TLDR: China’s venture capital & startup scene
By The News Lens (these highlights provided for you by Annotote)
“ my own research covering 24 VCs prior to the 2008 Global Financial Crisis, only two of the nine domestic VCs were effectively serving as investors in early state firms … what made these two VCs (one the captive VC of a state-linked conglomerate and the other the VC fund of a state ministry) able to pursue these investment strategies was mimicking the investment behavior of prominent foreign VCs active in China
“ domestic firms including JVs contributed only 11% of the venture capital funds for start-ups with foreign firms providing the rest.
“ [In 2016, a] whopping 1.37 trillion RMB raised by venture capital and private equity firms with the bulk of the funding coming from 323 government guidance funds … no doubt the Chinese government’s intends to support venture capital lavishly.
“ Many government guidance funds still invest in a range of other projects, such as infrastructure, rather than supporting early stage entrepreneurship. These funds often still have very restrictive rules about where they can invest and in what industries.
“ informal alliances of tech entrepreneurs, foreign venture capitalist and local governments, which want venture investment from wherever, have also provided a discreet pushback to give foreign VCs the space to operate within China
“ the rising number of local funds may mean local allies are harder to come by for foreign VCs at a time when the trends of the past five years indicate a hardening line against foreign investors
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