Whether Gao Zhun herself is willing or not, she interrupts her 20-year-long work in the listing of Chinese stocks and joins ByteDance as CFO, which will be interpreted as a change in the prospect of Chinese Internet companies going public.
Few lawyers can be transformed into executives of large companies other than legal affairs, and there are only two cases in well-known Internet companies in China. In 1999, Cai Chongxin, who is qualified to practice law in New York State, became Alibaba’s CFO. The second example is this week when Gao Zhun, a senior partner at Skadden, took over as CFO of ByteDance.
After 23 years, the two appointments represent the beginning and end of a generational trend. Cai Chongxin joined Ali. He is a young Chinese entrepreneur who works in a private residence and attracts an entrepreneurial partner with the infinite future of China’s economy. It is also the beginning of Chinese Internet companies grafting overseas capital, from financing to listing, bringing unlimited growth.
Micro Motion is one of the very few people who has followed this booming trend the whole way. The first Chinese concept stock IPO she represented was the listing of Ctrip in 2003, the first important Chinese concept stock IPO after the NASDAQ bubble burst. In the following 23 years, she led the team to participate in the overseas listing of 123 Chinese companies. So far, nearly half of the top 50 Chinese Internet and technology listed companies listed in the US and Hong Kong stocks have been listed by her agent.
In the past six months or so, the number of IPOs of Chinese Internet companies has plummeted. At this time, Micro Motion also chose to join ByteDance, the world’s most valuable unlisted company, and it is likely to be the last incubating Chinese Internet industry for a long time in the future. A billion-dollar listed company.
Iconic aside, the appointment itself is unusual.
“Byte is really daring to ask, and she really dares to go.” A high-level headhunter said with emotion. There are also company people who have cooperated with Micro Motion, who have a high evaluation of her, expressing their shock to “LatePost”.
CFO (Chief Financial Officer) responsibilities include both internal financial and cost management, as well as external financing, listing and subsequent market value management. Micro Motion has no financial-related experience, at least from personal experience. Even in Micro Motion’s richest IPO process, the law is only part of it.
The appointment of a CFO is always taken as a signal that a company is going public. But the addition of Micro Motion does not mean that ByteDance will be listed soon. It further shows that ByteDance, at least when selecting executives, still continues Zhang Yiming’s eclectic employment concept.
always-on star lawyer
According to Micro Motion’s speech when she returned to her alma mater, Peking University Law School, in 2018, she spent more than 10,000 hours of billing work in the first three years of participating in the China Concept Stock IPO. With one day off per week, she averages more than nine hours of billable work per day. While many Chinese-funded law firms require corporate lawyers to work 1,500 – 2,000 hours a year.
Successful people usually like to emphasize that they achieved their success through hard work rather than luck, regardless of the actual situation.
But Micro Motion’s diligence is well-documented. According to SEC data, in the past two decades, more than 2,900 US stock-related documents and statements have been signed by Micro Motion, with an average of one every other working day. During this period, she also participated in a large number of Hong Kong IPOs and unlisted companies’ investment and M&A transactions.
“LatePost” has contacted many colleagues, entrepreneurs, CFOs, and investment stakeholders who have worked with Micro Motion. Almost everyone praised her diligence, even though most of them were workaholics themselves.
In this industry, there are fewer women as you move up the ranks. Micro Motion not only accomplished the hard work, but also became a senior partner—the highest level a Chinese can reach in a foreign law firm.
“The best lawyers are not very different in ability, but she has always been the most committed one,” said a senior lawyer who has known Micro Motion for more than 20 years. Even in the legal industry that is used to working overtime, few senior partners in large law firms have maintained long working hours for decades like Micro Motion, and still reply to clients at any time in the middle of the night.
An investment bank executive who has worked with her for ten years recalls that she was pregnant with twins a few years ago, but no one noticed her pregnancy until she was ready to go to the United States to give birth. After giving birth, she only took a short maternity leave before rushing back to China to continue working.
Many people who are familiar with Micro Motion have commented that she is “good at communication and high emotional intelligence”. She is also one of the few lawyers who understands both the law and China concept stocks, and has an in-depth understanding of the company’s business logic and business model.
Like most good corporate lawyers, Micro Motion engages in projects with strategic advice that goes beyond their purview. She will also revise and embellish some of the wording in the prospectus.
Micro Motion is not only good at taking projects, but also has a consistent attitude towards large and small projects. A person who had contact with her commented that she “has the capital to be arrogant but can suppress it.” Another said that Gao Zhun has a soft figure and a firm stance, “It makes people feel that this is a discussion, but in the end I get reached the conclusion she wanted.”
Many practitioners who have contacts believe that Micro Motion’s most prominent advantage is its experience, and there are enough cases to help customers solve problems. This allows her to help clients figure out how to solve problems ahead of time, and even provide advice outside the law, rather than overemphasizing risks like lawyers who are less familiar with corporate business and regulation.
“She is more like a surgeon who performs operations all over the world. She has dealt with the most intractable diseases and must have the highest level of suture.” Shell CFO Xu Tao told “LatePost” that Gao Zhun was hired as Shell’s surgeon in 2018. legal counsel.
Firmly grasp the huge wave of Chinese stocks
Manage too large teams
Every once in a while, a revolutionary trend emerges that changes everything. People are lucky to be part of one of these trends in their lifetime. One of the most turbulent trends in the business world this century is the boom of Chinese Internet companies. Starting from the four-bedroom house in Hangzhou’s Lakeside Garden Community and the dance classroom with disco-style headlights in Shenzhen, the wealth and destiny of millions of people and the lives of more than one billion people have changed.
Micro Motion jumped on the bandwagon early in its career. She entered Peking University Law School in 1987, and after graduation, she went to the United States and received a master’s degree in sociology from the University of Alabama and a doctorate in law from the University of California, Los Angeles. After graduating with a Ph.D. in 1998, Micro Motion joined Latham & Watkins. In 2002, Micro Motion returned to Hong Kong from the United States to participate in Latham & Watkins’ business in China.
In 2003, Micro Motion participated in the listing of Ctrip. Two years later, he participated in the design of A/B shares for Baidu’s IPO. So far, Chinese concept stocks have come out of the shadow of the bursting of the Nasdaq bubble, and more Chinese Internet companies are preparing for overseas listing. In another year, Micro Motion was promoted to partner of Latham & Watkins.
There is a clear Matthew effect in the legal profession. The more diligent the lawyers are and the more projects they get, the more projects will come to them, and the strong will stay strong.
The same is to undertake IPO projects, and the logic of law firms and investment banks is completely different. The income of the latter depends on the amount of financing, so big investment banks tend to filter out small projects; lawyers charge by time, and can even serve two competitors at the same time, so they are more motivated to fight for as many projects as possible.
This is an important reason for Micro Motion’s reputation in the industry. “The number of projects she and her team have taken over far exceeds that of their peers, which gives them rich experience to ensure service quality,” said an investment bank executive who has worked with Gao for more than ten years.
In 2009, Skadden poached Micro Motion and became the leading Chinese stock law firm in the industry. In 2018, when the centralized listing of Chinese concept stocks came, Micro Motion’s team participated in 7 of the top ten IPOs in the Internet industry that year.
At Skadden, Micro Motion manages the largest team of U.S.-based lawyers in China. In this team, there are not only 5-6 law firm partners including Li Haiping, Wu Yuting and Du Shu, but also more than 10 lawyers who have been practicing for more than ten years. Micro Motion enjoys promoting her subordinates, securing projects and promotions for them, and most of the team has been with her for many years.
By February 17, 2021, the total market value of Chinese Internet and technology companies listed on Hong Kong and US stocks will be approximately US$5.2 trillion.
But the golden age came to an abrupt end. With a series of regulatory measures in China and the United States and other changes in the macro situation, the total market value of these companies is currently only about US$2.1 trillion, which is not as high as that of Apple.
At present, among the Chinese Internet companies to be listed, only Ant Financial, ByteDance, and SheIn are valued at over US$100 billion.
Micro Motion’s choice to resign to join the company at this moment is like handwriting a period for that era, and it is also considered a wise choice by many people. “After all, the original road has come to an end.” A capital market person who had contact with her said.
“Byte is really daring to ask, and she really dares to go.”
Micro Motion is not ByteDance’s most cross-border executive appointment. Zhang Lidong, head of Byte’s commercialization business, comes from the traditional newspaper industry and currently manages more than double Baidu’s digital advertising revenue. This is a choice that digital advertising giants such as Google, Facebook, Baidu, etc. will not make.
In 2016, Zhang Yiming, the founder of ByteDance, met Micro Motion at the recommendation of the board of directors. At that time, ByteDance had just started internationalization for a year.
It is understood that Zhang Yiming also met the partners of two top law firms, STB and Davis Polk, and finally chose Micro Motion. Micro Motion subsequently participated as a lawyer in several mergers and acquisitions of Byte, including Byte’s acquisition of Musical.ly, which helped TikTok take an important step in capturing the global market.
ByteDance has not established the position of CFO for a long time, and Zhou Shouzi, the only one who has held the position of CFO, has only been in this position for more than half a year. This is not an exception in Chinese Internet companies. Pinduoduo’s CFO only served for 10 months, and then only served as vice president of finance.
“Some entrepreneurs are worried about hiring a CFO who is too powerful to bring them a threat.” said a senior Internet executive recruiter who has participated in CFO recruitment for many large Internet companies.
The CFO has a broader scope of responsibilities than “corporate finance.” They are deeply involved in corporate governance, financing processes, and communications with investors.
Airbnb founder Brian Chesky has spoken with his CFO, Laurence Tosi of Blackstone Group, on a number of issues, including whether the company will go public, whether to accept financing, whether to actively acquire Serious conflict occurred.
And Google CFO Ruth Porat (Ruth Porat) has changed the way Google operates to a certain extent – reducing the budget of unprofitable projects, splitting hundreds of billions of dollars from profits to buy back stock, and rewarding shareholders.
“LatePost” learned that ByteDance has long dispersed the businesses that should be under the jurisdiction of the CFO in different departments. The financial team is managed by Li Ying, the corporate development department is in charge of Liu Zhao, and the investor relations department is in charge of Bloomberg. All reported to ByteDance founder Zhang Yiming. These managers already have extensive experience and can share the pressures of the CFO.
ByteDance is also a relatively less financially stressed company. Byte is valued at hundreds of billions of dollars, comparable to Tencent and Ali; advertising revenue is close to 300 billion yuan, only slightly lower than Alibaba, which ranks first; its product Douyin, as the largest short video platform in the country, has more than 600 million daily active users.
ByteDance’s bigger problem is regulation. Its most potential business, TikTok, is spread all over the world, and its future development is highly constrained by the geopolitical environment.
“ByteDance really needs someone like Micro Motion at this time, who is familiar with SEC laws and can communicate well with regulators,” said an investment bank executive who has worked with her for more than ten years. The company is in a heavily regulated environment, and it faces numerous legal issues, both domestically and internationally. “But if she’s only given the title of legal counsel, she’s bound to be reluctant to join,” he said.
An important choice for Micro Motion in her career as a lawyer is to always be a corporate lawyer instead of an investment bank lawyer, which also gives her ample opportunity to understand the operation mode and business logic of various companies, and to deeply intervene in the company’s equity governance. , investment and financing and mergers and acquisitions.
Micro Motion’s senior lawyer background is uniquely attractive to ByteDance. “LatePost” learned that ByteDance has a dedicated team in Singapore to study regulatory risks around the world, and Singapore happens to be Micro Motion’s second work location outside Hong Kong, China. Hua Wei, head of the Human Resources and Management Department of Bytes, has also frequently mentioned “compliance” in the OKRs in the last two bimonthly.
ByteDance has also taken on important executives to join as CFO. In April 2021, the 9-year-old company welcomed its first CFO, Zhou Shouzi, the former president of Xiaomi International Department. But by the end of that year, Zhou Shouzi was fully in charge of the TikTok business and no longer held the CFO position.
In this way, people who have helped 123 Chinese companies go public also got on the Byte bus. The beginning of a man, the end of a generation.
This article is reprinted from: https://www.latepost.com/news/dj_detail?id=1123
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