Interning in Venture Capital in China

img_1274

Before I get swept up in the semester, let me close the chapter of winter break. I’m writing down my internship thoughts in the polar chill of Cambridge, MA. January has ended. Everything’s days and continents away.

Did you do anything meaningful over the break other than drink bubble tea?

Yes!! (Doing meaningful things and drinking bubble tea are not mutually exclusive, after all.) I went to Beijing during the last two weeks of break for an internship at Northern Light Venture Capital (NLVC).

img_4824

Interns + Michael – Harry

What on earth is venture capital??

To be really honest, I had a pretty vague idea before going. But, here’s the textbook definition:

Venture capital is a type of financing provided to private, early-stage companies deemed to have high growth potential by investors in exchange for equity, or partial ownership of the company.

Here’s what I now think after two weeks: although VC is about returns, it can also be about creating social good through innovative (perhaps, disruptive) ideas that improve lives and efficiency. When you have lots of money, you can mold the future. You will also want to be richer. So you become a Limited Partner (LP) at a firm with knowledgeable people to invest your money in startups with lots of potential (which also happen to be hungry for capital). VC is a risky asset class. But, high risk, high returns. In some sense, it’s a win-win.

Why did you want to do a VC internship in China?

I wanted to immerse myself in China’s unique startup ecosystem. As a storyteller by heart, I’m intrigued by China’s burgeoning “content entrepreneurship” amidst its media revolution (from Wechat public accounts to Zhihu to Ximalaya FM podcasts to online fiction publishing).

I’m also fascinated by the media sector, which might be disrupted by new formats of how we experience content (augmented reality, livecasts) and communicate with one another (what’s after the mobile phone?). How the real and the virtual will merge in content consumption is a ripe area of growth.

In learning first-hand about NLVC’s portfolio companies, and how people who have one foot in the future and one in the present conceive of these possibilities, I sought to draw insights for my own career. My mantra is: Do something different every break!

What did you do?

We met with investment and legal professionals, visited start-ups (ranging from autonomous vehicles to data analytics to fashion to e-sports to teleradiology to AI+ entertainment), and sat in on New Horizon VC’s in-house team meetings in different sectors (TMT, Healthcare, and Risk Control & Portfolio Management).

What did you learn?

Here are some unexpected takeaways and nuggets of information:

  • You can only truly understand ‘consumer demand’ when you are in the field. Example: It’s really easy to be idealistic at a place like Harvard that online education is going to be the next big thing and to take the thirst for knowledge for granted. But, beyond a certain point, is knowledge really value-adding to most people’s lives? From the investor’s perspective, the future of pay-for-knowledge startups (知识付费) is extremely uncertain.
  • What’s the next big thing after PC/Mobile? The traditional keyboard/touchpad model might be rendered utterly obsolete. Here’s speculation from a VC professional we met —  perhaps, mobile phones might be separated into different devices according to function, e.g. watch, augmented reality glasses, fitness devices, or even soft screens (which is totally new to me).
  • Sometimes, the best indicator of how far a startup can go is the founder.
  • The big challenge for autonomous vehicles is one of generalization (beyond particularization — an operational design domain, and localization after data collection).
  • Many technologies seemingly far away from our lives are actually already all around us. The commercialization of autonomous vehicles is upon us — from airports to valet parking. AI is being used in product placements on variety shows that I’ve watched — many of the products and advertisements on Singer (歌手) were augmented!
  • In China, Wechat mini-programs are very crucial to many startups’ creative strategies.
  • For many e-commerce startups, the focus is now on a streamlining of the offline and the online retail experience. This concept of ‘new retail‘ can engage online data to make the physical consumer experience individually tailored. Here’s a read of Alibaba’s pivot.
  • What’s important to a startup? Ideas, leadership, funds, timing. An oft-overlooked aspect is the importance of a talented team who will leave their high-paying jobs to join you to develop your start-up idea at the drop of a hat and will stick with you and stand by you even in times of hardship. That’s what really takes to make a sustainable startup.
  • Augmented/virtual reality sports matches! Imagine The Hunger Games in the virtual realm. Kind of like Ready Player One. Maybe a good story idea.
  • While a typical EM (emerging market) crisis, as triggered by withdrawal of foreign currency, is unlikely in China due to its low external debts, one can only be cautiously optimistic about how the Chinese government will rebalance as the market undergoes structural reforms. While smooth rebalancing is currently the most probable medium-term outcome, the second most likely outlook is that China may encounter Japan-style stagnation (without its wealth).

Ultimately, I learned that it’s very hard to be the number one in any field. But, this internship has really taught me to think in terms of intersections — if you can become the top 10% of multiple fields, there may be a niche intersection where you can make an irreplaceable and maximized impact to the world.

That’s so cool! How can I get to know more about VC, entrepreneurship, and China?

Here are some interesting articles shared by everyone in the internship:

Some career guidance from wiser people I met:

I read so much. How about some photos?

A snapshot of some happy moments. Most of the time, I was so busy that I didn’t have time to take pictures.

Exhibit A: I tried a Rachel Zoe jumpsuit at the offline experience store of 女神派 Ms. Paris, a designer clothing rental platform — a Chinese version of Rent the Runway. Of the four main pillars of human life — clothes, food, accommodation, and travel (衣食住行) — the sharing economy is finally starting to take off for clothes (after Airbnb, Uber/Lyft/Didi, bike-sharing, etc.).

Exhibit B: I’m sitting on a gaming chair at e-sports startup, 9eplay.

img_1170

Exhibit C: Harry and I met with our Harvard & Singapore senior, Zara! She is currently working in venture capital at GGV Capital’s Beijing office — fun fact: aside from being a blogger, she also co-hosts 996, a bi-weekly English podcast featuring the movers and shakers in China’s tech industry. Writers put themselves out there, she said, that’s how opportunity comes knocking. 她说:“肯定会迷茫,但是专注于把眼前的事情做到极致。” Really inspired. ❤

Exhibit D: My internship roommate, Olivia!!! We are at some door in the Forbidden Palace’s Imperial Garden. 

Coming up next: shopping week, figuring out classes, and crazy little things.

Lots of love,

Screen Shot 2017-04-08 at 11.16.46 PM

img_1272

2 thoughts on “Interning in Venture Capital in China

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s