Venture Capital in China

ventureblog.com

5 points·reitzensteinm··2 comments

Having grown up overseas, I'm shocked at how unaware people in the States are at the differences overseas. A friend of mine is neck deep in providing hardware for two new Beijing and Bangalore branches of his company. It's a nightmare. I'm assuming an exec just said, "let's open up branches in China and India" without researching things fully and thinking through the implications.

My friend is having nightmares just getting computer equipment through customs. I can't imagine trying to invest millions in startups in a foreign country.

I'd think that investors would be better off investing stateside in companies that are focused internationally. There's not much to stop a startup in the US from developing it's site in Mandarin or Cantonese.

Why not just buy equipment locally? Or ship the stuff through Hong Kong?

In my very limited experience, almost all of the VC I've witnessed in China has involved imitative trend-chasing by small players hoping to cash out by getting foreign investment. Or government corruption (multi-million dollar investments in multi-thousand dollar projects).

Wholly-foreign entities in China have the freedom to perform well. The problem otherwise isn't the lack of entrepreneurs or even necessarily innovation:

http://www.danwei.org/media_regulation/supply_to_end_for_pri...

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