Angels also start a business: Investors are favored by entrepreneurs to introduce dynamic funds into the investment circle

Wang of the United States, today's headlines Zhang Yixi, where to Zhungchengsu, UC Yu [Weibo] ... These entrepreneurs, with their beautiful résumés, are now limited partners in an angel investment agency called Source Capital (2¥q parter, LP). "I'm also trying to be quick and wrong to see which ideas are valuable and what doesn't work." "Source Capital founder Cao Yi said. And that statement sounds like a complete entrepreneurial tune.

Cao Yi May 2014 as vice president of the post from Sequoia, the formation of source capital, and quickly raised the first phase of the 100 million dollar capital. In the months that followed, the young investment firm had invested more than 10 start-ups.

The investment agency, which is trying to build a culture of entrepreneurship, does have a different approach to traditional venture capital institutions. "Such LP itself as an entrepreneur, in the first line, there are actual combat experience, like senior students to give new entrepreneurs practical help." "Cao Yi said.

He is not the only investor who comes out of a traditional investment organization and builds his own investment organization to practice his ideas. Before that, IDG China's Zhang, Gao Xiang and Yue Bin separation established the Gao capital; the Dong of the Gobi Capital created the Indus-tree capital; After the victory of Huaxing's capital, Huang won the game to set up a network of games, while another investor Zhou Zijing of Huaxing established the ether capital.

But in the seemingly boiling areas of early investment, this is just adding some more high-profile news.

In fact, this field has rapidly poured into a large number of individual angels and institutional angels in just a few years. These investors include the traditional institutions such as jingwei and IDG, including Xiaoping, Lei and other Super angels with personal brands, and big companies such as Baidu, Tencent and Alibaba are also actively involved in early investment; a large number of individual angels are also emerging.

And Cao Yi, Zhang and so on to start their own new fund investors, but is the latest to join the wave of the camp.

According to the Chingko Research Center, in 2013, a total of 30 angel investment funds were collected and in 2012 and 2011 the figure was 22 and 13 respectively. It can be expected that the number of 2014 will be more.

The situation is somewhat like what is happening in Silicon Valley: The rivalry between personal angels, institutional angels and traditional VC for good entrepreneurs is becoming fiercer, and they also need to innovate to maintain their competitiveness.

Angel investment in Silicon Valley has been decades old, and China's angel investment, according to the Qing branch, began in 2011-it was only 3 years ago. As a result, almost everyone in this industry is exploring and learning quickly.

"Before 2010, the Internet industry was just a small industry ... Only companies with products and users can get financing, which is equivalent to the current B-round. "Cao Yi said. He entered the industry in 2004 and has been engaged in early investment.

Even by 2010, there are few people who have a concept of angel investment.

"I remember when we went to Wuhan East Lake new technology Development zone enrollment, most entrepreneurs think we are to get money for the project, not to avoid us, is directly ask us how much training fees." No one believes that we offer free training and that future investments are possible. Lenovo Star Executive director Wang Mingyao said. Lenovo star, as a project of Lenovo Holdings, was founded at the end of 2008 and was initially used as a "special training class" to conduct "High-tech industrialization" training for PhD students of CAs. Since 2010, it has provided start-up funds for entrepreneurs and has become an angel investment agency.

In the year, the incubator startups, founded in Mountain view of Silicon Valley, quickly summoned 12 trainees in the first phase, and another incubator YC training camp (Y Cominator) was 5 years old, and has hatched Dropbox, Airbnb, Heroku and other star companies.

"This is related to the stage of development," Wang Mingyao said, "Before 2005, the technology is not ready, Internet users have not been trained, computer performance and bandwidth is not enough, so is the portal, search such a point-like development; 2005 to 2010, the infrastructure is up, with the means of payment and the function of mobile Internet, So the chances of connecting into a line begin to get more. ”

More than 2010 years later, not only are Internet users fast, but mobile internet users have become more popular. China has more than 500 million Internet users in 2011, according to the China Internet Center, and in 2013, China has 309 million microblogging users, and more than 242 million people have had internet shopping experience. For entrepreneurs, they are faced with a large number of users who continue to grow.

Technology, regardless of bandwidth, cloud technology, or more and more developer-oriented development tools and services, the entrepreneur's threshold for entrepreneurship is reduced.

For example, if you want to develop an application on a mobile phone, entrepreneurs can store it in the cloud services, using Easy-to-use data analysis tools, and free use of the upgrade fee business model, so that entrepreneurs in the product size before the large, can be free to use a lot of tools (related reports see "First financial weekly" 2013 the 17th issue of "Let entrepreneurship become simple").

The pursuit of technology companies in the U.S. capital markets is clearly encouraging for Chinese start-ups. In 2010, Chinese companies listed in the U.S. have Dangdang [Weibo], Youku, education and SouFun. Youku financing amounted to 233 million U.S. dollars, the market rose to 167.97% on the day.

All this has allowed investment agencies to start chasing businesses in the Internet and mobile internet sectors. And internet companies are growing faster than traditional companies, allowing investment firms to invest more early to get more favorable prices.

"The cycle of traditional industry development is long, and the technology industry is developing much faster." This determines that investors need to go ahead, faster, or easily missed. "said Yang Ruilong, partner of northern Aurora.

Since 2010, IDG has embarked on a massive investment of angels in start-ups, followed by institutional investors such as Jingwei Venture, which have aggressively recruited investment managers on a massive scale. Sequoia Capital, even if they do not dabble in this field, but as a money for the Fund LP, Angel Round of the company investment.

According to the Chingko Research Center, in 2008, only 25 Angel investments took place throughout the year, and in 2013 a total of 169 angel Investments took place throughout the year.

In addition, a large number of individuals enter the angel investment, because the rich more and more. According to China Merchants Bank and Bain, a joint release of the 2011 Chinese Private Wealth Report, China's high net worth of the population expanded year in 2010, the population reached 500,000 people, more than 2009 90,000 people, the annual growth rate of 22%. By 2012, the figure had reached 700,000.

After 2011 years, the Super Angel raised more capital and formed a fund focused on early investment, such as Xiaoping and Wang Qiang.

Almost everyone who enters the industry has to learn and grow quickly.

For a while, you'll see some articles on the web, using Silicon Valley's approach to prove why angel investors should not occupy so many shares, or why it is not good to intervene too much in startups. A great deal of Anderson Hollowetz (Andressen Horowitz), founded by Y Combinator or Netscape founder Anderson, was translated. And some organizations will give everyone a "lean Entrepreneurship" (Lean startup), so that most of those who do not have entrepreneurial experience to understand the business.

And in the 2013, just two years later, the area has changed dramatically. You can even say that what's happening in this field is more like what's happening in Silicon Valley.

The 2010 Anderson (Marc Andreessen), published in the Wall Street Journal, "Software is devouring the world" is happening in the United States and also in China. The internet and mobile internet have begun to seep into more and more traditional industries, such as health, education and finance.

"Now startups are like a big outbreak of species," he said. Cao Yi. The Economist, in describing the diversity of Silicon Valley entrepreneurship and the impending change in the face of various industries, is likened to "the Cambrian of Entrepreneurship".

Behind this is the continued decline in the threshold of entrepreneurship. Increasingly inexpensive cloud services and more useful development tools allow entrepreneurs to develop products with less cost and faster speed.

At the same time, some entrepreneurs are starting to get paid. Some of them are gaining wealth because of listings, and some emerging phenomena have created more financial freedom for entrepreneurs, such as Tencent, to change their plagiarism strategies and start buying small companies. These rewarded entrepreneurs and executives are still willing to continue to be part of the business with the Angels as they achieve financial freedom. In Silicon Valley, entrepreneurs and corporate executives are the main sources of angel investors.

The threshold for setting up investments and funds is also being lowered. "Even 5-10 years ago, it was hard to save a dollar fund, you need resources and relevant experience in China and the United States, but now the threshold for VC has been lowered, as long as there are seven or eight years of experience in the country, the establishment of a fund is not a problem." An investment manager, who declined to be named, told the first financial weekly.

This is no doubt for the Cao Yi to leave the original large platform, to open their own small and fast funds to provide a favorable geographical environment.

"Larger platforms are also experimenting with new things, but the new platform will be better and be able to explore and try faster." "Cao Yi said.

This logic, it sounds, is similar to the logic of many big company technicians giving up their work to start a business.

The internal structure and management of traditional VC can keep up with the changes in the entrepreneurial field, first questioned in Silicon Valley, and later questioned in China in 2013. Huaxing's Huang Shenli has openly pointed out that the traditional VC has a high management fee is not enterprising, more aggressive young people can not get out of the problem.

Like most startups, investors who are out of the big platform can make some quick attempts.

"Our business model has not been well thought out. "The ether capital Zhou Zijing in an interview with" First Financial weekly "said. But his attempt has begun. He opened the "Etheric school", every weekend to invite entrepreneurs and investors in the industry, to the first start-up of the people to finance, business direction and other guidance.

This seems to be what entrepreneurs need. Many entrepreneurs have the biggest headache in their initial start-up stage, how to get in touch with investors and how to deal with investors.

"Small business is the side of the potential single force micro." More people should give them some early guidance or advice on this. We were not. "Zhang Xueli, the CEO of Rou Shi, said.

Now this kind of free service starts to become more and more. In addition to the Etheric school, Lenovo Star, innovation Workshop, small table entrepreneurial class are providing entrepreneurs with such learning opportunities. For investors who are open minded and willing to devote themselves to these activities, this is the way they can get to the best entrepreneurs in the early days.

The new fund and angel investors are also trying to make faster judgments and decisions than big institutions. The average time a VC makes a decision is within two weeks. It even tries to shorten the time of decision making, for example, about half a week, but it turns out to be unrealistic. As a small, flexible fund, the practice was quickly tried and quickly abandoned.

Some agencies are trying to standardize the venture capital agreement (Term Sheet) to reduce the entanglements of entrepreneurs. Institutional Angel The fund announced its own investment agreement to simplify to a page, the source also claimed that its investment agreement will be able to download the site, each entrepreneur is the same.

"Even if we decide not to invest, we will give a clear answer and explain why." I think some of these reasons can also help entrepreneurs. ”

And this kind of interpretation of the rejection, it is indeed the entrepreneur needs. "There are some investment agencies that are heard after contact with us, but we really want them to have feedback to understand why they don't invest in us, which helps us improve," he said. "Front-time Interactive founder Liu Jie said. The company is developing a somatosensory technology. In fact, smart entrepreneurs are also good at learning from failure. Some angel investors are beginning to realise that they have to maintain a better relationship with these entrepreneurs regardless of whether they are pitching or not, as these entrepreneurs are likely to adjust their direction quickly, learn from their mistakes and make a successful product.

More and more entrepreneurs are also favoring investors who are entrepreneurial.

Should Xiao Yi, the founder of the Lazy household, in many investment institutions selected Xu Min established ze thick capital.

Shing was touched by the point is that Xu Min see Shing Team before, first went to Tuanjiehu dui son. There because Beijing maternity hospital and become the month sister-in-law and home economics aunt's gathering place. Xu Min and these months sister-in-law chat, understand their work and encountered problems.

"When we met, I thought Xu Min knew us very well. "Shing said. Xu Min suggested that should be the reception month sister-in-law of the store from the original a residential area upstairs moved to the bottom of the street store, and decorate the bright transparent. The reason is that, as women, those month sister-in-law and home economics Aunt may be uneasy about the need to enter a secluded place. Shing immediately accepted Xu Min's advice.

Shing also felt that the entrepreneurial temperament Xu Min and his team members made her feel close. One day, Xu Min and his partner were carrying a pair of shoulder bags, holding popsicles and subway cards in the lazy Home Office door, a young entrepreneur appearance.

For entrepreneurs, angel investors have assumed the role of entrepreneurial partners. They need to consult with angel investors when they are in trouble and get help from Angels in terms of strategy, finance, contacts, etc. Entrepreneurs also want angel investors to think like them, from the longer-term vantage point of the business.

In Silicon Valley, an obvious phenomenon is that angels with a continuous entrepreneurial background have better investment results. They know more about what entrepreneurs need, they think about things from an entrepreneur's point of view, and give them what they need most. For example, the founders Fund created by Peter Thiel, founder of Andreessen Horowitz,paypal, and the YC incubator created by the famous Paul Graham.

Source Capital and Gao Capital have introduced a large number of successful entrepreneurs into their LP teams, and they are actually trying to get them to learn about industry and entrepreneurship, and to help new entrepreneurs. And when the Internet and the various areas of the mobile Internet become subdivided, these successful entrepreneurs in a field of insight and practical experience is more valuable.

"If an investor had only previously invested in a mobile internet project, he would have to start a power provider, and his understanding and expectations would be different." Zhangyan, a serial entrepreneur, said he had created a warm island and is now the founder of the Wild Sugar net.

Even traditional investment institutions are trying to change themselves.

"From the very beginning and jingwei contact, to the Jingwei give us term, that is two weeks time." I think they are very efficient at doing things. "Liu Jie said. He began his contacts with Jingwei in September 2013 and quickly got his investment.

And IDG is acting very aggressively. In August of this year, it made a gimmick for the "The first meeting" of the conference, claiming that it will increase the investment of the new entrepreneurs. The Guo Lei, a 1989-born boy, developed a rapidly popular application called "Face".

"There are more and more investors and more investment forms. So everyone is looking for ways to provide more and more services, getting closer to entrepreneurs. "What we're trying to do now is to do the entrepreneur culture and make the investors look more like entrepreneurs," said Li Feng, a partner at IDG. ”

The idea that traditional investment institutions would not be heeded a few years ago is now being sought after by these institutions, and they are aware of the immense power that such applications can erupt among young people.

Guo Lei For example, one of the expressions he developed was a leg stretched down from above, with legs and hair on it, and the characters were pulled up. "It's a nasty look, but young people like it." "Guo Lei said.

"Only young people understand what young people need. "Guo Lei said.

"When we choose a team, we are all of them. "Cao Yi, referring to the source team. The team that has just been set up for less than a few months already has 10 members.

And almost all the other agencies are stressing that what they are offering is post service. The first practice, Anderson Hollowitz, has been popular in Silicon Valley.

"If you're going to say what Lenovo has learned over the years, it's that we're faster and we're going to have to invest more." "Wang Mingyao said. He also tried to show that the star of Lenovo had a more friendly side to the entrepreneur.

It can be expected that more innovation will appear in the field of angel investment. The way in which the public is raised has changed the financing process of most hardware start-ups in Silicon Valley. In China, most of the platform has just started. Rethinking the shortcomings of the traditional investment institutions, the yellow victory, that he created a game of the platform, so that game entrepreneurs in the financing, but also can quickly test the user's response.

And a angellist-like investment platform is making the information of startups and investors transparent and communicating faster and easier.

AngelList Another notable innovation is the syndicate function. This function allows any investor to be the project's sponsor on its platform, to assume the role of the general partner (GP), to manage and service the investment, while others who are authorized to do so can follow the lead and assume a limited partner role (LP).

VC circles are introducing this practice into China and calling it "dynamic Fund". With such a pattern, according to Xu Min, "the ability of the recognized investor to emerge from the company or organization, before which their talent is locked in the company or organization." ”

No one knows whether the next person to be released will add new elements to the investment of Angels, as Marc Andreessen, Paul Graham, or naval ravikant. But anyway, it's always good for entrepreneurs.