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How to Start Your Business in China

How to Start Your Business in China. Jiangtao Yu, Ph.D. Why do we want to go back?. Family, friends… and food? Natural & social bonding; Glass-ceiling in US; Government policies; Technology development; Business opportunities. The reality. Taking care of family?

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How to Start Your Business in China

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  1. How to Start Your Business in China Jiangtao Yu, Ph.D.

  2. Why do we want to go back? • Family, friends… and food? • Natural & social bonding; • Glass-ceiling in US; • Government policies; • Technology development; • Business opportunities.

  3. The reality • Taking care of family? • Parents: Pollution and poor health-care system; • Husband and wife: Separation; • Kids: Completely different child education system; • Delicious food? • Yeah, but not safe… • Business opportunities? • Great opportunities, no glass ceiling, but very complicated.

  4. Who can go back with higher success rate? • Internet and… pretty ladies???

  5. The only sustainable reason for returnees is: We still have dream…

  6. How to start your business in China? • Getting to know China • Technology development trend • Government policies • Market opportunities • Find a local person you can trust and team up • Be well prepared • Mentally, physically • Financially • Technologically

  7. The three essences of success • Timing • Location • Connections

  8. Getting started: Timing your project • You need a 5-year plan; • Start preparation NOW, make a few steps move, don’t wait until window is closed; • Go back to China when you feel relatively confident, don’t jump into the “pond” without thinking.

  9. Seed money • From US • SBR; • Family & Friends; • Angel, Venture Capital; • From China • Angel, VCs; • Government support; • Industry investors.

  10. Find a location • Where economy is relatively developed • Yangtze Delta Region is probably your top choice; • Where you feel comfortable and trustworthy • Can be or around your hometown; or shop around, keep communicating until you finalize your decision; • Where you have platform support to lower cost • Especially important for Biomedical start-ups.

  11. Build up connections • Connections are not simply teamwork; it’s a NET-work… • Focus on your strength (mostly technology) but know how to deal with people; • Team up with some marketing /sales gurus or build up firewall; • Know politics and… watch CCTV news!

  12. Other resources • Pay attention to policy trend • 1000-plan (state, province, local city, high-tech park); • Government support; • Government grants; • Innovation funds for small business;

  13. Reverse culture shock • Under-developed healthcare/education system • Dealing with complicated government system • Sitting in meetings with no sense • Training “job-hoppers” • Spending a lot of time on dinner table with hard liquor • Karaoke and got drunk… Do you think you still have time for R&D?

  14. 浙江清华长三角研究院 • Yangtze Delta Region Institute of Tsinghua University, Zhejiang • Located in Jiaxing City, Zhejiang (right in the middle of Shanghai and Hangzhou) • Four research directions: Biomedical, Environmental, IT, and Advanced manufacturing • Four innovation centers: Silicon Valley, Ningbo, Hangzhou, Taizhou

  15. What do we do? • To recruit overseas talents and facilitate them to overcome the reverse culture shock – “Talent-Inn”; • To incubate early projects, help them find right location and local partners and negotiate better funding terms from government/VCs /industry investors – “International Incubator”; • To provide seed money for early projects from overseas – “Zhejiang Haihe Venture Investment Management Co., Ltd.”; • To outsource high-tech projects from China to US.

  16. Case study 1 • An internet storage start-up company • Incubated 1.5 years; • Got 10M RMB government funding (with terms) and 10M RMB VC investment by the end of last year; • Early investment valued up more than 10 times.

  17. Case study 2 • An internet service provider start-up company • Recruited CEO/CTO for the company; • Helped the company to negotiate terms with local government to build up the largest data center in the Yangtze Delta Region; • Net Income 7.7M RMB last year, ~30M RMB this year • Investment valued up 12 times by year end.

  18. Case Study 3 • A medical device start-up company • Incubated 0.5 year; • Signed term sheet with 20M RMB investment; • Investment valued up ~100 times if deal is executed… • But…project is on-hold now.

  19. Case Study 4 • A mobile image search start-up company • Incubated 1 year; • Got 2M RMB government funding 1 year ago; • In talk with VCs and signed term sheet with 2M $ investment; • Investment valued up ~5 times.

  20. For whom interested in “International Incubator” • Please contact • Jiangtao Yu, 408-881-2706 (US Cell), 158-0573-7618 (China Cell), jiangtao.yu@gmail.com;

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