It is said that the purpose of a compass is to point in the right direction.

As North Beta Capital enters its 10th year, its goal is no longer to stay in the Chinese domestic financial industry. Instead, it has found a unique development model in this capricious market and become a long-term strategic partner of many leading digital technology unicorns and listed companies thanks to its "Investment + Investment Banking + Growth" framework.

In the past decade of Growth, they have looked beyond China and focused on deepening their roots in the digital technology industry, striving to become a global leader in industrial capital. They are embarking on a new journey towards their ideal of becoming the "Bolton of the Digital Technology Age."

 Rock Climbers in the Age of Great Digital Migration

Jonathan Zhu, Founding Partner and Chairman, North Beta Capital

Leisure long sleeve shirt：Marc O'Polo

Hidden blue patchwork tie：Brunello Cucinelli

Navy blue suit and trousers：SUIT AWAKENING

1000 kilometers south of Anqing, Anhui, lies Shantou, Guangdong, and over 1000 kilometers to the north is Beijing. In 2013, Jonathan Zhu from Anqing and his friend Shaodong Huang from Shantou together embarked on an entrepreneurial journey in Beijing.

At that time, both Jonathan Zhu and Shaodong Huang were in their early twenties, a rarity in the capital market. However, despite their diverse backgrounds and personalities, both young men were imbued with the business genes of the prominent Anhui and Chaoshan business communities, and they shared a common vision of achieving success in the field of digital technology by staying true to their original goal and conducting business in the right direction. They embedded this vision into the name of their company, "North Beta Capital" and aspired to be a team driven by culture.

"I hope that we can continue to be a culture-driven team," Jonathan Zhu shared in this interview, offering four insights on mission, vision, values, and mindset.

First, on the mission, he said, "I like the words of Lu Yao's works, which are simple and powerful. Lu Yao, a famous writer, wrote in his book, "Starting from Noon": "Only with the passionate intensity of first love and religious zeal can one achieve something." In other words, the two core driving forces that push a person forward are desire and idealism. Desire can push a person forward, but idealism can keep a person moving forward continuously.

On July 4th, 2013, Jonathan Zhu invited Shaodong Huang to co-found North Beta Capital . Over the past decade, North Beta Capital has gone through a period of exploration and survival in its first five years, and in the last five years, it has found a sense of mission for its long-term development based on survival. The original driving force for survival has enabled North Beta Capital, a start-up company, to survive, while the sense of mission will help North Beta Capital achieve more stable and long-term growth in the future.

"The mission of North Beta Capital sounds very simple and plain, “From Good to Great，We Help You Thrive”. First, we need to find excellent companies in this challenging and changing era and find outstanding founders with both innovation and resource integration capabilities. Second, we need to truly help them achieve high-quality growth, so that they can live better. This seemingly simple and plain statement embodies our experience, lessons, and understanding of the past decade."

Secondly, on the vision, Jonathan Zhu has never stopped learning. This includes joining GASA Academy, a Chinese educational institution, and participating in a study abroad program to retrace the path of the first industrial revolution in the UK in October 2019. The most impressive organization he encountered during this learning journey was a group called the "Lunar Society."

In 1756, 28-year-old Dr.Bolton and his friends founded the Lunar Society in Birmingham, England. The Lunar Society brought together well-known scientists, engineers, instrument makers, and gun manufacturers in England at that time. British author Jenny Uglow referred to the Lunar Society as "a group of friends who were pushing forward into the future." They made significant scientific contributions to biology, chemistry, geology, and astronomy. Watt, a representative figure of the first industrial revolution, was also a member of this organization. It was he who improved the steam engine and pushed the improved steam engine technology into all walks of life, completing the rebirth of various industries. Among them, Bolton, as the initiator of the Lunar Society, once helped Watt with all his might when his research was in financial difficulties and ultimately pushed Watt towards success.

Today, humans have come to the fourth industrial revolution. We are in an irreversible wave of the digital migration of humanity. The vision of North Beta Capital is to become the "Bolton" of this era, to seek out the "Watt" of this era worldwide, and help them grow better and live better.

Regarding values, " Former Executive Vice President of Peking University, Qide Han, once gave me a personally signed book titled 'The Warmth of Medicine.' In the preface of the book, he shared an enlightening perspective on what constitutes a good doctor-patient relationship."

" 'To Cure Sometimes, To Relieve Often, To Comfort Always.' Han believes that a good doctor-patient relationship goes beyond just treating an illness and being treated. It's a connection that is enriched with warmth and humanity. This phrase comes from the epitaph of Dr.Trudeau in the United States."

"A good relationship between capital and founders must also go beyond just investing and being invested in. While the connection produced by capital is the foundation, the growth and deep partnership that follows are what founders truly need. That is the warmth of capital."

"Likewise, a good relationship between a platform and its employees must go beyond just being employed and employing. Becoming colleagues is the start of a bond, and achieving success together is the source of an organization's vitality. To genuinely care and support the development and growth of each colleague is what makes an organization warm."

"We aspire to be a warm digital technology industry capital, a vibrant organization. I am aware that it is easier said than done, but I firmly believe that when the road is rough and long, as long as we keep walking, we will eventually reach our destination."

Finally, regarding mindset: "Life is long and arduous, and the more we hurry, the more we need to be steady. Only by moving steadily can we reach faraway places." Don't cling to the past, don't fear the future; the present moment is the only moment in life.

In the eyes of Jonathan Zhu, running a business requires maintaining such a mindset. "When running a business, every day is a struggle." It is with this mindset that Jonathan Zhu sees every day of North Beta Capital as "rock climbing with bare hands. If completing a climb requires 5,000 steps, no matter how many steps have been completed before, if the next step is not taken successfully, it could mean losing a life, and all previous efforts would have been in vain."

When facing the future, Jonathan Zhu always reminds himself to take each step more steadily and more steadfastly in the present moment.

 Looking for Cyclical Growth

Shaodong Huang: Founding Partner , North Beta Capital

 Private property

For Shaodong Huang, joining the army of entrepreneurship is not a decision made on a whim or solely based on passion and impulse. Venturing into the investment field requires a spirit of adventure and enthusiastic dedication and careful consideration of a financial professional and a professional attitude towards cautiousness and risk avoidance.

As a co-founder of the youth organization "You Shi Hui", Shaodong Huang worked together with his friend and senior from Peking University, Jonathan Zhu in 2011.

"Our foundation of trust and 'revolutionary friendship' was built during the bi-monthly 'You Shi Hui' sharing sessions and other activities," Shaodong Huang recalled. Together they recognized the opportunities presented by the National Equities Exchange and Quotations (NEEQ) and the idea of starting a business in this area took root. But it took two more years of careful consideration before they took the plunge. They thoroughly researched all aspects of the capital markets, analyzed the business models of outstanding financial institutions and market trends from a policy perspective, established a division of labour and collaboration between the founding team and company organization, and incentive mechanisms (a division of money and power), and operational models before Shaodong Huang resigned and devoted himself to entrepreneurship.

The more thorough the preparation in the early stages, the easier the start-up will be. Shaodong Huang recalled that before 2018, the company started smoothly due to clear and focused business, gaining a good reputation quickly on the NEEQ. "We brought the boutique investment bank model to the NEEQ." Before starting his own business, Huang worked in the capital markets department of CICC and the investment banking department of Goldman Sachs Gao Hua Securities. "We mainly focused on financing through private placements and mergers and acquisitions in the sub-field of NEEQ, and also invested in nearly 20 companies." At one time, the best companies in the NEEQ market collaborated with North Beta Capital. The scale of North Beta Capital continued to grow, and the company had more than 100 employees at one point.

Before 2018, North Beta Capital's strategy had always been expansion. However, in 2018, North Beta Capital encountered challenging market fluctuations. "The policy release of the NEEQ did not meet our previously optimistic expectations, and the market liquidity and activity decreased. The overall market valuation decreased significantly, and a batch of leading companies also considered moving to other capital markets." That year, North Beta Capital faced the pressure of a shrinking market and a sudden increase in organizational and management challenges, with enemies on all sides.

Shaodong Huang had to consider how to avoid the short-term capital cycle and regulatory policy impact on business fluctuations. What direction should they focus on to avoid short-term policy and cycle impact and be more in line with the objective needs of human activity and long-term development of the business environment, with the ability to withstand short-term cycles?

Through a review of over 300 companies that they have worked with in the past five years, "we found a common trait among them - that companies with a deeper level of digitalization have better growth prospects and are more resilient to economic downturns." Looking at a broader perspective of human society, the wave of digitalization is still progressing vigorously and there are huge business opportunities. "The use of digital technology to transform various industries, reduce costs, increase efficiency, create value, and promote industrial digitalization upgrades is something that even the United States, which is ahead in technology and application, still has a lot of room for growth. Not to mention China, which is still in the early stages of industrial digitalization upgrades."

In Shaodong Huang's view, regardless of the trend of enterprise development or human life needs, the further upgrading of digitalization is bound to be a wave of social development and the "Fourth Industrial Revolution", which fits the characteristic of anti-short-cycle. "There are two major categories of opportunities here - industrial digitalization and digital industrialization." He said that based on their unanimous view on digital technology, North Beta Capital has adjusted its focus - from capital market development to long-term industry focus. "Focus on digital technology and deep plowing industrial capital - for us, the accumulation of dribs and drabs and breakthroughs in stages since 2018 has opened up a more long-term development direction."

Shaodong Huang is grateful for his experience in the early stages of entrepreneurship. For a team that was all very young at the time, it was a good thing. "Sooner or later, you will encounter a challenge of market cycle fluctuations. The earlier the problem is revealed, the more time and energy we have to reflect and meet the challenge, find a breakthrough and turn it into an opportunity."

It is also in the process of turning adversity into an opportunity that North Beta Capital has iterated and upgraded on the team level with "elite, industrialization, and globalization"; on the research level, North Beta Capital has defined and divided various sub-fields based on digital technology and continued to deepen research in the industry; at the business model level, in recent years, North Beta Capital has upgraded its integrated framework of "Investment + Investment Banking + Growth" based on a series of digital technology benchmark cases such as Weimob (2013. HK), Marketingforce, NewLink Group, Xunce Tech, Black Sesame Tech, etc...

As a manager, Shaodong Huang is now considering how to create a long-term operating organizational structure. "Looking at leading investment and financing institutions at home and abroad, building a people-oriented team and continuously cultivating organizational culture and systems are the underlying factors that guarantee business continuity through cycles and breakthrough upgrades. The North Beta Capital founding team and core partners have fully agreed to build a vibrant organization and put it into practice."

 Committed to Building a Community with Warmth

Rachel Li: Executive Director, North Beta Capital

Private property

In founder Jonathan Zhu's vision, he hopes to build North Beta Capital into a warm industrial capital through the framework of "Investment + Investment Banking + Growth". In the "Growth" division led by Rachel, they spent three years dedicated to realizing this goal by building North Beta Capital's digital technology ecosystem.

In January 2020, Rachel joined North Beta Capital as the head of brand marketing. She had previously worked in the media industry, producing an interview program for entrepreneurs and serving as a partner for a business school platform, which allowed her to meet many entrepreneurs, founders, and investors, including Jonathan Zhu. Rachel was impressed by Jonathan's ambitious gaze but humble behaviour.

At the same time, Rachel's communication and resource integration abilities also left a deep impression on Jonathan Zhu. When he learned that she wanted to explore new career opportunities, he immediately extended an olive branch. Rachel said that after leaving her previous business school platform, she thought about it for a long time. She realized that she knew many founders in various industries, but only at a superficial level, "like having 10 bottles in front of me, but each bottle only has 20% of water." She wanted to deepen her involvement with a different role, "at least to fill one or two bottles to 70-80% full." After careful consideration, Rachel eventually chose North Beta Capital.

She joined North Beta Capital during the outbreak of Covid-19. "Most financial practitioners are always running around in the front line of meeting entrepreneurs and start-ups. The epidemic made it impossible for investors to travel and difficult to meet companies offline."

Faced with this sudden challenge, Rachel thought of a solution - moving offline meetings online. She launched a "Hundred Investors & Thousand Enterprises" plan, pulling nearly a hundred investors and thousands of companies online, with 3-4 roadshows per week and 4-6 companies per show. For Rachel, the work was intense, but it also combed through the resources and contacts she had accumulated over the previous years, which in turn opened up the situation. In her work with investors and entrepreneurs, she quickly became familiar with the business content related to investment and investment banking, "helping companies perfect their business plans and fully understand the needs of investors and entrepreneurs during roadshows."

In early 2021, as the epidemic gradually stabilized and offline business activities resumed, North Beta Capital launched a digital technology visiting tour, introducing the founders of various digital technology industries to a dozen industry leaders, such as 4Paradigm, Glodon, etc., to exchange best practices and boost business cooperation. Rachel upgraded it to "build an online and offline digital technology community", which is like "the new Lunar Society" in the digital technology era. She is responsible for the marketing branding and Investor Relations (IR) department, which provides companies with a full range of services, including outward IR to help companies connect with potential investors, and inward to help companies' branding and talent recruiting.

In 2022, with the support of the North Beta Capital technology team, North Beta Capital launched an App called FinancingForce, which has attracted over 20,000 registered users including executives, founders, and investors in the digital technology industry. Currently, FinancingForce's series of audio seminars, "100-Days Talk of Digital Technology," has completed over a hundred episodes, with each episode featuring a founder who has deep industry insights, best practices, deep thinking, and methodology to share with potential business partners and investors, creating more possibilities.

This multidimensional empowerment breaks the cold "transactional" relationship between enterprises and investment institutions, making North Beta Capital close to its founders with a warm connection established in between. Through the ecosystem, excellent companies are discovered and business is delivered to the investment and investment banking business departments, becoming the most differentiated "Growth" module for North Beta Capital apart from its investment and investment banking businesses, forming North Beta Capital's innovative framework of "Investment + Investment Banking + Growth."

Having been with North Beta Capital for over three years, Rachel has been able to showcase her talents while actively embracing change and driving herself forward. "This is a platform that allows us to be free and upward, with full trust and consensus, driving us to work towards a defined goal together," Rachel said.

 Enjoy the Process of Starting a Business within the Industry

Watson Li: Managing Director, North Beta Capital

Blue striped suit jacket：Brunello Cucinelli

Blue jeans：Brunello Cucinelli

Watson Li is probably the most experienced member in the industry in the North Beta Capital. He has 16 years of experience in the information technology industry and 7 years of experience in investment and investment banking. He is also a former entrepreneur who has provided consulting, training, financing, and M&A restructuring services for more than 100 leading companies and startups, including Baidu, Huawei, and ByteDance. Therefore, he is also known as "Coach Li" by his colleagues.

After being introduced by a friend, Watson Li met the two founders of North Beta Capital right away. Because he endorsed the values of North Beta Capital and its strategic direction of focusing on the digital technology industry, Watson Li subsequently became a member of North Beta Capital.

After joining North Beta Capital, the first thing that Watson Li did was to "consult" the company and promote an internal digital operating platform. "Each colleague needs to understand the resources and status of both sides and effectively manage the project process. It's just like the 'engine' of the business."

To find an investor, it might be necessary to go through a chain of 6 people in the past. Now you can find an investor only by logging into North Beta Capital's internal system and searching to find out which colleagues have a connection and introduce him or her to you. "The efficiency has increased several times." Finding companies is also convenient, just enter industry tags or keywords. It reduces what would take two or three days to complete to within minutes.

Digitizing the North Beta Capital system has also made collaboration between internal units increasingly efficient. In fact, at North Beta Capital, investment, investment banking and growth are in three different business units, but it's underpinned by shared resources. "That means investment banking is responsible for identifying good projects, and investment is responsible for raising enough capital to participate in the top-tier projects in each field, facilitating the concentration of capital to generate greater returns." Each business segment can work in synergy as well as focus on its own core business.

The trinity framework of "Investment + Investment Banking + Growth" makes it easier to help North Beta Capital achieve its mission of "From Good to Great， We Help You Thrive". The ClickPaaS project handled by Watson has benefited a lot from the "trinity" model and achieved a win-win situation with North Beta.

Watson and ClickPaaS crossed paths several years ago when he was working for another institution. Through a fortuitous coincidence, he met the founder of ClickPaaS and helped him secure the first round of financing, gaining his approval. After completing the financing task, Watson joined North Beta Capital two years later and once again encountered ClickPaaS, which by then had more diverse capital demands. "After helping them complete the new round of financing, we realized the opportunities and challenges in their industry, and we helped them complete the merger and integration of another industrial software company, which enhanced ClickPaaS' market competitiveness," Watson believes that North Beta Capital can bridge business and capital that enables them to provide comprehensive services to enterprises. Because of their confidence in ClickPaaS' prospects in the low-code sector, North Beta Capital participated in the investment.

 Be Responsible for the Time of Enterprises

Ensy Shen: Executive Director, North Beta Capital

Blue blazer, blue polo shirt, trousers are all：BOSS

Ensy Shen joined North Beta Capital in the summer of 2022 because the founders of North Beta Capital recognized his capabilities. One of the areas that Ensy has been working on is the digitization of the energy industry, which is a new segment that North Beta Capital focuses on. Back in 2017, Ensy worked for North Beta Capital for half a year but eventually chose to go to another investment institution because of the different business directions at that time.

Now that he has returned to North Beta Capital, Ensy finds that the North Beta Capital is completely different from four years ago with its "trinity" model. Although Ensy is mainly in charge of investment banking, the actual work integrates all three aspects: Investment, Investment Banking, and Growth. "In addition to helping companies find investments, we also help them connect with customers, suppliers, and other resources, as well as help them figure their future development direction, product marketing methods, and even help them recruit talents, etc." Ensy said that they provide a full range of services for enterprises, "almost no difference to starting my own business." And this, too, is what makes North Beta Capital competitive in the market.

Ensy completed five deals in just eight months of working at North Beta Capital in 2017 and has completed four deals after joining again in 2022. When it comes to the selection of companies, Ensy has his way of doing things. "If the business is in the early stage, I prefer to look at the founders and founding team." Because at this time, factors other than the founders are full of great uncertainty. "I consider their academic background, industry resources, professional level, personality traits, whether they are hawks or doves, and their relationship with the team, as well as their approach to handling things." In different fields, founders are also expected to have different character traits, "for example, in a small and less competitive market, there is no need for a tough founder; while in a more competitive market, the founder needs to show strength and even a bit of ruthlessness."

Investors' experience is largely based on having sufficient and diverse sample data. However, as the investment progresses, more emphasis is placed on financial data, operational data, and economic indicators. "This is not absolute and needs to be considered in conjunction with the overall industry background at the time." One project that Ensy handled seemed to be performing poorly based on the static data of the company and was not highly regarded within the industry. However, when considering the 30-year development pattern of the industry, he realized it was actually experiencing a bottoming-out rebound and would enter an upward channel. Six months later, the result confirmed Ensy's judgment - the company's final profit exceeded expectations by over 300%, even higher than the profits of most listed companies.

Ensy's approach to investing reflects a more conservative temperament. "Other people may work on five or six projects at the same time," but he takes on very few projects at any given time, usually only signing on when he judges the project has a 90% chance of success. "I am responsible for the time of the company, as well as for myself and my team," he says. This cautious approach fits in perfectly with the consistent style of North Beta Capital.

With the framework of "Investment + Investment Banking + Growth", North Beta Capital helps leading digital technology companies in various fields, such as industrial digitization and digital industrialization, to grow steadily, orderly, and rapidly. In its development, North Beta Capital is positioning itself as a leading global ecosystem-building capital in the digital technology industry and is continuously helping various outstanding companies to grow fast and live better.

Producer and Editor/ Yu Lei

Photographer /Shusen Jia 

Stylist/Weiwei

Reporter/ Ying Xu

Costumer/Minqian Ma

Assistant/Wendong Li

Translate/North Beta Capital

[This article was published in the May 2023 issue of Bazaar Men]