Chapter 54: Are You Talking to Me About Fairness?

“Mr. Lu, do you perhaps have a better plan?” Dai Wei’s tone was sincere, his admiration genuine, and his way of addressing Lu Liang shifted repeatedly.

“You’re short on funds—substantial funds,” Lu Liang said with a smile, as if stating the obvious.

“Mr. Lu, please give us ten minutes; we need to discuss this,” Dai Wei replied.

Dai Wei understood the implication. Offering just 10% equity in financing wouldn’t sway Lu Liang—they needed to offer more.

Lu Liang smiled faintly. Dai whispered a few words to his classmates, and they moved toward the reception room to confer.

Liang Juntao, beaming, approached Lu Liang and offered him a cigarette. “Mr. Lu, where are you currently employed?”

He had checked Tianxing Capital, which had registered just last week with a pledged capital of six million yuan and had invested five million in a film.

He had never heard of Lu Liang before and wondered how he had received an invitation from Golden Edge.

“Partnering with President Meng from Kunqian Trading on some small ventures,” Lu Liang said, revealing Meng’s backing. Since he was unknown and even if wealthy, others might question the source of his funds.

“So you’re a friend of President Meng? I’ve been close with him for years, so we’re all friends now,” Liang Juntao said, suddenly understanding. He didn’t press further; if Lu Liang was indeed Meng Changkun’s friend, everything made sense.

He recalled that Tianxing Capital’s registered address was in Yongfeng Building, the same as Kunqian Trading.

“Teacher Liang, has someone told you to look after this Dai student?” Lu Liang suddenly asked, noticing Liang Juntao’s unusual attitude toward Dai Wei—not like a teacher toward an outsider.

Liang Juntao gave an ambiguous reply with a smile. “Mr. Lu, no need to take it personally; business is business.”

Lu Liang nodded. They smoked casually, chatting idly until Dai Wei and his partners finished their discussion.

Dai Wei approached and said, “Mr. Lu, we’re willing to offer 20% equity for financing.”

“One million still isn’t enough,” Lu Liang smiled wryly, dropping all pretenses and stating his terms clearly.

He could provide one million in financing plus a two-year interest-free loan of two million yuan.

But the two million loan came with conditions.

“Mr. Lu, please go ahead,” Dai Wei replied calmly.

During their talks, someone had suggested a new approach: increasing equity for financing might just be a stepping stone.

According to Lu Liang, unless they sold the entire company, they couldn’t secure enough funds.

So this scenario was anticipated.

“The average daily active users in the past seven days is 8,000. In two months, I want to see 80,000; in three months, 150,000. This is the condition for lending you two million,” Lu Liang explained.

Listening to him, Dai Wei realized this was an additional performance-based agreement.

A gamble, naturally, had winners and losers.

The two million interest-free loan was the reward for winning; Dai Wei wanted to know the penalty for losing.

“If after two months you don’t reach 80,000 daily active users, the one million is yours, but I will receive an additional 20% equity.”

“If after three months you don’t reach 150,000, the two million is yours, but I will gain a total of 40% equity.”

A tiered performance contract.

If they failed Lu Liang’s targets, factoring in the initial financing, he would hold 60% equity, replacing Dai Wei as the largest shareholder of ofo.

After all, even with efforts, ofo’s valuation couldn’t remain stagnant at five million after three months.

Losing wasn’t a big deal—it was just a loan of two million, a minor matter for him.

“This isn’t fair,” someone nearby protested indignantly. They could develop steadily without signing such an absurd agreement.

“Yu Xin, that’s you, right?” Lu Liang recalled his name and smiled. “You need money, I have money, and you want to talk fairness with me?”

Fairness never exists between investors and entrepreneurs. To get money, you pay a price.

Lu Liang considered himself kindhearted—only asking for equity, not cash.

Some investors demanded full refunds with interest if targets weren’t met.

This was why many startups ended up heavily in debt.

Initially, they had no assets or steady income; banks wouldn’t lend.

Yu Xin’s expression darkened. He wanted to retort but lacked a valid argument.

They had the right to refuse, but turning around, Yu Xin saw Dai Wei calm and unperturbed.

Yu Xin was shocked. “Dawei, you’re not agreeing to this, are you?”

Dai Wei looked up, resolute. “Mr. Lu, please give me some more time—I can convince them.”

Lu Liang nodded, a flicker of surprise in his eyes.

Liang Juntao, smiling broadly, reentered. “Mr. Lu, Dai is quite impressive, isn’t he?”

“Very determined,” Lu Liang praised.

Though they said they needed to discuss, it was essentially an agreement.

If there had been dissent, Dai Wei could have called a vote to enforce the decision.

He held 70% equity and was general manager.

This was one reason Lu Liang favored this team—only one voice inside.

He had met other teams where no one held over 50%, and the founders all split shares evenly, like playing pretend.

A recipe for failure.

After about fifteen minutes, the ofo team concluded their discussion.

Dai Wei responded, agreeing to the supplementary agreement and inquiring when they could sign the contract and receive funds.

He had no choice but to agree, as Mobike’s Hu Weiwei and Yiche’s Li Bing were formidable competitors.

ofo, a grassroots startup without backing from big players in the car-sharing circle, had to bet on itself to secure this three million yuan development fund.

“Come to the office Monday to sign the contract; once it takes effect, funds will be transferred immediately.”

Hearing this, Liang Juntao quickly suggested, “Mr. Lu, why not sign a letter of intent first?”

As head of this year’s startup exhibition, he was obliged to protect both parties’ interests.

Verbal promises meant little; a written letter of intent with a penalty clause was best.

“Sure,” Lu Liang smiled, agreeing.

Dai Wei nodded hastily.

“Go ahead and discuss; I’ll prepare the contract.”

Liang Juntao, glowing with satisfaction, left the reception room to contact a law faculty member.

The university had hosted startup exhibitions for many years and was well prepared in every respect.

Soon he returned with three copies of the letter of intent, clear and comprehensible even to laypeople.

The financing agreement and supplementary agreement’s letter of intent stipulated that any breach would require the offending party to pay 30% penalty damages.

One copy for each party, with the university holding one. If either side defaulted, the university would act as witness.

“Mr. Lu, I have one more question. Could you clarify something for me?” Dai Wei asked, still puzzled about treating ofo as a financial product.

“Financial products are defined by leverage,” Lu Liang said with a faint smile.

“Loans are a form of leverage, and so is delaying payments.”

Once the contract was signed, they were on the same side. He didn’t mind sharing some insights with Dai Wei.

The biggest problem facing ofo’s founders was their inability to flexibly utilize their current assets.

In his view, companies like this shouldn’t worry about braking once they start growing.

They should find every means to raise money and develop, sprinting nonstop.

As long as they don’t stop, all roads lead to Rome.

Dai Wei was struck. One insightful conversation was worth more than ten years of study, as if a new world had opened before him.

Yet he couldn’t help but ask, “What if they stop?”

Lu Liang smiled silently, then turned to Liang Juntao. “Teacher Liang, where’s the startup team from the International Studies University? I think I recognize someone.”

If they reached Rome, someone would take over.

If they didn’t, it would be ruin.

“The International Studies University’s team is in Zone B. Mr. Lu, I’ll take you there.”

“No trouble at all, Teacher Liang.”

Watching them leave, Yu Xin couldn’t help but say, “Dawei, you’re bargaining with a tiger’s skin. You have 8,000 daily active users now and want to hit 80,000 in two months?”

Hearing Lu Liang’s words, the capitalist in the textbook suddenly seemed real.

“That was impossible before, but now it’s possible,” Dai Wei’s eyes gleamed.

Lu Liang’s theory of financial leverage inspired a new approach.

With proper strategy, reaching 80,000 daily active users in two months and 150,000 in three was achievable.

The hardest part was the start; with a good beginning, daily active users would snowball and grow ever larger.