Thread by @lillianmli

1) So ByteDance 'disbanding' their investment team is the news of the day. While it's easy to say this is because of the new regulations around investment approvals, the reality is more complicated

2) ByteDance has bi-monthly (every two month) OKR reorgs. Yep, every two months. This means an organisation that is agile at best and chaotic at worst.
Teams spin-up and spin-down with relatively high frequency.
Re-org of a whole team, even with 100 people, is not new.

3) The investment team had about 3 different heads in 3 years. From Yan Shuo who's now head of gaming to Alex Zhu of former Musicaly, and now Zhao Pengyuan (who reports to Alex Zhu). For a division, the constant change must be a reflection of it trying to find clear direction

4) The investment team isn't the sole team that carries out investment in ByteDance. Functional departments initiate strategic investments (say the enterprise software department can invest in B2B software). Often the investment team gets brought in for the deal execution.

5) But they aren't often the origination team. This means that strategic investment wouldn't stop for ByteDance even without a designated investment team for it.
The fact that investment team and functional team can both approach startups has also caused confusion externally.

6) The regulations for Chinese tech investments only covers large platforms with about 100m users or more than 10 billion yuan ($1.58 billion) in revenue. Most of ByteDance's investments are in early-stage startups, this regulation doesn't really limit the team's options

7) While I'm sure the regulations gave some push and guidance that investments by CVCs is being watched by regulators. The fact that Tencent's investment pace sped up rather than slowed down in 2021 to me indicates this is not a blanket effect on Chinese tech CVCs

8) Don't waste a good crisis or new regulations that helps tech companies cull the divisions that might not be the most useful in their current guises.