ALL NOVEL 62
“Alright, let’s call it a day.”
Shortly after 5 PM, Team Leader Seo Jeonghwan stood up from his desk.
Dokyung looked at his seniors with a bewildered expression. Their desks were already clean, and everyone was holding their bags.
Han Dahyun was also tidying up her desk, seemingly accustomed to this routine.
“It’s company policy. We have to follow it.”
When working at branch offices, they weren’t affected by the headquarters’ reduced working hours, but the Leaders Center clearly operated under a team system, so it seemed to be influenced by the headquarters’ policy.
“Well then, it was nice seeing you chicks today. See you tomorrow.”
As one senior colleague bid farewell and left, Dokyung and Han Dahyun stood up to say goodbye.
After everyone had left, Han Dahyun looked at Dokyung and pointed to a table at the side of the office.
“I’ve worked at headquarters before, so I’m used to the reduced hours. They even shut down the computers there.”
“Ah, this is my first time experiencing this.”
“When I was first assigned to a branch office and became a PB, I wasn’t used to the opposite situation. You’ll probably get used to it gradually.”
Dokyung nodded and grabbed his notebook and pen before heading to the table. The two couldn’t help but laugh at how they looked like they were conspiring.
“Let’s begin. Dokyung-ssi, you know about IPOs, right?”
“Initial Public Offering, or corporate disclosure in Korean.”
Simply put, an IPO was the process of a private company making its ‘private shares’ tradable on the stock market for listing.
“That’s right. These days, some view the listing itself as an IPO, but strictly speaking, they’re different… but that’s not the important part.”
Han Dahyun waved her hand and gathered her thoughts before getting to the main point.
“This corporate disclosure process is much more complicated than you might think. Many general market participants think that when a company suddenly announces it’s going public, it just happens instantly.”
Han Dahyun seemed to be trying to explain in a way that Dokyung could easily understand.
Dokyung already knew this, but he focused on Han Dahyun’s words to check if there was anything he might have misunderstood.
“The first step is selecting a lead underwriter. The underwriter could be an investment bank or a securities firm.”
The IB Division where Han Dahyun worked at headquarters was an investment bank. IB’s work, also called CF, included managing IPOs, matching investors, and other corporate finance tasks. There was also S&T (Sales and Trading), which managed corporate assets and invested in stocks, real estate, and bonds.
“What the client wanted was……”
“He wanted our company to be the lead underwriter for his IPO. To that end, he asked me to connect him with the IB Division.”
Han Dahyun nodded at Dokyung’s words. While a simple introduction wasn’t difficult, using asset management services as a medium for the introduction could lead to unforeseen complications, so she thought Dokyung’s judgment was correct.
“Anyway, selecting a lead underwriter is competitive for us securities firms too. Why would we refuse when there’s a huge commission if the listing is successful?”
Dokyung nodded at Han Dahyun’s words. In fact, the client who had approached him could have just lined up several securities firms and talked to them.
“The fact that he asked you means……”
“To be precise, it seems he’s already made proposals to Taesan and Seonjin as well as me.”
“Exactly. If it were a company likely to succeed in going public, everyone would have lined up to do it. The fact that they refused means one thing. It might be harsh for the client, but the company isn’t attractive.”
Dokyung nodded at Han Dahyun’s words. In the end, not even being able to start the IPO process meant that securities firms, who should be the most welcoming, were indifferent.
“Even major conglomerate subsidiaries aren’t able to go public this year. IPOs are slipping one after another.”
As Han Dahyun said, even subsidiaries of domestic giant corporations were failing to list consecutively. Even though the KOSDAQ market was supposed to be an open door for ventures, this year everyone was being cautious about listings.
“It’s really tough these days. VCs have locked up their money.”
“VCs?”
VC referred to venture capital, financial companies specializing in investing in venture businesses.
“Yes. There was a startup that was recently recognized and suddenly flooded with VC investments. They had already completed all the investment contracts, but a week before the funds were to be executed, they were told that the funds couldn’t be released.”
“Does that happen?”
“It’s not unheard of, but… if the holding companies lock up the money, where are VCs supposed to get funds? That’s why many startups are closing down these days. You know how game companies recently cut their workforce, right?”
“Ah, yes.”
Dokyung recalled the recent gaming stock incident. It was the same then as it is now. When it became difficult to secure funding from anywhere, companies started reducing their workforce to cut expenses.
Some gaming companies even had to shut down.
“But even in these circumstances, there are ventures and startups that receive funding. It’s because VCs think they absolutely must invest. From their perspective, giving money during tough times can yield greater returns.”
Han Dahyun shook her head, seemingly regretful.
“If the venture run by the client you met was attractive, it might have been better to approach it from an investment angle rather than listing.”
As Han Dahyun spoke casually, Dokyung felt like something had hit him on the back of the head.
“That’s right. Investment!”
As Dokyung exclaimed loudly, Han Dahyun looked at him with a startled expression.
“Why do companies go public?”
“W-well, the main purpose is that they need money……”
“If investment is an easier method than going public, why did the client choose to go public?”
“Hmm…… Because investment opportunities have dried up?”
At Han Dahyun’s words, Dokyung smiled and stood up.
“Dahyun-ssi, thank you. I feel like my perspective has broadened a bit. If you need my help next time, I’ll be sure to assist you.”
With those words, Dokyung left the office as if he had an urgent matter to attend to, leaving Han Dahyun staring at his departing figure with a dumbfounded expression.
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“I think it’s time we need to reduce our workforce.”
Park Hyun-il sighed as he looked at the director speaking to him.
“I’ll inject my personal funds. Let’s try to hold out a bit longer.”
At Park Hyun-il’s words, the director furrowed his brow and spoke.
“President, if you inject your personal funds this time, it will be the second time this year. We don’t know how much more will be needed in the future, and you can’t keep injecting your personal funds indefinitely.”
“Are you suggesting we lay off all those people?”
“I’m not saying we should lay them off. We could give them three months’ salary in advance, with the condition of rehiring them when the company recovers……”
“Director.”
Park Hyun-il looked at the director with a stern expression.
“Let’s not play word games.”
He could fully understand the director’s position. The company was struggling, and all sources of funding had been cut off.
The root of the problem was the business expansion at the beginning of the year. They had expanded based on expected investments, but the global economic recession had caused investors to close their wallets.
“We’re preparing for an IPO, so can’t we just hold out until then?”
“It will take a long time.”
“Even if it takes a long time, it’s better than dying without doing anything. And in the meantime, the economic situation might improve.”
Park Hyun-il’s words seemed like stubbornness to the director’s eyes, but he nodded as if there was no other choice.
“I understand.”
“I’ll inject my personal funds as soon as possible……”
Knock knock-
As Park Hyun-il and the director were in the middle of their conversation, the door opened and the receptionist entered.
“President, Yoon Dokyung-ssi from Yuseong Investment Securities, who visited before, is here. He doesn’t have an appointment, what should we do?”
At the employee’s words, Park Hyun-il’s eyes widened.
“Show him in right away.”
“Yes, understood.”
“Director, I’ll prepare the money as soon as possible, so please wait a little longer.”
“Yes, I understand.”
As the director bowed and left the room, a welcome face entered simultaneously. Park Hyun-il stood up and approached Dokyung, extending his hand.
“Seeing you return after a week, have you changed your mind?”
Dokyung bowed in greeting and shook Park Hyun-il’s outstretched hand.
“I have something to discuss with you, so I’ve taken the liberty of visiting despite the impropriety.”
“Have you come regardless of the proposal I made?”
“That’s correct.”
At Dokyung’s words, Park Hyun-il’s expression showed disappointment, but he guided Dokyung to a seat.
As soon as he sat down, Dokyung took out a laptop from his bag and opened a prepared PPT file.
“In our first meeting, you mentioned that innovation follows where money flows.”
“That’s right.”
“Actually, I believe that money follows where innovation is.”
As Dokyung, who had only listened during their previous meeting, now expressed his own thoughts, Park Hyun-il felt intrigued.
At first, he wondered why this young man had come to see him, but now he just wanted to hear what the PB sitting in front of him had to say.
“Investors are hyenas. Why would they invest money where there’s no appetizing prey?”
It could be a chicken-or-egg argument, but Dokyung believed this. Money doesn’t move carelessly.
When someone is working towards innovation behind the scenes, money’s job is to bring that to the surface.
“You came to give me this answer……”
“No, I’m here to discuss how we can attract these hyenas.”
Saying this, Dokyung moved to the next slide on his laptop.
“Currently, venture capitals are not investing in startups and ventures. However, even in times like these, there are companies receiving hundreds of billions of won in investments.”
“……”
“Companies with stable revenue and ventures gaining popularity overseas are the main characters here.”
Park Hyun-il focused on Dokyung’s words.
“Which category do you think your company falls into?”
“……Coincidentally, neither.”
“That’s right. If I were a hyena, I would have seen it as an even more appetizing investment target than those two.”
“What do you mean?”
“I mean exactly what I said. I’m telling you that you could be an even better investment target than those two types.”
Dokyung pointed to the laptop screen.
“Your company is running a platform business related to beauty.”
Park Hyun-il’s company had developed a platform called BeautyClip, which started by displaying detailed ingredient information for cosmetics, allowing customers to leave reviews and ratings. It had evolved to include professionally conducted experiments on cosmetic efficacy and even expanded into an online cosmetics shopping mall.
Recently, they were aiming to diversify by allowing customers to review plastic surgery procedures on the platform.
“This year’s revenue is 20 billion won, with an operating profit of -6 billion won.”
Revenue was the total amount earned by the company, while operating profit was the amount left after subtracting business-related expenses from the revenue.
“That’s correct. How do you know this?”
“You’ve published it directly on your homepage.”
Although the company wasn’t listed, so it didn’t need to disclose this information, the venture industry constantly needed to attract investment to expand their business.
To allow more investors to see, they were disclosing everything they could on their homepage within the permissible range.
Even so, it meant that the PB sitting in front of him had gone to the company’s homepage to confirm all of this.
“The -6 billion won operating profit seems to be due to increased expenditure in preparing the plastic surgery-related system earlier this year, resulting in a larger deficit. Is that correct? If it’s inconvenient……”
“That’s correct.”
“I see. What caught my eye was last year’s financial statement.”
Dokyung displayed the company’s financial statement from the previous year on the screen.
“Revenue was 15.1 billion won with an operating profit of 4.9 billion won.”
“……”
“The operating profit is 32% of the revenue. While the revenue isn’t large, such a high operating profit means that the more revenue increases, the more money the company will make.”
Dokyung continued speaking, looking at Park Hyun-il with apparent excitement.
“The number of daily app users is rising sharply. Compared to the same period last year, it has increased by over 40%.”
“I hate to say it myself, but we have customer loyalty. They read reviews and immediately purchase cosmetics through our shopping mall.”
“Exactly. Customers who come in to read reviews don’t need to bother looking elsewhere. The price difference is at most 1,000 won from the lowest price. Since they can do everything on BeautyClip, it’s natural that the operating profit is high.”
Park Hyun-il couldn’t help but chuckle at the PB who seemed to know his company better than he did himself, speaking with such enthusiasm.
He was a completely different person from the one who had only listened to him a few days ago.
“However, these aren’t the only advantages. The continuous emergence of competing apps is a concern, and the limited number of cosmetic brands available on the platform is a weakness.”
These were weaknesses that the company was already aware of. Park Hyun-il nodded, unable to refute.
“Despite these weaknesses, BeautyClip is an attractive company. Platforms are easily replaceable as new competitors keep entering the market. However, BeautyClip already enjoys a monopolistic position. Customers feel no need to look for other apps.”
The lifeblood of a platform was how long customers stayed on it.
BeautyClip was a place where once you entered, you could look at cosmetics, leave reviews for products you’ve already used, read reviews, and immediately purchase cosmetics.
Naturally, customers had no choice but to spend a long time on the BeautyClip application once they opened it.
“As I mentioned, if more cosmetic companies are added to the platform, it will further solidify its monopolistic position.”
“We’re continuously negotiating on that front. It will increase soon.”
At Park Hyun-il’s response, Dokyung closed his laptop and looked at him with a serious expression.
“You like innovation. What surprised me most when I visited BeautyClip’s investment page was how frequently the word ‘innovation’ was used.”
“That’s right. I believe we are innovating and……”
“Unfortunately, I don’t think BeautyClip is innovating. You’re in a business that competitors can easily enter.”
Park Hyun-il’s eyes widened at Dokyung’s words.
“BeautyClip isn’t innovating; it’s generating revenue and making money.”
“What do you……”
“From a hyena’s perspective, it’s an appetizing target. Perhaps you’re so eager to present yourself as an innovative company that you’ve lost sight of the most important thing?”
Park Hyun-il was at a loss for words. He had been viewing the company from the perspective of innovation, constantly introducing new technologies and business methods.
But the PB sitting in front of him was looking at his company from an investor’s perspective.
“If I had to invest money right now, even in these difficult times, I would invest in a company that can generate revenue rather than innovation. Conversely, if I were in a position to introduce BeautyClip, I would show investors numbers rather than innovation.”
Saying this, Dokyung packed up his laptop and stood up.
“I won’t consider this meeting our last. My turn is now over. I hope our next meeting will be an opportunity for me to listen to what you have to say.”
“……”
“Thank you for your valuable time.”
Dokyung bowed and left the office, leaving Park Hyun-il sitting quietly with a contemplative expression.