On 28 February 2019, XMUM welcomed the guest speaker for the third speech of the Innovation Talk Series, Prof. Ma Fang, Dean and Founder of Taishan Management School (China). The talk gave XMUM students a captivating insight into how to design the allocation scheme of equity so that a long-term relationship of interest-sharing, destiny-sharing, and profit-sharing could be established among the founders, investors, and core employees.

The speech provided insights on three important questions for any start-ups: Whom do they form a partnership with,how to allocate equity, and what the rules of partnership are.

According to Prof. Ma, “A well-designed equity allocation regime helps companies to retain their top-tier talents, as your team are of the same mind only if all of you are in the same boat.”

He drew on the early experience of Steve Jobs to stress the importance of equity allocation scheme:

“The key lesson we learn from the late Steve Jobs, from being fired from the company he had founded, is: a properly-designed equity allocation scheme is equivalent to a good foundation of a successful start-up. It is the fundamental step for you to gain control of your own company when you introduce new investors.”

He also used example from classic literature to help audience understand what teamwork should be like: “The epic Journey to the West written by Wu Cheng’en in the 16th century depicts a classical example of fantastic teamwork. None of the team members are perfect, but they have formed a relationship of mutual appreciation and interdependence.”

Professor Ma received a round of applause after his inspiring lecture.

Prior to the talk, six groups of students consulted Prof. Ma on how to improve the quality of their projects for the 5th China College Students “Internet+” Innovation and Entrepreneur Competition. Prof. Ma kindly offered helpful advice to the students:

“Use quantitative assessment to show the attractiveness, volume, and value of the market from an investor’s standpoint.”

“When deciding on the product mix and customer segments, it’s better to go for the depth than for the breadth.”

Second-year student Zhang Shurong from the School of Energy and Chemical Engineering said after the consultation:

“Prof. Ma Fang pointed out the weakness of our project and gave us suggestions for improvement. We learnt from him the importance of choosing the right partners.”

Second-year Finance student, Wong Qin Lian, also found the coaching session useful:

“Prof. Ma guided us to analyse the rationality and sensibility of our target customers, in order to determine our market niche.”

The Creatito group got one-on-one coaching from Prof. Ma.

Prof. Ma Fang is the Founder and Dean of Taishan Management School (China). He is the author of the book “Equity Strategy” and teaches CEO and financial classes for a number of universities. Prof. Ma serves as the independent director for many companies and is the consultant to multiple institutions. For years, Prof. Ma has committed himself to the research of business management education, corporate governance, top-management structure design, and equity incentives.

The Innovation Talk Series, organized by Office of Research and Innovation, aims to invite local and international experts to give public talks and coaching sessions to XMUM students.