Recently, 36kr “2020 China Investor Future Summit” was held in Shanghai. At the summit, several GP-related honors were awarded. N5Capital was awarded: “Top 50 of the 2020 TOP100 Most Popular Venture Capital Institutions in China” , “2020 Top 50 China’s most LP-recognized Venture Capital Institution”, founding partner Mr. Will Jiang won the “2020 China’s Most popular Venture Capitalists TOP50 of TOP100”.
At the same time, Mr. Will Jiang, the founding partner of N5Capital, attended the top LP GP dialogue “Accompanying Is the Longest Confession” led by Yuanhe at the 36Kr “2020 China Investor Future Summit”.
LP GP dialogue “Accompanying Is the Longest Confession”
Speaking of current and future plans, Will Jiang said that N5Capital will make strategic adjustments to it exits in the next three to five years, and may place most of its project’s withdrawals at home rather than abroad. As an early stage VC, we basically occupied very important shares and board seats in the invested companies, and we have the motivation and obligation to help the invested companies to reform or evolve to meet the domestic listing requirements.
Speaking of the epidemic, Will Jiang said, “I think the epidemic has given everyone a great effect on not allowing naked running. It is necessary to reflect, reflect on the useless work done before, and face things with a more cautious attitude. It also gives everyone a chance to prepare for the systemic risks. We can’t keep calling the wolf coming. This time the wolf is really coming. As a result, we will see if everyone can “make a goat prepared instead of being harvested by others”. This is an obvious exam. Those who pass this time will enjoy the wave of dividends.
Speaking of GP’s expectations for LP, Will Jiang believes: First, support and trust are what LP has already had since the first day of investment. Second, for domestic investors, a very important point is the relative lack of “patience”- today the secondary market is good. Everyone says that I can make so much money by buying stocks today. I can’t see the return for early stage investments; if the real estate is good, buying a house can earn five times, the fund may not be five times in ten years, this is the Chinese investors’ understanding of the alternative asset definition itself that requires a better understanding of the word “patient”; after all, as a dual-currency fund manager, we are facing Chinese institutional investors and US institutional investors. For the early stage US dollar fund, it started at 10 years period, and can be extended to 12 or even 14 years, but it is really hard for the RMB fund to reach 8 years period. Institutional investors like Yuan He Chenkun have a good understanding of patience, but for other LPs, including LPs who have contact with early-stage investment for the first time, if they don’t have enough patience, this type of asset should not be included in their asset allocation, this is a test of humanity and patience.
At the same time, Mr. Qian Kun, partner of N5Capital, attended the Consumer Forum “Exploring the “Nuggets” Road of Consumption Investment” at the 36Kr “2020 China Investor Future Summit”. On the forum, Qian Kun said about which consumer products are worth investing in:
Consumption Forum “Exploring the “Nuggets” Road of Consumption Investment”
First, N5Capital will invest in industries with a market size of more than 100 billion RMB when investing. In most markets, it is difficult for a single brand to exceed 5% of the market size, and if a startup company wants to become a great company, the market share must be larger. Second, China’s consumer products have undergone several waves of development, and each wave of consumption enthusiasm is brought about by the shift of attention and the birth of new channels.
I think most companies have not reached the ceiling. The so-called seemingly large scale is because the new situation and new external environment have caused the ceiling of these companies to be higher than before, but it has not yet reached the time to break the ceiling. Master Diao said that every consumer brand is worth doing it again. These things have been done in the past few decades, rather than happening recently. Although every brand is worthy of being redone, not every brand and every category is worth investing in. These are two concepts. Some things are destined to be small businesses, so when we make investments, we have two criteria: first, the market must be large enough, and second, to see if there is an external environment to facilitate this matter. When a better environment such as the expansion of external consumer groups or channel changes appears, some brands will emerge, but not every consumer product or every category can produce large companies or start-up companies. I think it is difficult for entrepreneurs to think very comprehensively when they first started, and they often enter this field by relying on their love for products and the industry. If you really want to become a big company, you have to go through many ups and downs.
As VC investors, we focus on two points: one is whether we can make a large-scale investment so that the investment can return; the other is how quickly we can achieve this. Sometimes the identities and roles between entrepreneurs and investors are not the same. When entrepreneurs start their own businesses, they need to think about the reasons for being able to do this in the long run. There is no shortage of commodity manufacturing in China, and most consumer products are produced in China. From the product point of view, there are only two directions for making consumer goods-either always cheaper than others, or your product is unique. Products that are not in the middle of the two will face extremely strong competition. When I first started a business, I might not be able to do one of the two. I always believe that although consumer goods investment is very hot now, 90% of the projects are not worth VC investments, or the ceiling is relatively obvious. To really excel, it is very difficult to pick a good company. This requires entrepreneurs to work together.