Rural women Wang Fangfang e-commerce entrepreneurship story

Initially, as a rural woman, Wang Fangfang is not familiar with computers, let alone the use of microblogging, microblogging, how to open an online store on Taobao? The first thing you need to do is to get your hands dirty. All of this is unfamiliar to her. In 2013 into the county's e-commerce has just started period, she relied on their own a little QQ chat Internet experience, a chance to let someone else to register their Sina microblogging, they began their own new media and e-commerce road.

"The first transaction is through the microblogging to the customer in Guangdong sent 10 pounds of honey and 20 pounds of pine nuts, but at that time they do not have an online store, and will not use Alipay, however, this customer is very trusting me, through the bank account to me to remit the money, the next day I carefully select the high-quality pine nuts and honey sent to the customer. The customer received our agricultural products praise, through which transaction, let me recognize the feasibility of e-commerce, more increase my confidence in entrepreneurship, then began to open online stores around friends to learn how to open online stores on Taobao, how to use microblogging and WeChat to do marketing." Wang Fangfang recalled.

However, the subsequent development encountered a lot of difficulties and setbacks, such as unfamiliarity with computer knowledge, the online store pictures do not look good, no one asked for; do not know how to do marketing, agricultural products in the logistics and transportation of the quality of a series of problems such as 、、、、、 she had once thought about giving up. But just to give up, she repeatedly asked herself: is this difficult to defeat you? At night, she thought about it, she could not give up lightly. In her husband, the support of friends, she participated in the into the county government-sponsored online store training courses, to understand the knowledge of e-commerce, mastered the basic knowledge of network marketing

Never give up, in the struggle to depict the blueprint of entrepreneurship

The road of entrepreneurship is winding and arduous, Wang Fangfang is precisely in the path of this difficult zigzagging all the way through The first thing that came to mind was the product logistics. Initially, the first encounter is the product logistics problem, for fresh produce, to maintain its freshness and seasonality, from the field picking to the hands of customers, not more than 48 hours, due to the inconvenience of the local transportation, often fresh cherries, apricots and other tasty agricultural products to reach the hands of the customer is no longer fresh, and even can not be eaten in the situation, how to solve the logistics problem? How to solve the logistics problem? It has become the main problem that restricts the sales of fresh agricultural products. See farmers in the hands of fresh produce can not be sold in a timely manner, she sometimes can not eat well, can not sleep, just at this time, she used to use the microblogging to open up her mind, in microblogging appeals and requests for help, and finally created a new marketing model. That is, for seasonal cherries, apricots and other agricultural products, actively cooperate with other network sales platforms, the center of sales to the surrounding Lanzhou, Xi'an and other cities, to take booking, to ensure that the picking, logistics, delivered to the hands of customers no more than 48 hours of rapid sales model. In this way, not only solve the logistics of this constraint, but also through cooperation with other network platforms to improve the visibility of the online store and sales.

Through this effective model, in May this year, she accumulated to help local people sell fresh cherries more than 1,000 pens, the sales amount reached more than 100,000 yuan. So that the local cherries quickly sold out, increasing the income of farmers and solving the problem of buying and selling agricultural products. At the same time, her door-to-door purchase service allows local farmers to sell agricultural products without leaving home, both to broaden the sales channels of agricultural products, but also to really help the farmers to get the benefits of their own rich sales experience and marketing ideas.

However, she is not limited to obtaining the sense of satisfaction, when she heard that the Chengxian nationality of the painter Yao Yidong in the provincial capital of Lanzhou Museum of Art to hold a painting exhibition, she actively contact with each other, free of charge for the exhibition to provide the "Yunwufangguo" series of hometown agricultural specialties, the success of the hometown of the agricultural specialties pushed to the provincial capital of the cultural market, realizing the sales of multi-channel, for the hometown of the agricultural specialties. Sales of multi-channel, for the hometown of agricultural products also add the color of art.

Gratitude to the townspeople, in return to share the joy of success

Wang Fangfang has achieved a little success, but she did not forget the local folks, did not forget to care about her, to help her local party committees, the government, and did not forget the support of the community. 2014, June, she took out more than $ 6,000 with her partners for the Chengxian In June 2014, she and her partners put out more than 6,000 yuan to buy school supplies such as schoolbags, stationery and books for the children of Zhaizi Primary School in Suochi Township. At the same time, she also joined the Chengxian local civil love institutions - Chengxian love alliance, often to help those widows and orphans and people in need, it is such a sentiment, more so that she firmly believe that we must bring more pollution-free, natural farm products, to help more difficult people around the road to poverty and prosperity.

Wang Fangfang's successful entrepreneurship, for the county and even the city's majority of rural women, young people to carry out e-commerce, hard work set an example. She is a model and role model for the majority of rural youth to get rich locally and transfer to the rich, is the county rural women, young people with the spirit of the new era of the leader. Her entrepreneurial deeds will also further promote the development of e-commerce in the county, to help local agricultural products sold to the country, boosting the development of the county's economy play a positive role.

What should entrepreneurs know about the game of "one vote, one right"?

Recently, in response to the plight of ofo, Tencent founder Ma Huateng commented that the real reason for its collapse may lie in 'Veto Right'.

A media report commented that within ofo, a number of different rounds of investment institutions have veto power, and due to the repeated inability to agree on core issues, missed the best time to merge with Mobay, and directly led to the abortion of major financing, and even today's predicament.

The incident sent 'Veto Right' to the crater of public opinion.

What is 'Veto Right'?

Why did it come to such a decentralized predicament?

What kind of governance structure is 'better' in the early days of a startup?

Leveraging our proven Silicon Valley experience and past investment practices, LVC always tries to help entrepreneurs build a more balanced governance structure in the early stage, so as to avoid an inappropriate governance structure in the later stage of the company's development, which may prevent the company from obtaining a better opportunity for development.

The following is the summary of Veto Right's dismantling and practice. We hope it will help early stage entrepreneurs.

What is Veto Right?

Veto Right, or "veto right", is also known as "protective provisions" in transaction documents, which often means that certain shareholders (or their appointed directors) have to agree to certain important matters of the company.

Typically, early-stage investors (especially round leaders) or mid- to late-stage investors with a strong voice in the company will have veto power.

What explains the decentralization of the veto?

Theoretically, neither the founding team nor the investor organization wants the company to reach a management deadlock. So how does such a potential risk arise?

From a startup's perspective, there is a lack of awareness of corporate governance. Entrepreneurs are sometimes more concerned about which matters investors veto; however, entrepreneurs sometimes lack sufficient knowledge of how they synergize with each other, how they exercise their veto power, whether it will result in decision-making deadlocks, and the adverse effects of these management issues.

In addition, due to supply and demand, a certain round of investors demanded a veto because of their fund's strong investment strategy, wind control needs, and laid hidden dangers for the company's governance, and subsequent investors will likely make the same claim.

China's investment industry, after years of brutal growth, is still in the process of accumulating experience of the cycle, in order to protect the interests of the fund and avoid risk, there will be excessive reliance on the phenomenon of legal tools. In the industry, there is still a lack of awareness among practitioners of the need for veto power and the potential harm; there is no clear definition of what should fall under the need for special agreement on material matters for companies at different stages and businesses. Within investment organizations, the negotiation and review of terms and conditions are sometimes disconnected from project management because of the management model. The end result is that there will be organizations that have established a mechanism to control and be controlled, or to regulate and be regulated, with startups through legal tools.

What is the more mature veto model?

In practice, vetoes have been categorized as "categorical" or "combined".

According to the practice of Bluechip Venture Partners, in the late stage of development, the veto power of a company that adopts the categorized voting model will be more dispersed. The combined voting mode will be more conducive to the unified decision-making of the board of directors/shareholders' meeting, which is beneficial to the management efficiency of the company. The details are as follows:

Separate Class Voting: A single investor has sole veto power, or investors in different rounds*** have the same veto power in their rounds. In this model, with more and more rounds of financing, startups will need to cede more and more veto power.

Specifically, there may be a variety of forms, for example:

1, a startup has completed three rounds of financing A, B, C, corresponding to the lead investor enjoys independent veto, the followers do not enjoy;

2, the same completed three rounds of financing A, B, C, each round of more than one investor in accordance with the agreed proportion of the majority of rounds **** the same exercise of the veto, but each round of the majority proportion of the rounds to **** the same exercise of veto, but each round of the round of the majority proportion of the rounds of the majorities. The same exercise of veto power, but each round of negatives are independent of each other.

Single Class Voting: all preferred shareholders (i.e. investors) enjoy the veto power proportionally***. In this model, no matter how many rounds of financing the startup goes through, the veto power will be exercised by the preferred shareholders*** after a unified decision is made by them in consultation with each other.

Similarly, for example:

1. A startup completes a Series A round of financing, and the transaction documents set up a preferred majority structure, agreeing that the Series A lead investor, the followers, and all future investors need to exercise their vetoes in accordance with the agreed-upon ratio of ****. A round of lead investor, followers set up series A majority structure, according to the proportion to *** with the exercise of the veto. After a period of time, the company completed the B round of financing, the coordination of the re-establishment of the structure, adjusted to the preferred majority structure, agreed that all existing and future investors, need to be in accordance with the predetermined proportion to *** with the exercise of veto (according to the subsequent financing, the proportion may be adjusted from time to time).

According to the "2017 VC/PE Project Data Analysis Report" published online by Han Kun Law Firm, which is widely involved in the VC/PE field, nearly one-third of the VC/PE projects handled in 2017 still adopt the governance structure of "categorical voting". According to incomplete industry data, the adoption of the "classified voting" model may even be higher than 50% for early stage and VC projects.

What are the advantages of combined voting?

In general, we think that investment organizations are completely rational, but this is not the case.

Although most of the time, organizations and practitioners make rational decisions that are beneficial to the company and represent the interests of the majority of the shareholders after consultation and coordination, due to differences in the price of the shares, the background of the fund, the personal knowledge or investment preferences, the decision-making process is not 100% rational and beneficial to the company when encountered in extraordinary circumstances.

Classified voting amplifies the decision-making of a single organization, which creates a potential risk to corporate governance that cannot be ignored; while combined voting, through the internal democratic system of investors to make decisions, all rounds of investors are in accordance with the proportion of their own shareholdings (or the agreed proportion) to *** with the same decision on how to exercise the Veto Right, which can avoid the exercise of veto by some shareholders based on their individual needs.

Relying on a more balanced structure, it can be avoided that because of the individual needs of a certain organization, it determines the direction of things, which will allow the shareholders' meeting or the board of directors to make decisions with the realization that any disagreement is something that needs to be sat down and chatted about, and that there is a need for communication, exchanges, compromises, and concessions. This is a more rational atmosphere for communication and a set of patterns provided to us by the rules of the mature game. We are all trying to find our way in a compromise exchange, rather than making decisions based on individual needs.

Better Choices vs. Higher Costs

From the experience of Silicon Valley, when VCs were just sprouting up, there were a lot of investors who suffered from poor corporate governance because of veto issues. After running for 20 or 30 years, many investors, entrepreneurs and their lawyers realized that categorical voting, as opposed to combined voting, is not reasonable enough.

But the paradox is that setting up this consolidated voting structure at an early stage of financing is time-consuming for both investors and entrepreneurs.

This is because many entrepreneurs may not have a good understanding of corporate governance, so early investors need to do a lot of convincing when they dominate the veto structure in early-stage financing.

From Bluechip Ventures' practice, we usually need to spend a lot of time discussing the importance of corporate governance with founders before deciding to invest in a project. During the follow-on financing process, entrepreneurs and early stage investors need to use more energy to communicate with the next round of lead investors and their lawyers about such a structure, as investors often value their veto power. Past experience has shown that once a company decides early on to accept categorical voting, it is very difficult to change to a combined voting structure in later rounds.

At the same time, along with the subsequent financing, the shareholding of early-stage investment will be continuously diluted, and when early-stage investors propose to set up a consolidated voting structure, it means that in the future, it is likely that they will have to give up their own veto power and take certain risks, which is not easy for early-stage investors to do. For Bluechip Ventures, we are willing to take such a risk because we have learned from our past experience that our portfolio companies have also faced the dilemma brought about by the separate voting mechanism, and ultimately were unable to implement a plan that was optimal for the company and the majority of shareholders.

But after the cycle, mature market experience tells us that only when startups are able to put in place a healthier governance structure can we create a win-win situation: entrepreneurs don't have to worry about corporate governance headaches and get a better chance to grow; and all investors are able to participate in the major decision-making process in a more rational way, creating a better return on their investment for their funders.

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