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Tencent Technology Author Su Yang

Editor: Zheng Kejun

Luo Yonghao's "True Return" has entered the 2.0 stage, but his "entanglement" with investor Zheng Gang is far from over.）

On August 26, Luo Yonghao announced the progress of "True Repayment", saying that since the start of "True Repayment" in 2018, a total of 824 million yuan of debt has been repaid, far exceeding the "debt of more than 600 million yuan" previously announced. The main reason is that during the debt repayment process, due to additional compensation caused by various lawsuits and disputes, as well as various fines caused by late payment, the total debt increased by nearly 100 million yuan.

In addition, regarding the newly added 600 million yuan debt, Luo Yonghao said that when Smartisan Technology raised funds, it received 300 million yuan in investment from state-owned capital and 300 million yuan in loans, totaling 600 million yuan. Regarding the state-owned debt, Luo Yonghao revealed that in fact, this part of the debt has been quietly repaid for more than a year, and it will be fully repaid in the next few years.

Luo Yonghao said that he and his team will use all legal, compliant and business ethical means to "hype up" the company, and work at full capacity to increase cash income in various ways and pay off the remaining 500 million yuan of debt as soon as possible. (For details, see:）

In response to issues raised by Zheng Gang, an investor of Smartisan Technology, such as "no repurchase", "no repayment of 15 million yuan loan", and "no sharing of re-entrepreneurship profits with old shareholders", Luo Yonghao also explained them one by one.

Previously, as an investor in Smartisan Technology, Zheng Gang had "blasted" Luo Yonghao many times in public events and on WeChat Moments, including not holding a shareholders' meeting in violation of the company's articles of association and his "unfair" behavior of forcibly using the equity of his startup project, Thin Red Line AR, to offset investment funds.

Zheng Gang said: "You want us to accept a few tenths of a percent of your equity and give up billions of repurchases? This is dishonest, dishonorable and immoral. Since we invested in you, we believe in you and you have the ability. Why do you want to hurt the hearts of so many investors?"

Regarding the accusation of not repurchasing shares, Luo Yonghao said that the standard for mandatory repurchase has not been met. "The venture capital agreement of that year clearly stated in black and white that if the investors of Smartisan Technology want to force me to repurchase the shares of Smartisan Technology, more than 50% of the investors must sign and agree to trigger the repurchase."

Luo Yonghao said, "Zheng Gang struggled for a long time, but he only managed to get more than 20% of investors to force me to buy back the shares, which is far from the 50% stipulated in the legal agreement."

At present, Zheng Gang has joined forces with multiple entities to initiate a repurchase lawsuit against Luo Yonghao. According to the Science and Technology Innovation Board Daily, in September 2023, a total of 12 entities, including investors, partners, and Smartisan Technology shareholders, submitted an arbitration application to the Beijing Arbitration Commission with Luo Yonghao as the respondent, involving 580 million yuan of Smartisan Technology Fund investment.

Regarding the fact that Smartisan Technology borrowed 15 million yuan from Zheng Gang's investment institution during a period of financial difficulty, Luo Yonghao responded that it was true and that it was also true that the loan was not repaid on time.

As for "not sharing the benefits of re-entrepreneurship with old shareholders", Luo Yonghao said that when Smartisan Technology was not going well, it had gone through many rounds of entrepreneurial projects, and some projects had not yet had time to make equity plans for old shareholders. Among them, the live broadcast e-commerce company reserved 5% of the original shares for old shareholders from the beginning. Due to compliance and other issues, some equity needs to be implemented around January 31 next year.

Luo Yonghao said, "After the Spring Festival in 2020, when we started the equity structure plan for the live e-commerce company and the design company, my partners and I also made a 5% original stock plan for the old shareholders of Smartisan Technology. However, due to policy compliance and procedures, as well as some binding agreement issues, this part of the equity can only be fully implemented to these old shareholders, old partners and old colleagues around January 31, 2025."

At noon today, Zheng Gang, an investor of Smartisan Technology and founding partner of Zihui Venture Capital, responded to Luo Yonghao's long article on WeChat Moments, saying, "The moon only lets you see one side, and you can never see the other half. He also said that he would also post a video response with facts and pictures."

Appendix: The following is the "grudge history" between Luo Yonghao and Smartisan Technology investor Zheng Gang

●2011: Luo Yonghao initially had the idea of ​​making a mobile phone and received initial financial support from Tang Yan and others. Zheng Gang met Luo Yonghao through Tang Yan's introduction, but the first cooperation failed due to issues with the terms.

●May 2013: Zheng Gang invested RMB 40 million in the A round of funding for Smartisan Technology.

●April 2014: Zheng Gang invested in Smartisan Technology again in the B round, with a total investment of over RMB 100 million.

●April 2015: Zheng Gang tried to persuade Luo Yonghao to prepare for the listing of Smartisan Technology on the New Third Board, but Luo Yonghao was interested in introducing US dollar funds, and the two sides had differences.

●2017: When Smartisan Technology got into financial trouble, Zheng Gang supported Luo Yonghao and blasted Alibaba on WeChat Moments because Alibaba had intended to invest in Smartisan but ultimately did not.

●September 2017: Smartisan Technology’s Series D financing agreement included a five-year repurchase clause, laying the groundwork for possible disputes in the future.

●2018: Smartisan Technology faced difficulties, and investors including Zheng Gang helped raise funds. Zheng Gang even mortgaged his personal property to provide support.

●January 2019: Smartisan Technology internal sources revealed that employees changed their contracts to ByteDance, and ByteDance acquired Smartisan Technology.

●2019: Luo Yonghao started new entrepreneurial projects such as live streaming e-commerce. Zheng Gang said he had exchanges but did not participate.

●November 2022: Xihongxian Technology proposed an equity compensation plan, requiring Zihui Venture Capital to give up all its repurchase rights over Smartisan Technology. Zheng Gang believed that this practice was not fair.

●2022: Zheng Gang stated that Smartisan Technology did not hold a shareholders' meeting in accordance with the provisions of the Company Law, and that Luo Yonghao did not fully communicate with investors and directly proposed a compensation agreement, triggering a conflict.

●Before January 7, 2023: The differences between Zheng Gang and Luo Yonghao gradually accumulated, including the subsequent handling of Smartisan Technology and the equity compensation issue of new entrepreneurial projects.

Attachment: Full text of Luo Yonghao's clarification regarding questions raised by Smartisan investor Zheng Gang

Since January last year, for more than a year and a half, Zheng Gang, an investor of Smartisan Technology, has made countless personal attacks, slanders and defamation against me on social networks and some self-media. When it first happened, I responded and clarified in a timely manner in a calm and peaceful manner. Although Zheng Gang has continued to make unreasonable demands and abuse online to this day, most decent and formal media have not followed up, so I have not paid any attention to it.

This year, when I once again became a hot topic of public opinion because of my outspokenness against the "iron/director case", Zheng Gang also went all out, jumping up and down, and threw the dirty water that had been thrown for more than a year again. This time, because I happened to be in the hot spot of public opinion, a group of unscrupulous self-media who were eager to create chaos in the world followed up again, causing a great negative impact on the company and my personal reputation. At present, the company's legal department has completed the collection of relevant evidence and materials, and will later formally sue Zheng Gang for his long-term rumor-mongering, slander and defamation.

Over the past year or so, Zheng Gang has released countless videos and pictures to maliciously slander me. The vast majority of the content is slander and venting that does not contain facts or distorts the facts. Below I will pick out the most important ones to clarify.

1. The truth about the lawsuit in which Zheng Gang forced me to buy back Smartisan Technology shares

Although the venture capital agreement of that year clearly stated in black and white, if the investment shareholders of Smartisan Technology want to force me to repurchase the shares of Smartisan Technology,(This “forced buyback” means that after the investment fails, the investor forces the founder to repay the investment principal).A buyback can only be triggered if more than 50% of investors and shareholders sign their consent. But after all the efforts, Zheng Gang only managed to get more than 20% of investors to force me to buy back, which was far from the 50% stipulated in the legal agreement.

Two of the investors told me privately that they stood with Zheng Gang only to make an explanation to their previous sponsors and hoped that I could forgive them. Although I didn’t argue with them, it was still hard to digest. It reminded me of the famous, dark and ugly Indian poem, “You have already swallowed a lot of bitter medicine, please bravely drink this poisonous wine.”

From the perspective of emotion, reason and law, Zheng Gang's behavior of forcing me to repurchase the shares is completely untenable.If we force a lawsuit, there is no chance of success unless Zheng Gang and his accomplices are capable of creating legal fraud and false cases (because the investment agreement comes with a confidentiality clause, so I am not convenient to post the above "clear terms in black and white", and the full text of the agreement has been submitted to the arbitration court).But Zheng Gang still filed a rogue lawsuit to force me to repurchase. Most investors act rogue and sue entrepreneurs because they know they are embarrassed and they are willing to "play rogue in silence." Zheng Gang is not ashamed of it, and he even justified his naked rogue behavior on social media.

By the way, if the investors collectively force me to repurchase the shares, it will obviously benefit the investment institutions of Smartisan Technology in terms of practical interests. But why don't so many investors force me to repurchase the shares like Zheng Gang and others? The reasons are complicated, but generally speaking, formal, respectable and reputation-conscious investment institutions will not force the founders of the companies they invest in to repurchase shares when the founders have failed in their business and have not committed other serious dereliction of duty or illegal and irregular behaviors, because such unreasonable and bad behavior will also seriously affect the reputation and credibility of the investment institutions.

2. The truth about "Smartisan Technology borrowed 15 million from Zheng Gang and failed to repay it when it was due"

Zheng Gang has repeatedly stated that when Smartisan Technology had problems with capital turnover, he borrowed 15 million yuan from Zheng Gang's investment institution. Later, when the loan expired, the institution refused to repay the debt and criticized me for having character issues based on this.

First of all, it is true that Smartisan Technology borrowed money from Zheng Gang's institution, and it is also true that it did not repay the loan after maturity. But why is this the case? Because before this company-to-company loan matured, Zheng Gang, who claimed to be my friend, had already filed a rogue lawsuit to force me to repurchase the loan, and he had been slandering and defaming me online for several months. So when Zheng Gang contacted Smartisan Technology to ask for repayment, I felt angry and funny, so I asked my colleagues to reply to him: If you want to talk about friendship, then I will pay the money back to your company on behalf of Smartisan Technology, but since we are talking about friendship, you can't play rogue with me, and you can't file a rogue lawsuit to force me to repurchase when there are clearly written terms, and you can't insult me ​​online every day; if you don't want to talk about friendship with me, and do everything impartially, then for a public-to-public loan, don't let me personally repay the company's loan, this is called impartiality.

In fact, with my usual kindness, I took the initiative to take on the company's debt of more than 1 billion yuan and paid more than half of it. Would I really not pay this little money for the company? However, with Zheng Gang's rogue operation with no moral bottom line for more than a year, if I personally pay this money back to his company on behalf of Smartisan Technology, it must be the last and last payment before the finale of the real return, and the prerequisite for giving it to him is that he shoots an online video with an extremely sincere expression to admit his mistakes and apologize, and make a solemn promise that he will never commit such rogue crimes against any entrepreneur again. If Zheng Gang insists on saving face instead of money at that time, I will give him a big thumbs up and donate the money for charity.

Later, Zheng Gang asked to come to my place to talk, and we finally met and talked for more than an hour. During the whole process, he was confused and said a lot of nonsense and stupid things. The basic meaning he wanted to express was: 1. We are friends after all, you can't do this to me, you must personally pay our company back on behalf of your company; 2. I am in a difficult situation and under a lot of pressure, so I must file this rogue lawsuit against you to force you to repurchase, otherwise I will have to repurchase it myself.

I listened for a long time, and after I was sure I heard it correctly, I almost went crazy. How could a person say such shameless words? I had to reiterate that we can be friends or not, and just do business. Whichever you choose, I can accept it. But you can't choose friendship when it's good for you, and you can choose business when it's not good for you. This is a typical, pathological "want, want, and more". After listening to it, Zheng Gang repeated his stupid words to me several times with a bitter face, and I had to let my colleagues send him away.

3. The truth about Zheng Gang’s accusation that I did not share the benefits of re-entrepreneurship with the old shareholders of Smartisan Technology

To make this clear, let me make a list here:

1. When Smartisan Technology was unable to continue in 2018, its first attempt to save itself was the Bullet SMS project incubated by the internal team of Smartisan Technology. When the project was independently established as a company, Smartisan Technology directly held 25% of the original shares because it was an internally incubated project.

2. After Smartisan Technology and Bullet Messenger failed, I started Xiaoye Technology in 2019 to make quick money to pay off my debts. But I only worked there for half a year. Because of the huge uncertainty in industry policies, I chose to fade out of the industry before I could complete the equity plan for the old shareholders of Smartisan Technology.

3. After the Spring Festival in 2020, when we started the live streaming e-commerce company and designed the company’s equity structure plan, my partners and I also made a 5% original stock plan for the old shareholders of Smartisan Technology (because the live streaming company was profitable as soon as it opened, we even happily made a "relatives and friends stock" plan for the three earlier investment shareholders of "Lao Luo English Training", several partners of Smartisan Technology, and a group of old brothers and sisters who stayed with Smartisan Technology after its failure, namely "Zhen Huan and Her Friends"). However, due to policy compliance and process, as well as some issues with binding agreements, this part of the equity will not be fully implemented to these old shareholders, old partners and old colleagues until around January 31, 2025.

4. When Thin Red Line Technology Co., Ltd. was launched in 2022, because Thin Red Line was a company started with investment from the beginning, 5% of the original shares were reserved for the old shareholders of Smartisan Technology on the first day.

Last January, Zheng Gang suddenly attacked me online. According to him, the reason was:

1. Zheng Gang felt that the 5% original shares I left as a thin red line for the old shareholders of Smartisan Technology were too little;

2. Zheng Gang felt that I should not have required the old shareholders of Smartisan Technology to give up their right to repurchase Smartisan Technology shares in a written statement when signing the agreement to distribute the fine red line shares to them;

3. Zheng Gang felt that among the companies I had worked for, only the live streaming e-commerce company made money in the end, but this company did not distribute shares to the old shareholders of Smartisan Technology.

I will try to give clear and concise answers to these questions:

1. An adult, even if he or she is not a professional investor, must understand that investment has its ups and downs. Investment is not borrowing. When the venture capital investment that you make your own decision fails, you have to admit it. Those who cannot bear the consequences and make a move against the entrepreneur are definitely evil capitalists; those who cannot bear the consequences and get angry with the entrepreneur, make unreasonable demands, and throw mud everywhere are definitely giant baby capitalists.

2. As long as entrepreneurs have done their best with the investment from the fund, they have no legal or business ethics responsibilities if they lose money. Of course, from an emotional and moral point of view, if entrepreneurs are willing to compensate investors who lost money in the previous project when launching the next entrepreneurial project, it is a very loyal practice. But this is not the obligation and duty of entrepreneurs, nor is it a common practice.

3. Zheng Gang thought that I left too few shares for the old investors of Smartisan Technology in the new company, and he insulted me for it. Then, please tell me, Zheng Gang, this "professional investor", in the past ten or twenty years of China's technology entrepreneurship boom, what percentage of serial entrepreneurs gave the old shareholders of the old company an original equity plan of about 5% almost every time when they started a new business?

4. When a new company is established and raising funds, it is a common practice for professional investment institutions to require entrepreneurs to disclose and eliminate their financial risks and hidden dangers. Otherwise, if the new company succeeds in the future, some old shareholders of the old company will initiate malicious lawsuits, which will cause huge losses to both the new company and the founders. In accordance with the risk control requirements of professional investment institutions, I asked those old shareholders of Hammer Technology who voluntarily received the original shares of the thin red line to sign a statement of giving up the repurchase claim when receiving it. This is a natural and common practice. If there is something abnormal or unnatural about this matter, it is that most re-entrepreneurs usually do not make such original stock plans for the old shareholders of the old company.

As a professional investor, Zheng Gang could not be unaware of this industry common sense. However, when he was pestering me about this matter online, he could not provide any facts or reason. He could only vent uncontrollably and speak in a clumsy way, saying nonsense like "Why do you want to hurt so many investors' hearts?" and "Others are shivering in the cold wind." This can only be understood as him being either stupid or evil.

5. Finally, the 5% original equity plan made by Jiaogepengyou for the old shareholders of Smartisan Technology will be distributed to the old shareholders of Smartisan Technology according to the investment ratio of Smartisan Technology at that time when it is implemented at the end of January next year, but it does not include Zheng Gang and the part of Smartisan Technology shareholders who colluded with Zheng Gang and jointly initiated rogue lawsuits. When I made this decision, my colleagues felt very happy and thought I was taking revenge. In fact, I didn’t think about those things. I just thought that repaying evil with kindness is not a good thing. It is definitely a more reasonable arrangement to let those unethical shareholders not get it and let those virtuous shareholders get more.

4. The truth about why I allowed Zheng Gang to fabricate rumors, slander and insult me ​​online for a year and a half, and did not fight back

First of all, as an entrepreneur who has received investment and lost money, no matter how bad and unreasonable the investors are, no matter how vicious and unscrupulous the attacks and persecutions are, it is best to remain silent. Otherwise, it is easy to be criticized as "ungrateful" by ignorant men and women who do not know the truth, just like when I was young... you know ^_^

Secondly, during the years when I was working on Smartisan Technology, Zheng Gang and I, in addition to the normal relationship between investors and investees, also had many exchanges on products and helped each other more than once. It cannot be said that there was no personal relationship at all. This is also part of the reason why I was unwilling to turn against each other unless it was absolutely necessary.

Zheng Gang has always had a confused mind and no logic, but he used to be a very active and enthusiastic person. Perhaps because of the pressure in the investment industry, he has changed significantly in recent years. He often seems abnormal, as if he has completely lost the basic self-control ability of an adult.

For example, he would occasionally write some emotionally uncontrollable curse words on social media in the middle of the night, and then delete them in the morning. For example, he filed a lawsuit against me and insulted me. After a while, he felt that nothing could be changed, so he sent me messages to try to get along with me and said soft words, asking me to "if I still have even a little bit of relationship with him", because his request was very ridiculous, I didn't know how to reply, and he saw that I didn't respond, so he went online to curse again a few days later. When the company debt problem mentioned above happened, he felt bad and came to me to discuss settlement in a friendly manner. After his unreasonable request was rejected, he went back and threw dirty water on me...

The most abnormal incident involving Zheng Gang in recent years was when he was divorcing a small star. He lost control of his emotions and took a group of people to the woman's house in the middle of the night to snatch the child. News reports said that he also beat his wife and father-in-law when he snatched the child. Many details of the incident were shocking. Afterwards, Zheng Gang was detained by the police for 36 days. After he was released, Zheng Gang denied the accusation of beating his wife and father-in-law, but the media confirmed that he snatched the child and was detained for 36 days (the above are all public information that has been widely reported by the media, namely the famous "Zheng Gang child snatching incident").

Many people wondered how Zheng Gang could scold me for more than a year and a half without fighting back, and even thought that I was wrong or that he had something on me. In fact, it was because I watched him become more and more abnormal over the years. Although I was very angry at him sometimes, I was also somewhat sad because of our past friendship. So if there were no unscrupulous media to follow up and hype, which actually caused serious negative impact on me and the company, I would try my best to endure it. But since this matter has come to this point, I can only publicly refute and clarify it.

Apart from the above clarifications, Zheng Gang's insults and abuses against me over the past year and a half are basically pure uncontrolled emotional venting and insidious malicious framing, which are not worth refuting. Friends who are interested in reading more and are not afraid of being disgusted can search for "Zheng Gang + Luo Yonghao" on social media.

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