Waving traditional VC, will be out of period

There are three young people who live on the East Pole Island. When they join the island and set foot on the island and then choose the way of life again, they do not know the fate of the future. This is Han Han's movie "There will be no future", but But inadvertently has become the old IDG Zhang Zhen, Gao Xiang and Yue Bin - the three VC "rich second generation" when solo.

IDG, which for a long time has acted as a synonym for VC, is somewhat "homeland" to Zhang Zhen and Gao Xiang.

In 2002, Zhang Zhen, a graduate student at Tsinghua University, plunged into the venture capital industry and started his career at IDG for 12 years. "To become a good venture capitalist, at least have experienced a complete economic cycle, be seen as the world," an autobiography, Zhang Zhenru elaborate, and his "economic cycle" in the IDG complete.

In any public occasion, Zhang Zhen and Gao Xiang try to put aside the aura of past investment resume, but worried that it is misunderstood and disdainful to IDG. When IDG's LP came in, Zhang urged them to go to the managing partner first; if it is necessary to choose between IDG and Gao Rong's capital, "Choose IDG not to choose us."

In fact, I am personally one of nearly 30 personal LPs in Gao Rong's capital. Among the LPs with Gao Rong's capital, many are from companies that Zhang Zhen and others dropped at IDG.

More involved in seeing investment projects. Mushroom Street announced in June 200 million C-round financing, high-Rong capital and IDG at the same time with the vote on the list. In the same month, Mizu Network received a USD 30 million Series B round of financing from IDG and Gao Rong Capital. Gao Xiang repeatedly interviewed 21st Century Business Herald on the case of the meter off net in one interview. One of the reasons for this was tracking time and being familiar with team execution.

But rebellious young people do not want their own investment with too much IDG brand. Unlike companies that invested in pure Internet in the past, they are looking for a true convergence of the Internet and all walks of life, investing in new companies that are transaction-related and have the opportunity to change the industry chain.

VC2.0 business record

"21st Century": There are many comments in the industry about your departure from IDG. Including the traditional VC on the lack of incentives for investors, investment methods can not meet the needs of young entrepreneurs and so on. Stand on your own point of view to explain why you want to create a new VC agency?

Gao Xiang: IDG is a great platform that gives young people lots of opportunities, otherwise we will not be partners when we are young. The reason why we want to create Gao Rong capital is because we see the changes that are taking place within the industry. The first is the level of funding. A group of Internet entrepreneurs who earn money in the new economy are gradually emerging as new-generation LPs for domestic venture capital funds. They are somewhat different from the traditional mainstream US-fund LP in the United States and Europe. LPs do not take a long time to do this. However, they have personally created the Internet industry in China and are now the homeowners of domestic Internet resources. In the future of venture capital, these people are still to some extent still playing a crucial role. We are aware of this shift and we also see that the original VC fund was not sufficiently motivated to shift its focus to the new LP due to its size. Some successful entrepreneurs are also more willing to give money to dealings with VC investors, rather than large investment institutions. This is our chance. At the industry level, most of the venture capital investments we have been engaged in over the past decade have focused on pure Internet companies, most of which are related to information and entertainment, creating entirely new market needs and business models. However, with the rise of the mobile Internet in the past few years, the Internet has really become integrated with all walks of life. Therefore, the investment in the new economy faces a huge opportunity. Each industry may run a good company and may all be larger than the entire Internet industry in the past.

"21st Century": In the past year, the personnel changes of the U.S. fund have been very frequent. Many young people solo from well-known institutions, industry point of view, VC industry threshold getting lower and lower, while the entrepreneurial environment changes, but also to small VC brings more opportunities. How do you evaluate?

Gao Xiang: Can not completely use 1 and 0 to see these issues. Investment is a need to accumulate, but also need to constantly update the industry. So many small VC out now, limited funds, limited investment experience, to be growth, standing in the mainstream position, not to say two years later, the industry has undergone tremendous changes, a generation of new people for the old. But at this point in time, more thoughtful young people are involved in investing, bringing new genetics and a new beginning to the VC industry. On the one hand, investment is done in financial matters, and resource allocation is the core. Unlike Internet startups, you can do the job in the garage. When you do not have enough resources for your deployment, it's hard to do well. How to get funding is a basic ability for investors. The more resources your fund can obtain, the more efficient the resource allocation. The more experience you have, the more ways you allocate. But on the other hand, because VC invests in a new economy, companies must constantly update their knowledge and judgment. Entrepreneurship is constantly challenging the inherent thinking process, if you can not guarantee rapid update, it will be behind the speed of market development. Update is the accumulation of experience and coexistence. This is why we chose to come out at this stage. All three of us are under the age of 40, and with more than a decade of investment experience, we are in the midst of continuous improvement.

"21st Century": The new Gao Rong capital in the management structure and the traditional VC What is the difference? Gao Xiang: We are even more structurally managerial, creating more opportunities for young colleagues. We hope to maintain a smaller number of teams, it is important that each person's combat effectiveness is reflected, but also pay attention to the team structure on the age level. For example, we have begun to absorb 90 after the investment manager. "Founders 'Fund": GP and LP Dialectics "21st Century": Zhang Zhen called Gao Rong's capital "Founders' Fund", what is the structure of LP? Emphasize the value of entrepreneurs LP, does it mean that partial waste institutions LP resources? Gao Xiang: If you do long-term plan, the mainstream of the LP group can not be ignored. Gao Rong capital 200 million US dollars of the Fund's two LP sources: 50% from the traditional European and American LP, the other half from domestic Internet entrepreneurs.

"21st Century": What role will these LPs play to the companies that are being invested? If the entrepreneur LP too strong, have their own judgments on the project will affect the GP's independence? Gao Rong capital how to deal with the relationship between GP and LP?

Gao Xiang: In our case, there is no division between entrepreneurs LP and GP. Both China and Europe and the United States LP, are pure LP, the position and signed documents are the same. All investment decisions, only Zhang Zhen, Yue Bin and I participate in the three GP, others can not affect. This is an active and passive issue. When we need entrepreneurs LP to share resources or seek help from them, we will arrange meetings to meet their cooperation with the companies being invested. Admittedly, Entrepreneur LP will bring good resources. Today's Internet startups are different from those in the past. They are unlikely to work hard at all, and businesses inevitably have to deal with big companies. How to use these relationships is a very important start-up issue. At the same time, the founder LP has experienced from zero to the success of the process, you can share the experience and investment company. When the companies are cast over the need for guidance, we will help it to graft mentor resources. Another point, the past two or three years from the market point of view, mergers and acquisitions has become an important VC exit means, such as IDG to participate in the 91 assistant sold to Baidu case. Whether BAT or other domestic listed companies, are crazy acquisitions. Our LPs will also be potential buyers in the future.

"21st Century": Speaking of "crazy acquisitions and withdrawals", will it evolve investment into a more utilitarian "customization", such as the business line specifically for large companies to cultivate mergers and acquisitions entrepreneurial team?

Gao Xiang: This is not a causal link. Investment is never the company for whom the future is to be customized, which is risky - what if someone does not pay? Although M & A is an important exit, it can not be invested in M ​​& A. The purpose of investment decisions is still to find the industry's leading companies have the opportunity to be listed. Mergers and acquisitions are based on problems encountered in the process of enterprise development, or the process needs some large enterprises to support some of the things that happen naturally. Of course, for us LP, they can gain experience and support in a timely manner through their understanding of Gaorong Capital earlier and in startups. They are familiar with the development process of the enterprise. If there is a possibility of mergers and acquisitions, buying a well-informed company is totally different from buying an unfamiliar company.

"21st Century": Gao Rong capital specific fund-raising rhythm? In addition to the US dollar fund is still raising RMB funds, how to weigh the relationship between the dual currency fund? Gao Xiang: Speaking now the specific rhythm of the fund-raising is still relatively early. Our first US dollar fund close six months, duration of not less than ten years. Currently the coexistence of the dollar and RMB funds has become the mainstream of the standard VC. Our RMB funds will mainly invest in earlier start-up projects, as well as in areas where withdrawal mechanisms are not suitable for dollar investments. If we want to make the early investment in China TMT, but also need a comprehensive platform for funds to do things better.