Venture capital should change investment style to find new strategy

Van Mus Claudia Fan Munce, managing director of IBM's venture capital, believes that investing in interconnected corporate groups can help reduce risk and find new ways to enter the market, according to Businessweek. Given the current decline in venture capital (Venture CAPITAL,VC) industry, there are a few suggestions on how to run smoothly, but there is little mention of how to reshape VC good returns.　　Currently, emerging high-tech conglomerates are still relying too much on the preferred strategy, which is now seen as outdated. It's time for VCs to jump out of the old strategy and find new tactics. Under the traditional strategy, VC first analyzes the new market, then selects an investor from a large number of candidates, hoping that the selected company can take the top place in the competition.　　However, in the current complex High-tech market, the dependence of enterprises is greatly strengthened, therefore, no matter how clever the founders of the enterprise, how wise the Strategic approach, it is very difficult to select a single winner in many companies. Therefore, rather than the narrow choice of investment, VC rather than expand the scope of the bet. Thankfully, some VCs are already turning to new investment styles, trying to establish a network of connected businesses rather than selecting one or two independent companies in one area. The investment strategy is drawn from the computer industry.　　They build a network of companies that are complementary to each other and quickly expand their markets for those in the network. Taking the venture capital Anglo River Ventures as an example, it was founded in 2001, with 100 million U.S. dollars, the main investment in new materials, clean energy and other fields. It was founded by a former head of IBM in conjunction with others. Currently, Anglo River Ventures has invested in several start-ups in the field of energy-saving markets, including Synapsense, which specializes in sensing equipment.　　The company produces sensing equipment that can help other companies reduce energy consumption in their data centers. Early investment in these affiliated companies is now starting to yield returns. Also as the Clairvoyante company Anglo River Ventures Investment, its products are able to reduce energy consumption in the manufacturing of LCD flat lcd, which was successfully acquired by Samsung Electronics in Korea last year. Another company, the leading supplier of enterprise Manufacturing Intelligence (EMI) software, Incuity software was also acquired by Rockwell Automation (Rockwell Don (ROK)) in 2008. Communication with IBM allows Anglo River ventures to be keenly aware of the gaps in the market and work with other VC and major technology suppliers。 The creation of an ecosystem of affiliated enterprises and a new concept of investment in the whole system can help to generate multiples of the company's employment and market-required products. Investors can also reap substantial financial rewards by helping them diversify their risk and stimulate sales. All we need to do is look at Silicon Valley and look at the east of Massachusetts and other innovative areas. These innovation centers have spawned many excellent entrepreneurs through its surrounding universities, technology laboratories, large companies and start-ups. and VC itself will benefit from this synergy effect of enterprise.　　[Page] The VC model that has been questioned, although relying on VC to build a huge success of the enterprises are not a few, industry giants such as Google, Intel and Starbucks, but also because smart VCs realise that only by supporting the company's huge network can they make their own investments pay off. However, looking at the current economic situation, on the one hand, the IPO market is still in dire straits, and on the other hand, investment in the start-up companies have been shelved, which makes some investors have to send the doubt: the business model of the venture capital industry is no longer effective.　　According to a report released 21st by the National Institute of Risk Capital Assn, emerging companies in the second quarter only reached $3.7 billion trillion in Venture, less than half the same period last year, compared with 10 years ago. At the same time, some investors believe that the traditional VC has shown a huge and clumsy flaw, it is difficult to identify a real business new machine.　　However, if based on financial measures, venture capital is still a major way to promote the development of American enterprises can not be ignored, so some comments clearly ignore this point. The new measure of success is about how to inject new energy into the VC industry, with almost all the debate focused on financial metrics, that is, the size of investment, whether it is growth or decline, and the return on investment.　　It is noteworthy, however, that such measures are clearly too restrictive for an industry that has an important impact on the development of new ventures, the discovery of new talent and the cultivation of innovative business ideas. Perhaps it is time to throw away these traditional financial gauges and the technical indicators used to determine the quality of emerging industries, and instead seek out some more novel metrics. For emerging companies, it is hard to achieve success simply by relying on a large amount of venture capital. Creating an emerging enterprise is far more difficult than it might think, and it involves not only a strong management team, an inspiration to be a business project, but a sufficient amount of money to be backed up.　　Under normal circumstances, for a VC enterprise, can summon a group of outstanding talent seems to be more important than the size of financing capacity. VC industry has gathered a large number of outstanding talents. This is because they know how to build a management team and assemble an efficient execution level. andAt the same time, they are well aware of the enormous effort required to form a new business, which involves marketing, sales and financial statements. Rather than questioning the industry, perhaps what VC needs is a combination of technology to help build start-ups, drive the economy and create more jobs. It may be a good start to begin to break through the fields.