First, Huang Yan: How to understand founders
Besides innovation, vision, and vigor, there is another important factor in considering founders, which is the ability to learn.
VCs and PEs face different stages of growth: PEs look at companies that have basically all the business elements in place, and investors focus on revenue, profit and market growth. But VC to examine the startups are different, their business elements can not see. VC to judge the future growth of enterprises, must consider the human factor. Early-stage projects usually have an investment cycle of 5-7 years, and in such a long investment cycle, the business model at the beginning of the investment may change after half a year. However, the human factor is one of the few elements that does not change easily during this period, including the founder's personality, leadership and other innate qualities, as well as the entrepreneur's past experience and the startup's team.
It's not easy to look at people. When we talk about a project and meet the founder for the first time, we are generally in a working condition. Each of us in the work state, easy to show are trained professional state. We can't call it "pretending", but this side is more superficial and more professional, not deep enough, and it's hard to judge whether it's the most real side of him.
So now we go to meet the entrepreneurs will be relatively easy way to start, such as talk about childhood experience, talk about hobby beliefs, talk about the astrological sign of the Chinese zodiac, which seems to have nothing to do with the project we invested in, but these are human nature five years, ten years of the same thing. If we only talk about the market, talk about business models, a year later may be completely changed. With the passage of time, external factors are all changing, but the human nature of things more and more precipitation and highlight the importance. In addition, VC investors and entrepreneurs is a two-way selection process, if the two sides only stay in the very professional level of communication, each other will not leave much impression, because there is no personality and no characteristics.
In recent years, there have been a lot of controversies between entrepreneurs and VCs, and we are constantly thinking about and re-examining the investment process. For me personally, when choosing an entrepreneur, his integrity is the core. Integrity is deeper than rules, reflecting the bottom line in terms of people, things, worldviews and beliefs. If the entrepreneur and the investor have *** the same bottom line and beliefs, and are grateful to each other, it is not easy to produce core conflicts. The investor holds the mentality that I invested in you, you gave me a chance, and the entrepreneur feels that when I am short of funds, you invested in me, I have to treat with gratitude, so many problems will be solved.
This seems to be a very simple thing, but sometimes it is difficult to do. For example, entrepreneurs feel that you invested 5 million dollars in me, I made you so much money, and I'm still grateful to you? The key here is not business interests, but in the key point of life to each other to give a chance to make a heart-to-heart, *** with walking through a period of life's golden years.
For the consideration of the founder, we all pay attention to innovation, vision and vigor, but I feel that there is another particularly important consideration, which is the ability to learn. I think there are three levels to look at a person's ability to learn.
First, the ability to learn from books, through the classroom and reading to master knowledge, most readers this is relatively strong. But the book is very clear, can be reproduced is very strong, only master the book knowledge of people can be easily replaced; Second, the ability to learn from others, I found that the more successful entrepreneurs this learning ability is particularly strong. He can learn from everything and everyone he experiences. Bill Gates, Steve Jobs, and Jack Ma, they didn't learn much in the classroom, but their ability to learn from others is particularly strong. This ability to learn also makes them have the ability to constantly proofread in practice. This kind of learning ability is a kind of "star attraction"; the third kind of learning is called "enlightenment", he can find the most suitable for himself from books and other people, the most to play their own things, and then combined with their own character and aura, into their own things, this kind of things are unique and has an energy field, which eventually turns into his influence and achievements.
In addition to the ability to learn, entrepreneurs also need mental toughness, which is a kind of toughness and resilience.
China's VC industry, after more than a decade of growth, has said goodbye to the stage of barbaric growth and entered a period of intensive cultivation. In this new stage, specialization and differentiation is the direction of CDH Venture Capital, which is what we have been working on in the past few years. VC investors need to be recognized by the founders, on one hand, for their people, and on the other hand, for their specialized value-added services.
Wang Gongquan's departure in 2011 was very sudden and had an impact on us internally, but from another perspective, it also gave us an opportunity to promote specialization. We shifted from investing in a relatively broad industry to specialization. Over the past two years, we have reorganized CDH Venture Capital's strengths and characteristics, and focused on building a specialized team, because specialized value-added services require a specialized team, and only investors in specialized fields can provide more valuable value-added services to invested companies.
From the initial search for projects, industry judgment, choice of projects, to the final value-added services, specialization has brought competitive advantages.
After more than two years of sorting out, CDH Venture Partners' team now focuses on three major specialties: TMT, healthcare, and innovation and upgrading of traditional industries, which are led by partners Chen Wenjiang, Wang Hui, and Yan Xiaoping.
For example, in TMT, we focus on online offline investment opportunities, specifically those arising from the interpenetration of the Internet and traditional industries. For example, the Internet and business, finance, real estate, tourism, life services and so on. The main reason for choosing online offline is to combine the characteristics of the entire CDH investment platform and our VC team. CDH investment platform has made a lot of investment layouts in China's offline industries, while the VC team has a deep accumulation of online investments, and both Chen Wenjiang and I came out from the Internet field. The combination of these two strengths has turned into something unique and advantageous in the TMT direction of CDH Venture Capital.
CDH Venture Capital's entry into the healthcare industry began with its investment in Kanghui Medical in 2008, after which it found that the company's revenues and profits were very stable, with an annual growth rate of 30%. We analyzed the market supply and demand and found that there is a huge space for the medical industry in the future, and in 2009, CDH Venture Capital brought in Fai Wang to set up the medical team, who majored in Biology in college and then studied PHD in medical field in the U.S. After Fai joined us, we gradually brought in a number of medical professionals, including M.D.'s and other professionals in the medical industry. In the past few years, CDH has invested in more than 10 companies in the medical industry, including hospitals, pharmaceuticals, medical devices, etc. CDH has completed the initial layout of the medical industry.
The third major sector is the traditional industry of innovation and upgrading. The so-called "innovation and upgrading" refers to business model innovation and technological innovation in traditional industries. 2012, Yan Xiaoping joined CDH Venture Partners, and he is responsible for sorting out the huge market opportunities brought by innovation and upgrading and the listing opportunities in A-share market. I think the A-share market is becoming more and more the main battlefield for investors. In the past, we invested in more companies that went overseas for listing, but there are indeed many very good companies, because the national conditions are different, the business model is different, and they can't find a frame of reference overseas to be trusted, but they can become stars in the A-share market.
Talking about specific industries, last year's new energy and mobile Internet industry have suffered a trough, as an investor, my choice is to try to avoid listening to the noise, because people cloud is not good investment. Each industry has peaks and valleys, the key is to choose a good time to enter and exit. For entrepreneurs, they must also be brave enough to face the challenges of this environment. For example, the mobile Internet from the big industry is still a very good industry, just today the existence of some "big guys" so that small businesses feel the pressure, but think about it from a different perspective is also forcing them to use a new way to do the company to innovate, to promote the paradigm shift.
In fact, we invested in Qihoo 360, which is a typical enterprise growing out of the cracks. Zhou Hongyi as a passionate, full of ideal entrepreneurs, in the face of Tencent, Baidu, Alibaba, the "three mountains", if the same as others feel that there is no opportunity here, there is no opportunity there, there will not be today's growth space. Zhou Hongyi eventually found opportunities from the cracks. Perhaps some people evaluate him as a "spoiler", but in fact he is through a new business model, making the "three mountains" impressed by him.
Today, the external environment is still changing, which is an opportunity for entrepreneurs. Because if there is no change, there will be no Google, Facebook, Yahoo! In fact, successful entrepreneurs are still simmering, he was able to survive the cycle. Jack Ma is so, Steve Jobs is also so, how many hardships in the middle of the twists and turns no one saw. （
Yan Huang
Managing partner of CDH Ventures
He joined CDH Ventures in 2006, and is now the managing partner of CDH Ventures. Prior to joining CDH, Mr. Huang was the Co-Director of Intel Capital China.
During his six years at CDH, Mr. Huang has led investments in Internet, consumer services, new energy, medical equipment and healthcare services, among which LDK, Hanting Hotel, Kanghui Medical, GCL-Poly, and other projects have been successfully listed outside China.