mchenry-crisis.org Chapter 121 Unicorn
Chapter 121 Unicorn
Chapter 121 Unicorn
An hour later, as Ernst followed Henry Paulson, whose face beamed with a bright smile, into Goldman Sachs' media room, his eyes, which had just been sharp, involuntarily narrowed.
The media room was already packed with people, with reporters from well-known media outlets from all over the United States crowding the space.
Their cameras and recorders were neatly pointed at the signing table in front of them, and an indescribable restlessness and anticipation filled the air.
Clearly, Goldman Sachs had made ample preparations for this signing ceremony, with meticulous planning evident in everything from the venue setup to the event flow.
Ernst wasn't particularly bothered by Goldman Sachs' almost deification-like approach to promoting Google.
After all, Google needs this kind of attention to grow, and Goldman Sachs' strong promotion can indeed bring more opportunities to Google to some extent.
What made him somewhat uncomfortable was that Goldman Sachs hadn't consulted him even once beforehand about such a big matter.
It's clear that Goldman Sachs doesn't consider either side to be on the same level; they're used to being domineering.
Under the watchful eyes of all the media reporters, Ernst and representatives from several top Wall Street institutions walked to the signing table one by one and solemnly signed a series of contracts and agreements.
Flashes of light went off one after another at the scene, capturing this historic moment on film.
Ernst then walked to the backdrop with several major investors and took a group photo.
Everyone wore a satisfied smile, as if this cooperation was a matter of course and a natural outcome.
Google's Series B funding round boasted a star-studded lineup, led by Citigroup, with Goldman Sachs, Chase Manhattan, and Blackstone Group participating as co-investors.
In its Series B funding round, Google's pre-money valuation reached $40 billion, with the funding amounting to $7.2 million. Post-money, the valuation climbed to $47.2 billion, and Google gave up approximately 15.2% of its equity.
The price was so high that even the media, who were somewhat prepared by the high valuation Google had shown in its first round of financing, were still speechless with shock when they heard the specific figure, and a collective gasp filled the room.
Unsurprisingly, Ernst and Google once again became the focus of everyone's conversation in the United States, with everyone discussing this unprecedented funding round.
At the same time, a brand new word quickly spread to every corner of America: the word unicorn.
Unicorn companies are a professional term in the venture capital industry, and many people are familiar with this term in later generations.
It refers to companies that have been established for less than ten years, have a valuation of over one billion US dollars, and are not yet publicly listed.
These companies often have extremely high growth rates, possess core technologies, and have disruptive business models.
The term was originally coined in 2013 by an American venture capital expert in an article titled "Welcome to the Unicorn Club: Learn About Billion-Dollar Startups."
However, Ernst has now brought this word to the world's attention for the first time.
When reporters swarmed around him, pressing him to tell him what kind of company Google was in his mind that deserved such a high valuation.
Ernst said calmly, "Google is a unicorn, something that only exists in legends and is something you can only dream of."
With this, Google rightfully became the first company in the world to be dubbed a unicorn.
Of course, many media outlets have raised questions. They are not questioning the fact that Google has become a unicorn company, but rather questioning why Google is able to make so much money.
A company that was founded less than a year ago completed two rounds of financing in just three months, and the size and valuation of each round were more exaggerated than the last.
On what grounds?
Has Wall Street gone mad?
Has the world gone mad? Has it lost its mind?
Look at Google's current shareholder list: Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers, Blackstone,
Chase Manhattan and Citibank.
Each of these names, taken individually, is a renowned financial giant in the United States and even the world.
But now, they are both endorsing the same startup, which is quite puzzling.
At that time, the internet industry was still a nascent industry, and many veteran media professionals were still stuck in the mindset of traditional industries and found it difficult to change quickly. They all felt that Google's market value was simply absurd and completely contrary to common sense.
However, no amount of doubt can change the fact that Google has become a star company in the United States, and Ernst has once again achieved an astonishing increase in wealth.
Back in my luxury apartment next to Central Park, the phone in my pocket rang the moment I stepped inside.
The call was from Massim. Ernst answered the phone casually, tossing his coat onto the soft sofa as he asked in a relaxed tone, "Hey, Massim, any good news for me?"
A slightly reproachful voice came from the other end of the phone, "Old friend, that's not very nice of you. Why didn't you think of your older brother when you got something good?"
Ernst paid no heed to the complaints on the phone. "I can't help it," he said. "Who told you to be unwilling to part with the money?"
In Google's Series B funding round, Boston Consortium's financial representative, Bank of Boston, also sent representatives to participate.
Ernst was somewhat surprised when he saw who it was, but he quickly understood the reason.
Clearly, the Boston Consortium also has its eye on Google and wants to ride this wave to get a piece of the pie.
Although Ernst and the Boston Consortium have not yet established a full-fledged partnership, they are currently in a harmonious honeymoon period.
If the other party wants to participate in the financing, Ernst can't possibly refuse them and not let them get a piece of the pie.
To Ernst's surprise, the Boston Bank representatives hesitated when faced with his pre-investment valuation of $40 billion.
Even though the negotiations were basically over, Boston Bank still couldn't shake off its hesitation and make a final decision.
Ernst didn't have the time to wait for them, and besides, he didn't really believe that Boston Bank could actually join this feast.
Who among those present wasn't a financial giant? Although the Bank of Boston was the oldest bank in America and is now the largest bank in market share in New England, the wealthiest and most densely populated region in the northeastern United States, it was just a small fry compared to the other giants present at the time.
There was a moment of silence on the phone, followed by a soft sigh. "You know, Boston Bank's assets and size speak for themselves."
Ernst also sighed. In terms of size, Boston Bank may not be as big as the major Wall Street giants, but in the past, Boston Bank was their ancestor.
The Bank of Boston has a long history, dating back to the Massachusetts Bank founded in January 1784. It was the first federally chartered state-owned bank in the United States and the second bank established under the U.S. Constitution.
In 1864, the Massachusetts Bank was renamed the Massachusetts National Bank.
In 1903, the Massachusetts National Bank and the First National Bank of Boston merged and were renamed the First National Bank of Massachusetts Boston. A year later, the name Massachusetts was removed and the bank was officially renamed the First National Bank of Boston.
In the 70s, First National Boston Bank was determined to grow bigger and stronger, and in the following decade, it carried out a series of acquisitions of small regional banks.
In 1982, the bank simplified its name to Bank of Boston.
In 1985, Boston Bank acquired the Colonial Bank of Connecticut, and later acquired the Hospital Trust National Bank of Rhode Island, founded in 1867.
In 1987, Boston Bank followed up by acquiring Forman Bank.
In 1995, Boston Bank successfully acquired Harbour Bank of America.
The acquired bank had 205 branches and more than 1200 ATMs, which ranked seventh in the number of ATMs in the US banking industry at the time.
This crucial acquisition propelled the Bank of Boston's total assets to over $620 billion, making it the number one bank in the Boston area and leaving its competitors far behind in market share.
Even with such achievements, Boston Bank has failed to expand beyond New England, remaining confined to a small region and unable to compete with top financial giants nationwide.
Boston Bank is probably regretting missing out on Google's funding this time.
This was actually Ernst's intention, because he didn't want Boston Bank to become a shareholder of Google at all.
It wasn't that he was being hypocritical; rather, he had a bigger plan.
When the internet boom truly took off, Ernst couldn't believe that the Boston consortium wouldn't be envious and just watch Google's market value skyrocket every day.
At that point, he could use a share swap to get involved in Boston Bank, thereby achieving a deeper level of strategic planning.
If Boston Bank had simply been a regional bank, Ernst probably wouldn't have been interested in it at all.
But Ernst knew that in a few years, Boston Bank would be sold to Bank of America through a stock swap.
Bank of America has always been eager to develop its business in the Northeastern United States, and Boston Bank is undoubtedly the best choice for them to achieve this goal, without exception.
This is not just a simple financial acquisition; it signifies a deep collaboration between the Boston consortium and the California consortium.
The merged Bank of America will have a staggering total asset value of $9660 billion and 5700 branches in the United States and around the world. It will be known as one of the Big Three banks in the United States, along with Citigroup (which merged with Travelers Group) and JPMorgan Chase (which merged with Chase Manhattan and JPMorgan).
Ernst's main businesses are concentrated in California. If he could enter the Bank of America through Boston Bank, it would undoubtedly be of great help to his industrial development in California and even the whole United States.
This was something that suddenly came to his mind when he saw the Boston Bank in the conference room today.
"But don't be discouraged. Google's doors are always open to you, as long as the Boston consortium is willing."
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Ernst was fully displaying his friendship, laying the groundwork for future cooperation.
Following this Series B funding round, Google's equity structure has undergone significant changes.
Merrill Lynch, Lehman Brothers, and Morgan Stanley's stakes were diluted, with each holding 3.392%.
Although Goldman Sachs' shares were also diluted, it ultimately held 12.433% of the shares due to its participation in the second round of follow-on investment.
Citibank, as the lead investor, holds a 6.2% stake.
Chase Manhattan and Blackstone participated as co-investors, each holding a 3% stake.
After this round of financing, Ernst still holds more than 65% of the shares, reaching 65.191%.
Even if 20% of the equity pool is removed in the future, Ernst's shares will still be around 52% after dilution.
Even if he transfers 10% of the shares to the Boston consortium, the remaining 42% would still be enough for Ernst to have absolute say within Google and to carry out various operations.
In fact, so many shares are not necessary, because even with just 1% equity, Ernst could gain control of Google through a series of maneuvers.
But Wall Street will not allow Ernst to do that, at least not now.
Upon hearing Ernst's words, Massim on the other end of the phone burst into laughter. "Alright, brother, I'll accept your favor."
Then, he changed the subject and his tone became serious: "The conditions you mentioned earlier have been discussed intensely within our organization, and it will be difficult to give you a clear answer in a short time."
"But don't worry, we promised you we'd get Ernst Asset Management on that list, and you'll see the results soon regarding the $30 billion in assets under management."
The two exchanged a few more pleasantries on the phone before hanging up.
After hanging up the phone, Ernst was still brimming with excitement.
It seems the Boston consortium is putting in a lot of effort to win him over, which means that regardless of whether the two sides can ultimately reach a full cooperation agreement, Ernst has already secured both of these benefits.
Of course, the Boston consortium wasn't stupid; on the contrary, they were quite shrewd.
The reason they were willing to put up this $30 billion was that they wanted Ernst Asset Management to act as their front man, allowing them to invest and pick up bargains in the Asian market.
Walking to the huge floor-to-ceiling window, gazing at the beautiful view of Central Park outside, a smile of complete control appeared on his lips.
Next, he needs to steadily advance his plan and deal with any potential challenges.
Through the internet bubble, Ernst intended to use the world's wealth to build a vast business empire for himself, ultimately replacing the rest and becoming one of the few at the top of the American pyramid.