VCs crazy to burn money: But tech start-ups have no bubbles, only fanaticism

Make sure you have enough cash on your account for 9-12 months. "The recent open letter," The bubble Is there, "is widely circulated in the entrepreneurial and investment circles, and the seemingly shocking conclusion is that the capital bubble could burst at any moment," said Zhang Ying, a partner of Jingwei Ventures.

Coincidentally, far away on the other side of the famous venture capitalists Anderson also sounded the alarm of the technology bubble. In Anderson's view, the new technology companies now burn money at an alarming rate, "the market is bound to reverse, we will find out who is swimming naked, and many of the companies that burn money too fast will evaporate." "The benchmark capital partner even asserts that the new technology companies are burning huge sums of cash, much like before the dotcom bust of the late 90."

As if "China's housing market has no bubbles," the problem can always cause a war of words, the Chinese science and technology entrepreneurial community whether there is no bubble into a "different, benevolent" topic.

Investor Mania

Recently, in the micro-trust Friends Circle has a widely circulated joke: As long as you go to Zhongguancun Chuangye Street, get an Apple computer, a cup of coffee, pretending to be deep, there will be investors to find your investment.

The above jokes or just a joke, but the Qing Branch Research Center analyst Qi really feel "more money", "now as long as the hot industry, even if the project business model is not reliable can easily melt into the money, investment life afraid to miss any chance." There is no profit model is normal, no business model of the enterprise also investment is a little strange. ”

Investor mania can also be supported by a bunch of data. According to the data provided by the Institute of Investment and Research, 199 cases of the first half of 2014 were disclosed, the total investment amount was 1.122 billion yuan, and the scale of investment in half a year has surpassed the annual level. Close to 80% of the investment cases are concentrated in the Internet and it fields.

Tencent Science and technology statistics also found that the internet finance, online education and car sector is capital surging, "start price" nearly tens of millions of dollars. As of September this year, 33 companies in these three areas had completed their financing, with 5 of them reaching $100 million trillion, and 17 at more than tens of millions of dollars. In addition, over the past two years, aihongbianye in the field of electrical business has also been frequent victory, as of this September, there have been 15 electric companies have successfully financed.

It is also worth mentioning that, in the first three quarters of this year, they have dropped 45 projects, averaging 5 projects a month.

And higher prices for start-up projects are another manifestation of investor mania. Black Horse Fund partner Hu to Tencent Technology, the past financing path is usually angel round financing 2 million yuan, a round of financing 2 million U.S. dollars-5 million U.S. dollars. "Now many angel rounds of financing have entered the tens, or even to the price of billion to go." We're talking about chatting with an entrepreneur. Make investment, there are investment agencies directly to the price of a round to rob a single. "Hu revealed.

Lingdaihong, an angel investor in Mt. Lushan, has his own explanation for the frenzy, "some overheating, but it's a bit exaggerated to call it crazy." ”

Lingdaihong to Tencent Technology analysis, said the current heat precisely because of the past China's VC or internet giant too cautious, they have been used to gambling on the three or four years trend or strategic acquisition, which is a good phenomenon, VC appropriate positive point for entrepreneurship is very beneficial.

"Compared to the stock market of two and real estate, VC or very calm, Shenzhen stock market a traditional company, PE can get 40-50 times, this is a bit crazy." "Lingdaihong said.

Angel investor Macan, who had invested in star projects such as Huang Taigi, used nouns such as "Super Angel", "New Generation VC", "Public chip" and "FA platform" to explain the frenzy of capital. Macan, such as Xiaoping, Lei (Weibo) has a personal brand of the Super Angel, from the traditional institutions free from the new VC created by investors, as well as 36 of Krypton, such as the FA platform to some extent to promote the rapid flow of capital.

and VC or internet giants desperately invest in a root cause or do not want to miss the tide of mobile internet. The mobile internet is changing the traditional industries from the market, the way of operation, and creating new opportunities. Lingdaihong even used the history of a huge "destructive innovation" to describe the mobile Internet, in its view, this opportunity with the steam engine or power invention equivalent to, "This window of opportunity is probably the most of a year, all industries will appear next Ctrip and auto." ”

Entrepreneurial Mania

On the entrepreneurial mania, there is a piece of the same story from Zhongguancun Avenue: You drop a brick from the second floor, smashing 10 of the 5 are starting a business, 2 people fail to start a business, 3 people are preparing to start a business, and picked up the brick cleaning aunt is ready to Gan share their entrepreneurial experience.

There is no shortage of jokes, but you can really get a glimpse of the entrepreneurial boom in the crowded Zhongguancun business street. The new venture, which began construction in the second half of 2013, is now home to more than 10 entrepreneurial services, including Lenovo Star, entrepreneur, 36 Krypton, 3W coffee, garage coffee and Binggo cafe. Like restaurants touting guests, every institution is trying hard to attract entrepreneurs and would-be entrepreneurs: some offer free office space, company registration and technical support, a variety of free business salons, and some provide project roadshow and investor docking.

Likewise, the tide of entrepreneurship has flooded the campus. IDG Capital-sponsored campus entrepreneurship competition will be known to cover the country's 17 outstanding science and Engineering colleges and universities, recruitment of undergraduate and graduate students in innovative projects. And the entrepreneurial media-sponsored campus Black Horse Entrepreneurship Competition is said to be held in 121 colleges and universities in the country to run more than 100 phase of the campus Black Horse entrepreneurial incubation camp.

Why do young people craze for entrepreneurship? A passage called "Why the Internet needs young people" may give an answer, writes the article, which resembles the recruitment copy.

"Why does the internet need young people?" Because this is the fastest growing and most turbulent industry in the world. In addition to no Mano, today's internet and the ancient era of the Warring States no difference, the tyrannical and up, today or king, tomorrow will die. The decisive factor in defeating opponents, except Gold, is the warrior. To survive in a fast-changing environment, internet companies need fighters that grin thousands of miles around the clock, rather than slow-moving, elderly and infirm. ”

And the media such as "the tens of millions of pancakes dream", "How to sell 200,000 buns a day" and "The new technology men sell cosmetics years into the billion," such as the report has become a kind of novel companion body, they stimulate every young person's wealth dream and ambition like hormones, let people have a kind of "everything is ready, only owe us" feeling.

Of course, it is impetuous to be accompanied by fanaticism. One manifestation of this is that venture capital offers are often inflated. "The amount of financing that is now being publicized is often the real amount of financing multiplied by the exchange rate of the dollar against the renminbi." And then the founders have no clear understanding of this, so can only refer to the number of media reports, the vicious circle so formed. An investor to Tencent Technology revealed.

Craze ≠ bubbles

With all the fanaticism, many people have a chilling feeling. But is it a bubble to return to the gist of the article?

Wikipedia defines a bubble economy: it refers to an asset whose value goes beyond the affordability of the real economy and makes it vulnerable to a macroeconomic state of sustainable development. The bubble economy is often supported by a lot of speculative activity. Without the support of the real economy, assets like bubbles tend to burst.

In terms of the scale of the bubble economy, Broadsight, a consulting firm, has a broad range of features such as "new things" becoming more and more popular, and a lot of VC pouring into startups and MBAs leaving banks to join startups. And there is a foreign view that only the taxi drivers and the shoemaker are in the pursuit of their own not familiar with the field of stocks is a bubble. So, from this point of view, the current enthusiasm of the technological entrepreneurial world is far from a bubble.

Others have likened the current mania to the dotcom bubble of the 2000, in what two times have in common that everyone is more optimistic. It was believed in 2000 that the Internet was changing the entire business and magnifying its role and valuations. What's popular now is talking about mobile internet and lifting it to a certain height.

But both are wildly different from the economic fundamentals. In Wang Shiyu, the vice president of Qiming Ventures, the current entrepreneurial mentality is somewhat impetuous, but the general direction is right, "the fundamentals are no problem, the big environment is getting better, especially the Internet's total economic volume is still increasing, but also constantly penetrate to different industries." In addition, the mobile Internet dividend has not disappeared. ”

As former Fed chairman Alan Greenspan said, Bubbles are only known when they are shattered. All predictions of bubbles are an alarmist anxiety, or a helpless remorse, for the current tech-entrepreneurial world. What if the bubble really comes? Real Fund partner Li Yingjie to Tencent Technology answer is: "The so-called bubble will accelerate the growth of a good company, thickening its strength, will be bad company sooner or later the true colours, for the bubble toast!" ”

For enthusiasts, they don't have a lot of intellectual space left in their heads, only to find out after they've been through it, "Oh, this is called a bubble."

(Responsible editor: Mengyishan)