June Lian Capital executives: Focus on early venture investment

"China's VC industry, as a whole, I do not feel any special changes."　　"June Lian Capital President Zhu Linan said, although the cold winter, overheating opinions, but it is considered to belong to the" normal industry cycle. If not the legend Capital (hereinafter referred to as LC) Chinese name changed to "June Lian" (hereinafter referred to as "June Lian"), Zhu Linan the family less than the current media before, not to mention "I usually do not talk about the future of the economy," I am afraid laughable; including chief investment officer Chen,　　The chief financial Officer Wang Nenguang the core team is more impossible to Qi Qi to accept this reporter interview.　　However, the global economy is not good, LP to cover tight pockets, the capital market does not give the force and other external factors, it is really VC must consider the problem; These years have "domestic VC/PE rapid development, investment industry," such a new trend. Will the LC adjust the strategy to deal with the change of name? "Our investment theme has made some adjustments with the development of China's economy. "June Lian chief investment officer Chen said, from the original dedicated investment in IT development to now cover health care, clean technology, modern services, advanced manufacturing and consumer goods six major areas." But this is harmless to the changes in the philosophy of investment, "it is important to have long-term and sustained returns to investors." Zhu Linan said, "I always believe in the rich and Youdao."　　"Hope that the LC is not just a capitalist, but through the efforts to earn the money, the Real to the LP, to be invested enterprises."　　"Long-term cooperation with LP" To today we have invested a total of 130 enterprises, of which 20 through the IPO exit, there are more than 10 are through mergers and acquisitions of the way out. "21st Century": PE fundraising was slow last year.　　What is the progress of the fifth dollar Fund and the second phase RMB fund of June Lian? Wang Nenguang: Our fundraising is going well. Last May, our RMB fund has been collected and completed, with a scale of 3.5 billion yuan. Our two RMB funds are invested in social security.　　The total size of the fifth dollar fund was 500 million dollars and was collected in March 2011. Both the dollar Fund and the renminbi fund are, in fact, oversubscribed. For example, when the fifth dollar Fund was raised, the investor's will was 7.8 billion dollars, and 第二、三、四期 's LP were investing in the fund.　　Compared with the past LC only one investor of Lenovo, as of the fifth Dollar Fund, we have more than 30 investors outside the world, several big family funds are inside. "21st century": The enthusiasm of LP must be related to our investment performance.　　What is the performance of LC in the past 11 years? Wang Nenguang: Our first fund has been in operation since 2001 and has now completed all cycles, with a total return of over 7 times times the overall fund. Phase II, three funds have also entered the harvest period, the situation is good.　　Overall return level into the industry's top 25% (the first 25% points, top quarter) rankings should be no problem. We have invested 130 in total today.Companies, 20 of which have exited through IPOs, and more than 10 have exited through mergers and acquisitions. "21st Century": LC has the right to choose LP. So what are our selection criteria?　　How can we communicate with the LP when we are active? Wang Nenguang: Just talked about the change of investors, is actually LP according to our investment performance, investment direction made choice.　　Of course, we also have the intention to choose long-term and our cooperation LP. Zhu Linan: For example, Foreign LP, the first to have a clear Asian strategy, not today to invest in Asia next time but do not vote. Otherwise, it will cause misunderstanding in the LP market, we think our performance is not good. In addition, it must have Asian leaders to communicate with us in time, and the 3rd is to fully trust.　　Domestic LP, we ask at least to adhere to some important provisions, such as capital calls can not be arbitrarily extended. The relationship with LP is very important, even if your performance is good. These points are to be done for the sake of their interests, for the proper handling of conflicts of interest and for transparent feedback. In the June Lian, in addition to regular reports, we will organize annual LP annual meeting, the Fund's situation, the problems encountered will be communicated.　　If we encounter any related business with other brother companies, we will ask the Advisory Committee individually to identify the Committee, which is composed of LP. It's our style to be friendly to LP. For example, when we raise a renminbi fund, the fourth dollar fund has been raised and it is unreasonable not to give the dollar funds priority.　　So in the project, if the offshore structure of the company, there is no doubt that the dollar fund investment, if it is a domestic project, we will give priority to the possibility of changing to an offshore structure, if the business is willing, we will encourage him to do JV (joint-venture), so that the dollar funds also have the opportunity Focus on early project June Lian prefers to invest in the IPO from round A and the early company has low value before it goes into the second and third rounds of financing.　　To encourage more early-stage projects, there is a particularly early strategy within June Lian. "21st century": the size of the fund increased, June-Lian's investment strategy has also made some corresponding changes?　　For example, do you prefer IPO projects? Chen: We are more focused on entrepreneurship and growth, with special emphasis on early focus. Indeed, after 2006, June-Lian's investment has indeed extended, and the third phase of the Fund began to make long-term investments.　　But this does not mean that we have completely turned to the growth period, the June General Assembly of the investment spectrum or early, entrepreneurial enterprises. With the data as evidence, our investment case to date, the growth of only 30%-40%, the remaining 60% or even 70% are still early investment.　　Completely pure late case, next year will be on the market, this year to hurry in to earn a one or two times-fold case, we usually do not. June Lian prefers to go from a to the IPO, the early company value is very low first put a little money in, to its second round, third round of financing and then gradually append。　　In addition, in order to encourage more to see the early projects, June Lian has a special very early strategy. "21st century": compared to the early years it is only an investment direction, now June Lian covers 6 investment direction.　　In which direction to put more money, manpower, who will decide? Chen: In the face of so many investment projects, how to layout, focus on which points do need to be pondered.　　In the past TMT was indeed one of the largest in our portfolio, and in the early years it accounted for 80% of the total, even though more than 40% of the projects are now in this direction. At June Lian, there will be a one or a half to every quarter, and all partners will attend. This meeting is mainly to reflect on the investment before, and the implementation of the strategy, of course, the reflection is to look to the future.　　For example, after 2008, we restarted a lot of investment in mobile Internet-related projects, but in the previous 3 years even missed the UC Web projects, because there are some problems after the SP mode, resulting in the internal to this subdivision of the area is very nervous, do not dare to vote. 21st Century: Is there any new action on the regionalization layout? Why?　　What is the selection criteria? Chen: We set up an office in Wuhan last year. In fact, 8 years ago, June Lian set up the Shanghai office, but after that the pace has been a bit slow. This year and next will also consider the pace of block, but will not cast a net.　　Through the implementation of the geographical strategy, on the one hand, to capture more new investment opportunities and bright spots, for the investment company in the development of the region to help; On the other hand, the focus is to provide new opportunities for young people on the team. China has the opportunity to invest more active areas, and even the financial aspects of the development of distinctive areas, according to the truth we should cover.　　In addition to the western region, the south of Shenzhen, Guangzhou, such as the area of the concentration of such projects, we have to consider. "21st century": whether the focus on the very early projects, or the investment spectrum, coverage of the changes have brought about the internal management, decision-making system changes?　　How else can we guarantee investment efficiency and increase risk tolerance? Zhu Linan: Indeed, we are also trying to reform the mechanism. For example, a quick decision-making channel for a particularly early-stage project can be promoted if 2 partners are bullish.　　This will give us more room and make them more willing to take risks. We are also considering whether to set up a professional fund. For example, if you have a professional medical investment fund, then the investment decision on the project will be made by a professional investment partner.　　But this is still under consideration, because it involves the relationship between professional funds and other funds, the internal incentive system how to cooperate and so on. Exit: Do not want to earn all the money out of the time point of judgment or based on the enterprise fundamental judgment.　　June Lian has an internal withdrawal committee, responsible for regular observation of the growth trend of listed items. 21st Century: The capital market has not been a force since last year.　　Is June-Lian's investment and exit cycle good? Chen: PhaseFor our pressure will be relatively small, June Lian put the fund cycle as long as possible, the dollar fund cycle is 10+1+1, the renminbi fund is 8+1+1, many funds are 7 years or even 5 years, we firmly cannot do so.　　Objectively this makes us more patient and can work with more teams. Since 2008, with the establishment of domestic gem, SME, June Lian has also strengthened the withdrawal of domestic capital market, the current domestic and foreign two markets to launch the number of cases basically flat. But it is also true to pay attention to the possibility of the withdrawal of mergers and acquisitions, domestic capital market is still a lot of uncertainty.　　The slump in overseas markets may have to be a bad plan for six to eight months. Zhu Linan: I remember last year we had 5 IPOs, 4 years ago.　　So from the point of view of the exit, rhythm is still more normal, every year there will be normal money into the money out.　　"21st century": All kinds of uncertainty, how to grasp the point of exit time? Zhu Linan: The so-called exit, one is listed, one is cash out. Usually after the listing, we do not have a long time to observe the operation of the stock. The reason is simple, we are not a stock, do not expect to go through the level two market to make how much money, this makes no sense. Even if the luck hit the rally, but also to reflect on the price is there a problem? Exit time point of judgment or based on enterprise fundamental judgment, big city bad suddenly cut the share price, we will not be reconciled to wait, but will not insist for a long time. June Lian has an internal withdrawal committee, responsible for regular observation of the growth trend of listed items.