Bob Xu is the Founder and Managing Partner of ZhenFund. He is also known as one of China’s pioneering angel investors.This afternoon he joined the stage of 2014 TechCrunch Beijing to share with us one thing and one thing only—the importance of partnership.
Bob started by giving his condolence to Robin Williams, who passed away as of this morning. Bob said that Robin carried characteristics that every entrepreneurs and founders should have. Bob reiterated many timesthat he believes “finding the right business partner” is much more important than having the right business model.
To illustrate his point, Bob gave a few examples about startups that had failed because of partnership structures. For instance, ZhenFund had invested in a promising e-commerce company which claimed to have two co-founders. Only after the company failed had Bob realize that one of these so-called “co-founders” only had 1% of equity. “He is not a partner! He is merelyan employee,” says Bob.
What makes someone a partner instead of an employee?
Bob believes that within the broader Chinese startup environment, there should be a lead founder with a few co-founders and partners. With the lead founder takes the majority of the equity, 60% to 70% for instance, the other partners should each has a substantial portion as well, such as 10% to 20%.
So why are there so many lone founders? Bob contributed this phenomenon to 4 causes.
1. A lack of awareness that partners are very important and every company should have at least 2-3 partners.
2. Some entrepreneurs do not have the heart for it. They are unwilling to give, or rather, share their companies with other people. As Bob says, “when you share your wisdom, life , success,and failure with other people, your 70% or 60% will be magnified infinitely.
3. Lack of resources and connection so that some founders cannot find their partners. Bob asserted that he will not invest in founders who cannot find someone trustworthy to share his or her business life with.
4. Last but now least, Bob concluded that charisma also plays an important role in finding the right person to work with. If a founder cannot find someone to start a business together with,that says something about this founder’s charisma and how he or she lacks the skills of “inspiring marketing.”
Bob reckoned that when a founder manage to avoid all these causes above, he or she will automatically have a team that’s strong enough to walk on the rugged startup road.
Bob ended his incandescent speech with quotes from Robin William’s movie Dead Poets Society, with a little alteration of the first line:
I started my startup life,
because I wanted to live deliberately,
I wanted to live deep
and suck out all the marrow of life,
and put to rout all that was not life,
and not when I had come to die,
discover that I had not lived.