Roundtable | Some "Serious" Thoughts on Startup Services

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On December 23, 2021, "All MaLi for You — 2021 Source Code Capital Entrepreneur Services Report" was held in Beijing, with over a hundred investors and founders participating both online and offline. At this report, Source Code Capital announced the upgrade of its post-investment energy center to the MaLi Entrepreneur Service Center, and the evolution of its existing "dualization" post-investment services into a "six-complete" system for comprehensive founder support.

Two years had passed since the last post-investment services report. During that time, through deep understanding of founders' needs and continuous refinement of entrepreneur services, Source Code Capital upgraded its previous "systematized, productized" service framework to the "six-complete" entrepreneur service system: full-court assistance, full-journey companionship, full-spectrum service; wholehearted commitment, all-hands participation, and methodology-driven support.

At the report, representatives from Source Code Capital's entrepreneur services team shared their thinking on what it means to serve founders. We've excerpted the core perspectives from each speaker:

The Thinking Behind the MaLi Entrepreneur Service Center Upgrade

— Yi Cao, Founding Partner, Source Code Capital

We discover value, and we create value. Some institutions draw a clear line between investment and post-investment, but we've always sought a way to more accurately reflect the indivisible nature of the two. My understanding is that investment plus post-investment is integrated and inseparable — at its core, we want to accompany founders over the long term, understanding their needs earlier, more comprehensively, and more nimbly, while mobilizing different resources to form flexible combinations of products and professional services that comprehensively help founders succeed, together realizing our vision of "smarter business, better life."

Of course, this process requires us to start from first principles. It can't be self-indulgent. Using first-principles thinking, we persistently hold to our most essential intention: putting every founder's success first, not our own. Though of course the two are one — your success is necessarily our success.

We've traveled this road day and night for many more years. Today, we want to light a streetlamp. The entrepreneurial journey can be lonely; we're willing to offer more companionship, more light. We formally unveil the "MaLi" brand — our post-investment services refreshed as the "MaLi Entrepreneur Service Center." Source Code Capital, together with internal and external ecosystem partners, all MaLi for you: serving founders with "full-court assistance, full-journey companionship, full-spectrum service; wholehearted commitment, all-hands participation, and methodology-driven support."

Companionship Requires Professionalism, and Better Help

— Yungang Huang, Partner, Source Code Capital

In the old days of investing, the investor was a one-stop shop — from sourcing deals and industry research to negotiating terms with founders and reviewing legal documents, the investor had to be involved every step of the way, pushing things forward. If you think of the investment process as a small project, then the big project is what comes after investing, and no one was driving that either; it was mostly the investor self-motivating.

Source Code Capital wants to accompany founders. Companionship requires professionalism, and companionship requires better help. In fact, as the industry has evolved, there's been increasing emphasis on professional services, with professional teams needed behind the scenes. At Source Code Capital, this feels like a real blessing. Sometimes we've just signed a term sheet with a company and are still traveling, and our entrepreneur services colleagues have already set up various service groups and started conversations — no need for us to drive it.

The collaboration within the entrepreneur services team is also excellent. My feeling is that at every node of the service process, both upstream and downstream colleagues see themselves as both demand-side and supply-side, together providing the most professional service to founding teams. At Source Code Capital, the investment team and the professional post-investment team are regarded as a single whole, working from different angles in concert to serve founders.

Human Capital Is Core Capital

— Yunduan Zheng, Partner, Source Code Capital

Source Code Capital believes that human capital is core capital, not cost. Today's era is the era of "knowledge-ism" — S-tier talent density and knowledge density generate tremendous creativity and value. Capital is not the scarcest resource; S-tier talent is.

Source Code Capital has made an enormous commitment to full-stage, full-chain entrepreneur services. Entrepreneur services run from capital to industry to professional expertise — this is a complete closed loop of entrepreneur services. In the professional domain, Source Code Capital is building a true "platform-type" professional service system, spanning capital markets to organizational capability, user growth to sales operations, product R&D to strategy, PR to public affairs, finance to legal and tax.

In human capital entrepreneur services, in 2021 Source Code Capital connected nearly a thousand experts and candidates to MaHui ecosystem companies, with the number of director-level and VP-level core executives recruited for companies rising significantly year over year. On average, multiple director-level and VP-level candidates joined companies every week; our recruiting colleagues were often still discussing candidates with founders past midnight. Going forward, Source Code Capital's human capital team will continue building its growth talent network, focusing on high-frequency functional and industry needs, and gradually systematizing recruitment empowerment products to help companies enhance employer brand, optimize recruiting systems, talent philosophy, selection standards, interviewer training, and recruiting systems — bringing scientific recruiting empowerment to companies.

On the Code Brain course front, with an eye toward "focusing on real business problems" and "focusing on business cognition enhancement," last year nearly a hundred sessions were held, with over a hundred entrepreneurs and experts teaching, covering more than a thousand students at the CEO and CEO-1 levels. Code Brain continues to iterate, project-driven, building its curriculum system, lecturer system, and student system across four dimensions: "brain power, heart power, physical power, and network power." In organizational consulting, around "aligned goals, effective incentives, and meaningful growth," it develops and provides different products across expert connections, organizational diagnosis, goal systems, incentive systems, and growth systems. In 2021, organizational consulting provided several dozen consultations; in 2022, it will further strengthen product systematization, digitalization, and specialization.

IPO Is a New Starting Point, Not an End Point

— Wei Wang, Partner, Source Code Capital

From a company's earliest days, everyone's foremost concern is survival; as the company gradually develops and gets on track, its business capability, organizational capability, and fundraising capability improve rapidly, and its scale and industry position become increasingly prominent. In the middle-to-late growth stage or approaching maturity, many companies begin considering going public, completing the leap from primary to secondary markets — this is a shared goal for many companies, employees, and shareholders. From the enterprise life cycle perspective, early stage, growth stage, maturity stage, going public... these are all stages of enterprise development. The transition from startup to listed company brings more opportunities and challenges, so going public as a new starting point requires founders to think ahead and plan for strategy and path both during and after the process.

IPO is a systematic project — it's not something you can simply hand to listing intermediaries or leave to the CFO/secretary of the board and rest easy. IPO is a Number One project; it requires the founder and CEO to attach great importance and participate throughout. The listing process involves many choices and trade-offs, which often require the founder and CEO to weigh and decide from a long-term, holistic perspective — simply handing it to the company's listing execution team is far from sufficient. At the same time, IPO has extremely high demands for professionalism; a professionalized team must participate and execute throughout. Before listing, many companies think and decide more based on business and industry logic, but when a company is heading to the secondary market, it must fully understand and strictly comply with secondary market compliance requirements, listing rules, disclosure rules, trading rules, and so on — all of which depend on investment banks, accountants, and lawyers specializing in listing work to provide professional support.

The most critical point is that IPO is a new starting point, not an end point. Founders must think about what the company needs to do after going public, including post-listing strategy, business, capital operations, and so on. Throughout this process, Source Code Capital provides founders with comprehensive, rational securitization decision support, from capital markets team building to listing problem-solving, from secondary market resource coordination to post-listing planning and other full-spectrum customized services, safeguarding the company's listing and long-term capital strategy implementation.

Source Code Capital Wants to Be the Bridge Between Companies and Government

— Jian Wu, Partner, Source Code Capital

Many companies feel distant from government when they're just starting out; not knowing how to communicate, they don't communicate or communicate less — this is actually wrong. Some academic perspectives point out that local leaders can, in a sense, also be defined as "founders" — they too have to run a region and bring benefit to its people. There's a shared foundation in entrepreneurial spirit that allows for collaboration. The country now encourages building a "close and clean" new type of government-business relationship; we've always encouraged founders to engage more with government and collaborate more.

Source Code Capital plays more of a bridge role in connecting companies and government.

From a certain perspective, the goals of regulators are also the goals Source Code Capital is aiming at — we all want the industry to develop well. As an investor, Source Code Capital invests not only capital but also works to promote healthy, orderly industry development; our service foothold is how to make companies stronger and industries better.

Conversely, when regulators formulate policy, they also want to understand more about industry status and the cutting-edge issues happening now — at these times we have a good angle to provide some very neutral, well-considered suggestions, which is also Source Code Capital's unique value and role positioning. Beyond this, different industries have their own special language systems; sometimes younger founders aren't very familiar with the language system within institutions. In these situations, our role is somewhat like a "translator" — Source Code Capital has a responsibility to help all parties understand each other more precisely.

Effectiveness Matters Most in Entrepreneur Services; Intention Matters Most at the Foundation

— Di Long, Managing Director, Source Code Capital

Founders are our users. From the user perspective, full-court assistance means entrepreneur services must start from actual results, bringing founders fast, accurate, effective service that helps founders solve their most genuine problems; full-journey companionship is reflected in the fact that whether a company is at the seed stage, early stage, growth stage, or maturity stage, Source Code Capital's entrepreneur services in content, products, and capabilities can cover it; full-spectrum service means that startup needs are diverse — strategy, growth, organization, resources — and whatever the domain of need, entrepreneur services has the best professionals in that domain available to help.

From the Source Code Capital perspective, wholehearted commitment is the foundational intention — Source Code Capital has emphasized investment in entrepreneur services from the very beginning, wholeheartedly helping founders and helping founders succeed. All-hands participation means that entrepreneur services isn't just the entrepreneur services team, but also includes investment, platform, internal and external senior expert advisors, and the entire MaHui ecosystem participating in service, achieving "more people, stronger people, and more effective collaboration among people." Methodology-driven support reflects Source Code Capital's emphasis on foundational thinking, strategic approach, and practical execution — using scientific methods to provide effective service, a summary of "systematized, productized, and digitalized."

We must see not only the pain points of entrepreneurship, but also the high points.

What Source Code Capital's entrepreneur services team continuously does is understand founders — understand their grand dreams and present challenges, understand their morning optimism and nighttime loneliness, understand their walking on thin ice, and also understand their never giving up.

Because of this resonance with the entrepreneurial spirit, we have wholehearted commitment and ever-present companionship. We hope to accompany founders in becoming that change, creating value for founders, growing together, and achieving together.