Entrepreneurs brew plans for new ventures in cafe

On a recent summer afternoon, young entrepreneurs gulped down cups of coffee and stared intently at computer screens with a burning intensity. They huddled over laptops, developing algorithms, sending e-mails to potential customers and designing mobile apps.

They could have been in the office of any global software company. But these budding business owners were brainstorming in a coffee shop in Wuhan, capital of Central China's Hubei province.

For the price of a cup of coffee (15 yuan, or just under $2.50), founders of start-up companies can set up office for the day and have access to reference books, lists of job opportunities and the chance to rub shoulders with investors who also hang out there.

"It is not about selling coffee. We are angel investors, looking for startup, innovative companies with high growth potential," said Li Ruxiong, owner of the Optics Valley Start-up Caf.

Li has co-founded a venture capital company with Lei Jun, one of China's new billionaires and the chief executive officer of smartphone maker Xiaomi Inc.

Li, also the founder of Beijing-based Federal Software Co, said the pair chose Wuhan to set up the coffee shop because of the rich talent pool, with many great tech graduates every year.

Since the Wuhan Optics Valley Coffee Venture Capital Co was set up last year, it has invested 7.5 million yuan in three startup projects including an online "smart bus" system, which can support public transportation use in low-density suburbs, and an information platform for games.

As successful startup entrepreneurs, people like Lei and Li feel a calling to inspire young people who dream of starting their own companies.

Since it opened in 2012, the coffee shop has been a hub for Wuhan's young high-tech entrepreneurs, hosting four large road shows. There are four early-stage startups working in the shop at any given time.

When Lei and Li are busy, Li's wife Xuan Jie, who is also the vice-general manager of the venture capital firm, digs for new investment opportunities, evaluating projects and meeting young entrepreneurs.

"Being an angel investor is no easy task," Xuan said, sipping a cup of coffee. "We receive about 15 project proposals every day and need to choose two to three proposals to go through deeper, talking with team members."

She said that sometimes, the people behind startups don't understand what investors are looking for.

Investors aren't simply searching for projects; rather, they are investing in people.

"We are actually looking for a great team with a good market," she said.

Ceany Jing, a 25-year-old startup entrepreneur who developed the online "smart bus" system, said the operation received an investment of 500,000 yuan from the firm, which also provides a valuable service to his team.

"We meet on a daily basis, and what they provide is not just money but also very helpful ideas and advice for my company," he said.

"It serves as an incubator, helping young cash-strapped entrepreneurs who are most likely surviving on cheap instant noodles until their business venture takes off."

The caffeinated startup haven has already attracted the attention of city governments in other parts in China, and Xuan said the cafe will have 15 stores within the next three years.

Wuhan may have a long way to go before it can compete with high-tech industrial clusters like Silicon Valley, but people like Xuan are determined to push it in a more creative direction.