Editor Zhang Ying's letter to CEO: The bubble is right there.

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In the past 20 years, this index has been close to or more than 100% of the two times in 1999-2000 and 2007-2008 respectively, compared with the first dotcom bust and the 2007-2008 economic crisis. The 5-year U.S. stock bull has pulled the target again to 100%, although it hasn't reached 120% for the first time in the dotcom bubble, but the correction may be close to--Buffett's current assets, the proportion of cash has reached record highs, which may also be a signal.

If we lengthen the timeline, look at the 5-year rolling earnings of the S & P 500 index over the past 80 years, as shown in figure:

So over the past more than 80 years, the 5-year rolling yield of the standard and poor 500 index has occurred 3 times over 200%: 1937, 1987 and 2000, followed by three global economic crises and sharp declines in the stock market, which reached 180% today. Conclusion I do not want to say more.

2, unlisted enterprise financing environment is extremely crazy

The secondary market "hot" to a large extent also affected the first-tier market, just a few years ago, we measured the value of a tech company after it was listed as a "1 billion Dollar Club", but today you will find that many unlisted tech companies have relaxed to this level (in view of the early layout of the wireless field in Jingwei over the years, We only have 7 companies listed this year or more than 1 billion U.S. dollars market value), even more such as Uber, Dropbox these enterprises through VC financing in the unlisted before they have reached the market value of tens of billions of dollars, billions of U.S. dollars or even the acquisition of tens of billions of dollars (WhatsApp, Oculus) Also appears frequently in the American and Chinese science and technology industry today.

In the early stages, the price of a start-up angel and a round was also significantly higher than in the past, as Gurley, a senior Silicon Valley investor, said before: "No one ' sfearful, everyone's greedy, and it will eventually End。 "There are even a few technology companies in the United States that have signed up directly with their landlords for 10 or even 15 years in their choice of office space--and the capital they get from financing is to make these companies grow, no investors would want them to rent a house for such a long time--and that's also a sign that property developers think today's rents are high, That's why they're willing to sign a long contract.

In the 2014, China's early TMT investment and financing market, the phenomenon is also unusually obvious. All the mainstream funds are crazy to invest in projects, before the less common tens of millions of or even hundreds of billions of dollars began to become very ordinary financing, start-up projects each round of the time lag between financing is quickly shortened, or even the end of a few times after the price of the new financing has become "reasonable" and frequent.

Many people will say that today is the "best time" for entrepreneurs, and I agree and believe. Over the next 10 years, China's Internet/wireless emerging companies will have a growing share of GDP and a brighter future. But the principle of extremes, I think we all know, the domestic VC industry in 2011 had a short peak then due to the window period of the problem in 2012 quickly back to cold, by the change in heat cooling only occurred within a few months, when the adjustment comes, the original can finance tens of millions of dollars in the company at that time cut half, Cutting Two-thirds of the financing is not enough, and there will be a lot of money-less startups that will fall in the short dark.

People familiar with our industry may know that this year many of the basic financial to the money, people desperately to do the case, including us, several mainstream funds, so far this year to invest in the number of cases than last year twice times more. But how long can this situation last? The volume of a fund, the team determines the number of cases and the speed of their investment, now it seems that blind optimism is very dangerous.

September 22, Tiger Fund founder Julian Robertson in Public said: "He did not know when the bubble will burst, but it will be in a" very bad "way to rupture.

It says so much about market sentiment and future trends, and as a person who deals with entrepreneurs every day, I think what we can do is give some advice to our companies:

* For companies that want to finance, my proposal is that the best time is today, financing is not one-time, certainly need time, market sentiment may suddenly change. The founders must find a balance between valuations and the speed of financing. Jingwei will help you to select the most suitable for the industry and the stage of investors, focus on financing of energy investment, improve the probability of success. The best embodiment of my ability is also here, which is to help the company in the financing of the ideas, as well as the key provisions, the precise pace of financing.

* For companies that are financing, the speed at which the timing of financing is today is higher than the absolute value of valuation. Now that investors sign the letter of intent after the recovery rate is rapidly increasing, should try to get new investors to give a bridge loan. I'm not saying valuations aren't important, but getting the money quickly is probably the most important thing in a certain range; with money you can prepare for the winter and stay healthy during the winter, even if we're not sure when the winter will come and how long it'll be in winter. We also find that the financing process is more and more difficult for companies with more than $20 million in capital.

* For companies that have just completed their financing, my advice is to carefully plan your spending speed with founder intuition and rigorous data analysis. If this wave of correction occurs, the extreme swings in the balance will naturally increase the difficulty of future financing, so don't be overly optimistic about your pace of development and financing progress, especially the 2015 plan.

* Besides, the Jingwei companies that are preparing to go public in the United States, please practice "internal strength"; When the market is good, the tolerance of technology companies for revenues and profits is high, and markets value those growth curve indicators, such as user volume, monthly life and market share ratio, but once the heat turns cold, the market will have a great value for income and profit, And so the small-cap companies that have weak incomes and profits are abandoned.

Finally, I would like to say that the capital market is fickle, and my thoughts are just one of countless voices; I don't want winter to come so soon, but if it does come, you don't have to be too afraid, Jingwei will always provide you with support and help.

In any case, CEO, please find out your colleagues and staff to communicate the specific coping strategies, and make sure you have enough cash reserves for 9-12 months. The bubble itself is not terrible, in the face of crisis is always dangerous and opportunity coexistence, as long as it is a reliable team, early to the valuation amount of reasonable funds, the arrival of the cold winter is a good thing in the long run. It will only hasten the demise of the unprepared rivals, and the temporary achievement of a more powerful and aggressive self in the new wave of bull market. "Let ' s Win up. ”

Jingwei Venture

Zhang Ying

September 23, 2014