Wednesday, March 28th.
AM, Midtown Manhattan.
The first person Zhang Qingxue and Lin Shicheng dated, Existing Shares, was named Robert Harrington. He was in his sixties, had gray hair, and wore a pair of silver-rimmed glasses.
He invested 20 million US Dollar in SpaceX's Series C Financing in 2012. At that time, SpaceX's valuation was less than 2 billion US Dollar.
Six years later, SpaceX's valuation has increased tenfold, and his 20 million US Dollar has become 200 million.
Now the duration of his fund is coming to an end and he has to withdraw.
The meeting location is Harrington's office, an old office building located at Midtown Manhattan.
The office is not big, but the decoration is very particular. There are several aerospace-themed oil paintings hanging on the wall, and a Model of Falcon 1 is placed on the bookshelf.
Zhang Qingxue and Lin Shicheng were sitting on the sofa, and Harrington was sitting in the armchair opposite.
He held a cup of tea in his hand and glanced back and forth between Zhang Qingxue and Lin Shicheng.
"Lawyer Lin, I read your email."
Harrington put down his teacup,
"Era Vanguard wants to buy my SpaceX shares. The valuation is 24 billion, which is an 11.6% premium over the 21.5 billion raised in this round of financing.
The price is not low, but I have a question - how much can you buy?"
Lin Shicheng said, "Your entire position."
Harrington's fingers paused on the armrest.
"All? I own about 0.8% of SpaceX.
Based on a valuation of 24 billion, the value is about 192 million US Dollar. Do you want to eat it all at once?"
Zhang Qingxue nodded.
"Yes. We don't want part of it, we want it all. If you quit, just quit cleanly. Leave no tail behind."
Harrington was silent for a few seconds.
He looked at Zhang Qingxue and asked a very practical question.
"Are you Financial Investment or Strategic Investment?"
Zhang Qingxue said:
"Financial Investment. Era Vanguard does not seek Board of Directors Seat, does not interfere with the company's operations, and does not participate in any business decisions.
This can be written into the agreement."
Harrington asked again, "
What about the lock-up period? After you get the shares, will you sell them soon?"
Zhang Qingxue said:
"Three-year lock-in period. Within three years after receiving the shares, Era Vanguard will not transfer, sell, or pledge.
If you need a longer lock-in period, we can talk about that too."
Harrington leaned back in his chair and thought for a while.
His fund expires in eight months and he must liquidate his position before expiration.
If he can't find a buyer, he can only sell it to others at a lower price, or slowly clear it through over-the-counter transactions.
The emergence of Era Vanguard is the best exit opportunity for him - the premium is 11.6%, and he can eat it all at once without any subsequent troubles.
"A three-year lock-in period is acceptable. But I have one condition." Harrington said.
Zhang Qingxue Waiting for him to continue.
Harrington said:
"It must be written clearly in the agreement - Era Vanguard promises that it will not transfer its shares to any third party that may seek SpaceX Control.
If you want to withdraw in the future, SpaceX has the right of first refusal."
Zhang Qingxue and Lin Shicheng looked at each other.
Elon Musk also mentioned this condition. Zhao Chen already agreed to it on the phone.
"Okay." Zhang Qingxue said.
Harrington stood up and held out his hand.
"Then it's settled. The terms of the agreement Lawyer Lin will be linked to my legal affairs. After signing, the money will arrive and the shares will be transferred."
Zhang Qingxue held his hand. "It's a pleasure to cooperate."
Harrington let go of his hand and suddenly said:
"Ms. Zhang, there is something I don't know whether I should say."
Zhang Qingxue looked at him.
Harrington lowered his voice.
"I know there are two other early investors, and their funds are about to expire. If you are interested, I can help you connect."
Zhang Qingxue's eyes lit up. "Which two?"
Harrington took out a business card from the drawer, turned it over, and wrote two names on it.
"This company came in in 2011, and the fund maturity date is the end of this year.
This company came in in 2013, and their LP is urging them to exit recently. You can contact them and tell them that I introduced them."
Zhang Qingxue took the business card, glanced at it, and put it in his bag.
"Robert, thank you."
Harrington shook his head.
"You're welcome. You did me a favor, and I'll do you a favor. Everyone is happy."
At noon, Zhang Qingxue and Lin Shicheng returned to the hotel and reported the results of the morning's negotiations to Zhao Chen.
"Harrington has negotiated a 0.8% stake, valued at 24 billion, 192 million US Dollar.
Conditions - not seeking Board of Directors Seat, not interfering in operations, three-year lock-in period, and SpaceX has the right of first refusal when exiting in the future."
Zhang Qingxue opened the notebook and read out the key numbers.
Zhao Chen leaned on the sofa and nodded.
"The price is okay. Sign the agreement as soon as possible and get the money as soon as possible."
Lin Shicheng added next to it:
"Harrington also gave us two clues. The other two early investors, the duration of the fund is also coming soon.
If these two companies can also negotiate, plus the three mentioned by Elon Musk before, we can receive at least 2.5% to 3% of the shares."
Zhao Chen's fingers tapped lightly on the armrest of the sofa twice.
3%. Based on a valuation of 24 billion, 3% of the shares are worth 720 million US Dollar. Including 100 million US Dollar of new shares, the total is 820 million US Dollar.
The cash on Era Vanguard plus Treasury Bonds still leaves 2.1 billion US Dollar, which is completely enough.
"Contact those two companies in the afternoon and arrange a meeting as soon as possible." Zhao Chen said.
Zhang Qingxue nodded. "Okay. I'll ask Lawyer Lin to make an appointment."
March 29, Thursday, morning.
The second negotiation was held at a law firm in the lower city of Manhattan.
The seller is a woman named Patricia Vance, who is in her early fifties, has short hair, wears a black suit skirt, and has a stern expression.
She came in in 2011. Due to the need for capital allocation, she wanted to clear her position in exchange for cash as soon as possible.
At the negotiation table, lawyers from both sides sat on both sides.
Vance's lawyer is a white man in his forties who speaks quickly and makes tough demands.
"Era Vanguard If you want all the shares, you can. The premium is 15% and the valuation is 24.8 billion.
The lock-up period is five years, during which it may not be transferred, pledged or disposed of in any form.
When exiting in the future, SpaceX has the right of first refusal, and Era Vanguard is not allowed to sell its shares to any competitor."
Zhang Qingxue After listening, his expression did not change at all.
She opened her notebook and said calmly, "Ms. Vance, a 15% premium is acceptable. But the lock-in period of five years is too long, and we can only accept three years.
In addition, your client holds about 0.5% of the shares, which is worth 124 million US Dollar based on a valuation of 24.8 billion.
We are willing to eat them all at once, leaving no tail. This condition is much more cost-effective than selling it in batches outside the market."
Vance's lawyer exchanged a few words with Vance in a low voice.
Then Vance raised his head and looked at Zhang Qingxue.
"The three-year lock-in period is acceptable. But I have one more condition -
It should be clearly written in the agreement that Era Vanguard promises not to transfer the shares to any third party without SpaceX's consent.
This is also the agreement we signed when we originally invested."
Zhang Qingxue nodded.
"Yes. SpaceX has the right of first refusal, and we have agreed to this condition."
Vance was silent for a moment, then stood up and extended his hand. "Deal."
Zhang Qingxue held her hand. "It's a pleasure to cooperate."
Talking about these two companies, the shares held by Era Vanguard are infinitely close to 2%. This is a great victory.
After a few years, it will bring huge returns to Era Vanguard.