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Introduction

Entrepreneurs have always been one of the most dazzling groups in the bright starry sky of business civilisation. With the grandeur of a strategist, they lead the enterprise forward, and with the extraordinary courage of an explorer, they innovate and seek in the business waves, and every decision affects the livelihood of tens of thousands of employees and stirs up the capital market. Zong Qinghou to ‘Wahaha’ empire builder's identity across the field of fast food, Lei Jun more extreme price-performance strategy to subvert the smart manufacturing ecosystem, Liu Qiangdong ‘the right way to success’ business philosophy to lead the e-commerce industry change, He Xiaopeng to technology maniacs to reshape the posture of These entrepreneurs are both the trendsetters of the business wave and the centre of the risk whirlpool. When Zong Qinghou encountered a struggle for control in the Danone joint venture dispute, when Jia Yueting's dream of building a car encountered a broken capital chain in the winter, when Liu Qiangdong was caught in a public opinion storm due to the Minnesota incident, when Li Guoqing fought for control of the enterprise in a dramatic way of ‘grabbing the seal of the public’, when Su Xiangmao was caught in a desperate situation due to a marital dispute and eventually passed away, when Lei Jun encountered cross-border litigation in the jungle of smartphone patents, when He Xiaopeng reshaped the landscape of new energy vehicles with his technological mania, these entrepreneurs are both the fruits of the business tide and the centre of the risk vortex. When Lei Jun encountered transnational litigation in the jungle of smartphone patents, when Xu Jiayin's Evergrande empire triggered a chain reaction due to the debt crisis, and when Wang Jianlin experienced the thrilling leap of asset transfer in Wanda's transformation, these vivid cases together reveal the truth of the survival of entrepreneurial groups - they are in control of the rudder of the business empire on the surface, but in fact, they are just like sailing in the vast ocean, and they are always in the middle of the sea. They are sailing in the vast ocean, always facing the threat of the reef of legal risk. Under the rules of the game of the capital market, whether it is the internal management of enterprises, or external market activities, each subtle decision may trigger the ‘butterfly effect’, which evolves into business risks, and ultimately be examined under the rule of law. This is the core proposition that this article tries to reveal: entrepreneurs are not only engaged in business games, but also in a close fight with legal risks.

Risk 1: Rush to success backfires

Entrepreneurial risk-taking is the driving force behind business innovation, but aggressive strategies that rush to success often drag companies into a legal quagmire. When the sharing economy was just emerging, the young Dai Wei led ofo to rapidly expand the global market with radical strategies, but due to the loopholes in the regulation of deposits and over-expansion into the capital chain crisis, and ultimately triggered large-scale user lawsuits and legal disputes, which has become a typical example of the risk of ‘haste makes perfect’. Jia Yueting led the LeSee in the Internet ecological boom to ‘blindfolded wild running’ trend layout diversified business, but due to the capital chain break, resulting in serious debt defaults, and ultimately faced a number of transnational lawsuits, entrepreneurs also bear joint and several liability. Lei Jun's millet group is showing another kind of wisdom: through the ‘triathlon’ mode of steady layout, in the overseas market encountered patent litigation, with ‘technology + legal’ dual-track strategy to successfully break out, 2020 State Intellectual Property Office report will be listed as the ‘overseas patent risk prevention and control’. In the report of the State Intellectual Property Office in 2020, it was listed as a ‘Benchmark Enterprise for Overseas Patent Risk Prevention and Control’, realising the unity of safeguarding business interests and setting up a compliance model.

Risk 2: Low Emotional Intelligence and Going Off the Deep End

The struggle for corporate control often reveals the weakness of human nature. The ‘official seal war’ between Li Guoqing and Yu Yu, like an out-of-control farce, has become a textbook case of corporate governance failure, and the equity dispute not only paralyses the company's governance, but also puts the two founders in an ‘unseemly’ embarrassing situation. As a technical genius in the field of Internet entrepreneurship, Su Xiangmao, in the marriage dispute, emotional shortcomings make him lose his rationality, and give up self-help under the impulse, not only let himself lose his own life, but also let the hand-founded, unlimited prospects of the enterprise ruined, it is really saddened by the sigh of the wrist. This kind of emotional decision-making not only damages the value of the enterprise, but also may violate the relevant provisions of the Company Law of the People's Republic of China and the Criminal Law of the People's Republic of China. Wang Jianlin's performance in Wanda's transformation shows the ability to deal with crises with a high degree of emotional intelligence: in the face of the risk of the high gearing ratio of the cultural tourism project, he decisively sold his non-core assets, avoided legal disputes with the wisdom of ‘cutting off his arm to survive’, and at the same time reshaped the business logic through the asset-light model.

Risk 3: Desperate Desire and Desperate Risks

Once personal desires exceed the boundaries of the law, entrepreneurs will be very easy to get into a situation of doom and gloom. Xu Jiayin, the once infinite real estate tycoon, was blinded by excessive wealth and desire for expansion, overly relied on high leverage in the operation of Evergrande, operated in violation of the law, ignoring the laws of the market and legal constraints, and ultimately plunged the enterprise into the abyss of debt, and he was also in a deep crisis. Although Jingdong Liu Qiangdong's Minnesota incident was ruled not to involve a criminal offence in the legal process, the incident undoubtedly brought unquantifiable damage to Jingdong's brand image at that time. These vivid cases are entrepreneurs friends repeatedly ringing the alarm of risk: entrepreneurs' personal behaviour is closely related to the fate of the enterprise, any breakthrough in the legal bottom line of the fluke, may lead to the enterprise to crash into the unmeasurable cost of the risk of the reef.

Risk 4: Institutional Transformation and Backward Policies

In the deep-water reform zone, entrepreneurs should not only capture market opportunities, but also anticipate policy risks. Song Lin, the former helmsman of China Resources Group, in the critical period of business transformation, taking advantage of the policy lag and regulatory gaps, wanton corruption, seriously harming the interests of enterprises, and ultimately, individuals also fell from the peak of life to the bottom of the valley of the prison, which also exposes the inadequacy of the regulatory policy of the institutional transformation. Today, in 2025, Huawei, as a private enterprise, is able to face up to the problem of corruption in the internal recruitment process, severely punishing non-compliant employees, taking the opportunity of institutional optimisation to check for flaws, actively responding to the general policy of governing enterprises according to law, and setting a benchmark for the industry's development in terms of compliance. Through the positive and negative comparison found: legal risk prevention and control is not a passive response, especially in the special transition stage, enterprises and entrepreneurs can adhere to the bottom line, active compliance is extremely critical, which is related to the rise and fall of enterprises and personal destiny.

Risk 5: power and money transactions, play with fire and burn themselves

The rules of the game of the capital market do not allow any grey areas. Huang Guangyu's Gome empire is deeply involved in commercial bribery and other illegal quagmire, and eventually collapsed, triggering a series of chain reactions. Zong Qinghou's successful case of defending corporate control through legal channels in the Danone joint venture dispute proves that compliance is the most solid armour against risks. In the context of the rule of law, any attempt to break through the legal red line through ‘subterfuge’ will eventually be sanctioned.

Conclusion: the helmsman dancing on the tightrope

From Huang Guangyu to Xu Jiayin, from Li Guoqing to Su Xiangmao, the rise and fall trajectories of these business wizards together draw a shocking legal risk map. Every choice an entrepreneur makes is like dancing on a tightrope: not only do they have to show their business acumen, but they also have to respect the boundaries of the law. Therefore, the true entrepreneurial spirit lies in the ability to break the waves of the times and to build a secure defence within the legal framework. Only through the deep integration of commercial genes and the spirit of the rule of law, can we lead our enterprises to break the short-lived boom and bust cycle of local enterprises, and to grow in the everlasting business in the midst of the changing winds and clouds.

Special Announcement: This article was originally written by JIA LAWYER law firm lawyers, it only represents the author's own views, and shall not be regarded as a formal legal opinion or advice issued by JIA LAWYER law firm or its lawyers. If you need to reproduce or quote any of the content of this article, please specify the source.