New Economy Decade | Dialogue "VC Godfather" Yan Yan: To vote for "from 0 to 1" technological innovation

Zhongxin Jingwei, September 23rd (Ma Jing) "An important logic of investing in China in the past 20 years is the market arbitrage between China and the United States. Investing in a project, especially the Internet project, it will be listed in the United States quickly, and then it will be listed in the United States. Then Throw the stock arbitrage again. But in the future, this opportunity will become less and less. The logic of investing in China needs to be changed. The main investment line should be value creation, and it should be scientific and technological innovation from 0 to 1. " People Yan Yan said in an interview with Zhongxin Jingwei recently.

Yan Yan was the earliest group of venture capitalists, and witnessed China's venture capital industry from the era of grass to the golden age. In the nearly 27 years of investment experience, Yan Yan was called "VC Godfather" for its investment in the iconic projects such as Grand Investment, CNOOC, 58 City, Shenzhou Digital, and Kexing Bio.

After the 50th, Yan Yan still maintained sensitivity to investment hotspots and deep thinking about the market. In this interview, he shared a lot of dry goods about investment. He believes that the opportunity of the next ten years is in the original technology of 0-1, and the investment logic should tend to invest in hard technology and value; he believes in the power of the market and believes that companies with real technology content will continue to invest in the market; he pointed out the current investment; In the Red Sea, the government guides funds should not be both athletes and referees; he also emphasized that young people cannot just want to make fast money, and find their own contributions to make their own contributions.

Source of the founding management partner of Saifu Asia Investment Fund Source: Interviewee Confer

Talk about the development of new economic economic: the same frequency resonance with the development of Chinese VC and PE

In the past ten years, the wave of new economic companies in China has surged, and early players such as Alibaba and Tencent have developed and growing. world. According to the "2021 China New Economy Enterprise Fortune Development Report" issued by the China Enterprise Evaluation Association, China's "Sanxin" (that is, new industries, new formats, and new business models) of enterprises accounted for GDP from 15.30%in 2016 to 2020 17.08%of the year.

"China's economy, especially the new economy represented by the Internet, is actually developing at the same time with China's venture capital (VC) and private equity investment (PE). They are mutually promoting and interdependent relationships." Yan Yan said that the earliest Internet companies such as Alibaba and Tencent, such as the budding stage, were mainly invested by the US dollar -based overseas funds, because there were basically no venture capital in China at that time, and there were not many government investment funds, but the latter later This situation has changed. "It can be said that there is no risk investment, and Chinese Internet companies will not achieve such a vigorous development. Similarly, without these Internet companies, China's private equity investment and venture capital cannot grow so fast."

确实，细数中国新经济企业的发展和投资脉络可以看到，本世纪初，美元基金先行拓荒，软银集团曾先后向阿里巴巴投资合计8000万美元，Naspers投资腾讯3200万美元；2009年后， The RMB Fund has standing in the darlings such as Pinduoduo and today's headlines, and local VCs are standing behind the darlings, while the C round of financing has been more than $ 100 million. Today, China's new economic enterprises have been involved in social, e -commerce to chip manufacturing, and the industrial Internet. Behind these well -known enterprises, behind the financing of institutions at home and abroad and state -owned capital funds.

Yan Yan's Saifu Investment Fund (hereinafter referred to as Saifu) is also one of the above VCs. From Shanda Networks to Zhihu, to Koxing Bio, Saifu focuses on the investment of early and growing high -tech enterprises. The official website data shows that since 2001, Sai Fu has invested more than 300 Chinese companies. The first phase of the Saifu, the second phase of the Saifu, and the third Phase II US dollar fund in Saifu managed the annual yield of more than 30%of the annual investment in China.

Talking about the experience brought by past investment experience, Yan Yan said that the Chinese market has more characteristics. Although Chinese Internet companies are starting late, they have benefited from the vast Chinese market, many population, and the proportion of young consumers. Internet companies, especially mobile Internet companies, can easily do a large scale in a short time. At the same time, because the government's early management experience in Internet companies is not enough, and the control is relatively relaxed, this "letting self -current flow" has made Internet companies grow particularly faster. In the long history of more than 20 years, China's Internet companies have gradually become world -class companies.

Yan Yan also gave suggestions on the regulatory platform economy in the interview. He mentioned that because of the economic life pulse, the control of Internet companies is now more and more detailed. This is understandable, but the market is spontaneous. Policy regulation can actually give an enterprise a certainty expectation, which clearly stipulates what to do and not to do, so that the market has room for free growth.

Talk about the next ten years: the opportunity is 0-1 original technology

Yan Yan emphasized that Internet companies are the pioneers of China's new economy and Optimus Prime. In the past ten years, Internet companies have occupied most of the history of China ’s investment in investment. After shaping one -star company after another, the new consumer tracks have emerged, and medical health, semiconductor, and industrial Internet have successively made up. Communication) To cool down, the new consumer brand seems to be "one place". Is there a bubble in endless hot spots? Where is the opportunity for the next ten years?

"When we are a risk investor, the nature of the career is that facing failure may be more than facing success." Yan Yan said that the development of economic development is basically the accumulation of bubbles -most of deaths The process of becoming the flagship of the industry, and finally became a legend of the industry after decades. "For example, the automobile industry in the United States has also been from hundreds of people to the current three people. China is also the same now. Not only is the Internet celebrity consumer industry, but also the same is true of electric vehicles. Every province is basically available, but most of them will die in this province Drop, although each of them will feel that they will be survivors, so this is normal. "Yan Yan said. Regarding the opportunities of the next ten years, Yan Yan mentioned that in the future, the Internet of Things driven by 5G, China's consumption model represented by e -commerce and Internet celebrities is likely to lead the world. At the same time, it is necessary to pay attention to carbon neutralization and 0 -1 original technology.

"You look at the development of the world economy for decades, mainly from the promotion of Internet technology and biological genetic technology. China can be said to be the biggest beneficiary of the development of mobile Internet technology. The establishment of the United States GM has been established for more than 100 years, with a market value of billions of dollars. . But in just five or six years in China, Xiaomi has a valuation of 50 billion US dollars. We all feel incredible. As a result, three years, Pinduoduo achieved $ 60 billion. For 100 billion US dollars, this is never in human history. "Yan Yan believes that China not only has the world's largest consumer group, but also the world's processing factory. Driven by 5G, the Internet of Things will be greatly improved. It is expected that China will become the most competitive country in the development of the Internet of Things.

Talk about changes in investment themes: toward hard technology and value investment

In Yan Yan's view, the past China venture capital investment mainly relies on and emphasizes the innovation and change of business models. In the future, the theme of China's venture capital will return to hard technology investment.

"The current development stage of China and the decline of Sino -US relations has made China's domestic investment demand for hard technology very 'hard'." However, Yan Yan also pointed out that there are relatively few real original technology in China. Although China has achieved curve overtaking in the fields of electric vehicles, but in key technical fields, chips, precision machine tools, semiconductor materials, biomass materials, etc. still depend on imports. At the same time, it is also difficult to cultivate a 0-1 company. "The current cultural atmosphere of China is a fast food culture. Everyone wants to make money as soon as possible. It is hoped that a company hopes to go public in three years. How can there be so many good things in the world? ? "

In addition to returning to hard technology, Yan Yan also said that China's venture capital logic in the future should also go to value investment.

"The logic of making money in the past is to bring some successful business models in the United States to China, and then use China's huge demographic dividend to accelerate growth. In the past, we did not require Internet companies to make profits, only care about income growth. With the exit, we call this money -making model in investment. "Yan Yan believes that in the past, as long as the company was listed, even a garbage company could increase its value. There will be fewer and fewer opportunities in China, and the real valuable high -return investment should be in the field of original technology.

Yan Yan said that the gap between China's secondary market and first -level market valuation in the future still exists, and because the number of listed companies and unlisted companies is large, there is still an opportunity for arbitrage, but this should not be the main theme of investment. Investment should be invested. Investment should be invested. The main line should be innovative and valuable creation. Whether it is hard technology or soft technology, China will become a big technology country.

Talking about investing in the Red Sea: Government funds cannot be both athletes and referees

From the data point of view, investing in hard technology companies is already the next hot spot for capital chasing, and it has gradually entered the harvest period. According to data from the Qingke Research Center, in the first half of 2022, IT, semiconductor and electronic equipment, biotechnology/medical and health are the three major industries of equity investment. A total of 2714 investment cases occurred, accounting The investment amount was 181.994 billion yuan, accounting for 57.8%. In addition, the "IPO transcript of the VC/PE institution in the first half of 2022" released by the Qingke Research Center shows that the institution with "hard technology" has been excellent in the investment main line for a long time. Investment mainly focuses on the field of biomedicine and a new generation of information technology. 15 The average number of IPOs invested by home institutions is 6.47.

However, while the high technology content of hard technology companies, it also means that the profit cycle is long. How can investors give reasonable valuations?

In this regard, Yan Yan said that the pricing of high -tech, especially innovative enterprises, is a worldwide problem. In the past, the free cash flow discounts that everyone generally recognized had no way to meet today's valuation needs. However, there are two ways to refer to, one is to determine the price through supply and demand. "Valuation is what price you are willing to give. When economics, when supply and demand are balanced, there will be a price that everyone can recognize." The second is to compare references. The project can be valued at the price of the reference object.

Talking about how the capital market helps the development of hard technology companies, Yan Yan admits, "The essence of investment is profit -seeking, the market is invisible hand, and there is no need to intervene. You must believe that the market is smart. Innovative projects, the market itself will relay itself. "He pointed out that from the earliest angel round investment to risk investment to growth investment, there will be private equity investment when it is launched, and there will be various types of funds such as funds in the secondary market. Arrangement, the market can always find a way. However, Yan Yan emphasized that there is a phenomenon in investment now that the domestic government dominates the fund has become the main body of PE and VC, invested into the Red Sea, and has scarce investment opportunities for a period of growth. Yan Yan believes that government funds should be guided credit funds. Investment in projects with low market risk acceptance capabilities can play a role in decentralizing risks and guarantee to a certain extent.

"Government funds cannot be both athletes and referees. For folk society, the most important thing is that it should invest in some important technologies that are related to national economy and people's livelihood." Yan Yan believes that it is necessary to believe in the power of the market. The projects and technology that inventive value will definitely know the market. "Just like we encourage young people to say, don't believe that people will be buried by society."

Talk about the choice of young people: the four essential qualities of success

Since entering the investment community in 1994, Yan Yan has been cultivating in the industry for 27 years. In the past 27 years, Yan Yan led Saifu to be independent of SoftBank, becoming one of Asia's largest venture capital and growth enterprise investment funds, and its management of more than 40 billion yuan (including the US dollar and RMB) direct investment funds.

As a front -line trader to help many companies dreaming, Yan Yan said that Saifu's investment strategy has not changed. "In fact, our investment in the years is almost the same. It has been making venture capital and focused on the high -tech field. We have not invested in traditional industries, so it has not changed much in recent years. You can see that Buffett's investment logic has not changed. The correct investment logic does not require a lot of changes. "Yan Yan said.

However, looking back at Yan Yan's life, he will find that although he adheres to the logic of "unchanged" in investment, he stood in the investment industry after experiencing many "changes". From the educated youth of the countryside to the graduate student of the Department of Sociology to the Department of Social Science, to the study of international economic and economic science in the United States, from the World Bank Research Institute to investors from the 40 billion yuan fund now, Yan Yan's life is constantly cross -border Essence How to choose a good choice on the road of life? Yan Yan also shared some suggestions for young people in the interview.

"I have a lot of contact with young people in China in the 90s. The general feeling is that many young people are pursuing things now are less effort to make more money, what can make money, and what to make fast. This is his highest goal. Yan Yan said that it is not bad to make money, but you must not want to make fast money.

In Yan Yan's opinion, no matter what you do, young people want to succeed, remember four keywords: curiosity, independent thinking, self -discipline, and effort. "Only by maintaining curiosity about the world can you keep moving forward and get better and better." Yan Yan also said that young people now have fewer and less personality, and their hobbies are becoming more and more. People should be a person who thinks independently, and that no one has no self -discipline and pay.

However, Yan Yan also said that if you can succeed, you should also pay attention to finding your own position. Do not set the goal too high. "I hope that young people have such a thing, just want to be different from others. I hope in this I can make my unique contribution in the world. As long as you do yourself, you can do it normally and hard. "

(For more report clues, please contact the author Ma Jing, mailbox: [email protected]) (Zhongxin Jingwei APP)

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Editor in charge: Luo Yan

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