It feels like there are so many investors in China. Everyone is looking for the next Baidu, Tencent or Alibaba. The high supply of investors has created a high demand for start-ups. With so many investors playing in the same market, the trend is shifting towards earlier stage ventures. Steve Bell of Trilogy Ventures is taking ‘early stage’ to a more literal level by seeking out hot entrepreneurs in top Chinese universities.

A history of entrepreneurship

Steve studied a B.Chem at Georgia Tech and spent his early career at GE Plastics. In 1994 he was CEO and Founder of CORE Products GmbH, a tier 1 Auto Supplier – based in Switzerland and today a large global company. In 1998 he was CEO and Founder of SupplySolution Inc. which had multiple VC financings and later sold to Tradebeam. In 2006 he was CEO and Founder of ShangBy Inc. a Draper Richards VC financed company that later died in 2008. Since 2009 he has been the co-founder and Managing General Partner of Trilogy VC.

To find out more about Steve and his investment philosophy, I interviewed him.

China – full of talent and a high speed economy

“Between 2002-2006, I was Sr. VP at Trilogy Inc (needed “break” after 2 startups), I ran Product creation functions including leading Trilogy University – where each year, Trilogy hired from the best schools in the world and put the new hires outside the company in Trilogy University, where over 90 days the new hires formed small <5 person teams and created every new product at Trilogy Inc.  In 2005/06 – we did Trilogy Uni in Hangzhou China where we grew a 250 person office.

After only a few visits to Trilogy China, I was really blown away by 1 – The TALENTED people, really wanting to make a big difference and 2 – The speed of overall economic development.   It seemed to me China was the BEST place in the world to be an entrepreneur. Low cost at <5X USA for very early tech start-ups and fastest growing consumer market in the world – soon to be the biggest!

In 2006, while walking in the dirt market Beijing had a crazy idea that if we had video camera connected to web – my friends in USA could be “shopping with us live”.  Two weeks later, I started ShangBy Inc. and moved to China.  ShangBy hooked up video cameras in many Shanghai Jewellery stores and let mostly American women, shop live in the stores – just like being there with a real time one way broadcast video linkup.  They could buy and get goods in 3 days.”

Apple, Google, Microsoft, Facebook – all started by Students

“I had a front row seat to incredible creativity and innovation of top students while running Trilogy University.

When I ask students in China to name GREAT companies that become huge companies  (I have asked 1000’s through our University event programs) 4 companies are always in the first 5 names by students – they are Apple, Google, Microsoft, Facebook – all started by students.  I think student entrepreneurs have two big advantages. First, they are the most creative and most likely to do a really new idea and create a whole new “industry”. Second, they cost the least as they have very little obligations and responsibilities compared to the 30 year old or 40 year old.

I think experienced entrepreneurs have a much higher “success rate” and the students will fail more.  But students will start the BIGGEST companies and the really huge new products.

Finally, every VC/Angel I meet thinks experience matters and likes to invest in experienced entrepreneurs.  I have no competition and the students really need the help and money.”

Looking for doer’s who are determined, curious and have passion

  1. “First – DOERS. People who build product and not just plans. I like engineers or product people / designers!  I have not invested in any MBA teams yet and probably will not.
  2. Second – DETERMINED. People who will persevere through all the adversity and set-backs in the life of the start-up. I like entrepreneurs so committed to their product / vision – they will never give up and will do it whether I invest or not. They will always find a way.
  3. Third – CURIOUS. I think the best entrepreneurs I have backed so far are all curious people who have broad based interests and can ultimately be effective CEO’s as their start-up gets big.
  4. FOURTH – PASSION – I want to be “inspired” by the entrepreneur’s vision and product.”

Adding more value than money

“Trilogy VC wants to invest where we can add value beyond our money.  We focus on Mobile, Consumer Internet, Games, and New Media – areas where we have a network and expertise.”

Uni campus visits, competitions and a 3,000rmb prize

“Trilogy VC runs regular events at Tsinghua, Beijing, Beihang, Shanghai Jiao Tong and Zhejiang Universities.  We reach a 1000 + students on each campus each school year – and try to convince more of them to do start-ups.

A typical event will be me talking about how to start-up and I invite a young Chinese entrepreneur who already has a big business as a guest speaker to share their story.  Then we have 20 students give a 60 second elevator pitch to the audience. The audience votes and I give a cash prize of 3000 RMB. We have done this event more than 50 times.  We do this to build the Trilogy VC brand in top campuses.  I want every student thinking about a start-up at top Chinese Universities to think of Trilogy VC and seek me out.  I am very accessible to students at http://stevebell.renren.com and http://weibo.com/stevebell.”

Big Crowd at Beida DaXing

Letting the entrepreneurs take control

“We want to always provide at least 18 months cash to fund operations and like capital efficient small teams.  Typical investments are under 1 Million RMB.

We are active investors generally with a minority board seat. We love to talk product and distribution with the teams but the entrepreneurs run their business.  We generally get very involved in helping get ready for next funding round and making those VC introductions once the product is successful in the market.”

Most successful investments