Preangel Wang Lijie: The logic behind investing in smart hardware

The power of capital has been one of the strongest drivers of any industry. What does capital think of the hottest industry at the moment?

According to the latest statistics of the investment group, since 2014, 25 hardware manufacturers through VC and other means to achieve financing, and most of the intelligent hardware is still in the angel investment stage.

July 24, 21st century economic report reporter Preangel Angel investor Wang Lijie an interview. Wang Lijie has invested more than 20 smart hardware companies since 2012.

"Investors have to be able to judge the dark Horse and then cast a net to get the chance." Wang Lijie told reporters, we all know investment to cast dark horse, but in fact many people are qiangbai horse.

Consumption and capital driving force before and after

"21st century": Why do you want to invest in smart hardware?

Wang Lijie: Smart Hardware This industry is still on the rise, the front-end is the consumer in the pull, behind the capital in the push. Now actively promote or we this help angel investors, really to the apex of VC, PE when the force, they smashed in a lot of money. Now taking advantage of VC, PE has not been a large-scale entry, we have the opportunity, so the front of the user's pull and behind the industry's thrust is very important.

From the consumer's point of view, smart hardware in the brand, price, fashion, function have caught the young consumers. And they're the mainstream, and that's why I invest in smart hardware. Everything becomes intelligent, and we are interested in delving into his chances.

The key to investment is to look at the market. BAT has software genes and internet genes from an industry competitive point of view, but they still lack the hardware genes. Now some small start-up team to do hardware, to a certain extent, to lead slightly. At the same time, pure software products are easy to copy, and hardware has a certain threshold, in the supply chain, manufacturing has some difficulty.

From a large environment, this time period a variety of hardware overflow. Hardware start-ups are not as difficult as they thought, with some incubators gathering talent, ideas and capital. We have invested more than 20 hardware companies, and now the big VC is also focused on, even bat is also concerned about the hardware. BAT's attention, let the entrepreneur more confidence, the new person also strong courage to come in.

"21st century": What are the opportunities for smart hardware to subdivide the direction? Well talk about some of the smart hardware companies you voted for.

Wang Lijie: We are optimistic about the direction of transportation, medical care, wearable equipment for women and children and smart home.

First of all, in the traffic can do a lot of things, such as intelligent way to solve the traffic pollution and parking space problems, electric vehicles, air traffic systems. In the car network has a new hardware can be less fuel consumption, anti-theft, convenient to share, such as someone to drive my car, even a stranger, he can find my car through the network, with a mobile phone to open my car to pay, we hope this is the way to share the car rental.

Medical, we have invested in Shiyun Medical, Rui Ren Medical, respectively, are mobile health products and cloud services, for the mother and child groups to provide health services, wearable medical equipment hardware and software. There are many possibilities in the general direction of health.

Children can wear more than some of the properties of the play, but also a safe, healthy growth attributes; and what we have invested in the cool technology before is interactive sex toys, now focus on women's health. and the entire household including living, saving electricity and other aspects of the convenience of hardware.

I speak of hardware core is in the software, but its image is a hardware, hardware without software there is no soul.

"21st century": What do you value most when investing in smart hardware companies?

Wang Lijie: Essentially only two things to look at: The entrepreneurial team and the company's development direction. The hardware team must see their industry chain integration capabilities, is not a 10 years of hardware people, which is related to industrial connections, whether someone is good at financing, do hardware need a lot of money, is not willing to cooperate.

In addition to see the look, such as Tencent's team, coupled with Huawei's original hardware team to sound more of a look. How to assign the stock right of the team, the character, the work experience, the team cooperation years, the financing ability and so on are all we need to see.

In addition to marketing, we value the entrepreneurial "behavioral art" ability, such as Ma Jiajia, Luo, all of its products have not come out can be a large number of pre-sale entrepreneurs are behavioral artists. If entrepreneurs have this ability, then marketing can save a lot of money.

Valuation at the start-up stage

"21st century": What is the valuation of smart hardware startups?

Wang Lijie: Valuations are staged, mainly to see how long a company has been established, and whether the product has been made. If "Everything is all right, only the difference in mass production", then it is possible to subscribe to our fund's highest valuation, that is, a round of 50 percent valuation. If only the early operation, the team good enterprise, we value it within 10 million yuan.

Of course, some of the founder of the special cattle have also invested a lot of money, we can also consider a higher valuation, they do things "tall", is our optimistic. For example, companies with international patents want to do some medical field of intelligent hardware, the product has not been done, but also prepared almost, it can also talk about.

The valuation of angel investors is actually very flexible.

"21st century": from mobile internet to now, your investment logic, thinking has changed?

Wang Lijie: In the first stage, we invested 50 companies in 4 million, some projects in the transformation, such as our love sound, and then do the moral selection of the general direction of travel has not changed, but also doing overseas retail; Flash has been the tool, from the original Computer Management mobile phone, into the transmission between the phone, Next, a mobile app distribution channel was made; the Girlfriends app is now all about making smart hardware and making a boudoir hand ring.

The second stage, with 30 million cast 40, wave nets, delicious food to send these soft silver all cast, there are cars, O2O special heavy, generally see O2O development is to constantly enclosure, it takes a long time and money, the magnitude of the outbreak is more difficult.

So this logic moves to smart hardware. Smart hardware This wave, VC, PE overall still wait and see, some of them have entered the O2O, but now has not given intelligent hardware a very high valuation. We're a little early on the whole.

Our thinking about investing in hardware will change. Last year, the investment hardware, the industrial chain is not mature, the risk is very large, but the industrial chain is tending to mature. The back-end manufacturing industry faces development, entrepreneurs become more open, capital level, loans, supply chain finance will be more and more. In the sales channels, currently Jingdong, Amazon, Taobao are helping to do these channels, backwards and forwards, all aspects are growing. The industry is not long to the best, from an investor's point of view, the more mature the industry, the lower the risk.

"21st century": What do you think of the business model of smart hardware?

Wang Lijie: The business model that we value more is to make less profit on the hardware, as far as possible by reducing the profit margin, reach the penetration rate, increase sales, thus through the user, data, social networking to do the profit model of the Internet.

Of course, a lot of products at the beginning of the big margin, because a new thing is needed, entrepreneurs think they can make money. I do not discourage them from trying to make money first.

But if competitors appear, it is necessary to quickly through measures such as price reduction to let out the profits, because the larger data, to have more user data, the more accurate, the more real-time companies, may be more valuable. Of course, this is the need for large funds to help you burn money, to quickly docking large capital. After the big capital comes in, it can make 0 of the profit of the hardware.

21st Century: What do you think is the biggest problem for entrepreneurs when you are in touch with so many entrepreneurs?

Wang Lijie: We are most afraid of entrepreneurial impetuous, surrounding industry financing news constantly, stimulated by the disruption of rhythm. This entrepreneur must be in a subdivision of the product to achieve the ultimate, then including investment, partners are not difficult, such as looking for jingdong, micro-letter cooperation.

Some entrepreneurs to the enterprise valuation is too high, we suggest that the entrepreneur to small steps to run, there are relatively fast and reliable funds to take first, and then keep running forward. On account of the rich entrepreneurs to talk about financing will be more emboldened.

At any stage, entrepreneurs are bound to wrestle, and they must recognize the problem. We will look at entrepreneurs ' minds, perseverance, ideas, and ability to deal with crises. If appropriate, we can invest some money to help the entrepreneur tide over the difficulties, we will ask it to lay off staff when the company is in trouble, and help to find the right investor after the lesson is realized.