The Chinese Tech Diaspora Opportunity, with Eric Rosenblum, Managing Partner at Tsingyuan Ventures

Hi! Ben, Partner @ SOSV here- the early stage deep tech fund focused on hardware and biology, via our programs HAX and IndieBio.

It seems that 2020 will have news that make the previous ones irrelevant almost on a weekly basis… We hope you’re coping ok — we are trying our best.

This episode of our podcast Deep Tech: From Lab to Market (@LabToMarket) features a rare US/China cross-border investor, who built several companies with successful exits in China.

  • His fund co-founders are all graduates from Tsinghua University (China’s Harvard/MIT).

  • They identified a large and underserved niche of Chinese PhDs creating companies in the US.

  • The conversation brings perspective to the global war for talent and the opportunity of creating cross-border champions.

Note: the live event on ‘Deep Tech Startups vs. Covid-19’ with Khosla Ventures, Fifty Years and IndieBio announced last time went very well. Summary, slides and video are here.


About Eric Rosenblum & Tsingyuan Ventures

Eric Rosenblum is a Managing Partner at Tsingyuan Ventures, an early stage US fund with over $100m under management. They believe in the opportunity of cross-border and cross-discipline investments and focus primarily on US-based science startups founded by the Chinese tech diaspora.

  • Prior to co-founding Tsingyuan Ventures, Eric graduated from Harvard, worked at BCG then got an MBA at MIT and worked as a management consultant and serial entrepreneur in China for 14 years.

  • Eric was one of the rare foreign co-founders of multiple tech startups during China’s early Internet wave, and his ventures led to 3 exits (IPO for Linktone, M&A for ChinaNOW and SmartPay).

  • Coming back to the states, he then worked at Google and Palantir before co-founding Tsingyuan Ventures (清源创投) with former members of the TEEC Angel Fund (now TSVC).

  • TEEC started as a network of TsinghuaUniversity alumni (Tsinghua Entrepreneur & Executive Club (Tsinghua is like the MIT + Harvard of China) and wrote the first checks in 4 unicorns: Ginkgo Bioworks, Carta, Quanergy and Zoom, and about 160 tech startups in SaaS, AI chips, Fintech, Biotech, Blockchain and Semiconductors.

  • While it is a US fund, the Tsingyuan name reflects its focus and strategy by combining part of the Tsinghua (清) name and ‘source/origin’ (源).

Some context

This episode is particularly timely following the recent ‘Proclamation on the Suspension of Entry as Nonimmigrants of Certain Students and Researchers from the People’s Republic of China’ by the White House.

According to the Department of Homeland Security, in the 2018–19 academic year, there were enrolled at U.S. universities:

  • 272,470 undergraduate and graduate students from China.

  • 84,480 were in a graduate-level STEM program.

While these restrictions are focused on students coming from mainland universities associated with the army, it might impact the ‘intellectual balance of trade’ that had been so favorable to the US so far, leading to the creation of many successful companies.

Episode Overview

In this episode:

  • We reminisce about the early days of China’s tech scene and the waves of Chinese PhDs in the US, to highlight the upcoming surge in opportunities, particularly with the many applications of AI at scale.

Source: https://medium.com/tsingyuan-ventures/the-wave-were-riding-chinese-phds-in-the-us-5001c4480105

  • We talk about the intellectual balance of trade, and the value of this asset for the US.

In the intellectual balance of trade, we are way ahead, there are more foreign students coming to the U S and the largest group are the Chinese. The ability to have the number one, number two, and number three draft picks at Berkeley or MIT or Caltech or others is a huge asset for the U S.

Source: https://medium.com/tsingyuan-ventures/the-wave-were-riding-chinese-phds-in-the-us-5001c4480105

  • We discuss the role of non-state actors like Google, Baidu or Alibaba as talent factories.

  • Eric explains the 10-year lag between the moment a foreign student comes for a PhD, works for a few years and starts a company, and why he believes we’re still just seeing the upswing of the wave.

You’re looking at a lag effect of maybe 10 years, five years to get their PhD. And they work for a few years and they start a company.

  • We touch upon some of China’s advances with regulation, local support and public acceptance of technology for the new wave of data-driven startups.

  • We attempt to use analogies with basketball and pingpong to compare the impact and legacy of drafting outstanding talent into a system, and the risks of making the talent trade balance less favorable to America.

  • Last, we talk about such cross-border talent will be key to create more truly global champions from the US.

References Mentioned

  • Eric mentions many interesting examples of successful companies founded by the Chinese diaspora (including Guitar Hero, Zoom, etc.). He published a detailed articles about this here.

  • In addition to cross-border, Eric makes the case for cross-disciplinary investments here.

I forgot to ask Eric about recommendations on the podcast! So he sent me a few of his all-time favorites, that also happen to be very timely:

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