Chinese Web3.0 Entrepreneurs: Half in Shenzhen and half in Hong Kong

Author丨Carl

EDIT丨Marco

Techub News original (ID: TechubNews)

Chinese entrepreneurs in the Web 3.0 field have been laughing at themselves as “vagrants” in recent years. Singapore, Dubai, the United States, Southeast Asia, and Central Asia have continued to go overseas in the face of rounds of policy pressure.

Hong Kong’s policy declaration on the development of virtual assets has made many entrepreneurs see the dawn of return. Starting a business in Hong Kong has become the first choice for Chinese Web3.0 entrepreneurs.

“Almost all Web3.0 entrepreneurs in mainland China are staring at Hong Kong. Now there is a trend that entrepreneurs are gathering in Shenzhen from all over the country.” A Web3.0 entrepreneur told Techub News.

Another entrepreneur said that there are at least a dozen Web3.0 projects in Moments that are being implemented in Hong Kong.

There are also various problems in Hong Kong’s Web3.0 policy and implementation. Some people say it is difficult to open an account, while others think the cost is too high.

Going to Hong Kong, although the future is still uncertain, it is just that innovation or entrepreneurship has always been like this-sowing seeds in promising places.

1.** Millions of funding support, close to the investment of the angel round**

READ2N co-founder Jeff is very satisfied with the service of Hong Kong Cyberport Web3.0 base.

Recently, Jeff got an office in the Hong Kong Cyberport Web3.0 base, and there are “shared gyms, tea rooms, living rooms, etc., and you can move in with your bags.”

According to Jeff, READ2N is committed to using blockchain and AI technology to help literary works to spread better around the world. It has published more than 90 literary works in nearly 10 countries and translated them into 10 languages through AI technology. Currently, it has 5 million registered users and 4000 daily active users.

READ2N was established in Singapore at the end of 2022. Under the influence of the Web3.0 boom in Hong Kong this year, it decided to move to Hong Kong.

In January 2023, Hong Kong’s “Cyberport Web3.0 Base” was officially established. Hong Kong Financial Secretary Chen Maobo stated when Hong Kong’s 2023-2024 budget was released that he would allocate 50 million Hong Kong dollars to accelerate the development of the Web3.0 ecosystem.

Chen Maobo said on June 18 that since the establishment of the “Cyberport Web3.0 Base”, more than 150 Web3.0 companies have settled in Cyberport. At present, enterprises settled in Cyberport include well-known enterprises such as cryptocurrency exchange Hashkey Group, Web3.0 game developer Animoca Brands, Ethereum software company Consensys of encryption wallet MetaMask, etc.

At the beginning of this year, READ2N applied for the incubation program of Hong Kong Cyberport. Jeff said: “There is no threshold for registration, but it has to go through layers of screening and interview roadshows. There are many projects involved, almost all of which are start-up Chinese projects. The final admission rate is 5. %about.”

READ2N passed the interview and successfully settled in the Hong Kong Cyberport. In addition to venue support, READ2N also received a financial support of HK$1 million in installments.

Jeff said: “Cyberport also assigns an entrepreneurial mentor to each settled project to help companies promote the implementation of the project.”

The preferential policies of the Hong Kong Cyberport Web3.0 base have attracted the attention of many Web3.0 entrepreneurs. Many interviewees told Techub News that many people in the circle of friends are paying attention to Hong Kong Web3.0 and are planning to start businesses in Hong Kong.

AIGO CEO Luo Hu said that there are at least 10 Web3.0 projects that are starting businesses in Hong Kong in Moments, involving finance, e-commerce, DeFi, GameFi and other subdivisions, and more and more projects that can land in Hong Kong are expected.

Luo Hu comes from a leading domestic Internet company. The AIGO he founded focuses on AIGC and NFT commercial applications, helping companies and individuals improve efficiency and protect data privacy and ownership. Currently, AIGO is headquartered in Hangzhou, with branches in Shenzhen and other places.

Luo Hu told Techub News that he is preparing to move the company’s headquarters to Hong Kong and plans to complete it by the end of this year.

In April this year, the “2023 Hong Kong Web3.0 Carnival” was held in Hong Kong, with more than 10,000 participants. Hong Kong Financial Secretary Chen Maobo delivered a speech at the opening ceremony, saying that Web3.0 is an irreversible future trend, and he is full of expectations for the development of Web3.0 in Hong Kong.

Luo Hu participated in this conference. He said: “This conference includes AIGC, industrial blockchain, Social Fi, DeFi, GameFi and other subdivisions, and the Web3.0 ecology is fully covered, which shows that Hong Kong has great support for Web3.0. The openness and determination to promote the development of the Web3.0 ecosystem also sees the space and opportunities for development.”

With the help of local associations in Hong Kong, Luo Hu has set up an office in Kwun Tong District, Kowloon, and submitted applications to the Cyberport and Science Park.

Luo Hu said: “The service is very considerate and humane. You only need to have a product prototype, and the submitted information is not complicated. It is just the information in daily business, such as BP, etc. The help that can be provided to enterprises is listed in detail. I can feel I am eager to help you.”

According to Luo Hu’s calculation, if the company can successfully apply for the incubation program, the headquarters can be moved to Hong Kong within six months to achieve a zero-cost transition. “The support of the incubation program is close to the investment of the angel round investment.”

2.** Gathering in Shenzhen, marching into Hong Kong**

“Almost all Web 3.0 entrepreneurs in mainland China are focusing on Hong Kong. Now there is a trend that entrepreneurs gather in Shenzhen from all over the country.” Ram (pseudonym) said.

Ram is an “old man in the encryption circle”. He entered the encryption industry around 2015 and has engaged in investment and NFT entrepreneurship. Ram said that he has been in Shenzhen for several months, hoping to find opportunities for Web3.0 in Hong Kong, and is planning to start a business and do blockchain + foreign trade.

At a small-scale Web3.0 meeting held recently, Ram met entrepreneurs from Beijing and Hangzhou. The purpose of their visit to Shenzhen was, without exception, to prepare to enter Hong Kong.

Ram said that with Hong Kong’s support for Web3.0, the number of small gatherings in Shenzhen, which had been silent for a year, suddenly increased recently.

Many interviewees said that Hong Kong is backed by the mainland with convenient transportation, and the cost of starting a business and cost of living is lower than that of Singapore, while Dubai, Europe, America and other places generally have cultural rejection of Chinese.

After comprehensive consideration, Hong Kong is still the first choice for Chinese entrepreneurs.

Bao Yu, vice president of the Hong Kong Web3.0 Association and a member of the United Nations Asia-Pacific Digital Economy Working Group, told Techub News that Hong Kong has a good platform, while Shenzhen has a lot of talents and good technology. The combination of the two can produce better The best entrepreneurial model is to place business, investment and financing, and compliance in Hong Kong, and put the main business personnel such as development in Shenzhen and other places.

Currently, Bao Yu is promoting the implementation of DePIN, AI, Web3.0+ medical and other projects in Hong Kong.

Jeff, the co-founder of READ2N, said: "To start a business in Hong Kong, you must have reasonable expectations and then make corresponding actions. We actively embrace Hong Kong’s policies and explore some possibilities, but there is no need to move all of them to Hong Kong at once. Hong Kong has preferential policies. , Entrepreneurs should embrace these policies more and enjoy the convenience and cost savings brought by these policies.”

It is understood that almost all the entrepreneurs who go to Hong Kong currently put a small number of compliance and marketing personnel in Hong Kong, and most of them are still in the mainland. For some projects, the person in charge occasionally visits the office in Hong Kong to ensure “attendance”. .

Yang Wei, founding partner of Divide (equal capital), also suggested to Web3.0 entrepreneurs going to Hong Kong: “Don’t go to Hong Kong blindly, think about what you want.”

Yang Wei has more than 10 years of entrepreneurial history. He has experienced Internet 1.0 and 2.0 eras. He once worked for Tencent and has many years of experience in investment and capital markets. In 2017, Yang Wei started to invest in the field of Web3.0, mainly investing in the projects of friends around him.

Hong Kong is a place Yang Wei often visits, but due to the impact of the epidemic, it has been interrupted. At the end of last year, when the epidemic was over, Hong Kong issued a declaration on virtual assets. Yang Wei immediately went to Hong Kong to investigate the development opportunities of Web3.0.

In May, Yang Wei decided to corporatize the Web3.0 investment business in Hong Kong, turning individual sporadic Web3.0 investment behaviors into institutionalized investment behaviors. Currently, Yang Wei is looking for office space and recruiting talents in Hong Kong. Some of the Web3.0 projects he invested in have already landed in Hong Kong, and some are preparing to apply for the Cyberport incubation plan.

In Yang Wei’s view, no matter how the international situation changes, global trade will still exist for a long time. The importance of Hong Kong’s connection with the mainland and the world is self-evident. Hong Kong is now vigorously promoting the Web3.0 ecology, which is a rare opportunity for entrepreneurs.

However, starting a business in Hong Kong also means high costs, including high rent and labor costs. Yang Wei said that compared with the rent in Beijing, the core area of Hong Kong may be four or five times more expensive, and labor costs are also much more expensive.

Yang Wei values the potential advantages of Hong Kong. “The cost needs to be calculated comprehensively, including policy support, entrepreneurial vitality, international vision, industry exchanges, etc. Based on this calculation, the cost of Hong Kong is not high.”

**3.**Compliant Game

In addition to the high cost, Web3.0 enterprises in Hong Kong also have compliance problems, which are first reflected in opening bank accounts.

Harly (pseudonym) has been engaged in asset management for a long time. During the crypto bull market 2 years ago, he switched to crypto asset management and developed asset management software systems.

Harly said that in the past, there was no way to comply with the regulations, and there would not be too much legal risk if there is no public fundraising. Now Hong Kong can comply with the regulations, so I hope to register a company in Hong Kong and engage in this business in compliance.

But after a few trips to Hong Kong, Harly was a little disappointed, “It’s much more difficult than expected. It costs at least a few million to apply for a license. You need to build a compliant infrastructure by yourself, and hire at least two ROs (the person in charge of the license and the executor) , After the application is successful, only 10% of the asset allocation can be used in the cryptocurrency industry within a year, plus the cost of rent, personnel, legal fees, etc., it may cost 20 million.”

“In this way, it’s not as good as ‘hoarding big cakes’.” Harly said helplessly.

The “big pie” is bitcoin, the current market price is 220,000 yuan per piece, and the previous highest price was 460,000 yuan per piece. Harly predicts that Bitcoin will usher in the next halving cycle in 2024, and Bitcoin may usher in a surge.

Harly also encountered an unsolvable problem—the bank refused to open an account, and many Web3.0 entrepreneurs told Techub News about the similar experience that the bank did not open an account. Blockchain industry friendly bank", still unable to open an account.

Another person in the industry told Techub News that they asked their leaders and friends in the bank, but they couldn’t solve the problem. The other party responded that “they couldn’t approve it because they hadn’t been notified, otherwise they would have to bear the legal risk.”

The industry person told the reporter that Hong Kong is backed by the mainland and cooperates with the mainland to strengthen anti-money laundering supervision, and cryptocurrency is one of the important channels for money laundering. Hong Kong needs wisdom and vigorous industry promotion to solve the problem of Web3.0 corporate bank account opening.

In response to the difficulty of opening bank accounts for virtual asset companies, the Hong Kong Monetary Authority has convened a meeting of banks and virtual asset companies to ask banks to guide virtual asset companies on the materials required for account opening.

Xian Diyun, the alternate CEO of ZhongAn Bank who participated in the meeting, told Techub News that the HKMA is very supportive of the development of Web 3.0, but also understands that banks may have some concerns and concerns. This meeting brings the distance between the bank and other players closer, and the two parties can be more clear about each other’s needs.

Xian Diyun introduced that when a virtual asset company opens an account, the bank needs to do customer research, which can be as simple as two or three weeks, but it takes longer for a complicated shareholder composition.

However, some companies said that they should not encounter the difficulty of opening an account.

Jeff, the co-founder of READ2N, told Techub News that due to its adoption of Cyberport’s incubation plan and the endorsement of Cyberport, it is expected that opening a bank account will go smoothly.

Previously, Jeff had communicated with the bank on the issue of opening an account.

He believes that since Hong Kong is going to vigorously promote the ecological development of Web3.0, these problems will be gradually resolved.

**4.**It is suitable to start a business when the tide is low

In April this year, Hong Kong’s Web3.0 activities were extremely popular. People who are concerned about Web3.0 from all over the world flocked to Hong Kong. Within a month, more than 100 Web3.0 activities were held in Hong Kong. Some entrepreneurs said, “from morning to night There are endless activities to participate in until the early hours of the morning.”

Three months later, the hot scene of Web3.0 in Hong Kong is gone.

Bao Yu, vice president of the Hong Kong Web3.0 Association, said that the ebb tide is expected. There are objectively malicious sickles and victimized leeks in the Web3.0 world, and Hong Kong is hoping to solve this problem. The value of blockchain technology innovation, the application value of reducing stock transaction costs and increasing transparency in the form of Token, the natural financing function and changing business models such as financing, these are the real values of Web3.0 that entrepreneurs should pay attention to .

On the road of Web3.0 compliance, Hong Kong is at the forefront of the world. Bao Yu said that Hong Kong has clarified the license system for virtual asset exchanges, and everyone from the chief executive to the financial secretary is vigorously promoting Web3.0. Such determination is unprecedented in the world. Unlike Singapore, Hong Kong also allows local residents to Participate in compliant virtual asset investment.

On June 1, the new license system for the Hong Kong virtual asset exchange came into effect, and retail investors were allowed to trade virtual assets on licensed platforms.

Wu Jiezhuang, a member of the Hong Kong Legislative Council, told Techub News that more than 150 companies have expressed their intention to submit license applications, and some companies have begun to submit applications one after another. Two companies that have previously obtained part of the license are also submitting materials.

Bao Yu believes that the core issues of Hong Kong Web 3.0 have been solved, and other details are only a matter of time. At present, the compliance rhythm of the Hong Kong government is also well controlled. Trillion or 1000 trillion question.

Many entrepreneurs told Techub News that real industry practitioners should not be too concerned about the ebb and flow of currency prices, but pay attention to the real value and long-term value. good time.

Gao Zhimin, the founder of Bainawei Technology, values the fragmentation of rights and interests empowered by the blockchain. He said that the blockchain has the characteristics of decentralization, openness, and non-tamperability. With the help of blockchain technology, low liquidity Real estate and other rights and interests are fragmented and chained, which greatly enhances asset liquidity.

Gao Zhimin graduated from the University of Houston with a Ph.D. He has studied blockchain and other technologies for a long time, and has successfully landed in the US national shipping blockchain project. At present, Gao Zhimin has applied to the Science Park and Cyberport for incubation plans, and the project he submitted is the fragmentation of real estate and shipping rights.

Genie Dance CEO Ma Youxin is preparing for the trip to Hong Kong. He said that he has signed up for the Web3.0 welfare roadshow series BIG DEMO DAY roadshow on July 25, hoping to find like-minded partners and angel investors.

BIG DEMO DAY is co-hosted by Central Research and Hong Kong Cyberport, and co-organized by Techub News. Many global investment institutions and family offices will participate with high-quality projects.

The project Ma Youxin is preparing is AIGC+NFT. He said that he hopes that his project can jump out of the logic of domestic digital collections, focus on PFP created by AIGC, create a fan economy, combine cultural and creative peripherals, and extend the consumption field.