When someone shares with you something of value, you have an obligation to share it with others.
Saturday 1 November 2008
Chinese Venture Capital Industry Gloomy
The global financial crisis is casting a pall over China’s venture capital (VC) industry, with surveys showing that funds are getting harder to raise and investments are becoming harder to exit.
(BEIJING) The global financial crisis is casting a pall over China’s venture capital (VC) industry, with surveys showing that funds are getting harder to raise and investments are becoming harder to exit.
The China Venture Capitalist Index, designed to reflect how VC investors based in China and Hong Kong see the mainland market developing over the next six to 18 months, fell in October to the lowest reading in the 31/2 years of the survey.
‘The credit crisis has finally smashed into venture capital in China,’ said Mark Cannice, an associate professor of entrepreneurship at the University of San Francisco, who compiles the index.
‘We’re seeing declining exit opportunities, especially on the IPO side. Capital commitments are also declining, so fewer investments are being made,’ he said in a telephone interview.
Illustrating the tougher environment, 99.cn, an online music site launched last year, closed this week due to a lack of venture capital support, China Business News reported on Wednesday. According to Zero2IPO Research Center here, a total of 20 new domestic and foreign VC funds raised US$492.1 million in the third quarter, compared with US$3.02 billion raised by 40 new funds in Q2.
The total amount invested in Q3 was US$787.3 million, down 12.1 per cent from a year earlier and marking the first such fall in five years. Moreover, only 19 existing transactions took place last quarter, down from 36 in the April-June period, the centre, which is the research arm of Zero2IPO Group, said in an Oct 22 report.
Mr Cannice quoted Harry Man of Matrix Partners China as saying that Chinese entrepreneurs’ expectations had not fallen far enough to reflect the harsher financial environment.
Another venture capitalist, who declined to be named for the survey, said the market was caught ‘somewhere between uncertain and non-existent’.
He added: ‘I don’t believe that many deals will be done, only those already committed and rock solid from all standpoints.’
1 comment:
Chinese Venture Capital Industry Gloomy
Reuters
31 October 2008
(BEIJING) The global financial crisis is casting a pall over China’s venture capital (VC) industry, with surveys showing that funds are getting harder to raise and investments are becoming harder to exit.
The China Venture Capitalist Index, designed to reflect how VC investors based in China and Hong Kong see the mainland market developing over the next six to 18 months, fell in October to the lowest reading in the 31/2 years of the survey.
‘The credit crisis has finally smashed into venture capital in China,’ said Mark Cannice, an associate professor of entrepreneurship at the University of San Francisco, who compiles the index.
‘We’re seeing declining exit opportunities, especially on the IPO side. Capital commitments are also declining, so fewer investments are being made,’ he said in a telephone interview.
Illustrating the tougher environment, 99.cn, an online music site launched last year, closed this week due to a lack of venture capital support, China Business News reported on Wednesday. According to Zero2IPO Research Center here, a total of 20 new domestic and foreign VC funds raised US$492.1 million in the third quarter, compared with US$3.02 billion raised by 40 new funds in Q2.
The total amount invested in Q3 was US$787.3 million, down 12.1 per cent from a year earlier and marking the first such fall in five years. Moreover, only 19 existing transactions took place last quarter, down from 36 in the April-June period, the centre, which is the research arm of Zero2IPO Group, said in an Oct 22 report.
Mr Cannice quoted Harry Man of Matrix Partners China as saying that Chinese entrepreneurs’ expectations had not fallen far enough to reflect the harsher financial environment.
Another venture capitalist, who declined to be named for the survey, said the market was caught ‘somewhere between uncertain and non-existent’.
He added: ‘I don’t believe that many deals will be done, only those already committed and rock solid from all standpoints.’
Post a Comment