"The need for financing and sale of Chinese enterprises, it is golden days. Because everywhere in the flow of money, more money to investment in China was outrageous." Yi Ran Wang Kai Investment CEO in a recent blog that writes: "Now money batches of bricks flying, as if smashed with all who do not care." As a fellow human, Ran Wang saw a number of investment institutions in China such as over the river shuttle between crucian carp.
China ushered in another golden age of venture capital are defined and Qing dynasties Ventures CEO Ni Zhengdong called VC2.0 times. "Localization of new funds with new partners, is the most obvious characteristic of VC2.0 era." Ni Zhengdong that 2005 was a watershed in China VC1.0 and VC2.0, China has entered the 2.0 VC. And called the landmark event, including, to IDG, Softbank Asia represented the first wave of venture capital investments completed and all new funds raised to Sequoia Capital, represented by the entry of the international top venture capital and since 2005 VC industry began to frequent tremors.
The accumulation of more and more domestic and foreign venture capital institutions tremendous energy resources, and the outbreak of a more powerful impulse to invest. In 2006, investment in new and old forces of fission, restructuring and China's venture capital market matures, is caused by China's playing the world's most attractive investment hot land and the realization of a dream of the biggest breeding ground for heroes.
Adventure
"Money floating in the rivers and lakes." This is a Ran Wang Feng of China on the current hot investment and a joking type of expression. When the number of old fund not find the time landing more new funds flooded in.. In early 2006, the two forces intertwined, and changing the overall VC. First, the old VC in China and the reorganization of their division between the second is the international VC bigwigs finally the Chinese adventure.
"We are all the best and the latest is always the idea of holding an open attitude." Afternoon of March 2, the world's most legendary venture capitalist John Doerr is one platform in a speech at Tsinghua University on China's venture investors with open arms of welcome. Has invested in over Google, SUN, Compaq, Amazon, Netscape, Symantec, a long list of international companies such as John Doerr first visit to China, declared the international top venture capital firm KPCB began aggressively into China . It is understood that before the March 2, John Doerr secret meeting with the owner of 22 enterprises in China, and lightning on one of the first investment commitment.
KPCB than SequoiaCapital (Sequoia Capital) comes also one step too late. Late last year, alongside the United States and KPCB top U.S. VC Sequoia Capital has been established in Beijing and Hong Kong offices, and prepare specifically for China's fund and a local Chinese managers from the management team.
After a long trial and see, the international venture speculators finally started their Strategies in China. February 15, Seattle Ignition Partners (short Ignition), the establishment of Qiming Ventures in China, and claimed the next four years will be invested 200 million U.S. dollars in China, an average annual 50 million U.S. dollars. January 9, another Silicon Valley's top venture capital DCM dinner held in Beijing, formally entered the Chinese venture capital market, and declared that the next 10 years, DCM plans to invest an additional four billion yuan in China. In addition there have been landing BLUERUN Shanghai, and others such as 3i, NEA, Silicon Valley Bank, have also set up offices in China.
Some entrepreneurs sudden international VCs feel deep passion. "We are in contact with more and more international giant VC, VC and the enthusiasm of Chinese enterprises are increasingly high." As the creation of a unique mode of wireless portals, 3G gateway to a large number of VC are the focus of attention, a general manager Deng Yuqiang strong feelings: "around the side for more money than the original." He told reporters that a lot of VC's office in China has not yet established, could not wait to Singapore from the United States or came to find him sitting directly on the aircraft. "They did not come to trial, but investing in China with a very clear mission and goals, not to complete the impossible."
High returns and venture capital opportunities, so that the concept of international VC who rush to China. Softbank only from Alibaba cash proceeds of a project as high as 550 million U.S. dollars. Carlyle Group Ctrip 800 million also received a 15-fold return. Baidu, Focus Media, TechFaith, Vimicro, Actions Semiconductor, Suntech Power is equal to 2005 has been launched, so that Draper Fisher Jurvetson, IDG, Madden, CDH, TDF, etc. are all earning bowl full plate full, and appetite rose, have raised to a new China fund. Softbank Asia about 640 million U.S. dollars raised two funds, came in 2005, the first venture capital and fund-raising limits. In addition, CDH Ventures (CDH), IDG, TDF, Intel Capital and other venture capital institutions nearly 20 completed a new round of fund raising. According to Qing dynasties president Ni Zhengdong computing venture in 2005, active in China, Sino-foreign venture capital institutions to raise four billion U.S. dollars of new funds, setting a record the history of the Chinese venture.
With preparations underway for the international venture is not only, made by the domestic private capital build-up forces in the domestic venture capital funds also gradually gaining ground, and try from the already "open seats" feast on a piece of investment. China's president has Renya Xin Zhang Xingsheng left AsiaInfo the future, they created an angel fund, invested primarily engaged in online game operation Sheng Yu Ming Group and an ad for three-dimensional animation of the day-dimensional source startups. Beginning of the year 2006, e long-founder Justin Tang has resigned from his CEO post, said to be in private equity investments.
China launched an international VC VC forces Raiders and the rise of China, on the one hand increase the localization of excellent information on the competition for human resources, it also forced the international VC investments in "voice" to the local professional managers gradually "shift."
Power transfer
Continuously since 2005 to shock the outbreak of the VC is a VC who prepare the harbinger of a new round of competition. Increasingly fierce war for talent is behind VC preparations underway for a new round of investment. VC are brewing a new round-changing. Search
Seek a more excellent local manager, and the money to them to charge as VC are increasingly recognized way.
According to statistics and Qing dynasties, from 2005 to the present, the mainstream VC, there are almost 80% of the personnel turbulence, at least 20 VC executives jump ship. In 2005, IDG has been stable personnel changes occur, the investment through 3721, the financial sector, the media frame the right partner to join King Power CDH Investment, initiated the formation of a 150 million U.S. dollars of the fund. After the grand scenery of unparalleled investment in Softbank personnel changes also occurred in Asia, the China President Huang Jingsheng also left office in 2005, and select BAIN Fund Managing Director. DFJ's personnel changes and even more impressive, DFJ's masterpieces including air network, Baidu and Focus. But last year, responsible for business in China, Zhang Fan, senior vice president, this time chose to leave, and with Ctrip's Shen Peng also joined the Sequoia, a founding partner. Soon, Managing Director of Wheelock Gea Pacific Fu Ji-hoon also left, and select the GGV, became a partner. Investment through 3721, Vice President of JAFCO Asia, leaving Forrest Zhong joined with TDF, and became a partner, another vice president of Capsicum also entered GGV, as executive director.
Local VC's "independence" also tend to climax. Similar to the original first-line reconnaissance and intelligence officer with the Chinese partner the right to speak of people is gradually increasing, they are no longer as before, to much invested in the United States Committee on and wait for their decision making. In fact, the international mainstream VC are local professional managers in China began to hold trust attitude and the gradual decentralization of decision-making in China. It is reported that the newly established Ignition Partners of the two American partners, will be moved with his family to China, it is important to increase decision-making power within a vivid example.
Have found Jason Jiang of Milestone Capital is the first of a number of offices set up in China with local managers and venture capital companies. "It's like Madden this international background of the venture, but also other international venture capital, every project although the final decision-making power rests in the United States, Investment Committee, but the views of local investment managers are decisive." Milestone Capital partner nitrite on performance, said.
The reason for this one because of the importance of the Chinese market continued to increase, China has become a global top three, four economies, but also belong to the same magnitude as the U.S. single market players. Second, because of the uniqueness of Chinese culture, Chinese people more easily understand the Chinese market and business models, while foreign investment decision-makers is difficult to integrate into one. Third, China's unique business model, significant differences compared with the United States, according to the U.S. experience to visit the Chinese business model, will not acclimatized.
Another equally important reason is that after years of development, local investment manager's ability to quickly raise enough alone investment. Whether Tencent, Shanda, Baidu, Focus, Suntech had this stick in the U.S. Nasdaq in China caused by the concept of recovery are found by the local Chinese managers and focus on the investment. It is because of the success stories, local investment managers with an independent sense of completely burst out from last year, more and more managers are beginning to move toward independence surgeon China Fund. "Most of these people 99 years from the beginning of the Internet boom to jump out, and now have the experience in 2067, and all the sea water after all the choking choking enough, have seen ups and downs, have matured a. "nitrite on performance that this is an inevitable trend.
Recently appeared in China's funds are also designed specifically for China, specifically by the local managers operate, and this turns out different. The original model VC observed in the United States, have aimed at the opportunity came, were done without touching the ground, then left. According to Ni Zhengdong observation, the identity of such investment manager is no longer a foreign venture capital institutions set up in China's comprador. Foreign policy-makers on the local VC investment managers have been increasing attention. Ni Zhengdong that the power of local managers has never been so strong over.
"VC are more realistic, more and more local." Approached numerous VC Deng Yuqiang after they have a very clear understanding.
Competition
The old and the new VC VC were pouring into China in 2006, the relative abundance of funds, scarcity of good projects, will increase competition between them.
"From San Francisco to Beijing flight, the casually one day, man of first class are occupied VC shows that China's attractiveness to them." Say this, Bain Capital Managing Director has not yet divorced from Softbank Asia. Just as the snow flew, like the Fund of China, president of Softbank Asia SAIF Yan Yan told reporters in 2005, foreign venture capital funds such as pensions, etc., at the start of interest, some claim that investment in the history of never more than Silicon Valley, 40 miles radius of the most traditional, most conservative investment funds have also come to China, and China has become a venture around the area is not open. The world of venture capital for the next three to five years, China may be the world's best venture capital sites.
Nitrite on performance recalled that the Fund into China starting from 2003 when a new round of investment boom began, and since then, VC round to expand their investment, the fund type is more complete, and they are huge.
In 2005, China's venture capital companies, investment return rate of more than ten times there are nine, the huge Chinese market appeal, is bound to encourage more money to come. "There will be 4 billion to 5 billion dollars waiting to invest in China," TechVentures Co., Ltd., Peter Lu Wang Lu Wang a lot of hot money into China Peter analysis of venture capital industry, will inevitably lead to escalation of China's venture capital industry competition, the investor is concerned This increasing competition, certainly is a challenge.
The Ni Zhengdong feeling is that in 2006 China's venture in the field of competition fierce at least double than in 2005.
Huang Jingsheng think that the price of investment in Chinese companies is much higher than the two or three years ago. In addition to the macro environment, the industry, competition is an important reason.
The timing of investment projects is a key factor, Huang Jingsheng said that such a grand, started a short time, a year ago and one year after the vote cast, the price certainly differ greatly. IDG Olivia sighed, money is never scarce resources, good projects and good business are just a few. In investment in China last year by the combined six cases, and all the first round of financing in the enterprise to enter only the identity of investors. China Economic Cooperation Group Executive Vice President Zhang Ying said after the six cases the price of investment does not have a higher than 15 million U.S. dollars, the lowest one case only 200 million, 4 months after the other venture capital to the price of 6 times with the cast. And these 6 cases in 4, now have other U.S. venture capital in pursuit, would like to order 3 times to 7 times the price with the cast.
Therefore, when a good project, then the number of VC in the first follow-up, choose a good time to enter. When a VC is negotiating other interlopers situation will be more and more, this will inevitably drive up prices, resulting in increased competition.
The competition is intensified, VC who is generally believed that excessive competition would cause the surface, but in the long run, China's market capacity still needs more VC added.
Last year, China's private equity practice to only 0.14% of GDP, which is developed for 1 / 6. By this reference, the venture capital market in China is certainly not a bubble. According to private equity cycle, it is foreseeable, 2005 to 2010 will also have a larger growth. Bedford to Fund Investment (Asia) Co., Ltd. Huang Yongzhong that, in fact, the size of China's venture capital in the global and Asia is still relatively small, with China's GDP has more growth, more capital will be added, which could lead to reduced profitability of some capital.
And nitrite on performance only to find another layer of meaning after the competition, he thought the competition does, but not oversupply. Popular items now concentrated in certain areas, such as the Internet, TMT and so on, mostly concentrated in the eastern coastal region, while the mainland, a number of potential projects have not yet been tapped. VC circles will be asked to meet with people from other areas are concerned, nitrite on performance feel "a clear trend is the vision of VC are more open. If too much competition in some areas, we will have to open up new areas . because now more money in VC, several areas of investment money simply could not finish, it will try to spread the area of investment. in the past we did not pay attention to the industry, fund managers will also be looking at. "nitrite on performance compared to the trend" from the A single spark to Xinghuoliaoyuan. "
Two-way choice
Investors and financiers between the choice of investment managers and entrepreneurs in the process of negotiating mutual probing, weigh each other is a power game, is also a psychological battle, but the signing of a venture capital project is definitely the result of repeated trade-offs, less than a bitter battle. But who then look back, the smoke cleared, the natural side of easy.
One day in August 2004, IDG's Zhou Yang Fei came to power and office in Guangzhou 3G gateway, small office because of the arrival of the two is even more cramped. After brief greetings, the right week holding arms directly to the 3G gateway Deng Yu-Qiang, general manager, said: "You free WAP, ruining the whole market, you are the saboteurs."
Sentence rather abruptly makes Deng Yu-Qiang some off guard. Paused for calm, he began to explain to the comprehensive and Yang Fei two why do 3G gateway, where prospects. Zhou Yang Fei quite right and patiently listening to his speech later, there is no position on the left.
December 2004, IDG China, all of the eight partners in Guangzhou 3G portal. In the conference room, Deng Yu-Qiang began to explain to you 3G portal, Deng Yu-Qiang just about a minute or two, IDG intense eight partners began to discuss mobile Internet business, and indicate Deng Yu-Qiang has not talked about some things.
Deng Yu-Qiang would like a speedy end to the financing process. Then Deng Yu-Qiang of the Yang Fei said: "Before the Spring Festival whether mind." Deng Yu-Qiang Yang Fei sat in front, he said simply: "Today I signed with you."
IDG full asking price on the 3G gateway to accept, the agreement signed it. Chapter are not even covered.
"IDG is well aware of the industry, and efficiency is particularly high, the investors do not see much light, we should regard him as a partner." This is Deng Yu-Qiang investment in 70 large and small agencies chose IDG reasons.
After the bilateral cooperation, IDG's Yang Fei joined the board of directors 3G portal, Baidu and Tencent's success to Deng Yu-Qiang Yang non-convinced, and in the company's strategic development, Deng Yu-Qiang Yang Fei to help make it more feel its thickness.
Deng Yu-Qiang, referring to the selection criteria VC said: "In addition to price, VC industry recognition of the extent and degree of understanding is very important. Bilateral cooperation is one thing to go very far, and we may not go after the expiry of the financing earn one future profits must, then that is listed. so he must be the basis of VC funding more solid, a mature attitude of view is investment business. "
Ran Wang's advice on the financing are: the list of potential investors in theory can be further expanded, because you almost can not assume that all the big names to enter China's overseas investment institutions are looking at China; particularly if their overseas competitors come they will be more pins and needles. Test the water touching the door, but actually takes time to explore the way (the greater fame and methodology, the stronger the body the more so), so important if the time on business, or is best not to expect too much up to them. Talk very good cup of tea.
Let us look at the Milestone how to find Jason Jiang.
Jason Jiang of Focus Media models are unique in the world, with strong Chinese characteristics.
Milestone Capital of nitrite on performance and Lou Yun Lee began in November 2003, Focus got the case, then nitrite on performance and Lou Yun Lee has done a lot of sub-survey of the public, they found that the pattern of Focus Media can only appear in the China, but they could be successful. Professional managers to the land based Madden and CDH have made a decision very quickly, Investment Focus.
"Jason Jiang of Focus Media has been gathered through the acquisition of the Chinese market accounted for 99%, and there is no competition, we were making investments, and did not expect such an outcome would be." Nitrite on performance that really attract them First is the Focus model, followed by Jason Jiang this person.
"Jason Jiang VC who has found the quality requirements of successful entrepreneurs." Nitrite on performance, said: "He was very amplifier, often others can not, other people could not bear to pay, and he dare. Such as acquisition of gathering, the price is very high, most people difficult to make a decision, and Jason Jiang on the dare, but the results did make the acquisition of one plus one is greater than the effect. "nitrite on performance of the southern spring shot out of the performance.
John. Toure Quotations
VC is not a bet
Venture capital industry is actually a service industry, the venture capital industry to services for those entrepreneurs, therefore, industry knowledge and social networks are very important. Because if you do not have industry knowledge, he is the next bet, not to do service, you can not help entrepreneurs. Network of relationships is also a very key factors, including the customer's network, the network staff, partners of the network so that network capacity to grasp the critical relationship is very important.
The four risk venture
Venture Capital is divided into several parts, the first is the technical risk; second is market risk; Third, financial risk or financial risk, which means you do not have enough money to build a profitable business model can be ; The fourth risk is the human risk, or call personnel risk, you have a very good team. If the above four risk assessment can be very good, you can to help entrepreneurs start up. But to become a VC, you have to get through your efforts to help these entrepreneurs "qualifications" and not just by buying their shares to obtain such a qualification.
Venture in China in particular home
I come into contact with Chinese entrepreneurs in venture capital, entrepreneurs and the United States there are three main differences, the first Chinese venture entrepreneurs have a very aggressive, and they and other entrepreneurs compared to more able and less do more of the market. The second characteristic, because the scale of the Chinese market itself is relatively large, and growing rapidly, so long as Chinese entrepreneurs to focus completely on top of their markets enough, this and many other parts of the world, entrepreneurs are not the same. The third is that many Chinese entrepreneurs have characteristics, there is a spirit of nationalism inspired them, and they expect business to building China into a more powerful state and society.