Guohong Schwab Capital: Use entrepreneurial experience to invest, and we must maintain the "Party B mentality" that can endure hardship

Guohong Schwab Capital: Use entrepreneurial experience to invest, and we must maintain the “Party B mentality” that can endure hardship

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By Huang Zhuxi and Yao Xuelei

“SIG’s Wang Qiong invested in Toutiao and Gao Rong invested in Pinduoduo. If I can have such an investment experience once in my life, I feel that I will have no regrets in this life.” Ma Zhiqiang, the founding partner of Guohong Jiaxin, told 36 氪 without shy. .

I believe that the establishment of institutions under the tide of entrepreneurship and innovation in 2015 was driven by such “classic cases” that have been acclaimed in the industry.

Time has quickly shifted to 2018, three years later, and the fundraising environment under the influence of new asset management regulations can be called a cold winter. Over-raising by top institutions abounds. Shoulder institutions barely complete fundraising. In many cases, institutions that cannot raise money gradually disappear under the hustle and bustle of the market. The “stronger” and “Matthew effect” in the primary market Become the industry consensus.

Guohong Jiaxin is precisely a VC institution established in the hot 2015. After its establishment, they have invested non-stop in more than 30 projects (including: Weilai Automobile, Zongxue Literature, Blued, Kika, Kaixing Culture, Qishu Youyu, Star animation, pineapple zebra, etc.), and also ushered in the IPOs of projects such as Weilai Automobile (NYSE: NIO) and BlueCity (NASDAQ: BLCT).

Taking advantage of the heat, Guohong Jiaxin began to raise a second fund in 2019, and finally cooperated with Shenzhen Angel Fund of Funds, Futian District Guidance Fund and China Mobile Games in 2020 to establish an early stage fund focusing on investment in strategic emerging industries. Mainly focus on Shenzhen’s strategic emerging industries and Shenzhen-Hong Kong-Macao youth entrepreneurship projects. At present, Guohong Jiaxin Angel Fund has completed investment in 9 early projects, the targets are distributed in AI, Internet of Things, visual recognition, industrial drones, blockchain, robots and other fields.

In terms of investment logic, Guohong Jiaxin summed up their principle of simplicity-the project must have the following two important labels: First, the project must be an industry that can grow “sharks” and grow in the vast “ocean.” (Sufficiently large track or business model); Secondly, the founding team must have tenacious self-learning ability, entrepreneurial tenacity and entrepreneurial determination-this preference is based on the entrepreneurial experience of the core management team of Guohong Jiaxin.

The three founding partners of Guohong Jiaxin Capital, Xian Handi, Xiao Jian and Ma Zhiqiang, have all participated in the entrepreneurial process of China Mobile Games Technology Group (00302.HK), a Hong Kong-listed company, and transformed into investors after the company was successfully listed. The identity of the entrepreneur makes the three partners always maintain a sense of awe for investment and the industry during the investment process.

The three partners of Guohong Jiaxin (from left to right are Ma Zhiqiang, Xian Handi, Xiao Jian)

Founding partner Ma Zhiqiang told 36Kr: “Investment is an industry with poor means of competition and differentiation. In essence, it means taking funds to find good projects, but high-quality projects are scarce.In this process, we have been thinking about how to expand the boundaries of our capabilities? How to attract good teams? How to improve your core competitiveness and make yourself more valuable to the project? “

 Invest with the mentality of an entrepreneur, we have always been fellow travelers

China Mobile Games Technology Group (00302.HK) was founded in 2009 and became the first domestic mobile game company to land on the US stock market in 2012. The main shareholders at the time of listing included China’s two major sovereign funds (Social Security Fund and China Investment), MediaTek Technology and Hong Kong New World and other well-known investors. In August 2015, China Mobile Games returned from the privatization of the United States and landed on the main board of Hong Kong three years later, including Kuaishou Technology, Bilibili, China Reading Group, Weibo, Sanqi Mutual Entertainment, Palm Fun Technology, and Hong Kong Henderson Real Estate Chairman Li Jiajie, etc. Quality cornerstone investor.

The three founding partners of Guohong Jiaxin Capital are based on the rich entrepreneurial experience and network resources in China Mobile Games. Under the condition of “zero PR” of the fund, they obtained the family members of MediaTek and Quanta Computer’s controlling shareholder. The recognition of multiple LPs quickly completed the fundraising of the first fund. At the initial stage of investment, Guohong Schwab mainly used its funds to support entrepreneurial projects in which they were familiar with the field and the team, and made project value judgments in the “capability circle”.

“For early-stage entrepreneurs, entrepreneurship is essentially a process of continuous improvement. In the process, a large number of unfaced problems will be encountered, analyzed and solved.” Ma Zhiqiang, founding partner of Guohong Jiaxin, told 36Kr, ” During our entrepreneurial period, we started to develop from zero and constantly overcome difficulties to become a team with rich experience in the entire global capital market. We fully understand the difficulties and difficulties of entrepreneurship.”

Undoubtedly, the entrepreneurial accumulation of “starting from zero” has become the “poor ability” of the Guohong Jiaxin team from other institutions. This naturally determines the tolerance and empathy for entrepreneurs.In the collision and communication of helping entrepreneurs to overcome the obstacles of enterprise development, they can switch to the entrepreneur’s perspective, and sympathize with the entrepreneurial team more-all-round support and guidance.

Ma Zhiqiang said to 36 krypton that simply “earning money with poor information in the primary and secondary markets” and “making pure financial investment” have never been the long-term survival logic of an institution recognized by Guohong Jiaxin. Guohong Jiaxin’s goal is to make headlines. , Pinduoduo the same case.Therefore, they have always maintained the rare “entrepreneur mentality”. On the one hand, they invest funds in fellow travelers who have the original intention of starting a business and sympathize with each other; on the other hand, they use the entrepreneurial mentality to invest and always embrace and implement changes.

“As former entrepreneurs, we are deeply aware of the importance of “thinking diligently about the future”, which to a certain extent determines our criteria for identifying entrepreneurs-to find teams that can discover, embrace and implement changes . “

Of course, Guohong Jiaxin also practices in this way. From TMT, entertainment, consumer crossover to emerging technology, from the VC stage to the early stage, it is their new attempt to embrace change in the process of investment and entrepreneurship.

Entering into the early stage of investment, investment must have the “bitterness” of “Party B mentality”

The tide of double innovation has gradually receded from 2019. Entrepreneurship projects are not as overwhelming as they used to be. A large number of institutions are in a period of life and death without “bullet”. It was at this time that the three partners of Handi Xian, Jian Xiao and Zhiqiang Ma made the decision to move the investment stage to an earlier technology project, and completed the preparation of an early fund of 500 million yuan in 2020.

Founding partner Xian Handi mentioned in an exclusive interview with 36 krypton: “During the development of the entire digital culture industry, we have found that the underlying foundation for the continuous development of the industry must return to technological changes. In the past, 4G networks and other infrastructures were network content, Communication and marketing provide the possibility of realization. The advancement of science and technology has greatly improved the quality and efficiency of content creation. Technical improvement is not only the basis for industrial development and upgrading, but also broadens the boundaries of our imagination.”

Investing in emerging technology is a decision that Guohong Schwab has made after fully predicting external changes and evaluating its own capabilities.

Just as when smart phones were not fully popularized, they boldly tried mobile game entrepreneurship and the rise of mobile Internet saw forward-looking new changes in domestic entertainment tracks and business formats. The Guohong Jiaxin team realized that the model innovation of the past 20 years has entered At a relatively mature stage, China’s future innovation will enter the deep water zone of technological innovation for 5, 10 years, or even longer.

On the other hand, a solid background in science and engineering and practical industry experience gave them the confidence to cover the field of science and technology-the founding partner Handy Xian Stanford University double master degree in engineering economics and operations research, Carnegie Mellon University computer science/mathematics, economics and Three bachelor’s degrees in industrial management. He has served as the vice chairman, co-founder and executive director of China Mobile Games Technology Group. Founding partner Xiao Jian also obtained a master’s degree in software engineering from Beijing University of Aeronautics and Astronautics. CEO, co-founder and executive director.

Founding partner Ma Zhiqiang also graduated from Central South University of Forestry and Technology with a Bachelor of Computer Application and an EMBA from Sun Yat-Sen University. He has more than 10 years of coding experience. He mentioned: “Just as we do not choose to invest in the biomedical field easily today, our transformation must be judged based on reasonable competence boundaries.

When talking about the difficulties of early-stage venture capital such as long investment return period, head-up of excellent projects, large PE institutions entering the early stage by virtue of scale advantages, and high project valuations, etc.,Ma Zhiqiang admitted: “Intensification of competition is the inevitable law of the maturity of the industry. We have a clear understanding. It is no longer the era when Wang Gang invested in Didi to earn thousands of times in return. Everyone is talking about how badly high-quality projects are being robbed. These methods are used in every possible way, and you must find your own foothold.”

Investing is definitely not a role played by Party A. It needs to understand this from the perspective of cognition and mentality, position itself as a role of Party B, and use the mentality of sales to do the project.——How to get in touch with good projects earlier? How to quickly understand the value of the project? How to secure this investment opportunity? How to convince entrepreneurs? How can you be involved and can cooperate with you? This is a consciousness that we emphasize very much. “

In December 2020, Guohong Jiaxin Angel Fund signed a strategic cooperation agreement with 12 innovation and entrepreneurship bases under the Shenzhen Hong Kong and Macao Youth Innovation and Entrepreneurship Base Alliance. This cooperation was promoted with the support of the United Front Work Department of Shenzhen Municipality and the ARATS to build a bridge for exchanges, cooperation and interaction between Shenzhen, Hong Kong and Macao youths, and to promote the integration and development of youth in the three places. The partnership approach covers project investment and incubation, Consultation and entrepreneurship guidance, exchanges and cooperation between Shenzhen and Hong Kong youths, etc.

The cooperation has not only enabled the early projects invested by Guohong Jiaxin to obtain more comprehensive entrepreneurial services, but also became a special and important channel for Guohong Jiaxin to connect with outstanding projects in Hong Kong.“We have seen some outstanding young people in Hong Kong who have mastered advanced technology and then devoted themselves to starting businesses in the mainland. There are very successful cases. For example, DJI and Shangtang have such backgrounds.” Ma Zhiqiang explained. .

In the age when no one has ever seen carry, we adopted the “carry lifetime system”

At the end of 2020, Guohong Jiaxin released an investment manager recruitment information, in which the top-down “carry lifelong system” caused a lot of waves in the recruitment group——This means that as long as you join Guohong Jiaxin, regardless of whether you are the management or leave Guohong Jiaxin, as long as you participate in the investment of the project, you will be able to get the “legendary” carry in the industry when the project exits..

“As soon as the job advertisement was issued, two completely different reactions were formed in the investment crowd of the same industry. One reaction was the cheering of investment managers, and some even said that they hope this will become the industry standard; on the other hand, we have seen a lot of The bosses of investment institutions in the industry almost all remained silent.” Guohong Jiaxin told 36Kr.

Under normal circumstances, the salary package of an investment institution is composed of base (fixed salary) + bonus (bonus of the project) + carry (excess income distribution). Carry was once the “head” for young investors to enter the industry. But in fact, due to various reasons such as investor resignation in the middle of the job and insufficient level of seniority, no matter in the short term or in the medium and long term, there are very few people who really get Carry in an organization.

Boldly showing the attitude of recruiting talents to outstanding talents and implementing the “carry life system” for all employees is undoubtedly Guohong Jiaxin’s courageous and extremely sincere innovative measures in attracting and motivating talents.

“This decision is something that our team is very proud of.” The three best partners of Guohong Jiaxin who have worked together for more than ten years have demonstrated a highly consistent rationality and open-mindedness in the organization’s long-term operation iteration and investment income distribution mechanism. . Ma Zhiqiang told 36Kr: “We believe that investment is an industry that is highly dependent on people. The simplest logic is-no matter how good things are, they must not be attributed to one person, but an excellent team.”

Ma Zhiqiang further explained the reason for 36 krypton: “In the past, entrepreneurs who succeeded in starting a business in the past would often choose projects that are familiar to people around them. The success rate of such projects is much higher than that of sourcing. The biggest problem with this model is that it cannot be replicated.” The Guohong Jiaxin team has a clear understanding of the composition of institutional members: “The core founding members of the institution will eventually pass through the prosperous stage, and the institution’s cell blood needs to be continuously updated and iterated. Maintain a vigorous combat effectiveness.” 

“Previous entrepreneurial experience always reminds us that only by reasonably linking pay and return can we retain talent. There is a saying that hits the hearts of the people.“A hero doesn’t make significant money”As a huge variable in the investment process, Carry is precisely the best, most objective, and fairest mechanism to reflect everyone’s contribution to investment performance. “

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