High-tech hotspot is a magnet for talent

High-level professionals who left larger enterprises to start their own businesses have become the main force driving new businesses in Zhongguancun, a hotspot for business startups.

Statistics show that 47 percent of the 6,000-plus new businesses started in 2013 were by professionals who left their prior positions in larger enterprises.

Many are from big tech companies including Baidu, Sohu, Tencent and Huawei. With wide connections, rich business resources and professional experience, they usually have a better chance to succeed.

About 55 percent of startups that got more than 10 million yuan ($1.63 million) in financing were started by former senior managers or key technicians from big companies, while 59 percent of new businesses that merged were also started by the group.

Among all business starters in Zhongguancun, 37 percent have had multiple entrepreneurial attempts. Some 89 percent of ongoing business starters had successful experiences before, while 11 percent had unsuccessful attempts.

Ongoing professional business starters have garnered high recognition on the capital market, and their businesses have higher potential for receiving financing or merging with other companies.

With enhanced professional qualities, products and operations, Zhongguancun's IT industry has caught up with or even surpassed startups in Silicon Valley in the US.

The First Zhongguancun - Silicon Valley Innovation & Entrepreneurship Competition, held simultaneously in Beijing and Silicon Valley in December, attracted more than 200 business startup teams from China, the United States, Britain, Australia, Canada, Singapore, Japan and other countries.

Twenty global investment organizations specializing in business startups participated as the judging committee.

The event served as a good platform for business starters to exchange experiences, especially with their overseas counterparts.

According to local statistics, Zhongguancun has gathered the largest number of entrepreneurs under 30 in China. Among the 30 under age 30 influential business starters listed by Forbes China last year, 11 are from Zhongguancun. Ji Yichao, founder of Peak Labs in Zhongguancun, was the first entrepreneur under 20 to be listed.

With more than one third of China's angel investment organizations, Zhongguancun has formed an active angel investment system.

In the high-tech district, venture capital is often integrated with angel investments. After China Renaissance Partners established its angel investment foundation, a number of other venture capital companies including Sequoia Capital, Tusholdings and Gobi Partners have also made investments.

Meanwhile, Lei Jun, Xu Xiaoping and other angel investors have established special investment institutions. Organizations like the China Young Angel Investor Leader Association have created a strong atmosphere for business startups, said the administrative committee.

Innovative force

Startup businesses have been an important innovative force in the region. Through market-oriented mechanisms and with the help of leading entrepreneurs and well-known investors, Zhongguancun has selected nearly 200 "golden seed" enterprises featuring high technologies, new business modes, sustainability, strong business teams and mature corporate systems. The enterprises have played leading roles in innovation in their own fields.

An eco-system for business startups has now been formed. The main forces providing startup services have shifted from State-owned enterprises and government organizations to today's professional service organizations, leading enterprises, universities, angel investors and professional managers.

Innovative incubators in Zhongguancun are encouraged by the government to explore new mechanisms to further enhance their ability to provide value-added services for business startups.

For example, the Torch High Technology Industry Development Center from the Ministry of Science and Technology has 17 incubators from Zhongguancun including Garage Cafe, Innovation Works and 36 Kr in its national management system and will support their development.

Business startups in Zhongguancun have also received wide attention. Success stories have been frequently highlighted by national mainstream media such as China Central Television, Beijing TV, and Beijing Daily.

zhuanti@chinadaily.com.cn