The Innovation Works' office area. The company has taken the lead in China in investing in early-stage startup firms that have a high potential to grow.

 

Innovation Works, a combination business incubation and angel investment firm, shows what can happen when the vigor of youth is guided by the steady hand of experience.

With the average age of its employees hovering between 27 and 28, Innovation Works can be described as a young company, but at its head is founder Kai-fu Lee, born in 1961.

The company provides capital, human resources management, legal services, training and other services for business startups, most of which are in the Internet industry.

It is a one-of-a-kind company in its industry in China, said Tao Ning, chief of operations and partner, who is also a Yale graduate and former staff member of IBM and Google.

She said Innovation Works sets itself apart from other venture capital companies in three aspects.

First, it invests money in business startups at a very early stage. The 50 companies now being incubated by Innovation Works all work in a 7,000 sq m space in the same office building in Zhongguancun that houses the company.

Second, Innovation Works has strict criteria for picking projects for investment and incubation. The business founders are normally elites with more than seven years of working experience in the Internet industry. Additionally, each team should have no fewer than two members aged between 28 and 38.

Third, Innovation Works has a service group that carries out vital functions that companies lack at a

n early stage, such as financing and human resources.

Tao said that Innovation Works has hired 45 professional people who are industry leaders in law, human resources and financing to make sure that the startups it helps get qualified and professional support from the very beginning.

What is worth mentioning is that all the services here are nominally free of charge.

Tao said Innovation Works has a new take on traditional incubator services that allows companies to focus on their products at the first stage, thus improving the likelihood of success.

She said Innovation Works has its own talent database, and every year they will look for the best professionals in the Internet industry through campus recruitment. They have several target universities, all of which are known for programs in computer science and the Internet.

One may change his or her opinion of what it means to be a company after a visit to Innovation Works because startup enterprises can be little more than a row of desks and chairs .

The wall of the lounge features pictures of people using technologies. For example, a picture displays the affinity Asian girls have for the color pink, which reminds workers to pay attention to preferences during product development.

At the entrance of Innovation Works, logos of some of the incubated companies are plastered all along the wall.

As part of the Haidian Park, Innovation Works enjoys cheap rent and spacious offices. Haidian Park has also passed preferential policies to speed up project approval and company registration.

According to its agreements with companies, Innovation Works will be allotted a 17.6 percent stock share if an incubated company is listed.

"This type of incubator makes it easier for us to get stock shares, and we are better connected with the business creators," Tao said.

In other words, Innovation Works is like a kindergarten and a primary school, while other venture capital firms are like middles schools, she said.

"It's a relay race," Tao said.

xuxiao@chinadaily.com.cn

(China Daily 09/12/2012 page12)