Chapter 10: The Allocation of Shares Is a Major Issue

When the topic of equity distribution came up, Li Fu and the others couldn't help but frown. Equity allocation was no trivial matter—it was an issue of utmost importance, especially for a newly formed startup team. Whether the shares were distributed fairly would be a crucial factor in their future.

If the allocation was reasonable and everyone was satisfied, there would be no cause for resentment or division, and the team could unite more closely, unleashing even greater potential. However, if the shares were distributed unfairly, disputes over interests would inevitably arise. This was particularly true as the business grew larger and more successful, and the interests at stake became increasingly immense. At that point, even a small share at the beginning could become worth a fortune, deepening conflicts and often leading a thriving company down the path to decline.

It would be one thing if only the company suffered, but what was even more disheartening was that former close partners—often good friends, brothers, or relatives—could turn into bitter enemies over equity issues. Such stories were all too common, especially once questions of control arose after a company's growth.

At the outset, few anticipate how far a venture may go, and among our people, this issue tends to be overlooked. Some partners pay little heed to shares at first, only to realize later, when the company has flourished, that their own interests differ greatly from those of their colleagues. Inevitably, this breeds conflict.

"Equity is a matter of great importance. I think we ought to resolve this now, so as to avoid any future disputes or misunderstandings. Whether we start a business or not isn't as important as preserving the bonds between us brothers," Zhao Dongye said first. He was thoughtful and farsighted, and the others nodded in agreement.

"Originally, we thought if we pooled a few hundred thousand, splitting the shares would be easier and more even. But now, with Qian Jin investing five million, the three of us simply can't match that amount. No matter how we divide the shares, Qian Jin, you're bound to end up at a disadvantage," Zhao Dongye said after a moment's deliberation, turning to Qian Jin.

"Haha, come now, we're all friends here. Besides, how am I at a disadvantage? In terms of technology, Li Fu is the one making things happen. The ideas are his as well. Later, management will best suit you, Zhao Dongye, and for promotion and planning, there's no one better than Wang Wanli. As for me, I'm just a playboy," Qian Jin laughed. "All I can offer is some cash. When it comes to capital, we can't look only at the money invested. Otherwise, Li Fu would have nothing at all. Without his skills and ideas, we couldn't accomplish a thing."

Despite his usual carefree demeanor, Qian Jin was shrewd in his dealings with people. He knew his roommates' circumstances—especially that Li Fu simply couldn't match his investment—so he purposely emphasized that intangible assets like skills and creativity were just as valuable as capital.

From this alone, it was clear that Qian Jin was far from a feckless rich kid. He was smart, discerning, and knew when to advance or yield. If he were the sort who insisted on dominating the shares just because he invested the most, the others would never have agreed to join him. More funding certainly made a venture easier, but a lack of it didn't make success impossible.

Li Fu, in particular, had no money, contributing only his skills and ideas—a form of investment difficult to evaluate. Technical contributions could be estimated, but creativity was even harder to measure. Sometimes a single idea could revolutionize the entire enterprise, but once shared, its value could vanish in an instant. Frankly, Qian Jin could have started the venture himself, hiring a game development team with his wealth, but he chose not to.

Clearly, Qian Jin was a person of high emotional intelligence, not a petty man. Though willful at times due to his wealth, he was fundamentally easy-going and knew how to conduct himself. He understood his roommates' situations, as well as the true contributors within the team. Thus, he wisely chose to highlight Li Fu's technical and creative contributions, Zhao Dongye's management abilities, and Wang Wanli's strengths in promotion and planning.

At the same time, he downplayed his own role, calling himself a mere playboy with nothing but cash, so as not to put his friends in a difficult position during the discussion.

Qian Jin’s words brought a smile to everyone’s face, and they felt reassured that there would be no bitter disputes over equity. After all, Qian Jin, the principal investor, had already made such a generous concession, so no one else would go overboard.

"Here's what I think," Zhao Dongye said after some thought. "Let's each state our investments and the share we hope for, then we can negotiate. Investment includes not just capital, but also skills, ideas, management, and so forth."

"I'll start, since it was my idea," Zhao Dongye said confidently. "I'm putting in two hundred thousand, and will handle the company's overall operations and management. I hope to hold twenty percent of the shares."

Wang Wanli was next. "I'm investing a hundred thousand, and will handle planning, promotion, and marketing. Ten percent will suffice for me." He was realistic—he had neither the technical skills nor much capital, but he was a veteran gamer with some insight into the industry.

"Haha, since everyone's so modest, I'll be shameless. I'm investing five million. Thirty percent is enough for me," Qian Jin laughed, scratching his head.

With Zhao Dongye at twenty percent, Wang Wanli at ten, and Qian Jin at thirty, that made sixty percent in total, leaving forty percent. All three turned to look at Li Fu.

"If you're all being this modest, how can I take forty percent when I haven't invested a cent? All I have is some technical knowledge and initiative. I'll take twenty percent," Li Fu said with a smile, shaking his head. Given the total investment now stood at 5.3 million, taking forty percent would mean he instantly held assets worth over two million—a prospect he found unsettling.

"Twenty percent is too little; thirty is more reasonable," Zhao Dongye said after a pause. "After all, technical development is crucial, and without your ideas, we wouldn’t have this venture at all. Thirty percent isn't excessive." Qian Jin and Wang Wanli nodded in agreement.

"Indeed, that's too little," Qian Jin added. "The technology alone is worth more than that, not to mention the ideas."

"Agreed," Wang Wanli said. "You should have at least thirty percent. None of us knows the technical side, and that's the foundation of everything."

"But really, twenty percent is enough," Li Fu replied, trying to decline politely. "I've already valued my skills highly."

"Li Fu gets thirty percent. That's final. The remaining ten percent we can set aside as future incentives for employees. For now, we’ll use this allocation, and as the company grows, we can reward our most valuable contributors," Zhao Dongye said with a wave, decisively settling the matter. That he was already thinking ahead to employee incentives showed his remarkable foresight and talent.

"I think this distribution is perfectly fair," Wang Wanli said, smiling in support.

"I have no objections either. In fact, I’m still coming out ahead, getting to make money alongside the rest of you without any special skills," Qian Jin laughed.

"I do have an objection—my share is too high," Li Fu protested, shaking his head. "Let’s be businesslike. We should learn from Western and Japanese practices—even brothers keep accounts clear."

"Objection overruled," Zhao Dongye replied with a smile. "There are four of us, three in favor, one against. Majority rules—the equity allocation is passed."

"Exactly," Qian Jin grinned. "Thirty percent is hardly too much, Li Fu. You'll have your hands full with all the technical work—development, operations, and maintenance all depend on you. Even thirty percent might not be enough."

"Right, right, thirty percent is fair—let’s not waste time on this," Wang Wanli said.

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