DISQUS

Allen YANG · 3 months ago

By the request of Mr. Xiaobing Yin at IDG VC Beijing office, Mr. Jianping Xie, Vice President of IDG VC (hereinafter referred as: IDG VC), met with Mr. Jinwen Sui, President of Ivy eShipment (Beijing), Ltd. (hereinafter referred as: Ivy eShipment)，about the failed protection of business secrets by IDG VC at Conference Room on 5th Floor, PICC Building at No. 68, Xuyuannan Rd., Beijing. The minutes of meeting are as followings：
1. Mr. Jianping Xie on behalf of IDG VC first expressed that IDG VC is serious with complaints from clients. Regardless of investment by IDG VC or not, IDG VC cherishes relationship with clients who present Business Plan and talk with IDG VC before. Mr. Jinwen Sui expressed his gratitude to IDG VC on this point.
2. Mr. Jianping Xie affirmed that if IDG VC has liability, IDG VC will take responsibility whatever the responsibility is, but the conclusion should be made on proof rather than on reasoning. Mr. Jinwen Sui agreed that and pointed out two main faults by IDG VC: (1) We as a venture business highly trust IDG VC. In 2005 introduced by Mr. McGovern，Mr. Jinwen Sui on behalf of Ivy eShipment presented our Business Plan to IDG VC. That means we told our business secrets to IDG VC. As a VC company from US, IDG VC absolutely has the obligation to keep our information in secret. Keeping customers’ business secret is the cornerstone of business ethical standard for IDG VC in VC industry. What happened to us proved that IDG VC broke that ethical standard. Mr. Dongliang Lin, a longtime partner at IDG VC even gave his brother, Mr. Sen Lin, ivy eShipment’s business plan to help Mr. Sen Lin set up companies to compete with Ivy eShipment. Because of this grave fault by IDG VC, Mr. Sen Lin, a brother of Mr. Dongliang Lin, has actively followed and studied Ivy eShipment for four years! Most of our business service models were exemplified in Ivy eShipment’s 2005 version business plan. (2) When Mr. Sen Lin, a brother of Mr. Dongliang Lin, could not figure out the business operation model of Ivy eShipment, Mr. Sen Lin approached Ivy eShipment for business cooperation several times at the beginning of 2007 and in the middle of 2008. Mr. Sen Lin emphasized several times that his company is invested by Mr. Dongliang Lin, Mr. Lei Zhen and Mr. Zhi Tan. Mr. Jinwen Sui repeatedly at several get-togethers (with other people on site) asked Mr. Sen Lin to prove his business relation with Mr. Dongliang Lin as a condition for business cooperation. Then in October of 2009, Mr. Dongliang Lin personally entertained Mr. Jinwen Sui and our Chairman Mr. Edward Hwang to prove his business relation with Mr. Sen Lin. The result certifies that the business cooperation is a trap. The participation of Mr. Dongliang Lin, as a longtime partner at IDG VC, in this process has caused huge loss and harm to Ivy eShipment. The whole event is caused by the disclosure of Ivy eShipment’s business secret by IDG VC. The disclosure of business secret led Mr. Sen Lin to perseveringly seek or steal business secret from Ivy eShipment for 4 years. Mr. Jianping Xie on behalf of IDG VC stated that IDG VC strictly obliges the business ethical standard to keep customer’s business information in secret, and IDG VC’s norm does not allow investment in companies set up by relatives of any IDG employees. Mr. Jinwen Sui presented proof that Mr. Sen Lin involved in several companies invested by IDG VC. We have surveyed several cases before.
3. Mr. Jianping Xie claimed that IDG VC has no association with Huotongda Technology (Beijing), Ltd. and other companies operated by Mr. Sen Lin. IDG VC has no intention to get involvement in the dispute between Mr. Sen Lin and Ivy eShipment. Mr. Jinwen Sui emphasized that IDG VC and Mr. Sen Lin are closely connected
4. Mr. Jianping Xie suggested settling dispute through negotiation, and separating the dispute with IDG VC from that of Huotongda Technology (Beijing), Ltd. Mr. Jinwen Sui also expressed the intention of Ivy eShipment to settle dispute through negotiation. Mr. Jinwen Sui personally believes that it is possible to solve the dispute with IDG VC separately, but Mr. Jinwen Sui needs to make report to the board of Ivy eShipment.
5. Mr. Jianping Xie also recommended that Ivy eShipment should negotiate with Huotongda Technology to settle dispute. Mr. Jianping Xie said that it does not matter to have a competitor in the market due to the big size of the market. Mr. Jinwen Sui agreed with Mr. Jianping Xie on his opinion to settle dispute through negotiation, but Huotongda Technology (Beijing) Ltd. always ‘set fire’ to escalate the dispute when Ivy eShipment wants to cool down. Regarding to the entrance of a competitor for Ivy eShipment, Mr. Jinwen Sui stated that Ivy eshipment can accept competitors through proper competition not improper, illegal, immoral competition. Mr. Jinwen Sui can understand Mr. Jianping Xie’s intention to allow Huotongda Technology (Beijing) Ltd. to continue operation.
6. In the meeting, Mr. Jianping Xie also pointed out that Ivy eShipmeng gave business plan not just to IDG VC, and Mr. Sen Lin also could deny that Mr. Sen Lin once admitted Mr. Dongliang Lin provided Ivy’s business plan to Mr. Sen Lin. If go to court, IDG VC can arrange a lawyer to accompany the case. Mr. Donliang Lin’s personal behavior has noting to do with IDG VC. Mr. Jinwen Sui strongly rejected this point. If IDG VC does not plan take responsibility of the business activities by its partners, there is no need for IDG VC and Ivy eShipment to talk, to look for settlement. Without enough proof, Ivy eShipment would not launch this battle with IDG VC.
7. Mr. Jinwen Sui prepared some documents for Mr. Jianping Xie, but Jianping Xie refused to sign the receipt. Mr. Jianping Xie suggested continuing the document delivery through previous methods (courier, fax, etc.). Mr. Jinwen Sui agreed.
8. Mr. Jianping Xie also talked about the danger of Mr. Jinwen Sui’s too much trust with IDG VC. Mr. Jinwen Sui agreed. As an returned student from US, we generally do not accept investment from domestic VCs. Because of our worry about the confidentiality of our business plan, we also typically do not submit our business plan to domestic VCs. IDG VC is an authentic American venture capital firm and Mr. Patrick McGovern is a successful high prestige. We definitely trust IDG VC without worrying about the ethical standard problem at IDG VC. Mr. Jianping agreed that a lot of entrepreneurs from US have similar thoughts, and these entrepreneurs typically deal with VCs original from US.
9. The two sides finally decided that: Mr. Jianping Xie went back to investigate the story about Ivy eShipment’s submission of business plan and the role played by IDG VC’s Partner, Mr. Dongliang Lin, in this dispute. Mr. Jianping Xie would come back to talk with Mr. Jinwen Sui within one week. Mr. Jinwen Sui also asked Mr. Jianping Xie to relay a piece of message to Mr. Dongliang Lin, the message which Mr. Jinwen Sui is willing to meet with Mr. Dongliang Lin to talk about the dispute with Huotongda Technology (Beijing) Ltd. Mr. Jianping Xie agreed to relay that message to Mr. Dongliang Lin.

Allen YANG · 3 months ago

With the authorization of our board, we hereby formally protest against your IDG VC firm in China for violation of trust, the breach of VC ethical code of your partner and the disclosure of our proprietary information to third party.
1. In 2005, Mr. Wade Wilson, one of our cofounder, contacted Mr. McGovern for our China venture business (Ivy eShipment (Beijing) Ltd.) to look for investment. You relayed our case to Mr. Dongliang Lin in China. Mr. Dongliang Lin arranged Mr. Fei Yang and Mr. Jianguang Li to meet Mr. Chris Sui, one of our cofounder. Mr. Chris Sui submitted our printed version of Business Plan to Mr. Fei Yang and presented our business model to Mr. Fei Yang & Mr. Jianguang Li in the meeting. Unfortunately your firm did not make a decision to invest in our venture (Ivy eShipment (Beijing) Ltd.).
2. In our Business Plan on page 61 “Growth through acquisition” we explain our business strategy of customer acquisition.
3. In 2007 Mr. Sen Lin, a brother of Mr. Dongliang Lin, entered into our industry and set up a web of companies including but not limited to Ace Fit Investment, Huotongda Technology (Beijing) Limited, Huotongbafang Technology (Beijing) Ltd. to compete directly with our China Venture (Ivy eShipment (Beijing) Ltd.). Mr. Sen Lin’s initial business activity was focusing on the acquisition of Modified Pager Users (please check our Business Plan on Page 61, 5.5.2 Service Acquisition of Modified Pager Users).
4. In the early part of 2007, Mr. Sen Lin, on behalf of Mr. Dongliang Lin, contacted Mr. Chris several times to ask for business cooperation. Mr. Chris Sui sent email to Mr. Dongliang Lin to ask for confirmation of his relationship with Mr. Sen Lin. Without response from Mr. Dongliang Lin, Mr. Chris Sui did not go forward with Mr. Sen Lin for business cooperation.
5. Mr. Sen Lin had not done well in the acquisition of Modified Pager Users after one and a half years in business. Then in September 2008, Mr. Sen Lin came back to ask for business cooperation with Mr. Chris Sui. This time Mr. Dongliang Lin entertained Mr. Edward Hwang (our chairman lived in Silicon Valley, USA) and Mr. Chris Sui to confirm his relationship with Mr. Sen Lin and his involvement in Mr. Sen Lin’s business. Under that circumstance, we signed business cooperation agreement (see the attachment, hereinafter referred as “The Agreement”) with Mr. Sen Lin’s company.
6. Under The Agreement, Mr. Sen Lin’s company promised to pay our China venture (Ivy eShipment (Beijing) Ltd.) RMB 2 million to buy services from our China venture with the payment of four installments within one year: on October 5, 2008 half a million RMB, on November 5, 2008 half a million RMB, on March 5, 2009 half a million RMB and on June 5, 2009 half a million RMB. In exchange Mr. Chris Sui would help Mr. Sen Lin’s company launch Risk Management Program for China’s trucking industry. Risk Management Program includes our ID Verification Services, Fidelity product for truck drivers, Truck Database, etc. (Please check our Business Plan on (1)page 46, 4.5 ID Verification, (2)Page 49, 4.6 Truck Database, (3)Page 51, 4.7 Map & Shipping Directory, (4) Page 53,4.9 Insurance Agency Services).
7. After the first payment of half a million RMB by Mr. Sen Lin’s company to our China Venture (Ivy eShipment (Beijing) Ltd.) on October 5, 2008, our China venture helped Mr. Sen Lin’s company launch its Risk Management Program. Mr. Sen Lin also got a detail look of our business operation and strategy. In order to faster execution of the project, we shared our database and our source code with Mr. Sen Lin’s company. But after the first payment and our execution of The Agreement, Mr. Sen Lin broke The Agreement and refused to further pay our China venture (Ivy eShipment (Beijing) Ltd.). Furthermore Mr. Sen Lin seriously violated The Agreement and worked on its own Risk Management Program independently.
8. During the business cooperation, our cofounder Mr. Chris Sui did see Mr. Lin Sen has an original hard copy of our printed Business Plan. Mr. Sui was shocked and asked Mr. Sen Lin whether Mr. Dongliang Lin gave that copy of Business Plan to him. Mr. Sen Lin said yes with smile and asked Mr. Chris Sui not to mention this again.

In summary, we believe IDG VC firm breaks the followings:
1. IDG VC as a VC firm violates our trust in your firm. Even though your firm does not need to sign NDA with us when we present our Business Plan to your firm, as industry rules your firm should keep our information confidential.
2. Mr. Dongliang Li, as a longtime partner at IDG VC firm, took our Business Plan and helped his brother, Mr. Sen Lin, to set up business to compete with our China venture (Ivy eShipment (Beijing) Ltd.) directly. As a partner of IDG VC firm, his action categorically violates ethical standards in VC industry.
3. After the initial failure of Mr. Sen Lin’s business, your partner Mr. Dongliang Lin further helped his company and his brother implement contract fraud to steal business secret from our China venture (Ivy eShipment (Beijing) Ltd.).
Paying close attention on Ivy eShipment (Beijing) Ltd., the goal of IDG VC is not for investment decision on Ivy eShipment (Beijing) Ltd. but for knowledge and business secret from Ivy eShipment (Beijing) Ltd. to build your own business. IDG VC’s behavior has caused huge losses to our China venture (Ivy eShipment (Beijing) Ltd.) and investment of US angel investors. We are asking for a formal response and compensation from IDG VC. We would appreciate if you could let us know the ethic code of IDG VC firm.