Bao fan: VC and upgrading

the author: bao fan (huaxing capital, chairman and CEO)

actually start and upgrading of the VC industry, although I don’t want to say, say like old washed-up.

generation of big background, is the change of the population structure, 1985 was a watershed. People born before 85 and after 85, thoughts and ideas have very far. From entrepreneurs, really can do things, is to be able to understand “85 after” the people in the crowd. Cause as a result, the age of the entrepreneur is becoming more and more small. I just recently took over a case to market, the founder of 24 years old! My personal feeling, the era of mobile Internet entrepreneurs is smaller than the average age of the PC era, was five. Now that entrepreneurs younger, VC is looking for investors, entrepreneurs, he hopes to understand each other, have resonance, uncle like my age, he felt unable to dialogue. To keep pace with times, to say I am example. OK, of course, old VC can recruit more young people to docking and young entrepreneurs, but decision who will do? If the decision or we do, we still can not understand the young entrepreneurs, have to translate it again for the young and efficiency is lower. Young VC can more deeply understand the generation entrepreneurs have attached market, more accurate judgment of the project, to make decisions by them, the efficiency will be much higher. So, come out to raise a new fund investors more and more young.

is another important background, the mobile Internet era, the start-up cost less and less. Do it on the PC before a product, design the along while, may need to prepare a year to launch. Mobile end soon, do while try, may be a few weeks to get product out, first, there is a problem to change, not to try a few months, I quit, for a product. Try to do this side model, determines the entrepreneurs is very little money. And now a lot of things can rent, like what server, software development, spend $writes can solve many problems. Early startup need money less and less, the result is more and more small funds into the investment industry, micro VC – perhaps only 1.2 billion yuan began to cast, cast A project may be millions of yuan is enough, not as they used to throw A good wheel must be millions of dollars.

as a result, the threshold of the young investor to raise also decreased. He started to raise $100 million may be quite difficult, raised 100 million yuan is very easy. The most typical example is the perilous peak huaxing, four years ago, the first period funds only 100 million yuan, a week finished melting: huaxing capital has given some money, I called my friends, they are out of the money. Huaxing was established 10 years ago, we raised are on their own, and by foreign companies. Traditional foreign funds are not willing to support fundraising for the first time, feel that the risk is too big. Give the young investor money most now is not a traditional fund, possibly even before the investors in the traditional VC investment company, the founder of the listed company, the founder of the rich, think of the investors, to send money.

the related, and in the future, the raise will play a major role in the raise. If an angel investors out of 500000 yuan, 20 people is 10 million yuan to startup, there is no need to like the past combines A wheel. And there is also a good mechanism, who pay the most, you for everybody looked at the booth, participate in the management of the invested company.

new VC: quick, accurate, malicious

so you can see, the new fund size is not big, more early, with the angel investment has become increasingly blurred boundaries. , of course, it is more strong than traditional angel investors is operations team, both investor team, also including the investor team, any angels on industry research, services are not necessarily spell after team.

so, the challenge for the traditional vote early VC is one of the biggest: it can’t find the entrepreneurs, for entrepreneurs, and you for $5 million to $10 million at a time, and I don’t need so much money, I as long as the melt a millions, tens of millions of yuan is enough; When I try for half a year, if this thing done, I may be about to melt tens of millions of dollars, by this time your money is not enough again. All the people who do fund, ultimately to serve the investors, who is from the perspective of investors, in that case, I might have asked put the money into the late.

this in new VC partners, who dare to pull a team out in the traditional VC is strongest individual capabilities, so that he can afford to do this thing. They play in three words: strong, fast and exact. Quick, is to see the right project under the load. High mountains huaxing cast a electricity project, 20 minutes. We think really just twenty minutes, isn’t, the most main is their homework done enough, have long known that people in the field of what what, once to an entrepreneur, a see fit for it. This is must, in the previous work, clear what to vote, don’t throw about. Malicious, which is able to fix the entrepreneurs. Them and now is with the generation of entrepreneurs, and even is classmates or colleagues before, haven’t come out of these entrepreneurs, who have been fool somebody else’s business, rather than wait for this person entrepreneurship to change. From this perspective, the traditional VC can do?

but the independence of our young people a new fund, may lack enough experience. You are young, advantage of the latest and the most tide project easier to understand, but the investment it is need to experience very much, do you want to see the big waves. Have you ever experienced before the Internet bubble, low tide ever seen naked swimmers, then your heart strong enough, it is very important. There are other all sorts of small, entrepreneurial partners such as trouble what should you do? After you have seen a lot of things to make accurate judgment, this is perhaps the lack of a generation of young people, so want to find a balance between acuity and experience.