Startup Legal Talks (2)
Li Ziqi's brilliance and loneliness, equity is the foundation of the company, Dilireba, Zhao Wei, Zheng Shuang, Yang Mi, Mao Buyi's equity has greatly bottomed out!
More dry stuff, less wordy, and welcome to startup law. We-media channels are a common way of starting a business around us. If you want to talk about the big guy in the media, I'm afraid you can't get around Li Ziqi, who is the most subscribed in the Chinese channel. But everyone must have heard the news of Li Ziqi's video breaking in July in July, and even Li Ziqi himself posted on Weibo angrily criticizing capital. Anyone with discernment knows that she has encountered a dispute over equity. What kind of magical thing is equity, which can make a little-known country girl become popular overnight, and make a big V with millions of fans suddenly have nothing?
1. Li Ziqi's company equity structure
There are so many companies related to the concept of Li Ziqi, such as Guangxi Xingba Food, Guangxi Jiaxu Food, these are the manufacturers of Li Ziqi snail powder. These companies are very successful, and they are exported to overseas and famous all over the world. For example, in Chinese supermarkets in the United States, Li Ziqi's snail powder is placed in the most conspicuous place as soon as you enter the door. But this is not the point. In such a large number of faulty and complicated equity relationships, the most important thing to look at is two companies, Hangzhou Weinian Brand Management Co., Ltd. and Sichuan Ziqi Culture Communication Co., Ltd.
So what is the relationship between the two? Let's take a look at this simplified diagram. Hangzhou Weinian and Li Ziqi (formerly Li Jiajia) themselves hold 51% and 49% of the shares in Sichuan Ziqi Cultural Communication Co., Ltd. respectively.
Let’s briefly talk about what happened to this Hangzhou Wei Nian. There are piles of companies related to Hangzhou Weinian, each holding 35% of the shares, but the main ones are Hangzhou Weinian Xingyao, Hangzhou Weinian Xingchen, and Hangzhou Weinian Xingchen. These "Weinian" companies in the Wei Nian Sea Area. And the actual controllers behind these Wei Nian companies are investor Liu Tongming.
Then we will go back to Sichuan Ziqi Culture Communication Co., Ltd. Some people will say that 49% is not a lot, and basically they can compete with Hangzhou Weinian. We look at whether this 49% is too much or too little from two perspectives.
2. Think 49% of the shares are too small
First of all, I would like to say a point of view, that is, that 49% is too little. If you think that the most important thing in Sichuan Ziqi Culture Communication Co., Ltd. is Li Ziqi, then 49% is indeed too little, not even a decision-making power. There can only be a one-vote veto on a major matter at most. Because under China's company law, there are many important matters that need to be passed by 2/3 votes, so if Li Ziqi disagrees, Hangzhou Wei Nian can't reach 2/3, it is indeed impossible to pass, but most of the matters All of which can be decided by Hangzhou Wei Nian. So, if you think that Li Ziqi is the key person in this company, then 49% is indeed less.
Friends who hold this view, we can also cite many examples.
Like Dilireba's Shanghai Wenyu Cultural Media Center, that is Dilireba Dilimurati's 100% stake.
Wu Yifan owns 99.99% of Xiamen Yihe Yunqi Culture Media Partnership.
Looking at Zhao Wei, who can be both an actor and a director, she has a lot of companies, not to mention her Zhao Zhao Film and Television Culture Studio, which holds 100% of the shares. But there are also few. In addition, a company she mainly uses is Hebao Entertainment. Among them, Zhao Wei has only 4.5% of the shares, and most of them are investors.
3. Think 49% of the shares are too small
Another point of view is that this 49% is too much. There is actually some truth to this statement, because although the majority of the audience sees you, a celebrity in front of the stage, lighting and sound effects photography, costumes and makeup props, and the investors behind all of this, it is very important.
Friends who hold this view, we can also find many such similar examples. For example, Yang Mi's Tibet Jiaxing Quartet. Among them, Yang Mi is only 18.75%.
There is also Mao Buyi’s (formerly known as Wang Weijia) superstar Buyi Studio, which is Wo Haw Haw Entertainment and Culture Co., Ltd., of which Mao Buyi has no shares at all.
4. 49% are more or less
In fact, to say that 49% of Li Ziqi's are more or less, I can't give a definite answer, but what is certain is that it is either more or less. This is not nonsense, but to say that there is definitely a problem with this equity allocation. It is possible to increase or decrease the equity structure of the company, but the current 51/49 allocation is not acceptable.
About the harm of equity sharing, friends who have read the first lecture of my US company law 20 should all know, where we talked about 50% each for two people, 33% each for three people, and 25% for each of four people. % is the worst way to allocate equity. After the broadcast of the equity-sharing episode, many viewers asked me if the 51/49 is not enough, why should I use the equity distribution method that is so different as you said.
For this question, I can give a very clear answer for companies that need to conduct multiple rounds of venture capital, that is, the 51/49 structure will be diluted to 45.9% as long as it enters a 10% investor shareholder in the next round And 44.1%, no one can have the final say. Instead, 10% of the people fall to whoever can take the lead, resulting in 10% of the minority shareholders becoming the actual controllers of the company.
As for Li Ziqi's model, she herself accounts for 49%, and Hangzhou Weinian accounts for 51%. The next investors will invest in Hangzhou Weinian, so it does not sound like 10% of the minority shareholders will come out to disrupt the situation. But 51/49 is still a bad construction. Because such a shareholding structure can be formed, it means that neither of the two people submits to the other, and such an expedient distribution is formed in desperation. So it is conceivable that in the daily process of company operation and cooperation, it is inevitable that the two people will fight against each other over various miscellaneous matters. They may not say anything on their lips, but they have long held grudges in their hearts. A scene is a matter of time.
Let's talk about a negative teaching material, Zheng Shuang, we don't need to say more about her personal behavior, no matter how good the equity structure is, something will happen sooner or later. But looking at her company equity, I believe she is still very conceptual in this regard. Needless to say, the Shanghai Zheng Shuang Studio under her own name is 100% owned.
Just as Whale Valley, which she founded with Zhang Heng, also has a relatively stable 68% and 32% equity, and Whale Valley, which is held by Whale Valley, also has a 72% ratio.
5. How should the company's equity be divided?
I don't want today's video to become a celebrity equity inventory, but like I tell you, the celebrities we talked about today include tax evasion, raping of young girls, surrogacy and abandonment, and celebrities commit crimes. And we have heard too much about the ruined future. Why is there no problem because of the equity struggle? Or to put it another way, those artists with bad personal conduct have also been mixed for so many years, and Li Ziqi is farming well, with a 51/49 shareholding structure, isn't it a pity that her career has stopped because of this?
Some people may say that they also need to work hard for the company, so who wants to be the shareholder with a small proportion? But what I want to tell you is that if you can't form such a tacit understanding of who is the master and who is second, then the business of these two people would have started on the wrong side. If you insist on starting, the day you start is the countdown to failure.
Business is not politics. In politics, it pays attention to checks and balances, and the separation of powers is stronger than one-man hegemony, but with checks and balances comes inefficiency, so we have often never seen a government that is particularly efficient. However, what business needs is efficient output, and it cannot be designed in such a way of equal shares or similar shares.
The shareholding structure is the foundation of a company, and it can be said that it has the same important position as the actual business operation of the company. Some people may think this is very unreasonable, because something as important as the shareholding structure needs to be determined when the company is first established, and at that time, both parties may not know how much each person can contribute to the company. Whether two people can really work well together. But isn't that what life is really like? There are many very important things that we decide when we are not ready for anything. Let’s not talk about the family background, which is a factor that can’t be decided by oneself. Go to college to choose a major, get your first job after graduation, and find someone to marry when you are young. These things that determine our happiness in the next few decades have to be chosen when you are just entering the society, and once you choose, the cost of changing is very huge.
Li Ziqi is undoubtedly a strange woman. She is full of flowers and angry horses, and she uses swords in the world. She pushes Chinese culture overseas without saying a word, so that countless foreign friends will be moved by her and see the beauty of the world. Before she even realized it, she herself was pushed into the abyss step by step by the failed shareholding structure.
The first step in starting a business is choosing a partner. A good entrepreneurial team must have a good equity structure, and don’t let your entrepreneurial idea be ruined by a failed equity structure.
More dry goods, less wordy, here is the law of startups, see you in the next issue.
