Chapter 95: Thrilling Highlights of the Three Visits to the Thatched Cottage

Gu Cheng quickly figured out Sun Zhengyi's scheme: the other party had sealed off many of his exit routes, such as prohibiting equity sales for cash-out after two years, not allowing him to hoard some of the funds and instead mandating full investment. In the internet circle, many businesses in the early years of startups only chased traffic and earned nothing. Following Sun Zhengyi's playbook, Gu Cheng would have to generate four billion in gross profit within two years; otherwise, his forty percent stake in the company—or at least the surplus—would slide into Sun Zhengyi's pocket. Sun Zhengyi was taking a calculated risk. Knowing it was impossible to coerce Gu Cheng into accepting venture capital outright, he would instead lend far more than Gu Cheng's current plans could absorb, betting that Gu Cheng's profitability would falter and leave him unable to repay the principal and interest. At that point, Sun Zhengyi could step in smoothly and claim a controlling position in Gu Cheng's future empire. Of course, Gu Cheng could refuse the terms, instruct Cai Chongxin to mediate again, and seek alternatives from Goldman Sachs, IDG, or Sequoia—borrowing less, at a higher rate, with fewer restrictive clauses. The decisive factor would be Gu Cheng's resolve and his belief that he could hit four billion in gross profit within two years. Sun Zhengyi might be gambling big, but even if he lost, the downside was limited. He would lend three billion and receive four billion back, netting one billion in interest over two years—far exceeding any bank yield. Investing that sum elsewhere would be hard-pressed to yield more; after all, in 2001 real estate had not yet begun its surge, and even flipping houses would unlikely deliver thirty-five percent returns in two years. Whether he won shares or lost to interest, Sun Zhengyi could not lose—unless Gu Cheng proved utterly incompetent and the company collapsed. Gu Cheng decided to seek clarity: "If I agree, the contract will include numerous clauses restricting how I may use these funds—for instance, prohibiting investment in certain sectors?" Sun Zhengyi answered with characteristic frugality: "Precisely." Gu Cheng drew a breath: "May I ask for specifics?" Sun Zhengyi considered it, then replied candidly: "All funds must remain within the internet and content-creation industries. No speculation in financial products, no real estate ventures. I retain the right to block any misuse of the borrowed capital in high-risk areas." Should Gu Cheng obtain the money and Sun Zhengyi lose control of its deployment—entering the stock market, futures, or forex with a brilliant stroke—he would simply walk away. If the bet went awry and Legend Entertainment faltered, Sun Zhengyi would find himself clutching defeat with no recourse to cry over. Bluntly, entering the gambling arena with full force carried its own risks of breaking even. Lenders naturally possess the authority to close off such irresponsible use of funds. Gu Cheng grasped the implication: "So, as long as I achieve four billion in gross profit within the content and internet sectors, I can dispense with you. Failure will leave you as major shareholder—I have summarized correctly?" Sun Zhengyi replied with absolute certainty: "Exactly that simple." Gu Cheng nodded: "Understood. Yet we are in a winter of economic chill. Forbidding cash-out from equity sales and demanding reliance solely on gross profit compresses the timeline too tightly. How about extending to three years at fifty percent total interest? You lend thirty billion now; by September 2004 I repay forty-five billion. I can arrange phased disbursements with deferral. If that does not suit, I will seek other partners." Gu Cheng's position was strong, with numerous backups available. Sun Zhengyi accordingly tempered his demands after deliberation and consented. The two sides signed a framework agreement that day, leaving detailed terms to be negotiated by legal and financial teams. ... Though this transaction had caught Gu Cheng off guard, reflection revealed Sun Zhengyi's strategy as logical. Having initially declared his refusal of venture capital, Sun Zhengyi could only pursue indirect means. With decades of experience, Gu Cheng recalled similar precedents. For instance, in another timeline, twelve years hence, two entrepreneurs and investors—Cheng Wei and Wang Gang—emerged from under Ma Feng's Alipay. They launched Didi Chuxing. By late 2013, circumstance brought them together with Ma Teng for tea. Aboard the high-speed rail to Shenzhen, the pair debated: "We must listen to what Ma Teng intends to propose, but we must uphold principle and refuse his money outright. We are Alipay alumni; New Year we return to Hangzhou to play mahjong with Ma Feng. Accepting his funds would stain our honor before the Jiangdong elders." Their resolve remained steadfast, yet once inside Tengyun's 3701 suite the situation shifted. Ma Teng wasted no time: "I admire you both and your project immensely. Examine the terms Lao Luo has prepared." A document unprecedented in internet history was placed before them. Cheng Wei scanned it in disbelief: Ma Teng offered that "if Didi turns profitable, the agreement stands; if it fails, Tengyun will repurchase every share held by the founders at eighty percent of today's valuation." In essence, profit would split seventy-thirty in Cheng Wei's favor; loss would see Ma Teng return all capital. Alipay-raised Cheng Wei could not resist and defected to Ma Teng. Gu Cheng knew the precedent well. Sun Zhengyi's terms mirrored those offered by Luo Shuhan twelve years later: one party promised "profits yours, losses shared"; the other "profits shared, losses mine." Such investors crouched low, seeking only an entry point while hunting superior assets. Once this logic crystallized, Gu Cheng felt less stunned. As a transmigrator, he understood the compressed posture of capital chasing excellence in later booms, yet that did not license others to do the same. Cai Chongxin possessed no such perspective. To him, Gu Cheng embodied a historical marvel, forging an unprecedented situation in which an investor deigned to lower himself. The significance rivaled "Three Visits to the Thatched Cottage"—the enduring myth of a monarch seeking talent through deference. Cai Chongxin, originally Ma Feng's partner and neutral in the Gu-Sun affair, stepped forward with measured counsel once Sun Zhengyi departed, addressing Gu Cheng earnestly: "Little Gu, this venture carries genuine risk. Your enterprise rests on Legend Entertainment as its sole cash cow. Let us calculate: currently Legend yields pure profit of roughly ten million yuan monthly. Even absent future cash shortages and with promotion costs eliminated, gross profits converting fully to net would cap at thirty to forty million monthly—fifteen billion over three years. Other book, audio, and official-game e-commerce ventures earn far less; your total gross within three years would reach at most twenty billion—still half short. Where else will you locate two more cash cows of equivalent caliber? Hastily accepting these terms was imprudent." Yet as the analysis continued, Cai Chongxin's tone softened into indifference, drifting into another register: "Never mind. Worst case, Sun Zong offers four billion yuan for forty percent equity. Securing such a valuation marks you as a circle heavyweight." In that instant, Gu Cheng discerned in Cai Chongxin the spirit of Lu Xun's warning—that once a man is ground beneath the yoke worse than cattle or horse, even a price scarcely above them will compel willing submission. Gu Cheng offered no explanation. Cai Chongxin’s assumption spared him further interference and eased Sun Zhengyi’s vigilance. Only Gu Cheng believed he could deliver four billion in gross profit within three years. Details and tactics would require ongoing refinement as circumstances evolved. Such audacity would inevitably reshape history; many foreknown events would lose relevance, demanding adaptive responses. Only the inexorable tide of technology remained unaltered. ... Gu Cheng had sought two billion; Sun Zhengyi had instead flooded him with thirty billion, intent on strangling the venture until interest payments faltered and equity mortgaged. Success hinged on Gu Cheng’s appetite and resilience. Historically, Chen Tianqiao’s journey from Legend to collapse yielded perhaps fifteen billion in cumulative gross profit, including E Yi’s share—a figure already surpassing expectations of contemporary seers. Sun Zhengyi’s pricing therefore struck a careful balance: ample enough to ensure failure, yet tantalizing enough to sustain hope. Such psychological leverage, born of meticulous calculation, could not be rushed to completion. Gu Cheng first needed to restructure equity, establishing a holding company to serve as guarantor for the convertible bonds. He summoned Pan Jieying, outlined the proposal, and requested she establish a new holding entity to consolidate Legend Entertainment, Dingdang Network, and Chengpin Audio and Video. Pan Jieying’s initial reaction was shock: "Thirty billion? We agreed on two or three—how has this ballooned tenfold? Convertible bonds carry interest several times loan rates; repayment will strain us." "The rate is elevated," Gu Cheng replied without lifting his gaze, stating the figures plainly. His cousin’s knees buckled; she gripped the table until steady, then exhaled: "Very well. After three years you may return home a wealthy man, with thirty billion even if the company sells at a loss." Her long poverty rendered her skeptical of Gu Cheng’s talent—Legend’s triumph was once-only. Gu Cheng hesitated to lecture her, recognizing that her hopeful view might prove advantageous. He would shoulder all worries himself. "Handle this promptly. Sun Zhengyi’s first tranche arrives in September; I await the funds." "I will see to it."