[DrewHintz]

> It’s like Y Combinator

....

> a $115 million fund in order to create five successful Chinese startups a year

The funding levels imply it is less like YC and more like a standard VC. With those numbers -- even assuming 50% overhead, and five years of five startups each -- that's over $2 million per startup. YC starts at $17k to $20k per startup.

[megaduck]

$2 million is an astounding amount of money in China. You can get engineers for $10-15K a year, and designers, sales, and marketing people for a lot less. Equipment can be a little more expensive than the U.S., but office space is dramatically cheaper, as is virtually everything else.

I imagine that the high level of funding is to impress the hell out of potential partners and new recruits. For a variety of reasons, many people in China will shy away from a new and risky business. In order to get employees and partners on board, you need to give the impression that you are large, in charge, and not going anywhere.

[gommm]

The problem is that from my experience trying to hire here, it's extremely difficult to find good engineers.... Cheap engineers are dime a dozen, but quite a few I've interviewed can't even do the fizzbuzz test.

And of those that could most were needed a lot of hand holding to do any basic tasks (and some of those were people with 3 years experience, I can't imagine how they could have provided any value to the company they were working for)

[cglee]

I doubt you could get top notch engineers in Beijing for 10-15k without giving up equity. I think if you go work for Microsoft in Beijing, you can make 40-50k. It's really not that astounding - have you seen real estate prices in Beijing?

[megaduck]

I think you just proved my point. While Beijing definitely has advantages, there are other places in China where you can do business for a heck of a lot cheaper. An order of magnitude cheaper.

Even in Beijing, you don't have to get a massively expensive office in Wudaokou or the CBD. I'll also guarantee that you can get pretty good Tsinghua and Beida graduates for 15k, although I'll concede that finding talent is one of the top challenges in China.

Microsoft China spends money like it's going out of style. They're not really a good baseline, although they are a magnet for talent because of the big brand name and outsized salaries. You can get in bidding wars with them if you wish, but it's not strictly necessary.

Bottom line is that the only reason to spend that kind of money is to impress the hell out of people. However, that kind of impressiveness is necessary, which is why you almost certainly need such a large investment.