Possibly the World's Smallest VC

@Zhiyan Chen

How small can a venture fund possibly be?

Here's one answer: $3.3 million.

What that means: checks of just two or three hundred thousand dollars; less than $66,000 in annual management fees (barely enough for a few international trips); and a financial model that remains unproven at scale.

But one person did exactly this. Her name is Xiaohan Xiang, and her fund is called: XIAOXIAO FUND.

XIAOXIAO FUND is just Xiaohan Xiang. She is simultaneously the investor, analyst, legal counsel, CFO, and HR. If there's such a thing as a solo GP, none is more solo than this.

When elsewhere asked some LPs whether a fund this tiny could even work, most furrowed their brows: "Never seen it before. Curious to find out."

Later I realized that by merely asking the question, we were already acknowledging how rare and precious XIAOXIAO FUND truly is.

This is the fourth new fund story elsewhere presents, following Nebulon Ventures, Source Code Rhythm, and Creek Stone. Trust us — this may be the bravest and most singular one yet.

I spoke with Xiaohan Xiang, founder of XIAOXIAO FUND, twice. This is her story.

The Farewell

In the summer of 2024, I probably cried more than I ever had in my life.

That July, on a Monday afternoon, after the routine weekly meeting at Atom Ventures, I walked into my mentor Raymond's office — Raymond Feng, founding partner of Atom Ventures — and handed in my resignation.

We talked for two hours that day. I cried for two hours straight. Not because of conflict, not because I'd been wronged — on the contrary, Atom had been too good to me, like family. My colleagues had cared for me like family. The guilt, fear, and reluctance of this "breakup" hurt worse than the end of any romantic relationship.

During the two-month handover that followed, I was in tears almost every day, my eyes perpetually swollen. Seeing my colleagues' expressions, I cried. When peers reached out to chat, I cried. Saying goodbye to portfolio companies one by one, I cried. Talking with an LP who worked closely with Atom, I cried too. As I was leaving that day, the LP sent me off with a line: "All the past is prologue. Xiaohan, you have to keep moving forward."

I was born in 1994. I had just turned 30.

Many people asked me: if things were so good at your old firm, why leave? Why not simply launch a new product line within Atom? Raymond had even suggested: "Take the Atom brand. If you invest well, we'll split the carry."

I was grateful, but I declined.

Three reasons: First, it wouldn't be fair to my colleagues who stayed — why should I get that privilege? Second, with an established firm's brand behind me, I feared my investment decisions would become distorted. Once fundraising scale grew, I wouldn't dare to bet on dark horses the way I do now. Third, and most fundamentally — I wanted to try running a fund my own way.

I wanted to create something. I wanted to live in a way I could respect, to truly be myself. So I quit, armed with nothing but a hazy idea: a micro-sized dollar fund targeting young people, focused on AI, with global reach.

No LPs. No deals. No idea how to structure a dollar fund. I set out anyway.

From Novelist to Silicon Carbide Investor

Before entering VC, I was a pure humanities student.

I studied Chinese Language and Literature at Huazhong University of Science and Technology. My daily task was reading novels; my thesis was writing a novel. I once wrote two novels over 100,000 words each — one I categorized as "rural literature," the other as "Shanghai-style literature." Looking back, they were terrible. They'll stay buried on an old hard drive.

Later I went to New York University for Global Affairs. It sounds like a grandiose major. I did intern at the UN for a while, but that environment left me somewhat numb. The daily work was trivial and inconsequential. I couldn't see myself there.

By late 2018, I faced two choices: an editor position at a national media outlet's overseas edition, or an internship at a VC firm I'd never heard of.

I chose the latter. A major reason: I'd just gone through a breakup and desperately wanted to leave New York.

I joined Atom Ventures, a RMB fund that had consistently focused on early-stage investing.

When I first arrived, I knew nothing about VC. Raymond's main ask of me was translating TechCrunch articles.

By early 2019, Atom was at a critical juncture, pivoting to all-in hard tech. Raymond felt that as a straight guy, he couldn't make consumer decisions, so the entire team shifted to domestic substitution plays. This humanities student was thus "thrown into the deep end" of hard tech investing.

The first six months were thrilling and painful. I wanted to see deals, wanted to pull the trigger. But I couldn't even tell you the difference between CPU and MCU in Chinese. Every pitch deck required massive self-education. I soon discovered, though, that many peers in hard tech weren't exactly technical experts either. If nobody truly understood, why should I feel inadequate? I began leaning into my humanities intuition: reading people.

My first deal was a company making inspection equipment for silicon carbide, a third-generation semiconductor. Though I never fully grasped the technical details, the founder's conviction completely struck me — that force that makes you want to believe someone when they speak.

That deal later became an important benchmark for Atom's transformation, and gave me my first taste of what closing a deal really feels like — not just adrenaline-fueled excitement, but the anticipation of "I've finally set out."

The Gap Opportunity

Over six years at Atom, I went from a "Grandma Liu" who couldn't read financial statements to an independent deal-maker. I invested in numerous "little giants" and hidden champions. But by years five and six, I found myself in a comfort zone. Doing a few deals annually had become almost too easy — 30% effort could get the job done.

This "comfort" made me deeply uncomfortable, because I realized I was becoming a "smooth operator."

Right then, GPT-4 appeared.

From late 2023 onward, I was completely pulled toward AI. Someone who never had insomnia was now scrolling through news until sleepless every night. Yet by day, I still had to pretend to focus on hard tech.

This dissonance felt twisted.

Many young people around me had started building AI applications. They were极度 passionate about product-making, and from Day 1 they wanted global markets, settling in US dollars. Meanwhile, large institutions, constrained by capital sources and internal mechanisms, struggled to invest in "little sprouts" with just a PowerPoint, a demo, and no big-tech pedigree.

I saw a dysfunctional dollar fund market: big funds couldn't deploy checks under $1 million, yet these young founders only needed tens or hundreds of thousands for their first round.

In this gap, I saw my opportunity.

Lifting Dark Horses

So, let me reintroduce myself: I'm Xiaohan Xiang, founder of XIAOXIAO FUND.

I named my fund "XIAOXIAO" for several layers of meaning: First, it's genuinely small — under $4 million in size. Second, I invest in teams I meet when they're still tiny. Third, "Xiaoxiao" is actually my childhood nickname.

The English name isn't Small, Little, or Tiny — it's XIAOXIAO. I know X is hard to pronounce at the start of English words, but foreigners will have to learn pinyin eventually.

Many people have laughed at how miniature my fund is. Annual management fees are just a few tens of thousands of dollars — barely enough for basic operations. But I never aimed for scale. Objectively, I couldn't achieve it anyway.

But since VC is a financial product serving entrepreneurial paradigms, and since this wave of AI software founders can build demos without much capital, I can offer micro-checks sized for them.

XIAOXIAO FUND's first deal was Teable. Its founder is Jiabei Chen.

It was pure serendipity.

Just starting the fund, I needed a data management tool and found Airtable's paid version too expensive, so I searched for open-source alternatives. After trying Teable, I was stunned by its UI design and product logic. Scanning the QR code, I discovered the developer was actually in Shenzhen. I immediately rushed down to meet Jiabei.

Jiabei was born in '94, same year as me. He was among the first engineers on Feishu's multidimensional table product, and co-founder and CTO of Vika. At that point, he'd been grinding on open-source multidimensional tables for two years. The team had it rough — one partner had gone to work elsewhere because they couldn't make payroll, the only time Jiabei cried during his entrepreneurial journey. We talked for three or four hours that day, and I wrote him what I call a "blank check": "I really want to support you, but my fund is still getting set up. Wait for me."

Jiabei actually waited. Later, I gave him his first payroll funding, with valuation set at a deeply friendly "friends and family" price. After that, Teable pivoted to database agents and performed well, securing follow-on funding from ZhenFund, BV, and other major institutions.

My very first shot, completely my own, had been fired. It gave me enormous confidence.

I position myself as the "training wheels for dark horses."

Big funds typically chase "white horses" — big-tech halos, elite pedigrees, high valuations from the start. But many talented young people may have just graduated, or spent two or three years at ByteDance or Alibaba before wanting to escape the corporate machine. They might pitch Sequoia Capital China at a $20 million valuation, but big institutions can rarely accept projects without data traction.

At that point, I tell them: "I'm willing to bet on you, but can we slash that valuation to $5 million — cut it off at the ankles? I only want 5%, I'm not taking advantage. I'm also building something from scratch. Let's grow each other. On your board, you'll always have my vote."

Some are willing. Since I was relatively early among micro-funds going all-in on AI, I've backed some 90s- and 00s-born founders with serious "animal spirits." One kid born in 2003 returned from the UK to start a company, radiating intense entrepreneurial energy. After meeting him, I chopped his expected valuation to one-fourth. He thought for a day and agreed.

This trust isn't built on rigorous financial due diligence, but on a kind of "kindred spirit" aesthetic. Looking back, the founders I select tend to be "alternate universe versions of me": utterly convinced, courageous enough to take risks, possibly misunderstood by the mainstream.

Oh, and by the way — according to family generational naming conventions, I should have been named "Xiang Dahan" (Xiang the Big). But my mother thought "Big" sounded awful for a girl, so she flipped through the dictionary and found "Xiao," which sounds like "small" and echoes "big."

"Xiao" and "Han" both mean "daybreak."

The One Holding the Umbrella

I started my first fundraising two months after quitting. The LPs who supported my first close were mostly longtime friends and founders I'd previously backed.

They didn't even wait for me to ask. Hearing I'd left to do my own thing, many people's first reaction was to ask: "Xiaohan, do you need money for this?" I said: "Yes." They wired funds directly.

I'm deeply grateful to them, and to the new LPs who later supported XIAOXIAO FUND, even those who hadn't known me long. I know they're not purely in it for financial returns — more that they see me as a window into young people and the world of AI. To honor this trust, I share every investment memo with them and frequently update them on the fund's progress.

These six years, I've spanned from hard tech to AI software, from RMB to dollars. Along the way, there were far more people throwing cold water than offering support. After launching XIAOXIAO FUND, someone told me bluntly: "Xiaohan Xiang, you're destroying your career."

I don't care. In my definition, a career isn't climbing a ladder — it's continuously exploring uncharted territory.

Even during my six years at Atom, I never considered jumping ship. I didn't want to become a cog in a big machine. That hierarchy, that peer pressure, that process of seeking consensus just to get past investment committee — it would only erode my creativity.

In this industry, many chase becoming Somebody. My idol is Faye Wong. My favorite line of hers — "Face the world in a daze, face yourself straight on."

Perhaps XIAOXIAO FUND will never become a billion-dollar fund, but it will certainly be unique. If the world only had standard answers, how boring would that be? Without uniqueness, how could one even breathe?

If this is rebellion, I hope to keep it forever.

For XIAOXIAO FUND, I have three core values, always displayed on the website:

• The world needs diversity to be wonderful.

• Social progress comes from the small challenging the big.

• The passion of life lies in free creation.

Now, with 65% of the first fund deployed, I'm beginning to think about raising the next. I'll continue betting on "dark horses" overlooked by the mainstream. I want to be the GP that founders think to call — like a "big sister confidant" — even in their darkest moments.

On my last day at Atom, Raymond gave me a 3D-printed desk ornament. It still sits on my WeWork desk. It shows a rainy day and an umbrella. He told me to buy a Molly from Pop Mart to place underneath. He said: "From now on, no one will shield you from wind and rain. You need to learn to hold your own umbrella."

Actually, since I decided to strike out on my own, I'm not afraid of getting wet.

When I eventually stand firm, when XIAOXIAO FUND eventually stands firm, I hope to be the one holding the umbrella for young people.

Cover image: Claude Monet, The Umbrellas, 1886, Musée d'Orsay