How a Crowdfunded Coffee Shop Collapsed Into Infighting

In 2015, a group of former colleagues from a major Chinese IT firm launched a crowdfunded coffee shop meant to blend community, culture, and commerce. Their goal was ambitious: 200 shareholders, each contributing 50,000 RMB (about $8,000), for a total of 10 million RMB to build an O2O social hub and incubator. What followed wasn’t growth, but a series of leadership coups, financial disputes, and mass defections that reveal the hidden perils of equity crowdfunding.

The Ch Coffee project began with promise but imploded due to governance failures, opaque financial practices, and power struggles among founders—resulting in around 40 of the original 130 shareholders leaving within months.

The Vision: Culture, Coffee, and Community

The idea for Ch Coffee started with Feng Jingwei, a former engineer at Hanwei, a large Chinese IT company known for its strong internal culture. With limited personal capital but big ideas, Feng turned to equity crowdfunding as a solution. Drawing inspiration from successful models like 3W Coffee, he envisioned a 200-shareholder model, each investing 50,000 RMB to create a cafe that was both a social space and an extension of Hanwei’s corporate culture.

The planned cafe would serve as an IT-themed O2O hub, facilitating resource sharing, business matchmaking, and brand exposure for Hanwei products. Beyond coffee and drinks, Ch Coffee aimed to sell Hanwei merchandise, host events, and even offer startup incubation. The founders laid out detailed plans covering marketing, thematic events, and multi-stream revenue including coffee sales, product retail, and incubation investments.

The Broken Trust: Financial Secrets and Founder Fallout

From the start, transparency issues plagued the project. The four founders—Feng Jingwei, Pu Jianyu (the eldest and most experienced), and two others—agreed to pool all investor funds into a shared account managed by Pu, who was tasked with full financial disclosure, including timely bank statements and payment proof. But in March 2015, a shareholder noticed discrepancies between their payment platform and the receipts Pu shared, raising immediate concerns about fund handling.

Soon after, Pu went silent, ignoring messages and failing to provide requested financial clarity. Though the team initially defended him, pressure mounted. Eventually, another founder, Gong Lixin, stepped in, located Pu, recovered the missing funds, and forced his departure. Some shareholders received refunds from Pu directly, and the official reason given for his exit was violation of financial transparency rules. Pu, however, claimed the real issue was a shift away from the original vision. Around 40 shareholders left soon after, many lured away by Pu himself.

Power Struggles: The Fight for Control

With Pu gone, internal tensions escalated. Feng Jingwei, the original visionary, sought the role of general manager. But his lack of managerial experience and shifting founder alliances weakened his position. The group established a formal selection process: a 15-member hiring committee, including five directors and ten elected shareholders, would choose the GM based on votes.

However, the process quickly unraveled. Zhang Pengcheng, a respected former Hanwei executive, joined the committee and then unexpectedly declared his own candidacy for GM, violating the rules. Worse, previously disqualified former shareholders were quietly reinstated onto the committee, further eroding trust. Feng withdrew from the race in protest, and Zhang was eventually elected by default with unanimous votes—though controversy over his self-nomination and opaque decision-making persisted.

Shortly after taking office, Zhang demanded not only standard compensation but also 1 million RMB in virtual equity with perks equivalent to 50,000 RMB shares—raising concerns about self-dealing. When his requests were denied or challenged, Zhang lost confidence and resigned. Feng was then appointed GM, fulfilling his original ambition—but by then, the founding team’s cohesion was shattered, and many early supporters had already quit.

Frequently Asked Questions

What was the original crowdfunding goal for Ch Coffee?

The goal was to raise 10 million RMB by recruiting 200 shareholders, each contributing 50,000 RMB. This funding was intended to establish a flagship cafe and eventually grow into a chain.

Why did the first founder, Pu Jianyu, leave the project?

Pu Jianyu stepped down after being accused of financial mismanagement, including discrepancies in payment records and a lack of transparency. He later claimed he left because the original vision had been abandoned by other founders.

How many shareholders left Ch Coffee during the conflicts?

Approximately 40 out of around 130 shareholders exited during the various leadership disputes and financial controversies, significantly weakening the project’s foundation.

What governance model did Ch Coffee try to establish?

Ch Coffee founders set up a system with a 15-member selection committee for choosing the general manager, composed of five directors and ten elected shareholders. However, the process was marred by rule changes and self-nominations that undermined fairness.

What role did equity crowdfunding play in the collapse?

Equity crowdfunding created a large, equal-shareholder base that required strong governance. Without clear leadership, transparent finances, and conflict resolution mechanisms, disagreements over money and power quickly eroded trust and led to mass exits.

Who ultimately became the general manager of Ch Coffee?

Feng Jingwei, the original founder, became general manager after Zhang Pengcheng’s resignation. He had initially stepped back but regained the role amidst the ongoing turmoil.

Recommended FrontStreet Beans for Community Cafes

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