Xi Cao of Lisi Capital and His Eleven Luo Han --- Wait — let me reconsider. "十一罗汉" is almost certainly a reference to *Ocean's Eleven* (the film), used here as a playful nickname for his team. Let me adjust: Xi Cao of Lisi Capital and His Ocean's Eleven

By Muxin Xu

Edited by Jing Liu

Years from now, people will still remember the moment Kuaishou listed on the Hong Kong Stock Exchange: the first capital feast of China's internet in 2021, and possibly the last.

On February 5 that year, Kuaishou's shares surged over 190% on its IPO day, closing with a market cap exceeding HK$1.2 trillion. Six days later, it briefly broke through HK$1.73 trillion, becoming China's fifth-largest internet company after Tencent, Alibaba, Meituan, and Pinduoduo. That morning, Xi Cao posted a photo on his WeChat Moments, his hands resting on the shoulders of Su Hua and Cheng Yixiao: "The next decade will be even more exciting!"

In hindsight, Cao's words will serve as a precise historical footnote. For the primary market, Chinese companies completed 656 IPOs on the A-share, Hong Kong, and overseas markets that year — a robust validation of private equity's value: 414 of these listed companies had VC/PE backing, a penetration rate of 63%. For Cao himself, it was also a decade of transformation. He had started as a product manager with an engineering background; a year after joining Hongshan in 2013, he met Su Hua, then still an obscure investment manager. In the years that followed, Cao led or participated in bets on star projects including Douyu, MetaX (沐曦半导体), JiTai Pharmaceuticals, Taichi Graphics, Houmo Intelligence, and Unitree — becoming the youngest partner at China's most influential venture firm.

But on the very day he was confirmed as a banner figure of his generation of investors, the 36-year-old Cao resigned to start his own firm.

This was neither impulsive nor theatrical. It stemmed from an instinctive, yet validated, conviction: "The market has peaked," and it was time to begin a new journey. Sure enough, starting in Q2 2021, the capital markets' dramatic transformation gradually unfolded.

"The repetition of life at a big platform" was another factor. Cao's friend Wang Yu, chair of Tsinghua University's Department of Electronic Engineering and co-founder of DeePhi Tech, understood this best. "We've always been entrepreneurs, but in fact, internal entrepreneurship is harder than external entrepreneurship — you can't break certain things. This is what resonates most between us."

As one of the most influential and perhaps most talked-about investors among China's new generation over the past decade, Cao embodies many traits of his era. He rose to prominence young, with his portfolio concentrated in mobile internet, giving him frequent crossover appeal; he shunned suits, at one point buying a Meituan delivery jacket to wear between high-end office buildings; Yang Tianzhen described him as "a temperamental, living, breathing person" — unlike investors who preferred fancy restaurants and lectured on their sophistication, Cao would rather treat her to barbecue and skewers.

If Cao is viewed as a symbol, he represents what a significant portion of this generation of venture capitalists aspires to be. One investor told Anyong Waves that because Cao once lived in a neighborhood near Guomao, he later decided to move there too — "to be closer to them." In 2019, in 36Kr's "36 Under 36" industry peer review, Cao received 53 votes from his peers, topping the list (out of 60 participants). Such consensus-level recognition has not been seen since.

In 2021, Cao left Hongshan and co-founded Monolith Capital with Tim Wang, formerly a secondary market partner at Boyu Capital. A year later, Monolith decided to return to familiar territory: the VC segment, focused on early-stage tech investment.

The zeitgeist was now incomparable. For instance, among the 143 Chinese companies that went public in the first half of 2023, the top three performers were Shenzhen Capital Group, Yida Capital, and SMIC Capital. Internet fell out of the top five by financing volume, while manufacturing IPOs led in both scale and number.

Perhaps this is the biggest question people have about Cao: as someone who achieved outsized success in the mobile era, how will he maintain his sharpness in the next wave?

This is not a question Cao alone must answer.

The Secret at the Foundation

There are many angles from which to deconstruct Cao's success: his instincts (he seemed to always step perfectly in time with the era), his timing (entering the industry on the eve of the TMT explosion), a certain degree of contingency (his years as a Tencent product manager gave him earlier awareness of Kuaishou's value), and the luck that accompanies every success.

But one trait stands out prominently in Cao: his people skills. In some industries this might not count for much, but in the primary market — where social networks overlap and interests are tangled — those who earn this reputation are rare.

Yang Tianzhen met Cao as fellow classmates in the first cohort of the Hundun Entrepreneurship Camp. "Sincere and direct" was why she chose to befriend him; in her view, this was also why Cao was "better at earning others' trust." Yang remembers Cao once going to watch the World Cup, buying a bottle of Moutai at the airport, drinking it while composing her a text message thanking her for being a good friend and for accompanying each other through difficult times.

"I think he's someone who expresses his feelings. Many people, especially men, don't like to externalize emotions, but building human relationships sometimes requires this kind of expressive gesture," Yang said.

This habit seems closer to instinct for Cao. He mentioned reading Xiang Biao's Self as Method, in which the anthropologist describes his childhood across three worlds: the底层街区 (bottom-tier neighborhood), the world of declining aristocracy, and the intellectual world of school. This made him perceive the differences between different lives.

Cao suddenly realized his own childhood had unfolded across a similar triad. Growing up in a small city in Hebei, some relatives lived in village hometowns while others were in first-tier cities like Beijing and Tianjin. Later he entered an elite university, entered the world of internet companies, and eventually became an investor.

These are three typical cross-sections of Chinese society: village, small city, and metropolis. These three slices rotated through Cao's life on roughly a monthly basis, and he belatedly realized that this rotation was what gave him the skill to interact with people from different worlds. "All of this accumulation applies to doing VC; other industries might not require meeting so many people."

But among these three cross-sections, the one Cao knew and felt most comfortable with was the small-city boy he once was. Fortunately, this was another asset for his VC career, because in the TMT era, the star entrepreneurs most in demand mostly came from such non-first-tier cities. And this豪华的朋友圈 (stellar network of friends) was not only the powerful circle built during the TMT era, but also an indispensable cornerstone for launching a new VC.

Nearly all the founders from that wave of new-economy companies with market caps above $10 billion became LPs in Monolith at its founding. Cao was not the investor behind many of these entrepreneurs, yet had become longtime friends with them — perhaps because they shared similar upbringings: having experienced enough social slices growing up, while being, in a sense, "elite-school underachievers" representing a sufficient disregard for rules, and, as Wang Yu put it, having very strong "ability to survive under pressure, like facing peer pressure."

Yang Tianzhen often forgot Cao graduated from an elite school, until one birthday when her friend Shui Ge (Wang Yuheng) mentioned wanting to visit the Galápagos Islands, and Cao naturally launched into the geography and scientific history of the archipelago. "You really don't see so-called elite-school airs on him — and I mean that as a compliment."

Yang told Anyong Waves: "When Cao interacts with people, he's good at grasping their underlying traits. For instance, he'll introduce me to friends he thinks I should know, and I've never been disappointed, because he knows I care about interestingness, so he connects me with interesting people, not just those with status or influence."

The ability to grasp human foundations comes from experience, but also from perceptiveness. In Wang Yu's view, chatting with Cao "is comfortable" because he always stands in others' shoes. As chair of Tsinghua's largest department, Wang saw Cao's tremendous support for education: "China's academia and industry are relatively siloed now, so those who can connect both sides in an organic, market-oriented way — Cao is one of them."

As a scientist-entrepreneur, Wang also saw Cao's sincerity in communicating with scientist-founders: "Investors shouldn't just agree with you to win allocation; they should analyze pros and cons from a business perspective. Scientists are smart, and therefore sometimes trapped in their own logic — they need someone to help puncture it."

Insight and empathy are universal across any context, even transcending cycles. But for Cao at this moment, the real challenge may be: when someone has achieved enough success in one era, how do they break free from inertia?

Ocean's Eleven

As early as 2018, Cao had toyed with the idea of starting his own firm. But the resignation stalled on a simple question from his former boss: "After you leave, what will you do, and how?" Cao realized he wasn't fully prepared. So he stayed, and helped found Hongshan Seed Fund. Those four years taught him at least two things: how to systematically do early-stage investing, and how to be "Number One."

"Eight years at Hongshan — the first four looking at mobile internet, the last four investing in tech and manufacturing." Cao mentioned this several times in our interview. During those four years, his investment themes had quietly shifted: Taichi Graphics, JiTai Pharmaceuticals, MetaX, Houmo Intelligence, and LandSpace were all projects he captured at Hongshan Seed Fund. At the time, AI was not yet the dominant force it is today, but he had seen nearly every AI+ project on the market.

Cao told Anyong Waves: The investment approach then was from first principles, thinking about where changes in production tools would create commercial opportunities. Hence he saw how greater computing power and more advanced algorithms could drive innovation in AI+ fields requiring massive data computation.

Investing is not opening blind boxes. Cao didn't only learn of Kuaishou's massive market cap on the bell-ringing day, nor did he only then sense "the market seems to have peaked" — he had begun thinking about the necessity of "change" much earlier.

This forward-leaning action was validated three years later. In early 2022, Cao began assembling Monolith's VC team. He met candidates with similar backgrounds: graduated from top business schools, employed at top funds. Their reasons for meeting him were largely the same — "they all felt their own funds had various problems" — and Monolith's appeal lay in: star investor-founded; investment direction unknown. For dollar-fund investors sensing the need for change, it seemed an ideal "experimental field."

Meeting enough people, Cao realized that if he didn't want to become others' experimental field, he had to make sweeping reforms at the organizational source — starting with personnel composition.

2021 was a record year for dollar-VC fundraising, yet crisis already lurked. While some dollar investors struggled to find the next internet opportunity, the RMB side was booming: semiconductors and new energy became the new "sexy stories," with Pre-A rounds in energy storage frequently exceeding 100 million yuan. No one yet anticipated that by October the following year, this figure would balloon to 18.3 billion yuan in GAC Aion's Series A.

Cao believed that this constant sector rotation was precisely why he didn't want "standard dollar-VC elites." In his view, Chinese VC at the industry's hottest moment had an "investment-bank-like" character, with more star investors being generalists from business backgrounds. Observing them, he found they could switch investment sectors roughly once a year — but in an era transitioning toward industry, what was needed more were specialists who could go deep.

Thus, Cao set his hiring principle as: "Avoid recruiting from investment institutions as much as possible; instead find people with substantial industry backgrounds, or who have founded companies themselves, or who have done enough research." They might have less investment experience, or simply be sufficiently interested in investing, but "VC isn't really a financial industry; pure VC is more like a tech industry, so what matters more is cognition and judgment."

"Because if you break down 'technology' — it's science and technology. What truly drives commercial development is technology, and the principles behind technology are science," Cao told Anyong Waves. "So our colleagues, they know which technologies can bring major commercial opportunities, and they understand the frontier scientific principles behind each technology, able to think, deduce, and decide in an earnest, fact-based, well-researched manner, consistent with first principles."

Cao the TMT-era investor, facing the so-called "hard tech" era, still had to grapple with issues of expertise, valuation system changes, and more. Cao the founder of Monolith Capital had the more important job of building the team's entire system, and using his rich investment experience to compensate for team members' relatively limited investment histories.

This made Monolith resemble the film Ocean's Eleven: the mastermind handpicking 11 members for his heist, each with a different profession — card sharp, explosives expert, pickpocket, acrobat. This was not a massive army, but a special forces unit.

In Cao's view, experts from different fields formed this early-stage tech-focused VC team, and the chemistry between them was crucial. "Just as the boundaries between academic disciplines don't exist in nature but are divided by academic affairs offices, the lines between investment sectors are also artificially drawn — while the development of science and business in nature and commerce should have no dividing lines," Cao told Anyong Waves.

Indeed, many of the greatest commercial opportunities in recent years have come from cross-domain technologies: battery technology innovation brought electric vehicle opportunities; next-generation atomization technology brought e-cigarettes; 3D printing technology unexpectedly flourished in the invisible aligner industry.

Cao revealed to Anyong Waves that among Monolith's undisclosed investments is a medical device chip company, where Monolith led the round with two well-known healthcare funds following. This doesn't mean Monolith surpasses vertical healthcare funds in medical expertise, but that it has both medical and chip specialists on staff.

Another key chemistry exists between Monolith's primary and secondary market teams. At Monolith, primary and secondary team memos are shared, meetings are open to all. Cao believes that especially for early-stage investors, attending secondary team meetings to see what endgame companies in an industry look like enables a complete rather than partial industry picture, leading to deeper and more comprehensive research cognition. If they find that companies in a particular industry remain small even at IPO, then from a VC perspective that industry can be directly filtered out.

The synergy between primary and secondary teams is what Monolith aims for, but could this synergy also become a drag?

Cao thought about this for a long time, eventually simplifying the dilemma to code: "You can't force synergy, because synergy should be a chemical reaction. Daily inputs are training data for the model; no single piece of data produces the final output. Synergy is actually emergent."

Looking back on his first year-plus of entrepreneurship, Cao admits that since starting his own firm, his admiration for his former employers Tongchuang Weiye and Hongshan China, and for the two founders and former bosses, has only grown. "Managing that much money, that many people, that many deals — not easy." Now, as Number One, Cao is the one who must backstop the organization, with more responsibility on his shoulders. "The more you engage, the greater your reverence; you become more cautious about many things."

Primitive, Upward Force

Over the past decade, Cao — and China's primary market investors generally — were people who rode a rapidly ascending elevator to the skies. Of course, being able to enter the industry as an investor a decade ago, or specifically as a dollar-fund investor, was already a choice that started you at the finish line.

At a private occasion, someone once asked Cao: Why do you always make the right life choices? Cao answered almost without hesitation — clearly a question he'd been asked many times. His answer: "Spend the vast majority of time thinking, and make only a small number of decisions."

Reviewing his life choices: because research had too many uncontrollable factors for one's career, Cao gave up direct PhD admission and went to Tencent in Shenzhen; because he felt large-company work had too many uncontrollable elements for the individual, he chose venture capital where you could put eggs in multiple baskets; because he believed TMT offered more opportunities in Beijing, he didn't go to Tongchuang Weiye's headquarters in Shenzhen but based himself in Beijing; then in 2013 he joined Hongshan, catching the era's express train.

Thus, building a new fund is Cao's current optimal decision. Regarding whether Monolith will consider RMB fundraising, Cao's answer is: "In preparation."

For so-called "dark horse funds," this may be a good moment — many LPs currently lean toward looking at newer institutions, which carry no historical baggage and can move lightly. By contrast, many established dollar funds are mired in layoffs. Anyong Waves learned that Monolith's RMB fund investment directions may include next-generation digital industries and tech-enabled manufacturing.

Despite such dramatic market shifts, Monolith has remained active in deploying capital this year. Cao told Anyong Waves that Monolith has already invested in general-purpose large models, large-model computing power, AI+ gaming, AI+ education, medical device chips, and XR applications this year. Among them are top-tier star entrepreneurs including former Zhiyuan Young Scientist Yang Zhilin, Giant Network CEO Wu Meng, and former Genshuixue COO Zhang Huaiting.

Some entrepreneurs noted that despite being a startup, Monolith is already recognized as a first-tier fund in the industry. In the first half of this year, domestic VC deployment amounts fell by nearly half year-over-year. "Fundraising isn't easy; in the current market environment, getting their money is a plus, and shows you're of the same aesthetic."

Yet VC is ultimately a long-cycle industry; this is only the beginning, and Cao will need to deliver more answers to this era.

Yang Tianzhen mentioned in our interview: "In the past you couldn't tell whether the era made you or you made yourself, but now you can distinguish." She believes that as fellow members of the same generation, this is a question both she and Cao face. In her view, at a moment when the era's pace has slowed, this is a moment of major life choices for everyone.

"This isn't just Cao's question, but one our entire generation must answer."

Cao has always loved mountain climbing, finding joy in "earnestly, quietly climbing." "The meaning of climbing is in the ascent itself — it's a primitive, animalistic, upward drive," Cao said. This is also what makes entrepreneurship most interesting.

The name Monolith derives from the mysterious black monolith in the classic sci-fi film 2001: A Space Odyssey, with its perfect mathematical proportions of 1:4:9 — the squares of the first three natural numbers. To Cao, Monolith represents the ultimate truth and wisdom of the universe; choosing this name expresses his and his team's curiosity, truth-seeking, and exploration of the essence of business and the world.

The name also signals, to some extent, that this will be a path that is destined to be different — yet long.

Image source | Ocean's Eleven poster

Layout | Yunxiao Guo