VCs flee the internet and lose patience

The Internet industry, which once dominated the top three on the investment charts of the past years, is gradually polishing investor patience because of unknown factors. "Investing in the internet is definitely a hard dirty, and I'm now looking at traditional projects with normal cash flow," said one prominent investor in private. An investor who declined to be named told the first financial daily that some people who have escaped from the Internet investment Circle are no longer bullish on the field. Even from the internet to the current rather favored mobile internet, investors ' mentality has changed subtly. The investors mentioned that although many investors are optimistic about the mobile internet field, but a lot of institutions in the real investment hesitant, the main concern for the trend of the judgment will be biased, afraid to cast the wrong doorway, which also to some extent hinder the organization's investment activity. Since 2012, the internet industry has seen a sharp decline in quarterly investment compared to 2011, according to China Venture statistics, the 2012 Chinese Internet industry total disclosure Case 133, total investment of 3.95 billion U.S. dollars, compared to 2011 57.1% and 55.5% respectively. "Now internet entrepreneurs want to rely on an idea to get their money out of the way, instead they need to spend more time polishing it." "Starting point VC Fund founding partner Charlie to reporters. Innovation gap VCs pursue high returns, and often such high returns cannot be achieved in traditional investment areas. However, such as the Internet, such as the technology industry itself because of its inherent in the label of innovative labels, virtually cater to their taste, it has become a favorite object of the venture. In their view, there must be a revolutionary technological or business model innovation, so that the existing market competitors will be less, or with the competition to open a larger gap in order to eventually achieve high returns. Charlie admits that innovative technologies and innovative business models are the rules for finding good projects in the Internet world. Many of the early projects in the United States have given him the feeling that a lot of whimsical ideas are exciting. However, although there are a lot of entrepreneurial people in China, but not many exciting projects. "I couldn't find a project, no new things, and I couldn't get excited," he said. "Charlie said. At Stanford University, students can take a year off to try to start a business and then come back to school. There was a 19-year-old computer science undergraduate who dropped out of school with more than 10 students in the department and created a clinkle company with mobile devices to buy goods and services, a move that was supported by professors and principals of computer science. But this kind of scene, in the domestic but seldom see, the external environment to the innovation restraint more or less fetter the domestic entrepreneur thought the unrestrained. In addition, Lenovo Star Investment director Liouville, the lack of domestic success to survive the original technology start-ups is the reason from technology to products, products to the market is particularly difficult, in which involves supporting the environment, industrial ecology, user mentality, intellectual property value and so on. On the other hand, it is noted that the United States has a sound intellectual property protection, such as pure technology or a single intellectual property has been favored by the wind. At home, however, this practice is not feasible. "If companies just focus on technological innovation, regardless of product, market and other layout, and will not be bullish investors." Charlie says it pays special attention to enterprise team staffing, such as whether there are market personnel, whether to set up a product manager position, and to focus on the integrity of the team. Liouville that, for the original innovation entrepreneurs, can not hold the confidence in the success of the technology research and development, on the contrary to think about their own advantages, according to market demand design products, to obtain cash flow and customer channels, access to market opportunities. Raise the threshold Liouville told reporters that the network as a new information pipeline, connecting users and businesses, reduce transaction costs, clustering transaction role significantly, subversion of the offline traditional business model. Coupled with the existence of a strong infrastructure, so that the internet has never been as low as the cost of start-up, but it is because of this low-cost, resulting in too many entrepreneurial, success rate is not high, the competition is also very cruel. "For the Internet, the threshold is lower, the enterprise is easy to develop, the scale effect is also easy to enlarge, but to do a good product, so that its sticky performance so that users like, the early days will need time to invest." "Charlie said. This, in part, tests the patience of investors. In Charlie view, the Internet is invisible, touch the virtual body, compared to the offline entity shop, its actual performance can be from each store cost input, customer unit price, passenger flow and other data on the objective estimate, by this investors can get clear accounts, But these elements in the development process of internet companies are uncertain, and this uncertainty sometimes let investors heart bottomless. Charlie For example, 2000 has been popular in the internet enclosure, the industry is prevalent like enclosure to rob users of the market, to the number of users to measure the success of the enterprise. There are a lot of enterprises to take this into the money, although money "burned" to a pile of users, but once the enterprise began to charge, found that users have run, the initial financing also played water drift. "Now such enclosure has no meaning, investors in the emphasis on the user base is big enough at the same time, more concerned about the conversion rate, if the accumulation of users can not be converted into effective paid users to maintain the future development of enterprises, the accumulation of this amount is meaningless." "Charlie said. Liouville also blunt, at that time the simple accumulation of user data is purely a game of drumming, and now the use of users can be turned into app promotion, games, electricity quotient, the formation of income cycle. "An app user with only counting capabilities is too far away from the value of a user with a deep industry application." "Instead, the number of users, the impact on users, the quality of the users affected is more meaningful," Liouville said. "But this is not a low demand for the investment institutions themselves," he said. Liouville adds that this requires investors to judge not only the current user value, but also what kind of user value will rise faster in the future and thus be laid out in advance. GGV Capital'sPartner Jeff Richards bluntly, in the hot market, VCs can be to the concept of plagiarism and lack of competitiveness of enterprises to smash money, hoping to have the next investor "takeover." But in the long run, this approach is no longer feasible. Now, the investment threshold has obviously increased.