My plan is pretty straightforward. Feel free to chip in with your opinons:
The goal is to allow the 170 million US-based TikTok users to buy the company using WeFunder, StartEngine, and Republic. This means unaccredited investors who use TikTok. (like you our me) could actually purchase the company. That is if China is willing to sell.
PHASE 1: Requires you to sign this petition. TikTok must be divested by January 19, 2025. There is no going back. As we said in update 1, China is not selling. So by signing and making a ruckus, TikTok users will demand the sale. With enough signatures. By "we" I mean I would start, along with Change.org to ask former CEO Kevin Mayer and California Senator Laphonza Butler to help. Senator Butler confronted President Biden about the prospective lost TikTok jobs and Mr. Mayer served briefly as COO of Bytedance and as TikTok CEO. He has years of experience at Disney and is an advisor.
The goal would be to form a Special Purpose Vehicle (SPV), raise money from the people who signed the petition and hold the money in escrow. We would then ask the investors, who own 60 percent of the company and who stand to lose everything to force China and founder Zhang Yiming to facilitate a "sale".
What's at Stake
According to Reuters 110 Billion in assets as lost in the war on Ukraine as Western investors simply had to walk away. 60% of ByteDance is owned by global institutional investors such as the Carlyle Group, General Atlantic and Susquehanna International Group, while 20% of the firm is owned by Zhang and 20% owned by employees around the world. Three of the company’s five board members are Americans. They will lose to a degree if the ban succeeds.
Then there is reality. How many of the 170 million users would continue to use TikTok with a VPN if a ban is instituted. TikTok is a global company. They sell items globally, selling TikTok to another entity is partially impractical. It would be difficult since the technology is so tightly integrated. China may feel that loss of control means their algorithm can be compromised.
Every single day of this ban, as the rhetoric tightens and everyone postures the investors money is lost.
We believe it would be hard to turn away from the good will of individual TikTok users turn investors offering their money to save the situation.
In order to work and get the billions in valuation an exemption would have to be made by the US government to allow 56,000 individual Reg CF's to be created. A Reg CF is a regulation crowdfund. It is the only vehicle for unaccredited investors to invest in a company. This means that WeFunder, StartEngine, and Republic would all have to create companies with a cap of $5,000,000 with shares starting at $100 to allow US based persons to apply to invest in the SPV that will acquire TikTok. The SPV (that myself and someone like Kevin Mayer would create would then lobby the Chinese and US governments to facilitate the sale.
If we fail the loss would be the cost of the creation of the entities. The majority of funds would go back to the investors. Nothing tired. Nothing gained.
I suggest we called the Special Purpose Vehicle - SaveTikTokUSA SPV LLC, and incorporated in Delaware.
A key component besides getting 110 mililon signatures is getting someone like former TikTok COO Kevin Mayer to sign on to lead the effort. I chose hime because he was the former CEO of TikTok and COO of ByteDance. Frankly anyone that the founder Zhang Yiming likes would be welcome to facilitate this transition. Your signatures are crucial in attracting him and other key figures to the campaign. It will take substantial legal and lobbying talent to get this done by January. I believe Mr. Meyer will be trusted by both US and Chinese stakeholders, would ideally head the company post-IPO. I also recommend California Senator Laphonza Butler, to sign on as an advocate, based on her efforts to help US-based TikTok employees. I think she could be asked to serve in an advisory role on behalf of the TikTok community.
With SaveTikTokUSA SPV LLC created and established, a massive fundraising campaign would then commence. Current top-tier Regulation CF companies like Republic, StartEngine, and WeFunder would be contacted to receive funds to hold in escrow for the TikTok sale. The US government would be approached to allow an exemption for SaveTikTokUSA entity structure under the current conditions. Normally you are allowed to file one REG CF per year, per company for transperancy. I am in GUST Launch Startup school. I graduated from Founder Gym, attended Founder Institute. From those experiences I can attest that currently, there are no current structures to allow individual investors to buy into a company This will be unprecedented and new. It will require your effort and attention to even make it a reality. I believe it can be done.
The SPV is essentially a pass thru vehicle to be composed of 56,000 individual companies. Each individual Regulation CF (or company) would allow for shares starting at $100 to be issued to raise $5,000,000 raise. They would then be combined to form the larger entity which would buy TikTok and convert it into shares.
If approved by the SEC and US government through your petitions (and probably protests); but hopefully goodwill, anyone US citizen could buy shares in the the individual Reg CF with the understanding that it would be converted to TikTok shares upon IPO sale. This would be unprecedented and great for the TikTok user who would be able to invest at the earliest level.
If the sale does not materialize, investors would get their money back minus the fees. Mr. Mayer and myself could engage notable banks like JP Morgan Chase and Morgan Stanley to facilitate the transition and purchase of what ByteDance chooses to give to the SPV.
Despite the value of TikTok, I believe traditional media has underestimated its economic impact, and global influence. TikTok's synergy between creators and commerce is unmatched. Its educational, musical, and e-commerce contributions are substantial. TikTok users are deeply loyal due to the platform's ability to facilitate authentic expression.
PHASE 2: Bytedance sells TikTok USA LLC to its US employees, who form an Employee Stock Ownership Plan (ESOP) for the amount raised by US-based and registered TikTok investors.
It is my prayer and hope is that the government of China would approve of the sale, so that Zhang Yiming (founder of TikTok with 20 percent ownership of ByteDance), and the investor base -Carlyle Group, General Atlantic and Susquehanna International Group and others will consider selling to their former employees, who would then sell to SaveTikTokUSA SPV LLC for the escrowed amount.
This diverges from proposals to sell to major tech companies like Microsoft, which would raise US antitrust concerns and would not have guaranteed outcomes.
A "sold" TikTokUSA would continue to function as normal on the surface with some key changes. TikTok's existing structure, branding, and current algorithm, while user data remains in the US. Bytedance would license technologies where they feel comfortable. But the greatest benefit would be to you the general shareholder and TikTok creator. We can reform TikTok because we would own it. The new US entity could offer better compensation to creators and enhanced privacy controls. The Bytedance/TikTokUSA sharing agreement would allow Zhang Yiming to continue building on his vision of TikTok as global powerhouse - but with goodwill between both countries.
Lastly this would be a celebration of the best parts of capitalism. The Information reported that TikTok is already preparing to fire US based employees in anticipation of a ban. Our plan would allow Chinese employees to benefit from post-sale profits of an IPO because we could have them as apart of the ESOP sturcture. This would ensuring fair compensation for thehard work Chinese employees at Bytedance who have make TikTok a global success. In fact your petition could foster global goodwill and continued technology sharing between TikTokUSA and TikTokWorld in China.
To be real. China might abandon the US market, but preventing US users from accessing the app via VPNs is impractical.
PHASE 3: IPO - US-based employees would sell their ESOP to SaveTikTokUSA SPV LLC, which then files for an IPO.
TikTokUSA Incorporated, (hopefully with Kevin Mayer as president), negotiates technology transfer agreements with Bytedance and meets with CFIUS to address national security concerns as it preps for its pre-IPO roadshow. Upon the IPO, TikTok users become shareholders in the newly formed company. The legal provisions to allow for this one-time event of having 56,000 mini companies wrapped into one entity would expire as it would no longer be necessary.
PHASE 4: Life returns to normal, with everyone having learned a lot.
CODA: Nothing happens without your signature on the petition.
Please share this with your friends and anyone with a TikTok account.