Startups need an ecosystem to thrive, businessman says

Venture capitalists need to think more about how to build an ecosystem for startups they invest in and create a platform on which they can cooperate and help each other, rather than just providing money for them, an industry veteran said on Saturday.

The real value venture capitalists can offer to startups lies not only in capital, but more importantly, it is the added-value services they provide that play a bigger role, said Liu Bingyun, president of Tamarace Capital, a venture capital firm that focuses on investing in startups in TMT (technology, media, telecom), mobile internet, culture and sports, smart hardware and other industries.

He spoke at the ceremony marking Shenzhen Bay Start-up Park's first year anniversary and the opening of his company's new office.

"The added-value services include provision of industry resources, entrepreneurial guidance, connection to other players in the industry chain and so forth. Venture capital organizations should put more focus on 'investment of an ecosystem' so that in the long term, the hundreds of startups they invested in can coordinate with and help each other to achieve faster and more sustainable growth," Liu said.

As one of the biggest gathering places for startups in the city, known for its powerful innovation capability, Shenzhen Bay Start-up Park has so far attracted more than 40 incubators, maker spaces and investment organizations.

However, the proliferation of incubators and maker spaces across the country following a frenzied entrepreneurial wave has also seen many dying. Some worry that there are not enough entrepreneurs to fill so many incubators and maker spaces.

Wang Shengjiang, founder and chief executive officer of Hong Tai Newspace (Beijing) Startups Venture Capital Co Ltd, said a large number of incubators are just providing property services to startups and only 20 percent, or even less, have the resources and ability to offer actual help.

"Incubators should not act in the role of just landlords. Instead, they should strive to make 'chemical reaction' happen in the 'physical space'," Wang said.