China · Investments

Have any Tech StartUps or SMEs received Chinese equity funding and wish to share their experiences?

William Franklin Founder at China Investors Club 中華投資者俱樂部

June 9th, 2015

We are seeing increased amounts of cash coming out of China but so far is has been restricted to hard assets (property) or proven concepts. Have any Tech StartUps or SME's managed to get Chinese funding when there is not much of a trading history but growth potential is high? 

Casey Jr.) Director of Business Development at Clean Energy Associates

June 10th, 2015

William, this is from a friend who is Chinese and works with a family office to do US-China investments:

<<>>

To answer the question of William, some Chinese funds have been indeed invested in startups, particularly in the tech sector. There are no such restrictions that the Chinese can only invest in hard assets or proven concepts, but it is the mindset of the majority. The reality is that they have the ability to generate very high returns as well as manage the downside risks well at home. In the US, or in some cases in Europe, the motivation of asset allocation is largely directed to safe investment or branding investment. Of course, some is intended to acquire technologies, not necessarily cutting-edged, to apply to their home market. 

Having said so, there are still some capital from China being invested in tech startups in the US, mostly established and run by Chinese nationals or origins. They may increase this type of investment gradually with the focus on mobile, biotech and etc. The motivation is, again, not to benefit directly from the high potential here but rather their applications in China. Very few, if any, can afford to overlook the emerging mass market.

<<>>

Best,

Casey

William Franklin Founder at China Investors Club 中華投資者俱樂部

June 11th, 2015

Casey - thanks for your comprehensive response, particularly the part about Chinese nationals being more successful than non-Chinese in raising funding. A recent example in the UK was a firm that secured funding from a HNWI in China because they 'got on over dinner speaking Mandarin' rather than through an exhaustive funding roadshow.

Any other comments from the network are most welcome.
William