Source Code Capital AGM Review: Depth Over Breadth

China's economy is deeply intertwined with the global economy. The next China is still China. In the rapidly evolving technology and investment landscape, Source Code Capital has consistently led the industry with sharp market insight and forward-looking strategy. Recently, we successfully hosted the Source Code Capital Annual General Meeting, bringing together investors, industry leaders, and innovators from around the world to explore and share deep perspectives on current market trends and future opportunities.

Our management and investment teams delivered in-depth analyses of key technology trends such as AI and robotics, and how these trends are shaping future investment opportunities.

Source Code Capital remains committed to investing in technology-driven innovation and in the creation of lasting, genuine value. We believe that through our insights and strategic deployment, Source Code Capital will continue to maintain its leading position in the investment field, and by backing promising startups, steadily drive economic and social progress. We look forward to meeting new challenges alongside all our investors and partners, and seizing the boundless possibilities emerging technologies offer. Source Code Capital will continue serving as a bridge connecting entrepreneurs, investors, and the broader industry, jointly advancing society toward a future that is more intelligent, efficient, and innovative.

Excerpts from Yi Cao's AGM Speech

Depth Over Breadth

This year marks Source Code Capital's tenth anniversary, and I've now spent two decades in venture capital. If I were to share the single most important value I've developed — both personally and as a firm — over these 20 years, it would be this: depth over breadth.

In other words, I want to emphasize the importance of business model. When I became a VC in my twenties, most of my time was spent on the zero-to-one journey of companies. Most of my energy and intellect went into judging PMF (product-market fit) — whether the right product could find the right market.

PMF is critically important. It's the key to a startup's success, to winning or surviving, to owning that zero-to-one process. But when you invest in the best business model, you get to enjoy the one-to-ten journey, even the ten-to-hundred journey — not just zero to one.

We've built a strong track record of returns. But what matters most is the future. Depth over breadth. We will focus even more intently on investing in the best business models and the best founders.

We've learned some lessons from the past. We once assumed that as AUM grew, more people would mean better investing. Now we believe that with the right organization and talent, a leaner, more dynamic team actually produces better results.

The domestic and global environments are undergoing profound changes. Technology development led by AI will bring deep and widespread social and economic transformation. China's AI sector is advancing rapidly. Chinese entrepreneurs continue to evolve — they are more shareholder-oriented, more disciplined in controlling expenses and costs. Over 90% of the new generation of entrepreneurs have a global outlook, targeting global markets from day one — and this is precisely where Chinese venture capital holds its advantage.

Source Code Capital enters its second decade still young. We will travel light, upholding fundamentals while innovating. We will stay patient and curious, never losing our original aspiration. We will be more seasoned — steady, precise, decisive, no wasted words, no detours, no futile effort. We will move forward cautiously but fearlessly, hearts set on vast horizons, exploration never ceasing.

Excerpts from Yungang Huang's AGM Speech

The Two Sides of AI Investing

We see AI opportunities falling into two categories: AI-native and AI-enabled.

AI-Native (Side A): AI-native means AI contributes more than 50% to a product or service — AI is the core. Typical products include ChatGPT, Gemini, the new Bing, Character.AI, and others that rely primarily on AI technology to deliver services or create value.

AI-Enabled (Side B): AI-enabled means AI contributes less than 50% to a physical product or service — AI serves as an auxiliary tool or technology that enhances existing offerings. Typical products include Adobe Firefly, Blender, Microsoft Copilot, CapCut, and others that incorporate AI to augment functionality or user experience.

We believe that mapping AI-native to AI-enabled, and online to offline, gives us four main quadrants.

Online (A1 and B1): A1 covers consumer-facing applications that directly leverage AI to deliver services — search engines, content platforms, and the like. B1 covers products that use AI to enhance user experience or service efficiency, such as social networks and e-commerce. Gaming sits somewhere in between.

Offline (A2 and B2): A2 refers to products heavily dependent on AI technology, such as autonomous vehicles, advanced robotics systems, and AI-driven drug discovery. B2 refers to products that integrate AI into existing offerings to improve performance or add new capabilities — medical devices, materials, logistics, and similar fields.

From an investment opportunity perspective: Side A > Side B, AI-to-C applications > AI + hardware > industrial AI

In our AI investments, we favor companies that can directly harness AI technology to create new value and deliver innovative services or products — those with disruptive potential at the frontier of AI technology.

At the same time, when evaluating investment opportunities, we pay particular attention to AI applications that can respond quickly to market demand, with high degrees of innovation and user-centricity. We seek out and support the companies most likely to lead industry transformation and achieve commercial success, building a diversified portfolio with high growth potential.

Reference: Exclusive | Yungang Huang and Source Code's New VC: Back to Classic Tactics