New China-U.S. Start-up Competition Swaps Money for Talent
BY Francesca Fenzi
Silicon Valley entrepreneurs and their Beijing counterparts will compete together--but what the winners get depends on where they're from.
Silicon Valley has no shortage of start-up competitions, but, it seems, there's always room for one more. A new competition launching in June brings together the Valley and its Chinese counterpart Zhongguancun Science Park--or "Z-Park"--in Beijing. The curious part? What you win depends on where you're from.
Finalists from the United States, for example, stand to win up to $50,000 in cash from both Chinese and American VCs. Meanwhile, the Beijing finalists compete to receive, well, a handshake: They'll get free access to the Z-Park incubator, run by Hanhai Investment, and networking opportunities with Chinese investors.
So what gives? After all, "cash" sounds way better than "networking opportunity," right?
Not necessarily, says Larry Li, co-founder of Z Park Venture, an investment firm that will be supporting the competition. He argues that in the Beijing start-up community there is plenty of venture capital, but not as many experienced technology entrepreneurs.
"There is too much money and not enough companies," he says. Rather than offer prizes of disproportionate value, he explains, the competition is designed to help connect growing companies on each side of the world with the tools and resources they most need--Silicon Valley entrepreneurs with funding, and Beijing founders with fresh talent and technology.
It probably doesn't hurt that early-stage start-ups in Silicon Valley are also cheaper to fund than those in Beijing. The perceived value of tech start-ups in Beijing--due to the wider availability of investor funding--are valued higher, initially, than those in the U.S., Li says. Silicon Valley entrepreneur and investor Steve Blank notes in a recent blog post that Beijing has the biggest venture capital industry outside of the U.S.
But, while the funding may be plentiful in Beijing, there aren't as many VCs writing the checks. Another issue for Chinese entrepreneurs, writes Blank, is the dearth of "knowledge sharing" and mentoring among the start-up community.
According to Li, each side is looking to take advantage of the other's strengths.
The competition will run between June and November of this year, and will be sponsored by both Chinese and American investment firms like Hanhai, Z Park Ventures, and Beijing-based IDG Capital. Winners will be selected from Beijing and Silicon Valley simultaneously--though start-ups from all over the world are invited to apply, says Hanhai president Victor Wang.
In September, 30 nominees will be chosen from each batch, followed by 12 semi-finalists and three finalists. The 12 semi-finalists from the U.S. will be invited to Beijing to meet and network with their Chinese counterparts--perhaps initiating the exchange that Li and his fellow investors hope for.
FRANCESCA FENZI reports on entrepreneurship, technology and small business news from San Francisco. Her work has previously appeared in TIME, USA Today, Pop City and The Northside Chronicle. @FrancescaFenzi