Zhou: Venture capital to burn money entrepreneurs burn their youth

Dictation: Zhou: Rei Chenghui Today too many people think venture capital fun, earn money, but they ignore, in the United States is a set of rules of the game, without the rules of the game, the game is not play.　　There is no good rule of the game, light people, creative, light money, are not enough. The rules of the game first set American venture capital to flourish, rely on three things to support: The first set is the company law.　　China's "Company law" does not support two things: first, the preferred stock, they do not have special protection; In addition, China's "company law" to recognize physical and monetary cash transfer, the evaluation of intangible assets and the proportion of shares have restrictions.　　Second, both domestic investors and entrepreneurs lack the sense to follow the rules of the game.　　In fact, I met too many entrepreneurs, they do not understand that take the money of venture capital, they must abide by the rules of the game, they always think that the money is the purpose. This awareness is a culture in Silicon Valley, but it is difficult to transplant.　　Let me give you a few examples of a joint venture that sets out how many shares we share, but we have to find someone else, we may have to leave a stake in the future, and many entrepreneurs don't have the sense to rely on one or two people. You think, you don't want people to vote for your big share, you want investors to share with you, why don't you want to share with your employees? Why would you want to share your shares with your senior managers in the future? Why are you holding shares in your hands?　　Many entrepreneurs do not have this idea. Also, many of China's traditional entrepreneurs can let the company buy him a luxurious car, but with me a joint venture, you buy a car before you ask my advice.　　China's traditional entrepreneurs are very troublesome, such things to tell you? Another example, the past to do traditional enterprises, their own management of a book on it, but to be listed, it is necessary to accept the IPO, audit, to make the financial clean.　　Many Chinese entrepreneurs can not do this, they may take a lot of money from the enterprise, feel that the enterprise is his personal.　　You will find that these entrepreneurs accept this set of rules, not that they have to, but they have to approve the rules from the inside, but I don't think anyone is teaching entrepreneurs these concepts right now. Why do I refuse to invest? A person, I think the individual is very capable, but do not know how to share with employees. As a High-tech enterprise, employees are very important.　　If he does not know how to respect his staff, that they are working, they are the boss, that is wrong. There is a person, in the traditional industry for a long time, I feel he will always give you "wipe the table." We should all have a rule, set a game rules must obey. But some people do not obey this rule, I also can't control him. Because in fact VC is a weak group, why is the weak? Before the money was bull, once the money is put into the company, he can send a person to watch every day?　　If the entrepreneur wants to toss, absolutely can toss empty, he really has no way. I've always believed in the truth that "helping others succeed makes you easy to succeed."”。 Why I can build the most powerful channel of China's Internet, because I was the first to give the agent 50% of the split, before I have never.　　Before working with people, I first think you can get what good, I think your good enough, then I can also get some benefits, your benefits may be greater than my advantage, I will talk to you about cooperation, it is difficult to refuse, because people are driven by interests. Holding VC is not good VC Wang told me a word: "Hung 祎, found the problem I will tell you, you do not fall into this pit, but you finally insist to go, I can only bless you." Because in the end this enterprise is not mine, but yours.　　"Now I have learned this set of ideas, this is the Angel investment and VC must abide by the rules of the game." Why don't VC seek big shares? I have a company with whom I pay, he does not pay, I have this company 90%, he only 10%, I put 5 million dollars in. On the surface I control, who worry about the company every day? It's not him, it's me.　　The company's dead or dead he has not cared about, he will feel, "even if the future earned 50 million, I will be divided into 10%, but now find a way to put this 5 million pack my purse more affordable." If the reverse, I cast 5 million, only 20%, he has 80% shares, he will certainly work hard every day, may not wife, not home, because he is the company's 80% shareholders.　　What we VC want is this spirit: we burn money, he burned youth, health, because he made more money than we do.　　You will think, VC is to eat meat do not spit bones, I said you wrong, VC to earn money, will want your shares, but good VC will balance the capital and entrepreneurs between the severity. I have been talking about the rules of the game, I think if the VC does not talk about the rules of the game, up to take the others 50%, this enterprise is difficult to do. Because the entrepreneur started out stupid, later slowly understand, slowly think why you take up my so big cheap, I think everyone will start to play Abacus, the Chinese most simple step, I can't afford to hide, I do not give you dry, always can, I withdrew. Finally, the business man left, what is the enterprise?　　The spirit is gone. From the rules of the game, the holding of VC is not a good VC, and VC also has a concept-to respect the entrepreneur. China's business environment is not the same as the United States, many companies in the United States are very large, changing a professional team to operate is able to work, but also find such a professional team.　　In China these two points do not have, the Chinese start-up companies basically have each family's play, change a team does not turn. Angel Investment still have a condition, must have a mentality, is not too greedy, do not expect to earn extra money by Angel investment. You do not look at the final return on investment, and to see the absolute amount of 10 million dollars, 5 times times the return, and even 1 time times the return, I earned 10 million dollars, you put in 100,000 dollars, 100 times times the return, but only 10 milliondollars, and 100 times times the return is difficult, generally is 10 times times the return of only 1 million dollars.　　So from the absolute value of money, do angel investment absolutely did not do VC money. Don't change the team back to the previous topic, the third pillar of Silicon Valley is talent. China's professional manager team is almost non-existent.　　The number of professional managers that can be found in China is the group of multinationals in China. This group of people are really professional workers, their mentality is very heavy, they are the most good sales or mananger, they do not have a strategy of experience, few foreign companies to allow China's local office to develop strategies, your marketing department is the United States headquarters, an executive department,　　The main task is to earn money, which is the experience of this group of people. Even if these people dug up to get a start-up, they also play, because they lost the brand resources, do not know how to use a small resources to do things.　　These people in the start-up phase of basic can not use, must let your business also listed, long to a certain scale, please these people to help you keep the city, or a tube of financial, pipe sales. A smaller company, if it is to grow up in China, needs a particularly special talent-intuition, which the MBA school cannot learn.　　There is not enough information on the battlefield, can not buy any market research reports, but also see the overall situation, but the entrepreneur to make decisions, to rely on courage, a lot of things beyond the business management of things. In retrospect, who is the professional manager that can be invited in Silicon Valley?　　Ask HP's CEO, or one of Apple's top executives, that they are really working at the company's decision-making level, who are really experienced and don't necessarily really do startups, but at least they've made the whole strategy and they've got to go into some Silicon Valley startups. In China, if you want to invest in a company to see the team first, do not change the idea of the team, if the change of the team means you have failed.　　In the United States to a certain degree of change in the team is possible, I think Chinese companies before the listing is almost impossible, this is China's national conditions for investors brought about by the challenges. Before investing, keep your eyes open and invest your money. When you are married, you must open one eye and close one eye. You have to tolerate it, you have to go with her.　　If you get divorced, you won't find a better. Why does Silicon Valley grow into today's Silicon Valley? We all know that Silicon Valley is rich, actually money is on top, which we can see. Here are two things to support: one is the rules of the game, the other is the experience of countless people, which is in the hands of many successful entrepreneurs or angels and venture investors.　　With these two fulcrum, money can continue to circulate.　　But today in China, a lot of money came in, but this system, I think still need time to build slowly. Angel Threshold: What's more important than money why do I preach angel investment everywhere? Objectively speaking, I've actually invested in the company andNot much, investment is not big, and there is no successful example, are in the early stages.　　In fact, I am not a pure angel investor, the reason why I put this wing around, is to pass some ideas out: on the one hand want to let more people understand the venture capital, and let more entrepreneurs also really understand the venture capital.　　VC to China a bit sour the U.S. VC why more powerful, mention KPP, mention Sequoia, they invest in a lot of companies are really high growth companies, like Apple, Yahoo, Google, really grow a multiple, and are in very early time cast. But the VC is a bit stale in China. We all say that there is a lot of hot money in China today, but a lot of young entrepreneurs ask, why can't we find someone to invest?　　The reason is not that the money is gone, but that the money came to China after two problems: first, today's high growth in the United States in a few industries, such as medical, biological, pharmaceutical or High-tech, and frankly, China has no high-tech, the best Internet companies are not relying on technology to defeat others, are relying on the Chinese operation. VC in China suddenly found another opportunity, today's China is very much like the 70 's the United States, China in the traditional consumer industry opportunities.　　So, now many VC in with PE (private equity funds) Rob Business, this is the second VC into China after the problem.　　In fact, in the United States, VC and PE are more clearly, you rarely heard, KPP, CP (capital private) to cast a very traditional, often tens of millions of dollars of traditional industries, their money is to cast some future can double the industry. But today, a lot of head hanging VC name to invest in enterprise, actually or because the enterprise has scale, business model is very clear, cash flow is very good, also has the profit, I think this kind of project operation and true narrow VC is not the same.　　For some early projects, really dare to invest in VC not too much. Today's VC a typical feature is that when the market is very hot, we swarm. In the first half of this year, we swarm a bunch of web2.0, this is an extreme, the result is now web2.0 in China does not have a real big enterprise, a few get the money did not get due growth.　　In this case, all the VC is a swarm of waiting to start watching. Even if there is VC in the early company, it is not because he may not really have a special vision. For example, today there are VC investment early, it must be a case of 500,000 dollars.　　Their idea is, "I cast 10 cases to vote 5 million dollars, have lost only 5 million dollars, as long as there is a good, make 5 million dollars is easy." If you don't have money, you can be an angel. The history of venture capital in China is still too short, and it is now 10, which is very short compared with the history of 40 years in the United States.　　There is a big shortfall in the early stages of investment. Why do American Angels invest a lot? Not that America's rich more and I don't think who hasMoney who is called Angel Investment, now the rich people in China is indeed much, but money does not mean that enterprises can do success.　　Angel Investment must meet at least three conditions: first, the industry to understand, in order to plan the direction of the second, at least after the enterprise, know how the start-up company, can give entrepreneurs some very specific advice; third, to have a good relationship, to be familiar with VC, to the venture capital. In Silicon Valley, this kind of angel investment many people themselves have started the company, also sold the company, or to the company listed, or itself is a public company's senior management, such as Google, Apple behind the angel investors, such people to invest in the start-up is really helpful.　　If it's just a little bit of money for the start-up, it's a very low success rate if you let it grow. The famous story of Apple was that a man had just sold the company nothing to do, listening to friends said, there were two young men who made a personal computer, and he looked at it, and first gave the two boys a tens of thousands of-dollar cheque to pay them this month, and then sat down to help them with their plans, and then called to help them find a VC to vote for.　　, VC come to look for someone, so their circulation develops very quickly.　　But in China without this history, no one passed this thing, every enterprise seems to rely on their own groping, so each enterprise growth is particularly slow. I started 3721, I grew from 5 to 50 people, you know how long? It took 1.5, almost two years, and then from 50 people to 100 people, almost another year, every 50 people a year. At that time I also consulted Jinshan Lei, that year Lei gave me a lot of guidance, because Lei do Jinshan time is also very long, accumulated a lot of experience. He told me that the size of the people in your company is a challenge to its organizational structure and management style.　　So I took 5 years to grow less than 200 people, like molting, there is a growing pain.　　After that, today I will be the one to guide them, at least they will not be so painful, because at least I can help them solve a lot of problems, they do not have to take 3721 of the road to walk again, at least half the time to shorten. If more and more people like me come out and not only invest their money in startups, and is to do business experience to teach them, after repeated cycle, filtration, in 10 years you will find that in China, there may be hundreds of or even thousands of people like me, and in the operation of enterprises, but also in the direction of enterprises,　　China's High-tech development will achieve a chain reaction effect. I am now the entrepreneur behind the entrepreneur and I am satisfied with it-not just sitting in the house and sometimes going to the forefront. To start a business, you must go to the front line, contact the agent, contact the customer, you have to use his products to give him advice.