Following his departure from Google (NASDAQ: GOOG) on Friday, Kai-fu Lee announced via Twitter that he was planning to launch a new venture fund. Today, he revealed the guts of a $115 million venture capital company that is focused on angel-round financing.
The company, Innovation Works, hopes to launch five successful start-ups a year in China. In addition to investing money in hot prospects, Innovation Works will act as an incubator for the businesses it backs. This approach doesn't exist yet in China.
Lee's latest endeavor has already attracted some major investors, such as Steve Chen, co-founder of YouTube, electronics contract manufacturer Foxconn (OTC: FXCNY), and Legend Holdings (OTC: LGDI), the parent of PC manufacturer Lenovo. Foxconn and Legend Holdings already have venture arms but have nonetheless decided to back Lee's endeavor.
Edward Yu, head of Analysys, an internet research company based in Beijing, tells the Financial Times, "This venture is unique because it tries to do much more than venture capital normally does. It attempts to develop the entrepreneurial talent which the internet industry in China still lacks."
There are venture firms in China backed by Chinese companies -- such as ID Tech, a spinoff from Acer (OTC: ACEIF) -- but they tend not to pursue early stage investment.
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