Local VC must cross several development bottleneck

1. Local VC organization. As a result of legal deficiencies, the past local VC basically take the form of the organization of the company to operate, this form has many drawbacks, not suitable as the operation of VC organization. With a backward form of organization and the use of advanced organizational forms of foreign VC competition, like the Qing Army with machetes and bows and the armed forces with the Yang Pa of the British invaders confrontation, we first in the system to lose the other side. The New amended Partnership Act, which will enter into force on June 1, 07, solves this problem, it can be foreseen that in the near future, the VC in the form of limited partnership will be a hot topic of VC Circle in the second half of this year, and it is believed that it will not be long before the birth of local VC with LP-GP mode operation. The limited partnership also solves the problem of double taxation of the VC. 2. VC financing Channels. The United States has developed capital markets, there are very smooth private placement channels. By contrast, our domestic capital markets do not have a legal claim on private equity, private equity has been in the state of half underground, between legal and illegal. If the local VC wants to have the big development, must solve the financing channel the question. 3. VC Exit channel. IPO is the most critical VC exit channel, but the domestic gem has been slow to launch, the local VC exit channel is always unable to establish, and ultimately can only rely on M&ama, which in large part restricts the development of local VC. And foreign VC, can take the domestic election project, overseas investment, and then listed abroad mode, exit channel is very smooth, local VC in the exit channel and lost to the foreign VC. Shenzhen's gem has been in preparation for 7 years, and there have been recent reports that it could be launched during the year. The launch of the gem will break the local VC in the Exit channel constraints, will greatly promote the development of local VC. 4. Qualified LP and GP. is not rich can do LP, also not casually find a person can do GP, a first-class VC, not only need first-class GP, also need to have proficient VC Limited Partnership game rules LP. 5. Competition for good entrepreneurs and entrepreneurial projects. Because in the scale, experience, resources, capacity and other aspects of VC has a relatively large gap, so the local VC in the competition for the project is obviously at a disadvantage, so the local VC will face a very fierce competition for excellent entrepreneurs and entrepreneurial projects. At present, due to foreign VC-oriented professional VC generally unwilling to cast early projects, and more like icing on the cake, so there is a deep gap between the grassroots entrepreneurs and professional VC, local VC due to the general size of the small, will be forced to move forward the investment phase, have to pay more attention to the early projects, This makes the experience of the local VC face more sinister living environment, so there are a lot of local VC in this brutal competition and heroic sacrifice will be no doubt, but this may be the achievement of individual survival of the very tenacious local VC, the real venture capitalists may know more about the Chinese market, closer to the entrepreneur, More entrepreneurialAmong the venture capitalists of God. The above is to restrict the development of local VC several bottlenecks, local VC to achieve rapid development, these obstacles must be crossed. Fortunately, some of these problems will soon face breakthroughs, and some are at the beginning of the dawn. I wish the local VC overcome many obstacles, really ushered in the spring of Chinese venture capital. 2007.4.25