From the 15th to now, in just a few days, Lehman collapsed, Merrill Lynch was acquired, stock indices plummeted, and panic flooded global financial markets like a tidal wave.

Liu Wan suffered heavy losses—not only from stock devaluation, but also from leveraged investments seeking higher returns.

Yet as shock gave way to clarity, though her mood was low, she began considering new avenues for her capital.

Would Yu Xing’s project have potential?

From Guo’ai Network’s development and his actions, despite being a first-time entrepreneur, he showed considerable ability—and his understanding of vertical segmentation and industry competition was promising.

Though not a true angel investor, angel rounds don’t demand overly strict criteria.

With a clear business plan, a preliminary team assembled, and real market demand present, it was worth a try.

“Sister Ying, congratulations,” Yu Xing said immediately, full of enthusiasm. “You made an absolutely right decision!”

Liu Wan laughed at his exaggerated tone: “Then should I say ‘congratulations to you too’?”

“Yes, but I need to know one specific number,” Yu Xing kept his enthusiasm. “How much can you invest?”

Liu Wan countered: “What’s your valuation? How will equity be split?”

“Without counting your angel round, my initial idea is to use most of the proceeds from selling Guo’ai Network,” Yu Xing stated precisely. “We’ll still reserve employee stock options. The parent company will remain the Hong Kong entity—though we’ll change its name later. So the starting capital is around 1 to 1.5 million. Song Yufeng has about 120,000.”

The fluctuating figures included contributions from Lu Haiying, Zhong Zhiling, and Song Yufeng.

Liu Wan thought for a moment: “You’re serious about this. Your commitment makes me feel more at ease—I’ll contribute 500,000. Let’s round it—definitely 500,000.”

“Great, Sister Ying. Let’s meet in person. You’re still in Shanghai, or I’m in Jin Ling these days—if you come over, we can discuss details.” Yu Xing immediately sealed it. “500,000!”

Liu Wan, still pained by her losses, said: “I hope this investment doesn’t need cutting again.”

“Don’t worry—we’re family. Even if this company fails, we can just sell it later; its positioning and market still have value.” Yu Xing recalled something he’d heard. “We’ll include a clear exit clause in the contract.”

Liu Wan agreed.

She hung up, holding her phone, thinking of the deal just sealed—and the global financial collapse—and suddenly felt lost. Was this a good decision?

Perhaps, if it’s not terrible, it’s good enough.

Unlike Liu Wan’s uncertainty, Yu Xing’s mind was crystal clear. He immediately called Song Yufeng.

“I’ve found an angel investor. We need to define equity based on capital contribution. Are you really going to put in your 120,000?”

When Yu Xing met Song Yufeng earlier, he’d casually mentioned the funding situation and knew he had 120,000 in savings.

Song Yufeng was caught off guard: “Huh? Angel investor? I, uh, Boss Yu, I’m still thinking—your pace is so fast?”

“If everyone waited like you, when would this company ever grow?” Yu Xing said bluntly. “We’ve secured 500,000 already. If you put in your 120,000, you’ll still get a solid equity share.”

Song Yufeng: “This, this...”

“Give me your answer tomorrow. No extensions,” Yu Xing emphasized. “Just say yes or no. Exact equity numbers can wait.”

Song Yufeng took a breath: “Alright.”

Yu Xing ended the call, mentally calculating equity splits. Once Guo’ai Network sold, he believed Song Yufeng would accept his expected diluted stake—he’d only invested that small amount anyway.

And if Guo’ai Network didn’t sell smoothly, they’d already locked in roughly 620,000 in initial capital.

If things went wrong, since Liu Wan had already committed, she probably wouldn’t mind becoming a major shareholder.

(End of Chapter)