We summarize our physical model for the early co-evolution of spheroidal galaxies and of active nuclei at their centers. Our predictions are in excellent agreement with a number of observables which proved to be extremely challenging for all the current semi-analytic models, including the sub-mm counts and the corresponding redshift distributions, and the epoch-dependent K-band luminosity function of spheroidal galaxies. Also, the black hole mass function and the relationship between the black hole mass and the velocity dispersion in the galaxy are nicely reproduced. The mild AGN activity revealed by X-ray observations of SCUBA sources is in keeping with our scenario, and testify the build up of SMBH triggered by intense star formation.