Dear LPs and Supporters of XIAOXIAO FUND,This is the very first LP letter from XIAOXIAO FUND.

First and foremost, I’d like to wish you all a Happy New Year!Words cannot express the depth of my gratitude to each of you.

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Those who know me well are aware that I am not someone who excels at meticulously planning every step. Reaching this point has not been the result of a carefully crafted, long-term plan but rather a decision born out of what feels like a mix of serendipity and inevitability. In February, Xiaoxiao Fund will officially reach its first close. While it may only be a small step, it is a step forward nonetheless, driven by courage, passion, conviction, and your unwavering trust and support.

 

I have always seen myself as an “outlier” in the venture capital world. Coming from a liberal arts background, I entered the industry upon graduation, transitioned into a new focus area shortly after, and began investing in hard tech—a journey that, in the blink of an eye, has spanned five years. Every step along the way has been a process of navigating the unknown, but looking back, I realize I’ve been continuously challenging myself.I’m deeply grateful for my mentors and colleagues at my previous firm, for the outstanding peers and partners I’ve encountered, and for the entrepreneurs who chose to trust me. Over the past few years, I’ve undergone significant personal and professional growth, a journey filled with surprising and serendipitous moments. It has solidified my belief that early-stage investing is a career I am deeply passionate about and committed to pursuing. To have found this path is, without a doubt, one of life’s great blessings.

 

At 30 years old, I find myself at a point of reflection, repeatedly asking myself the question: “What kind of person do I want to become?” The answer, distilled into: Self-growth and the freedom to create. These words encapsulate why I’ve chosen to embark on this challenging yet meaningful endeavor.This endeavor, in the broader context of today’s environment, is itself an “outlier.” Uncertainty in the political landscape, instability in technological change, young people’s anxiety about future opportunities, and the weakening momentum of globalization—all of these factors contribute to a pervasive sense of powerlessness among venture capitalists, especially younger professionals. Yet, in the face of this widespread sense of helplessness, I’ve chosen to strike out on my own, guided by a few core beliefs:All feelings of powerlessness and confusion are, and can only ever be, temporary. The key lies in adopting a long-term perspective and mindset to dilute the impact of these challenges. Anything that makes you feel afraid, uneasy, confused, or powerless should be viewed through the lens of time to diminish its weight.Every generation has its own historical challenges—ones that cannot be avoided or ignored. Once you’ve seen them, why not choose to believe in them?

 

As I’ve often said, XIAOXIAO FUND is built on three core values:

The beauty of the world lies in its diversity.

The progress of society depends on the small challenging the big.

The passion for life stems from the freedom to create.

 

Today, topics like AI, globalization, and the global Chinese diaspora are already familiar to many. These themes are discussed extensively, often in repetitive ways. However, I’d like to share my perspective on the people I’ve encountered in these areas.AI as an emotion:

 

• Every wave of technological transformation not only empowers daily life but also creates an inescapable emotional undercurrent for young people. Today, AI has become such an emotion—one that envelops an entire generation. Young people are immersed in it, driven by a desire to create, recreate, or participate in something meaningful. This emotion, this intrinsic drive, is a powerful force in and of itself.

 

• A new dimension of globalization: While de-globalization is undoubtedly gaining momentum, globalization remains an unstoppable force from the inside out. Young people building AI applications aspire to go global, and industries across the board are venturing abroad—from complex industrial products like automobiles to simple everyday items like hair ties. Chinese ingenuity and productivity have created high-value, cost-effective products that are sweeping the world. In the past, I might have seen globalization as a way to escape the intense competition and saturation of the domestic market, seeking a breathing space abroad. However, witnessing Chinese open-source software being adopted by African users on GitHub, or seeing affordable and high-quality Chinese goods thriving in Latin America, I was reminded of something a hard-tech entrepreneur once said:“In the 19th century, during the Industrial Revolution, a handful of developed nations, representing less than 10% of the global population, accounted for over 90% of the world’s GDP. This meant that the remaining 90% of the world’s population contributed little to modern history and reaped few benefits from the era’s advancements. Today, foreign aid and donations from developed nations are no longer sufficient to address the weak productivity of some underdeveloped countries. But the spillover of Chinese-made products can, at a relatively low cost, enable more people to enjoy the benefits of modern advancements.”China has already become another "hub": what China has, the world has. Isn't this, in a way, a more peaceful and universal form of "manifest destiny"?

This realization has become a significant source of motivation and inspiration for me to pursue this work.​

 

While many talk about macro trends, major environments, and mean reversion, I acknowledge their validity but still aspire to embrace my own deviations. There’s much I don’t know, can’t do, am unfamiliar with, and am yet to understand. But at the same time, I have a measure of fearlessness, audacity, and unreserved determination.

 

As for the name, XIAOXIAO FUND, I hope it conveys humility, potential, and a sense of playfulness—something not overly serious but instead approachable and memorable.​XIAOXIAO FUND, “XIAO” stands for “X Is Another Opportunity.” It is about coexisting with challenges and dancing with uncertainty.​

 

A founder I know once shared how deeply grateful they were to the early investors who supported them. “Because those investors chose to believe in us and dared to support us, they gave us the chance to ignite our dreams,” they said. “Those dreams spread like stars across the night sky, creating a brilliant and diverse constellation.” She concluded, “Life needs more stars like these to truly shine.”

 

​I am profoundly grateful for your support of XIAOXIAO FUND, and I hope this vision of stars can be passed on through XIAOXIAO to illuminate even more dreams.​

 

Make a dent in the universe in your own way!​

 

This is destined to be a rough beginning, but I hope this rough beginning becomes a shared and cherished memory of how we rocked into the New Year together.​

 

Happy Chinese New Year!

 

Xiaohan

 

Jan 2025