Shenyin: VC is not an innocent person in a failure case

VC intentionally or unintentionally become those vicious investment failure cases of conspiracy 2007 is China's venture capitalist is regarded as the "favored", the scenery Unlimited one year.　　But since then, with a spate of vicious investment failures, almost all of China's leading venture capitalists have been involved. Not because of the rapid deterioration of the industrial environment, nor the natural defects of the business model, from PPG, itat to the Asian media, Yan Yan Media, Prince milk, the species, and so on, all the problems ultimately point to the "people"-the entrepreneur's own professional ethics, moral integrity.　　Naturally, one of the easiest questions to ask is, why do investors who claim to be "investing" are repeatedly mistaken?　　The abnormal success of God's desire to make people perish, will first make people crazy.　　These unusual failures of the past 12 months have been largely due to the abnormal success of previous years. Until the 2003, most Chinese businessmen had not seen the "little gold Hand" of venture capital. 1993-2003 years, IDG Management Fund scale has been 200 million U.S. dollars, the same situation also has Ding Hui investment, its establishment in 2002 only managed 135 million yuan and 100 million U.S. dollars of two funds. Yan, the chief executive of SoftBank Asia's Information Infrastructure fund, also had to accept remote command at Japan's headquarters.　　You know, this is China's 3 most cattle venture capitalists. Even with these limited capital, they still create impressive results.　　Ctrip 3 years 16 times times return, Shanda 14 months 16 times times return, the 2 years of 20 times times return, Baidu 4 years return, Mengniu 60 times Years 3 times return ... 2005 years later, China quickly became the world's second largest venture capital market. People or those people, in a short span of two or three years, they are not only on their own, but also the amount of money available is 10 times times or 20 times times (compared with the first-class American counterparts, no less). Every big-name investor is ambitious to play the next beautiful "home run" (Investment circle slang: A case that returns more than 10 times times).　　The question is whether they really want to know how much of the success of the previous successes came from personal effort, and how much of it was created by the environment or by luck. By 2006, only 15 of the 150 projects IDG had closed, the failure rate was under 10%, and the success rate abroad was 20%.　　According to statistics, Chinese enterprises from the acceptance of the wind into the IPO time is usually between 1.5~3 years, and abroad generally in more than 4 years. Obviously, such a high success rate and so fast speed is not normal. It can only explain the quality of the first generation of entrepreneurs generally excellent, and the past ten years China's rapid economic growth has given enterprises the opportunity to stand out. According to one of the famous domestic investors said: "Since all the trees are hand-picked fruit, why do we have to rush to dig holes to plant trees?" But sooner or later things will come back to normal. Want to pick up the fruit of many people, the price will drive up.In the 34 market, 5 times times P (P/E) Valuation cases abound, and in the 2007, 2008 global capital markets at the craziest time, companies often open 15 or even higher p, which directly means the future return on investment decline.　　It is precisely in these two years, whether the number of 399 and 318 investment cases, more than 8 million U.S. dollars in the average single investment, more than 6 billion U.S. dollars in total investment, has reached a record high. Abnormal success can only lead to excessive self-confidence. The most intelligent and capable mind is inevitably influenced by emotion.　　Have they seriously thought about the exact match between their personal energies and their ambitions? He admits he is a director of more than 10 companies that have been invested in a perfect world. This is a normal number for big-name investors in the industry.　　But at the same time, he has a lot of work to do with research projects and other social activities.　　With more than 10 companies, and these companies are also distributed on 9.6 million square kilometres of land, it is generally assumed that the supervisory role of directors is limited, at the most can only give entrepreneurs some decision-making advice. This may also explain why, after the Chinese Sequoia investment in the Asian interactive media listing, the founder of the transfer of funds of listed companies financial shenanigans, will be avoided including Zhang Fan and other directors of the audit, and eventually led to a return to the city scandal.　　[Page] Traditional industry and fool logic in fact, China is probably the most challenging venture capital market in the world. In the US, venture capitalists live in California's Silicon Valley. They are mainly invested in High-tech, biomedical, and currently popular green energy. In China, more than half of investors are focused on traditional industries. They need to know where to put the LCD screen appropriate, guarantee leasing companies can touch, commercial real estate risk where ...　　Any new industry means a new learning curve. has successfully invested in Mengniu, the first eye on the phase of Hunan Zhuzhou Prince Milk. A Li Huixing, pretty financial statement, with little rigorous due diligence, signed an investment agreement. What they do not know is that hundreds of millions of of the net profit on the income statement is the use of the three-month period to occupy the dealer's payment.　　By the way, Lily, who invested in Mengniu, had already left the British Union 3i, and presided over the prince's milk case Chen Basong as early as in 2007 to turn away, and the successor can only clean up the mess.　　Another negative effect of abnormal success is the "herd effect" driven by the logic of fools. Mengniu, such as home, niche, New Oriental, Wuxi Suntech, each industry pioneer of the IPO, will help a large number of followers to get investment.　　The easiest way is to replicate the business model of the leader, which is big enough in China anyway. You can say that these people are entrepreneurs, or they are speculators.　　Their purpose is not to be made, but to sell. StupidThe reason the melon logic passes is that it is simple enough to sell. We want to do "the public on the bus", we want to be "goat milk inside the Mengniu", we want to become "postgraduate training in the new Oriental" ... Not many people are going to take the logic one step further: is such a pattern truly universal?　　Is there any possibility of subversion? In the former media director Tan, some companies are obviously speculators and investors conspiracy products (do he refer to the sincerity of the media?) "Some VC to see the public listing, the acquisition of the framework, the crowd, to vote a target company." Their starting point is to disrupt, waiting for you to buy me, otherwise you do not do a good job. "You ended up buying the company, and it ended up spending hundreds of millions of dollars on it, and the company was in a mess." "You say VC don't know?" Is he innocent? Shit！ He's clearly. "Fast shooter in the domestic investment community, MBA graduation, investment Bank of VC is more sought-after." "They are more likely to get money from overseas investors and better at opening up overseas listings," he said. "The Tang Yue of the Blue Mountain Chinese capital is a typical representative. In March 2006, he co-founded John Griffin, founder of Blue Mountain Capital, the world's leading investment fund, with the first 300 million dollars and 2 funds up to $1.4 billion.　　But in the eyes of insiders, "Blue Mountain China's investment structure is very problematic, there is no firewall at all." In Lanshan China, Tang Yue a person to make a decision, look for the immediately orders, do not have to consult with others. Ancient cedar biodiesel, sea Rainbow Medicine, Henan Xin Yuan and other 6 projects, all dispersed in two or three line city.　　One of the projects, see the entrepreneur once, talk about 2 hours, 3 days after the advance of 10 million dollars to the other side of the book. Unlike the "spread-risk" approach of investing in "not putting all your eggs in one basket" in the industry, Tang Yue to see the project is all "under the punch", "fill the basket": Real estate project Henan Xin Yuan from 40 million U.S. dollars to 75 million U.S. dollars, clothing retail chain Project Itat,　　Invest 50 million dollars upfront, then add up to 85 million dollars. Tang Yue spent two years on 500 million dollars, spanning new energy, consumer goods, manufacturing, retailing, agricultural processing, real estate, technology, education and many other industries.　　It is inconceivable that a single partner and more than 10 investment managers can achieve such a rapid pace and a large industry span. Lanshan's case is a bit extreme.　　But to find an MBA from a business college as an investment manager, all due diligence is outsourced to a third party, and two or three partners take a look at it, which is almost already the practice of many investment institutions. "Value creation, price realization" is the duty of any venture capital. Lenovo investment in 8 years to cultivate the hkust flying, to obtain 10 times times the return, the CEO Liu Qingfeng is almost their hands-on teaching. But a practice like this would be teased by most peers. No one wants to do the hard work of value creation, waiting for the price to be fulfilled.Was robbed. In order to quickly ripen the project, investors are willing to pay a higher amount than the actual demand of the enterprise. Easy to go anyway. When the entrepreneur's gambling and the investor's gambling sex collide together, multiplication effect produces. As a result, it is either a big win in China or a big loss like itat. [Page] Buffett's son-in-law is an ordinary engineer, an orphan, who does the least sexy manufacturing, starts from a rented old workshop, imitates the battery technology that Japanese manufacturers have already eliminated, and another is the top student of a prestigious university, with a very deep family background and a strong style, called super sales,　　In the outdoor media industry, there have been successful entrepreneurship experience. If you were a VC, who would you vote for?　　Ask 100 people, 99 will tell you the latter. The answer is revealed. The first was Mr Wang, who had not been cast by a venture capitalist all over China, but Buffett had a fancy for him. The other is Zhao Songqing, founder of Huang Yan Media, who has won the favor of Orchid Asia, including Jason, and has financed more than $50 million trillion.　　But today, Zhao Songqing even used tough tactics to get the investors out of the house.　　"Investment is to cast people", a simple word has an endless meaning.　　How to assess people's ability and honesty, this is a top investors also need to sharpen the technology. Buffett's teacher Graham chose to use quantitative analysis to solve the problem. The company's financial indicators to evaluate the manager's ability and personal brand.　　But Buffett's own practice has found that the financial data of some companies appear to be very good, but is likely to be inaccurate and even misleading others, which also let him eat too much (if Buffett in China, he must have been desperate). "In the long run, those managers who put pressure on accounting statements to go beyond the essence of the business economy are usually either weak or dishonest, and the two must reside."　　"Mr. Buffett said with emotion. Therefore, integrity is a key requirement of investment choice.　　But Buffett has no more scientific approach, and he tests whether an investment satisfies this requirement, seeing whether the manager of the business is "willing to marry his daughter to this man". In a business society with a serious lack of integrity and contract spirit, the Investor's own contract spirit and honesty become more important.　　As a partner, how do you treat your fund's investors, what do you propose to the company as an investor, and what values do you use as a manager to ask your investment manager? "VC is not an innocent person in the case of any vicious investment failure," said Chen, managing director of Lenovo Investment. This may also be the reason why all the parties are tight-lipped in the face of our direct questioning.