Involving fundraising advice, investment standards and industry research and judgment.
Editor’s note: This article comes from WeChat public account “catcher’s mind” (ID: ibushouzhi), author Li Yi.
Problem map:
Founding Partner of Yimei Investment Ye Qing
In the usual opening year, investors first raise funds, and then start a period of investment peaks. This year, the venture capital circle was disrupted by the epidemic, which has made many investment institutions that were originally in a difficult fundraising environment worse. . For GPs and entrepreneurs, the more they are in uncertainty, the more they need to go upstream to see what LPs are thinking about, especially some established LPs that have crossed the market cycle.
Yimei Investment is one of the typical old-fashioned LPs. As one of the earliest VC / PE parent funds entering China (2001), it has cumulatively managed more than 10 billion US dollars in funds worldwide. In China, the scale of funds under management is about 8 billion yuan, and more than 80 funds have been invested, covering more than 1,000 enterprises. The most representative funds invested include: CDH Investment, SoftBank China, Junlian Capital, etc.
Recently, Catcher (ID: ibushouzhi) had a deep chat with Ye Qing, the founding partner of Yimei Investment, including Yimei’s investment standards, internal management of investment institutions, and fundraising suggestions.
Author / Li 曌
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Knowing what it is, also knowing why it is
Li Yan: The epidemic has affected many industries. What impact will this have on GP / LP investment decisions?
Ye Qing: Investment is a long-term matter. If everyone judges the epidemic on a monthly basis, there will be no long-term impact. Most GP / LPs may not be directly involved in strategy and strategy. There has been a major adjustment in investment.
But the epidemic may have far-reaching effects on some industries. For example, now is a good time for online collaborative development. There is fierce competition for various remote office products, and some investment opportunities will be extended later. Because telecommuting is relatively mature, flexible workers will become more attractive under the current downward economic pressure, so we have to think about where to go next. We ca n’t just seeThe telecommuting market is hot .
Li Yan: You are the first overseas professional background combined with a local team to manage the FOF of the foreign currency and RMB parent funds at the same time. In fact, being the first company means that there is no reference. Looking back, what was the difficulty in your pioneering process?
Ye Qing: The difficulty is that the market-oriented RMB FOF was a new thing in China. This has led to some practices that are common in the international market and have become domestic precedents. Moreover, the policy had no detailed rules at that time, it just said that the law was supported in the general direction, but the implementation rules were relatively lacking.
For example, when we first invested in Shanghai, we had to establish a parallel structure, and domestic implementation rules and policies were not explicitly listed, so you need to have a lot of communication and have to make a way out.
Li Yan: I think you have accumulated a lot of experience along the way. For example, how do you judge whether an investor is good enough?
Ye Qing: First of all, historical achievements do not represent the future. Secondly, because the market is changing, we must still invest in people who have a big picture and understand human nature. They also need to share the spirit and have personal growth. GP , such people are actually not many.
Li Yan: There are very few people like this. How do you select them?
Ye Qing: Although it is difficult to judge people, we have also summarized a few empirical methods. First, we must collect multi-dimensional information; second, we must focus on long-term interaction, not just a few weeks; we must jointly Fighting is the only way to understand it. When you have these three points, it is not too difficult to recognize people. Of course, the more experienced you are, the more people you see, it will also help you judge.
Xiao Xiaoge: Xiong Xiaoge said that investment is an art of regret. Presumably, you have also had regretful missed cases in the past. What is the reason behind the miss?
Ye Qing: Missing is unavoidable. In addition, the fund of our fund is not very large. We can only choose to invest. For me, the investment is not perfect. What I ask for is in my portfolio. Maximum value manifestation.
If we look at it, in fact, misses are also treated in two ways. One is contacted and not invested. It may be that I do n’t know enough or the LP has terms and conditions. The other is not contacted. I ’ve touched it. If it ’s the latter ’s miss, it needs to be well reflected. It reflects that your judgment and market coverage are problematic.
Li Yan: In the past, some LPs would not vote for One-ManShow institutions. However, in recent years, One-ManShow institutions have become more and more, and the return on investment is also good. This makes LPs rethink some of the criteria for investing in GP.
Ye Qing: Why do some LPs worry about One-ManShow? The main reason is to worry about talking or profitProfit distribution is uneven, so we must basically determine whether the people under the One-ManShow team have sufficient autonomy and results sharing .
For example, if a CEO is very successful in entrepreneurship, after the company goes public, he will bring a group of people from the original team to invest, even if it is One-ManShow, the CEO can respect the value of the team, and everyone also has great Good cooperation mechanism. So you can’t kill One-ManShow with a single stick. You have to look at it dynamically, know it, and you must know why, to make a good judgment.
Li Yan: You have long-term cooperation and interaction with many US dollar LPs. In recent years, we have also noticed that some US dollar LPs have withdrawn from the Chinese primary market. How do you feel about this?
Ye Qing: The current globalization is indeed facing severe challenges. In terms of megatrends, it is inevitable for the United States to propose a political decoupling from China. The United States Republican Party has the national security of a rising power In consideration, the Democratic Party has the consideration of protecting domestic employment. Therefore, in the US election year this year, the two parties are uncoupled. The good thing is that the United States is a society of diverse values, and American political circles have relatively limited influence on the business community.
To take a step back, countries and regions like Europe and the Middle East have their own political as well as economic aspirations. They may not be the same as those in the United States, because everyone may like the balance. The unipolar world is definitely not as good as the multipolar world. Not so pessimistic.
Li Yan: Then do you have some strategic changes in the fundraising end?
Ye Qing: Of course, we will adjust the composition of LPs. Traditionally, Europe and the United States are the main players, especially the United States. Now, LPs in Europe and some other regions will increase.
Baopu and humble, stubborn choice
Li Yan: We are currently at the end of a technology cycle. Many people in the venture capital circle are full of anxiety. As an investment senior who has repeatedly passed through the cycle, how will you adjust when you encounter anxiety?
Ye Qing: Indeed, everyone seems to be anxious nowadays. In fact, if you focus on what you should focus on and don’t worry about your own income, then you are not anxious.
When I was young, I was fortunate to have contacted many big investors in the investment community in the United States. I observed them closely, and found that Trendy investors are not in a hurry. They are strategic in nature and methodical. This plan will not be easily affected by the success or failure of the moment and time.
Li Yan: For investors, a large part of the anxiety today comes from fundraising. What suggestions do you have to share?
Ye Qing: I have three suggestions for a GP that raises dollars:
First: Do Your Homework, you need to know what your field of expertise is .
The second article: Be Realistic , large US dollar institutional investors generally do not invest in teams that do not have good performance or immature, so those who want to become famous by battle, rely on a Deal or The idea of raising a large fund at one time is unrealistic and requires patience. If the US dollar LP tells you that you are interested but you need to observe it again, when you can come to them again in the next issue, this is not polite. You must have the confidence to do it for a long time before you can get the long-term support of more US dollar LPs.
Third, find the right investors. It will help you grow up and endorse you, which will make you take a lot less detours.
Li Yan: We see a lot of investors. The reason why leaving from the original organization is also related to Carry distribution. What do you need to pay attention to when designing a good Carry?
Ye Qing: The main problem that Carry needs to solve is the inconsistency of responsibilities and rights. Then we follow the contribution. We recognize that credit is not hard work, but also pay attention to transparency. In addition, it is better to establish the Carry distribution mechanism sooner rather than later. In the past, some organizations may have limited awareness of human nature. In the early days, the Carry distribution mechanism was not given enough attention, and problems often did not occur until later when real money was divided.
Funds are a matter of few people managing a lot of money. The most important thing is that the team must be consistent with the management philosophy of the fund, so as to reduce internal consumption and talent loss, make better decisions, and go long-term.
Li Yan: The fund concept actually reflects the values of partners, but when we communicated with some GPs, we noticed that they talked more about how to build a systematic ability to make money.
Ye Qing: Just like in martial arts novels, the real trick is to combine swordsmanship with swordsmanship. This requires you to have internal skills first, otherwise you will be countered by the enemy. For investment, there are two parts to the cultivation of internal skills: On the one hand, you must have really good values to be able to do things in a practical way; on the other hand, investment has a trend. You must know how to seize the opportunity, but you must Be principled . Therefore, we have always adhered to the values of “embracing simplicity and being stubborn, choosing good and stubborn.”
Back to the problem of making money systematically, first of all, you must have Konw Yourself, and then Konw Market. Only by matching the advantages and market opportunities can you know which are your strengths and which are the ones you must not touch. Have its own unique investment philosophy. If you review the global VC investment history, you will find that the so-called misjudged or missed projects can finally be attributed to the investment philosophy and investment discipline. So if you have your ideas and discipline, you will sendRight people and deals.
Li Yan: A question that everyone was talking about for a while last year: Why China did not grow Benchmark, I wonder if it is related to the values and principles mentioned earlier?
Ye Qing: Benchmark is a typical successful example of sticking to its own unique ideas. The so-called stubbornness of choice is not speculation, eager for quick successes, and principles and convictions to have a vision. You can stand with Portfolio for many years.
Yi Li: You have shaped Yimei, and in turn Yimei has shaped you. What is the biggest impact of investing in these years on you?
Ye Qing: The biggest benefit of investing is that you are always dealing with smart people. Whether you are an entrepreneur, an investment colleague or a technocrat, you are always learning new things. I enjoy this process. It is a humbling experience. The more successes and failures you see, the more you realize that you can’t be a little lazy . Investing is investing in a new world in the future, so this also requires me to keep learning. Life is a learning process, keeping agrowth mindset.
Li Yan: We are currently at the end of a technology cycle. Many people in the venture capital circle are full of anxiety. As an investment senior who has repeatedly passed through the cycle, how will you adjust when you encounter anxiety?
Ye Qing: Indeed, everyone seems to be anxious nowadays. In fact, if you focus on what you should focus on and don’t worry about your own income, then you are not anxious.
When I was young, I was fortunate to have contacted many big investors in the investment community in the United States. I observed them closely, and found that Trendy investors are not in a hurry. They are strategic in nature and methodical. This plan will not be easily affected by the success or failure of the moment and time.
Li Yan: For investors, a large part of the anxiety today comes from fundraising. What suggestions do you have to share?
Ye Qing: I have three suggestions for a GP that raises dollars:
First: Do Your Homework, you need to know what your field of expertise is .
The second article: Be Realistic , large US dollar institutional investors generally do not invest in teams that do not have good performance or immature, so those who want to become famous by battle, rely on a Deal or The idea of raising a large fund at one time is unrealistic and requires patience. If the US dollar LP tells you that you are interested but you need to observe it again, when you can come to them again in the next issue, this is not polite. You must have the confidence to do it for a long time before you can get the long-term support of more US dollar LPs.
Third, find the right investors. It will help you grow up and endorse you, which will make you take a lot less detours.
Li Yan: We see a lot of investors. The reason why leaving from the original organization is also related to Carry distribution. What do you need to pay attention to when designing a good Carry?
Ye Qing: The main problem that Carry needs to solve is the inconsistency of responsibilities and rights. Then we follow the contribution. We recognize that credit is not hard work, but also pay attention to transparency. In addition, it is better to establish the Carry distribution mechanism sooner rather than later. In the past, some organizations may have limited awareness of human nature. In the early days, the Carry distribution mechanism was not given enough attention, and problems often did not occur until later when real money was divided.
Funds are a matter of few people managing a lot of money. The most important thing is that the team must be consistent with the management philosophy of the fund, so as to reduce internal consumption and talent loss, make better decisions, and go long-term.
Li Yan: The fund concept actually reflects the values of partners, but when we communicated with some GPs, we noticed that they talked more about how to build a systematic ability to make money.
Ye Qing: Just like in martial arts novels, the real trick is to combine swordsmanship with swordsmanship. This requires you to have internal skills first, otherwise you will be countered by the enemy. For investment, there are two parts to the cultivation of internal skills: On the one hand, you must have really good values to be able to do things in a practical way; on the other hand, investment has a trend. You must know how to seize the opportunity, but you must Be principled . Therefore, we have always adhered to the values of “embracing simplicity and being stubborn, choosing good and stubborn.”
Back to the problem of making money systematically, first of all, you must have Konw Yourself, and then Konw Market. Only by matching the advantages and market opportunities can you know which are your strengths and which are the ones you must not touch. Have its own unique investment philosophy. If you review the global VC investment history, you will find that the so-called misjudged or missed projects can finally be attributed to the investment philosophy and investment discipline. So if you have your ideas and discipline, you will sendRight people and deals.
Li Yan: A question that everyone was talking about for a while last year: Why China did not grow Benchmark, I wonder if it is related to the values and principles mentioned earlier?
Ye Qing: Benchmark is a typical successful example of sticking to its own unique ideas. The so-called stubbornness of choice is not speculation, eager for quick successes, and principles and convictions to have a vision. You can stand with Portfolio for many years.
Yi Li: You have shaped Yimei, and in turn Yimei has shaped you. What is the biggest impact of investing in these years on you?
Ye Qing: The biggest benefit of investing is that you are always dealing with smart people. Whether you are an entrepreneur, an investment colleague or a technocrat, you are always learning new things. I enjoy this process. It is a humbling experience. The more successes and failures you see, the more you realize that you can’t be a little lazy . Investing is investing in a new world in the future, so this also requires me to keep learning. Life is a learning process, keeping agrowth mindset.