8 reasons for failure cases: unsuccessful venture capital in China
It is normal for VC and PE to lose money, they can say that is must-pay tutor fee. Here are few main reasons why venture capital fail in China.
First, the lack of an ideal entrepreneurial team. In mature market, such as in Silicon Valley, both investors and inventors believe the most important business sccess is an ideal: if an inventor would like to do a samll business, to do your things dillently enough; for a traget of becoming medium business, be smarter, even a bit than other, howerver, as to enterprises of big businesses, there must be a moral and ideals. Usually, Chinese ignore or have not realizen the last factor.
Second, enterrpises cannot insist on its own direction of development, or get lost on the road of their long run target. It alwasy hard to adhere to the original and eventually die.
Third, enterprises are unable to adjust the market development strategies according to the firece market competition.
Forth, IPO is not the final aim. Some VC and PE just closely watch some project of pre-IPO and forget their untimate target. Certainly, it is irreproachability.
Fifth, key persons in company should better be shareholders or compensated with corressponding agreements. A stable staff team is the base of success.
Sixth, the risk of big boss spread too many industries. Some China enterprises think they can spread risk and like to persue the hottest industries like GE (Jack Welch and the GE Way is the business Bible in China)
7, The expansion is a dream, as well as a way to slove many problems. Undoubtedly, the tight cash status will bring out big risk, especially at the current situation of financial crisis.
8. Chinese team management often is a group of technical designers or programmers, the same as USA innovation enterprises, however, westeron culture are more likely to accept other experts in marketing, financing position comparing to Chinese culture.
