New Landscape of China's Venture Capital Industry Ecosystem: VC Forward, Angels Backward

　　It can be said that, to this day, more and more VCs are focusing on early-stage projects, and the landscape of the venture capital industry is quietly changing.
　　So, as more and more attention is focused on early-stage projects, how will the entire chain of entrepreneurial investment change? The author summarizes it simply as: VCs move forward, angels move backward.
　　China's capital market started relatively late, and for many years in its early stages faced the embarrassing situation of poor exit channels. Against this backdrop, the typical approach of Chinese VCs was basically to cover all three stages: early, middle, and late. Moreover, during the period when the growth enterprise market board was booming, some VC firms also participated in PE projects quite frequently. However, this situation has clearly changed today.
　　VCs are collectively starting to look ahead. At the recent ChinaVenture China Investment Annual Conference, many well-known VCs stated that in the future, VCs should pay more attention to early-stage projects and not pursue "quick money" as they did in the past few years.
　　Luo Fei, chairman of Songhe Capital, analyzed at a recent forum that the current stage is the best time for early-stage investment. "From 1997 to 2007, we invested nearly 100 million in early-stage investments, but many failed... We had a project that we invested in in 2000, which went public in 2007. In 2001 and 2002, we made some early-stage investments, and several projects went public in 2006 and 2007. We waited ten years and finally saw the spring of investment. However, starting in 2007, the era of PE firms competing for projects began, and we saw more and more funds entering the fiercely competitive mid-to-late stages."
　　The direct result of fierce competition is homogeneity. How to solve homogeneity? "We still need to stick to the essence of our early-stage investment." said Luo Fei.
　　At the same time, in the past one or two years, angel investors represented by Lei Jun, Xue Manzi, Xu Xiaoping, etc., have rapidly risen in China, and the phenomenon of "super angels" has attracted attention.
　　Angels have gradually moved backward. In several TMT cases disclosed in the past two years, angel investors have appeared.
　　"Speaking from our perspective at Kleiner Perkins Caufield & Byers, we mainly focus on early-stage projects. Personally, I invest in TMT, and what I feel most deeply is the rise of super angels in China. This is very similar to the United States, where there was a very obvious rise from the year before last to last year. China has not fallen behind the United States in this rhythm at all, almost at the same time, about half a year apart, China's super angels have risen, from Kai-Fu Lee's Innovation Works to some of Lei Jun's investment institutions, we see the rise of many super angels." Zhou Wei, managing partner of Kleiner Perkins Caufield & Byers, said so at the 2011 ChinaVenture China Investment Annual Conference.
　　Zhou Wei said, "I think for VCs, especially early-stage VCs, the essence is to invest in very early-stage companies. For us, we don't pay much attention to the public market and what will happen later, but the rise of super angels and how this early-stage VC ecosystem will change in the next few years is a very interesting phenomenon that we need to observe. But I also see that the institutionalization of super angels has already emerged, such as Kai-Fu Lee's angel fund, which has raised a relatively large US dollar fund. To my knowledge, Lei Jun's fund is also quite large, so they will also become early-stage VCs. In the next three years, investment in technology institutions will be a very interesting phenomenon."
　　The emergence of VCs moving forward and angels moving backward is one of the manifestations of the increasingly perfect entrepreneurial investment ecosystem in China. However, the road is long and arduous, and in the process of "seeking", there will naturally be quicksand and casualties, but I still wish all VCs and angels to go further and further on this healthy path!