Bill Gates and Paul Allen took nearly half a month before replying to Lin BaoCheng. They agreed to act as guarantors, with all three shareholders guaranteeing the 5 million USD loan in proportion to their shareholdings.
If the company later failed and went bankrupt, unable to repay the 5 million, then the three shareholders would each repay according to their ownership ratio. In other words, Gates and Allen would have to cover their share of the debt to Lin BaoCheng.
Though risky, after careful thought Gates and Allen decided to accept.
Their investigation showed that operating systems had great potential. Hiring staff and initial R&D wouldn't even require the full 5 million. So even if the OS project failed, the company would still have capital to recover, not collapse outright.
More importantly, Gates had dropped out of school to build a company with big ambitions. A small firm wouldn't satisfy him — he wanted to gamble on something larger.
Once Gates and Allen agreed, Lin BaoCheng had Isabella handle the contracts and transfers.
By April, the Rubik's Cube had been on sale for over half a month.
Lin BaoCheng visited Starlight Company to hear Eric's report.
"Boss, as of yesterday — March 31st — excluding one transferred store, we added 41 new outlets. That brings us to 80 stores total."
"Of these, five are in New York, the rest across California. We now cover nearly every city and major county in California. The state‑wide distribution network is basically complete. Next, we'll strengthen and supplement it."
With prior experience and ample funds, Eric Davis was expanding faster than ever.
"Still, only 40 stores were operating in March, 39 of them company‑owned," Eric explained. Setting up a store — location, purchase, renovation, staffing — all took time.
"Counting 40 stores, March revenue was 2.9 million USD. Compared to February's 2.4 million, that's about 20.8% growth."
Lin nodded, then asked: "Excluding Rubik's Cube sales, what was revenue?"
Eric replied instantly: "About 2.7 million USD, a 12.5% increase."
"And profit? Excluding the cube?" Lin pressed.
"About 270,000 USD," Eric confirmed.
A 10% margin was acceptable. But after salaries, taxes, and other expenses, Lin's net profit was only about 5% of revenue. Compared to his investment, it was negligible — recouping costs would take years.
That was only from selling other companies' toys. With their own products, it was different.
Lin said: "Rubik's Cube sales in March were 200,000 USD. At 20 USD each, that's about 10,000 units. Averaged across 40 stores, 250 per store — in just half a month."
Eric explained: "Boss, at first sales were slow. But day by day they grew. Yesterday alone we sold 2,000 cubes. In a few days, we'll break 3,000 daily."
Isabella added: "Boss, the cube isn't cheap for ordinary families. Sales are stronger in wealthier regions. So Eric and I agreed to expand stores first in affluent areas, then nationwide. Over time, the cube craze will sweep the country."
"Do it," Lin nodded. "I'll inject another 10 million USD into Starlight for expansion."
He had brought only 30 million USD to America. Already 10 million had gone to Starlight, another 10 million now, and the remaining 10 million split between New Century Software and Microsoft. He had no more funds available.
Eric cautioned: "Boss, 10 million won't open many stores in New York or Washington. It may not be enough."
"I know," Lin replied. "Use it for expansion first. Later, if needed, we'll borrow from banks. Our stores are owned outright, so we can mortgage them."
Even if Starlight wasn't profitable without the cube, expanding distribution was more important. Short‑term losses didn't matter.
"When the 10 million is spent, we should be able to borrow 30 million or more," Isabella calculated. With 30 million already invested, profitable stores, and a complete network, banks would lend generously.
"We'll discuss loans later," Lin said. "For now, focus on cube sales. My target is 500,000 units this year. Work hard."
Even 500,000 cubes wouldn't earn much. At 20 USD each, revenue would be 10 million. After costs, taxes, shipping, and possible discounts, profits would shrink.
But long‑term sales could reach tens of millions, even hundreds of millions. Earning tens of millions over several years was still significant.
Eric felt the pressure. Without licensing to other toy companies, 500,000 units was a tough goal. But not impossible. He resolved to push hard.
Pressure, after all, was also motivation. If he met or exceeded the target, his ability would be proven.