We are planning to invest in a startup. However, if we suddenly receive an investment offer from a company called OTK Company, we may suspect it to be a joke or a scam.
Therefore, the intervention of a reputable organization is needed. If Golden Gate steps in as an intermediary, startup executives will trust and meet with them. Since investment regulations vary by country, that aspect should also be considered.
It is natural for fees to be incurred when entrusting work.
How much would the commission be?
Hyunjoo Noona forwarded an email stating the investment interest in the companies I selected. She then began negotiations with Golden Gate.
In the meantime, I drafted detailed investment strategies.
Even though we could delegate everything and leave it alone, this time, I plan to experience firsthand what investing entails.
“How do we meet foreign startups?”
“We should invite them to Korea.”
It’s not that we are disappointed because we couldn’t invest, it’s just that the regrettable side of things naturally finds its way to us.
The more concerning issue is for Korean startups.
After the L6 Bankruptcy Incident, we captured the attention of global financial institutions. While the Financial Supervisory Service in Korea initiated an investigation, it was halted due to a lack of information.
If OTK Company starts investment activities in the Korean market, the Financial Supervisory Service will not remain idle.
“If we haven’t done anything wrong, we should be fine, right?”
“Yes, but…”
The problem is the high possibility of our true identity being exposed during the investigation process.
Once the truth is revealed, the media and public opinion won’t stay silent. Our names will appear in newspapers and news, and our graduation albums and past actions will be circulating on the internet.
To reiterate, if we make money through short selling, regardless of right or wrong, we will face criticism. Furthermore, since we have set up a corporation for tax evasion purposes, the criticism against us will be even more severe.
While well-known celebrities or speculative investors may enjoy such situations, we do not. Both of us are already content with our current lifestyles.
And…
I thought of my mother.
Even if only the fact of winning the lottery prize is revealed, phone calls come from all directions, and strangers loiter around the house. Can my mother really live comfortably in the old house?
It’s better to hide until you can hide as much as possible.
Taekgyu, who heard my story, nodded.
“If that happens, it will be difficult to go out of the house comfortably. Or you can go around with bodyguards.”
I sighed.
“Just thinking about it is terrible.”
“Are you thinking of giving up on investing in Korean startups?”
“No.”
What sin is there in startups that cannot receive investment? What sin are we committing by not being able to invest?
“If OTK Company does it directly, it should be fine.”
I had thought of another way.
I picked up my phone and made a call. Before the signal could ring a few times, the other person answered the call.
“Have you been well?”
[I’ve been waiting for your call.]“Could you please look for an office in Gangnam? The size should be between 100 to 200 square meters.”
I was about to say I’d explain the reason later, but the other person didn’t ask or probe.
“I’ll check right away.”
“If you find a suitable place, you can handle the contract yourself. I will deposit the down payment from here.”
“Got it.”
***
Golden Gate’s investment intermediation contract was completed.
The person in charge was naturally decided as Hyunjoo Noona. Noona’s team members are scheduled to help us with our work.
The commission is set at 1.8 percent of the total investment amount, with a minimum commission of $3 million determined.
If you invest $100 million, you will pay $1.8 million in commission, and if you invest $500 million, you will have to pay $9 million as commission. Even if you don’t invest a penny, you still need to pay $3 million without fail.
Taek-gyu, upon hearing the conversation, was completely surprised.
“Just connecting the dots costs this much?”
“I heard there’s a friend discount, even.”
If it weren’t for Noona Hyunjoo, I would’ve had to pay double.
Though willing to pay enough, the thought of actually paying made it hard to stomach. It’s not just a few million dollars.
Now that it’s come to this, I need to work hard enough to make the commission worthwhile.
We headed to Apgujeong by car. The destination was a high-end Chinese restaurant.
“What? Why another Chinese restaurant?”
Please, let’s stop eating black bean noodles.
Taek-gyu shook his head.
“It was reserved by Noona, not me.”
“······.”
Well, nothing we can do about it.
Before the real work began, Noona Hyunjoo came to Korea first. As soon as the preparations here are done, the rest of the people will come.
We entered the reserved room. Noona Hyunjoo was already there.
“You’re here early.”
“I took a taxi as soon as I got off. The traffic wasn’t bad.”
She seemed tired, perhaps from the flight. Still, she maintained her intellectual and beautiful appearance.
“Let’s have a meal.”
Hyunjoo Noona called a waiter to place the order.
“Have you been here often?”
“The main branch is in Harbor City, so I often go there. This is my second time here.”
The food was placed on a rotating glass plate on the table. Diners would turn the plate to bring the desired food closer to them and eat it.
Next, the chef appeared holding a sizzling plate of Beijing duck and proceeded to carve it in front of us.
Ah, this is the real deal when it comes to Chinese cuisine.
Come to think of it, it’s been a while since I ate out. I’ve been cooped up at home, only eating delivery food all this time.
As we dined, I discussed my future plans and investment strategies with Hyunjoo noona.
“So when is that person coming?”
“They’ll be here soon.”
I deliberately called him about an hour late.
Shortly after, a tall, well-dressed man entered the room. It was Senior Sangyeop.
“Welcome, Senior.”
I said, looking at Hyunjoo noona.
“This is the Park Sangyeop I mentioned earlier.”
Senior Sangyeop asked me, “Who is this person?”
“She’s Oh Hyunjoo, Taekgyu’s older sister.”
“Oh! The one working at Golden Gate that you mentioned before?”
I added some context, “She graduated from Korea University with an economics degree. She’s ten years senior to me.”
Senior Sangyeop nodded at my words. He then lowered his head and said in a loud voice, “Nice to meet you, Senior. I am Sangyeop Park from the Mathematics Department. I look forward to working with you.”
With his big build and short hair, it seemed like a big boss was greeting a gangster. Hyunjoo noona didn’t hesitate and extended her hand calmly.
“Nice to meet you. I am Oh Hyunjoo.”
Senior Sangyeop politely shook her hand.
“You can speak comfortably. You are like a sky-like senior.”
Noona Hyunjoo smiled.
“I’ll gradually get comfortable.”
We took our seats.
“Why did you want to see me?”
“First, have your meal. We’ll talk slowly.”
“Got it.”
Senior Sangyeop ate with good appetite, not being polite.
After the meal was somewhat finished, I stood up and got to the main point.
“We are planning to establish an investment company as a subsidiary of OTK Company in Korea. OTK Company will fully invest, and the capital will be 70 billion.”
Teakgyu and Noona Hyunjoo, who already knew, nodded, but Senior Sangyeop, who heard this just now, widened his eyes.
Recently, billions do not sound like much, but 70 billion is a large capital, enough to establish a small to medium-sized securities firm. (Of course, to really do that, you have to go through the relevant authorities for approval.)
Looking at Senior Sangyeop, I said, “I plan to entrust that company to you.”
Senior Sangyeop was surprised by the sudden words.
“To me?”
“For now, let’s set the salary at 100 million.”
This is a large amount compared to initial salaries in finance, but the important thing is not that.
“Based on performance, I will give you ownership of the subsidiary. 2% per year, up to a maximum of 10% over 5 years.”
“Wow!”
It’s a kind of stock option concept, and this offer is quite groundbreaking.
Even if the company assets do not increase but remain constant, one would receive 1.4 billion won per year and a total of 7 billion won after five years. As I anticipate, by then the assets would have increased at least tenfold.
“There’s nothing to get too excited about. If performance is lackluster, you’ll be fired immediately. Even if you don’t last a year, we’ll still pay you the promised salary.”
Sangyeop senior had a perplexed expression.
“What on earth makes you entrust me with a subsidiary worth 70 billion won?”
With these conditions, one can easily hire a highly experienced and exceptional financial professional. Despite this, there must be a good reason for making such a proposal to a school senior.
“I trust your decisiveness and sense of responsibility.”
Sangyeop senior never missed a looming investment opportunity. When he turned 5 million won into 50 million won by investing in MK Tech in the past, eagerly purchased SB put options upon hearing about L6, approached me promptly.
People’s true nature is revealed when they hit rock bottom.
Even after losing all his assets and falling into debt with CL Chemical call options, he never touched club dues. Without giving up or getting disheartened, he worked at the bottom for years to clear his debts.
While skilled individuals are easy to find, trustworthy ones are hard to come by.
I need an organization that will move like my hands and feet according to my foresight. There may be no one more suitable than Sangyeop senior to entrust in growing such an organization.
“Wanna give it a try? If you’re not confident, speak up now.”
He probably knows. That this is a rare opportunity that may not come again in life.
Sangyeop senior nodded firmly.
“I’ll give it a shot.”
“You’ve made a good choice. You’ve truly become a family member now.”
Clap clap!
When Taekgyu first clapped his hands, Hyunjoo and I joined in, applauding.
Sangyeop senior bowed awkwardly.
“Thank you. I will do my best for OTK Company.”
Taekgyu inquired.
“By the way, what’s the name of the subsidiary?”
“I thought of naming it K Company after the last letters of OTK.”
Hyunjoo added, “Isn’t that a bit hastily decided?”
“…,” I remained silent.
Delving deeply into naming even the company seemed too much trouble. So, for Senior Sangyeop who joined later, I explained the plan again.
“From now on, OTK Company will invest domestically and internationally. Our task is to meet startups in need of funds, invest in them, and acquire shares.”
—
The establishment of the subsidiary proceeded swiftly.
The complex administrative procedures were handled by Hyunjoo, who had entrusted a foreign law firm. K Company was established in Korea, with OTK Company injecting 70 billion.
A lease agreement was made for the 5-story building on Teheran-ro. It was a distance of 5 minutes by car or a 20-minute walk from the Taekgyu house.
OTK Company would directly handle foreign startup investments, while K Company would manage Korean startup investments.
I handed the USB to Senior Sangyeop.
“Here’s the list of startups that K Company needs to invest in. I’ve arranged the meetings in advance, so you’ll have a lot scheduled. Golden Gate will provide the necessary workforce, so discuss the extent of share acquisition or legal issues with them.”
Corporate investments can be broadly classified into two main approaches.
One is lending money, and the other is acquiring shares. Startups in need of funds often seek investments even if they have to reduce their shares. However, if the company fails to grow or goes under, the share value becomes worthless.
On the other hand, loans allow for the recovery of principal and interest in priority. Of course, if the company fails, it may not be recoverable. (That’s why sometimes managers provide personal guarantees.)
“Are you thinking of participating in the management, by any chance?”
“No.”
When you acquire shares, you gain decision-making power proportionate to your shareholding. Therefore, there are often cases where companies are taken away from investors who made wrong investments.
Startup founders are most worried about this aspect when receiving investments.
“I will invest but will not intervene in management at all.”
I don’t even have the ability to manage a field that I had no knowledge of from the beginning.
Let the managers manage on their own, and we’ll just reap the benefits of growth.
“Well then, good luck.”
After ending our brief meeting, Taekgyu and I got into the car.
We have booked a room at a 5-star hotel on Yeongjong Island and reserved a meeting room for the investment meeting.
This is the real beginning now.
