The investor snatched my company.
Smart investors are no longer satisfied with the returns from their investments.
What they want is no longer just a few percentage points of profit sharing, but your company itself - its core technology, market share, team potential, and even the untapped value of your data.
Li Ming is the founder of a smart home company. He became famous overnight for a smart central control device. To expand rapidly, he accepted an investment from a capital firm in the Series B financing and signed a strict gambling agreement: he promised an annual compound growth rate of no less than 50% within three years. Otherwise, he would have to transfer 20% of his equity to the investor for free and accept the investor's arrangement to restructure the board of directors.
Due to intensifying industry competition and supply chain issues, the company failed to meet the gambling target. Instead of exercising the option to obtain equity compensation, the capital firm sued Li Ming directly on the grounds that "the founder concealed business risks and was suspected of financial misrepresentation", asking to freeze all his shares and take over the company's operation temporarily.
During the lawsuit, the capital firm used its influence on the board of directors to quickly replace the financial director and the operation manager, and introduced a CEO candidate recommended by it on the grounds of "stabilizing investors' confidence".
Although Li Ming fought hard, due to the vague provisions on corporate governance in the gambling agreement, the court finally supported some of the capital firm's claims and allowed it to take over the company temporarily until the lawsuit ended.
During this period, the capital firm further diluted Li Ming's equity through related - party transactions and debt means, and finally completely controlled the company's direction. Although Li Ming retained some equity, he was completely out of the game.
Similar scenarios are frequently playing out in the industry.
There was a time when entrepreneurs and investors were groups that mutually achieved and supported each other. But now, more and more investors want to obtain control of the company through lawsuits.
The game between entrepreneurs and investors is like a high - stakes gamble: entrepreneurs bet their dreams and time, while investors bet their funds and resources. Entrepreneurs promise performance growth, and investors promise follow - up support. The two sides tug back and forth between numbers and terms, as if the value of the enterprise is just a set of quantifiable financial indicators.
Capital's focus is shifting from the "gambling table" to the "chessboard". Every move is a preparation for a larger layout: controlling shares, mergers and acquisitions, integration, and exit.
Entrepreneurs suddenly find that the promises and terms they once relied on have become the "Trojan horse" for investors to fully penetrate the company.
Investors Step In to Seize Listed Companies
A hidden war for corporate control is quietly unfolding.
The traditional gambling agreement has not yet exited the historical stage, but a more fierce attack has arrived - investors are no longer satisfied with gambling compensation, but are directly aiming at the core control of the company.
According to Li Ming, the company was in urgent need of funds during the expansion bottleneck period. After introducing the capital, it not only brought a large amount of funds, but also "advanced management concepts" and "rich industry resources". The two sides hit it off, and Li Ming regarded the investor as a trustworthy partner and mentor.
Later, when the gambling requirements were not met, the capital side began to question Li Ming's strategy: they thought that Li Ming was too focused on technology R & D and ignored short - term profits, and criticized his management style for not being "aggressive" enough. During this period, they continuously inserted trusted executives into key positions.
At a regular board meeting, the capital side launched an attack and demanded a vote to remove Li Ming from his positions as chairman and CEO on the grounds of "poor performance" and "management chaos".
In this way, Li Ming was kicked out of the company he founded in the shortest possible time. Although he made a sum of money through his shares, he also lost his lifelong dream and hard work.
In addition, in August 2025, well - known listed company Jinkai Co., Ltd. issued an announcement that its controlling shareholder, Shenzhen Jinkai Venture Capital Co., Ltd., was sued by the Shenzhen Qianhai Branch of Bohai Bank Co., Ltd., with the involved amount reaching up to 67.85 million yuan.
According to the announcement, 501 million shares of the company held by Jinkai Venture Capital and its concerted action parties have been judicially frozen, accounting for 99.72% of the shares they hold and 34.52% of the company's total share capital.
Once the judicial authorities rule in favor of the creditor's request and enforce it, these shares may face judicial disposal, which may lead to a change in corporate control. This means that a listed company with a considerable market value may completely change its owner due to the debt problem of its controlling shareholder.
The struggle for corporate control is no longer limited to traditional hostile takeovers or market games, but presents a more complex picture.
A startup company mastering new solid - state battery technology, whose founder Zhang Rui holds the key technology patent.
To expand the production line, he introduced an industrial capital investment. The latter invested 1 billion yuan at a high valuation but required the signing of extremely complex terms: not only including performance gambling, but also stipulating that if Zhang Rui leaves the company in the future, his patent must be transferred to the company (i.e., the company controlled by the investor) at a "fair price".
Later, due to a dispute over the technical route, Zhang Rui had a fierce conflict with the CTO sent by the capital side. Immediately afterwards, the board meeting was convened on the grounds of "poor management", and Zhang Rui was forcibly removed from his position as chairman, leaving him only the nominal position of "Chief Scientist". Zhang Rui tried to resist but was sued by the other side on the grounds of "violating the non - competition and intellectual property agreement".
According to the evidence presented by the capital side, the original agreement did stipulate that although Zhang Rui held the patent personally, the company had the exclusive license right, and once Zhang Rui left the company, the company could compulsorily acquire the patent.
Although the technology was Zhang Rui's painstaking effort, the capital had deeply bound him to the company through the clause design. Finally, under the pressure of the lawsuit, Zhang Rui was forced to sell the patent to the company at a price lower than the market price and completely withdrew. The group smoothly took over the technology and production line and integrated them into its own industrial layout.
In the game between capital and industry, entrepreneurs often fall into the dilemma of "not being able to raise funds without signing a gambling agreement, and becoming a'slave' to capital after signing it". Capital and industry should have a symbiotic rather than a parasitic relationship, but in reality, this ideal state is often difficult to achieve.
Transfer to the Real Industry through Litigation?
In the game of the capital market, the phenomenon of investors seizing control of listed companies through litigation means is increasing.
As the difficulty of fundraising in the primary market intensifies and the pressure to exit increases, more and more investment institutions are no longer satisfied with traditional financial investment returns, but hope to seek a more stable and long - term development path by directly controlling real - world enterprises. Litigation has become an important tool for them to achieve this goal.
The global venture capital industry is facing the most severe fundraising winter in seven years. Data shows that in the twelve months up to June 2025, global private equity groups only raised 592 billion US dollars, the lowest level in seven years, a figure nearly one - third lower than the record level in 2021.
The high - interest - rate environment and the slowdown in trading activities have made it impossible for fund companies to smoothly sell their old investments worth trillions of dollars, and investors' frustration is increasing. The root cause of the fundraising dilemma lies in the poor exit channels. Last year, private equity funds only returned 11% of the industry's assets to investors, the lowest level since 2009.
Against this background, the traditional venture capital model is facing unprecedented challenges. The once - smooth "raising, investing, managing, and exiting" cycle has been broken, and investors are caught in a dilemma of "not knowing whether to invest or not".
Especially since 2024, domestic venture capital has encountered great challenges in fundraising, investment, and exit, and the exit problem is particularly prominent, leaving a large amount of funds trapped in projects and unable to be realized. Even some well - known VC partners have chosen to abandon the title of "partner" and instead engage in the real industry or join startup companies.
Facing such a dilemma, investors' strategies have undergone obvious changes - from simple financial investment to seeking control of the real industry. Compared with the uncertainty of the traditional venture capital model, directly controlling real - world enterprises can bring more stability and long - term value.
Especially when the controlling shareholder of a listed company has debt problems, investors often seize the opportunity to fight for control through litigation means. The case of Jinkai Co., Ltd. is very typical. Its controlling shareholder was sued due to a 67.85 - million - yuan loan contract dispute, resulting in 99.72% of its shares being judicially frozen, directly threatening the stability of the listed company's control.
This is a strategic "seeking change through litigation" by investors.
Some investors may have a completely different judgment on the actual value and operational potential of the company from the founder during the long - term process of accompanying the enterprise.
They may think that the company's current difficulties are not the problem of the business model itself, but rather due to the ability bottleneck or strategic misjudgment of the founder team. When communication is ineffective and internal changes cannot be promoted, initiating a lawsuit by exercising the repurchase right or other terms becomes a means for them to seize corporate control, and then "operate the company themselves" or resell the company to a more suitable buyer in their opinion.
This step means that their role has changed from financial investors to industrial operators. Their purpose is no longer just to recover the investment, but to complete the transformation from "investor" to "industrialist" by directly controlling high - quality assets, and find a new way out for themselves in the cold winter of capital.
Choosing litigation as a means to fight for control is also because it is a relatively efficient and powerful way. Through the judicial channel, investors can quickly freeze relevant shares and avoid the uncertainty in the process of control transfer.
At the same time, litigation can exert great pressure on the other party and create favorable conditions for negotiation. For example, in the struggle for control of ST Lutong, the company directly sued the largest shareholder, asking to restrict the voting rights of its illegal share - increasing and claim 2.5 million yuan in compensation for its "illegal request to reorganize the board of directors" and other behaviors. This intense judicial confrontation reflects the intensification of the struggle for control.
From the perspective of industry characteristics, some emerging industries of strategic significance are particularly likely to become the targets of investors' struggle. Listed companies in fields such as artificial intelligence, chip manufacturing, and new energy not only have core technologies and market positions, but also conform to the national industrial development direction and have long - term investment value.
Investors also face a series of challenges when transforming from simple financial investors to industrial controllers.
Industrial operation requires completely different professional abilities and management experience, which is a big test for investors accustomed to capital operation. Private equity fund managers engaged in the real industry face challenges such as capital liquidity pressure, industry professionalism requirements, and market competition and uncertainty. Industrial projects usually require a large amount of upfront investment, and the capital recovery cycle is long. Different industrial fields have their own professional knowledge and technical requirements, and market competition is also more intense.
Nevertheless, more and more investors still choose this path because, compared with the uncertainty of the traditional venture capital model, controlling the real - world enterprise can better protect their own interests. Especially in the current economic environment, real - world enterprises with stable cash flow and core assets have stronger anti - risk abilities and can provide more sustainable returns for investors.
The company painstakingly created by entrepreneurs has gradually become a chess piece in the capital game. The two sides are competing to see who has more chips in their hands.
From the Honeymoon Period to the Deep Water Zone
It is undeniable that the relationship between investors and founders is getting more and more tense. Although we have heard many stories of mutual support and achievement in the past, today, this honeymoon - like relationship is gradually turning into a more complex situation.
Lawsuits are often heard of. From the earliest cases of Luo Yonghao and Zheng Gang to Zhu Xiaohu and Zhang Yutong, there are more and more such cases.
When one institution initiates a lawsuit, it often triggers other institutions to follow suit, resulting in a group effect of "litigation run".
The，result is often that many enterprises cannot maintain normal operations in multiple rounds of lawsuits and may even go bankrupt. This means that even if an institution wins the lawsuit, it is very likely not to get the repayment.
Behind these lawsuits, it is not easy to simply judge right or wrong on the surface. When we really enter the inner worlds of investors and founders, we often find that the logics and positions held by both sides are reasonable in their own contexts.
For investors, what they invest is not only funds, but also a precise calculation of future returns.
They often face pressure from limited partners (LPs) of the fund and need to achieve exit and returns within a specific period. Once the market environment changes and the enterprise's growth fails to meet expectations, that precise calculation is likely to go wrong. At this time, intervening or even replacing people is not out of malice, but more like a stop - loss strategy.
Especially under the current absolute dominance of state - owned capital, new requirements are put forward for the venture capital industry. State - owned LPs need a lawsuit to divide responsibilities, which makes general partners (GPs) more sensitive to wrong investments.
As a partner of an institution said: "We invest in enterprises, but more importantly, in people. If people make continuous wrong judgments, we have the right to start the risk - control procedure." And risk - control often means using the rights already agreed in the agreement - board seats, veto rights, and even the mandatory repurchase clause. From their perspective, this is not betrayal, but fulfilling the contract.
But from the founder's perspective, the enterprise is often not just a business, but more like a child they have raised with their own hands.
From zero to one, from nothing to something, every decision embodies a great deal of painstaking effort and belief. When investors demand to adjust the direction, replace the team, or even promote acquisition or being acquired in the name of "rational decision - making", what founders feel is not only a strategic difference, but also an emotional tear.
A founder who has experienced being "forced out" by investors said with a bitter smile: "They can say it's just business, but I can't be so calm. The company is my life."
This fundamental difference in position is usually covered up when the enterprise is developing smoothly. The two sides drink and chat, call each other brothers, and jointly enjoy the dividends of growth.
But once the trend passes and growth stagnates, the contradictions buried in the institutional design will surface. Investors hope to control risks and preserve assets, while founders hope to stick to their vision and make a comeback.
At this time, those clauses that were easily signed before - such as gambling agreements, repurchase rights, and veto rights - are no longer just legal words on paper, but have become sharp blades in the real world.
What really makes the conflict go to the extreme is often not a single mistake of one side, but the failure of the communication mechanism and the complete collapse of trust.
A senior venture capital lawyer analyzed: "Most investment agreements leave enough room for both sides to negotiate, but once one side starts to take confrontational measures - such as forcibly checking accounts, inciting internal strife, or putting pressure through public opinion - it basically means that the negotiation table has been overturned, and all that is left is a legal battle."
There are also some more realistic dilemmas between law and emotion. For example, what should be done when investors demand to enforce the repurchase clause and the founder is unable to pay the huge repurchase amount?
Or when the enterprise is still on the verge of survival and the founder starts a new business, does this constitute an infringement of the interests of old shareholders? These questions often have no standard answers and can only be difficultly weighed in specific situations.
In this series of disputes, there is also reflection and progress. In recent years, more and more professional investment institutions have begun to design more flexible exit mechanisms in agreements and pay more attention to post - investment communication and psychological expectation management.
Some founders have also gradually realized that taking investment is not just about getting money, but also about choosing a long - term cooperation partner. They need to rationally evaluate whether the values of both sides are compatible at the beginning of the negotiation.
Ultimately, investment is a cooperation based on trust. It starts with the enthusiasm of a common dream but must withstand the cold test of interests and risks.
Both investors and founders have to make choices again and again between idealism and realism, and between short - term returns and long - term values. Those lawsuits are just the most intense and helpless outcome of these choices.
As an entrepreneur who started a new business after reconciling from a conflict said: