Chapter 270: Hundred Billion Fund Burns the Wasteland
On the morning of the 21st, the World Internet Conference ended and Xie Jingxing returned to Shanghai.

He benefited a lot from Mr. Ma's guidance. Not only did he see the path to layout the chip industry, but he also realized and re-examined the significance of his identity as a venture capitalist.

That afternoon, he showed up at the headquarters of Science and Technology Venture Capital (Science and Technology Venture Capital) Group in Mo City, in the office of the Industry Guidance Fund Management Department. A senior vice president who was not in the team and had a VP title came out to receive him.

As a state-owned fund with a scale of 10 billion yuan, it was strategically reorganized by two state-owned institutions, Magic City Technology Investment and Venture Capital, this year. It is a trustee of the local government guidance fund and is directly managed by the local State-owned Assets Supervision and Administration Commission.

Xie Jingxing was very honored to receive such treatment even though he did not make an appointment in advance.

After all, Shanghai is not like Chuncheng, a poor country town. Haha, he doesn't have a note on his forehead saying "I have two fathers-in-law, one lights my way forward, and the other also lights my way forward."

"Mr. Xie, the Entrepreneurship Guidance Fund is a guiding policy that was only put on the strategic level this year. I am honored to receive the enthusiasm of a well-known social capital like you. It shows that our work is not in vain. If you have anything you want to know, please feel free to tell me."

The middle-aged female vice president with short hair and a capable and Western temperament said with her orchid fingers: "Try the Arabica beans from my friend's own coffee garden. They are definitely not as good as your collection, but the acidity is bright and soft, and there is a unique fruity flavor."

"Thank you, Mr. Zou. I mainly want to know the main industries and general fields currently supported by the Magic City Guidance Fund."

Xie Jing Xing took a sip of coffee, put down the cup and got straight to the point. He really didn't have the habit of collecting this thing, so it was hard for him to comment on it.

President Zou saw this and turned his head away nonchalantly, curling his lips. He was slightly dissatisfied with the handsome young star in the industry in front of him. He originally wanted to take a photo with him and post it on his Moments.

Humph, you've come to me on your own initiative, and you're still reluctant to say a few nice words.

The first government entrepreneurship guidance fund in China was pioneered by the Zhongguancun Management Committee more than ten years ago. It was established by following the example of Israel and was mainly aimed at meeting the needs of emerging technology startups that had difficulty in financing. A large number of current Internet giants such as Qihoo 360 and Baidu have benefited from it.

However, due to the conservative investment strategy of government funds, this approach lacks stamina, and only the financial businesses under top state-owned enterprises such as China Merchants Group, where Yu Nian works, have followed suit.

Until this year, the support method of providing grants to enterprises was banned. From top to bottom, enterprises could only be supported in the form of investment. Coupled with the hot land finance in recent years, local municipal investment companies have become rich.

A national integrated circuit fund worth hundreds of billions of yuan and various local government entrepreneurship guidance funds have emerged.

"Your question is a bit broad. The city has several entrepreneurship guidance funds in preparation, focusing on industries, early angel investors, and attracting investment from various district-level industrial parks. The investment style is very comprehensive."

Mr. Zou said with eight emphasises: "Let me give you a detailed introduction to the entrepreneurial guidance fund managed by our group. Our investment limit for a single project can be up to 1 million yuan, and there is no limit on the project field. As long as it is a good project, you can apply."

The supervision of direct funding to support enterprises is not transparent, so does that mean the investment is transparent?
At least the guidance fund, which is still in the exploratory stage, is even more opaque. Recently, no one knows how many people have lined up to come to the door and want to take advantage of the situation. She naturally thinks that the handsome boy is here for the same reason.

What is a good project still needs to be evaluated by our professionals. Mr. Zou savored the sour taste of coffee blooming on the tip of his tongue, straightened his back, folded his hands on his legs, and looked at it with a faint smile and reserved and appreciative eyes.

She didn't really want to do anything, but who would not speak sweet words and smile all the time when meeting a sponsor? Being young, handsome and talented but not good at coaxing others is a problem of ability, and not wanting to coax others is a problem of attitude!

Even if it's just to finish the coffee, as long as there is an attitude, I can still understand it. I'm not unkind. Mr. Zou was intoxicated with his own emotions and couldn't extricate himself: "Hmm. Hmm? What did you say?"

"I say, does the city have any regulations on cooperation between guidance funds and private equity?" Xie Jingxing repeated.

Mr. Zou leaned forward unconsciously: "You mean to invest in the Entrepreneurship Guidance Fund as social capital?"

"It is not the current market investment participation and cooperation. Private equity and local finance are the main investors, and the fund body is managed by private equity."

Xie Jingxing paused for a moment and emphasized: "Of course, it is the main body of the guidance fund, not the sub-fund."

"I'm sorry, Mr. Xie, I may have to confirm it again. Do you know the difference?"

Mr. Zou put aside all the messy thoughts, straightened his spirits, frowned slightly and asked seriously.

Currently, there are two main ways of operating government-guided funds. Direct investment projects (direct investment) have a literal meaning that is not very detailed.

There are many opinions on FOF parent fund business investing in sub-funds. For example, early-stage small venture capital institutions such as Jinshajiang can apply for money from government-guided funds and make investments that comply with relevant regulations.

This concept is the reason why China Merchants Capital and Suzhou Yuanhe invested in the first RMB fund of Grapefruit Capital. However, Grapefruit Capital was strong and they only requested investment in the Internet industry and major decision-making restrictions such as seats on the investment decision-making committee.

Relatively weaker venture capital institutions like Jinshajiang are very aggressive. If they jointly invest with ministries and central enterprise guidance funds to set up special sub-funds, they basically have to invest in certain specific industries, even if the entire industry is shit and there are no good projects, they have to invest even though they know they will lose money. If they cooperate with local guidance funds, it will be even more amazing, and they often require the invested enterprises to return the investment locally.

Jinshajiang took the money from the Shanghai Guidance Fund and went to Beijing to take a fancy to a project. It went to the project owner and said, "I will invest 1 million yuan in you, but you have to move your company to Shanghai and invest 1.2-1.5 million yuan in Shanghai within three years."

Whether you want to expand the scale of the enterprise or start a new business, you have to pay this money anyway. Don’t think it’s too much. This is the market price. Many poor areas even require a double return on investment!
Therefore, only top-tier companies dare to accept this kind of investment, build a R&D center in Shenzhen, set up a marketing center in Chengdu, and establish a regional headquarters in Beijing. As for the rest, they take the investment first, but not only do they not return the investment, they will go bankrupt on the spot in minutes.

“The investment management of this type of sub-fund is very complex and lacks market flexibility. As for what you said about a higher level cooperating with the guiding fund entity to invest and control fund management rights, as far as I know, there is no precedent for this nationwide,” Mr. Zou hinted vaguely.

Although it seems that your words and actions are aggressive, you actually have a bottom line. This will only harm you and affect your career prospects.

Xie Jingxing couldn't help but secretly shook his head: "Can you help me arrange an interview with the relevant leaders of your group? I have a relatively large-scale industrial fund plan in my hand, maybe we can set a precedent."

"Mr. Xie, our guidance funds are usually invested by insurance companies, banks, municipal investment companies, and finance departments. Especially the special funds for specific industries follow the city's industrial development strategy."

Seeing that the handsome young man was ignorant of his own limitations and really thought that any money was easy to take, Mr. Zou further rejected him directly.

Every sub-sector of the industrial development strategy of Magic City has an economic scale of hundreds of billions, and the scale of the corresponding industrial funds starts from tens of billions and easily reaches tens of billions.

How much money can a social PE/VC institution come up with to get involved? But the more I look at it, the more handsome it looks.

If you are smart enough, ask your sister out for a cup of coffee after get off work to talk about horoscopes and palmistry, and then come back to invest in a few projects with you. Wouldn't that be great?

"300 billion to 500 billion. The specific allocation of funds depends on how much the government can match. It is estimated that the total scale of the first phase of funds will not exceed 1300 billion."

Xie Jingxing finally added: "The semiconductor integrated circuit industry, from design to manufacturing + packaging and testing and terminal applications, all fields of direct investment and FOF investment business."

"Where did you get so much money?"

Mr. Zou blurted out with his eyes wide open, with only this one thought in his mind.

"Not now, but maybe next year. Thank you today. Mr. Zou, please arrange an interview for me as soon as possible. If you have nothing to do after get off work, how about having dinner together? As for a restaurant, your home is not appropriate. I'd like to serve creative Italian dishes, sprinkled with white truffles."

The King of Hell is easier to deal with than little devils. A dignified Xie Jing actually has to sell his smile to seek convenience, but it is not a loss at all.

After an in-depth discussion, he thoroughly understood the overall state of the guidance fund these days: disordered, slow, rigid, and confusing... But in any case, it would be easier to follow up with a basic concept...

On the Construction of Market-oriented Mechanism of Government-guided Funds

After returning home in the early morning, Xie Jingxing typed a line of words on the keyboard. This would be the title of his speech at the annual economic summit at the end of the lunar year.

Open investment promotion welcomes visitors from all over the world, no matter if they are ministries, central enterprises or local funds. He will bring his talent to whoever is sincere, and he will pay as much as the other party offers!
A large industrial fund can be established at the national level, and outstanding young business leaders may want to give it a try. At worst, hundreds of billions of funds will not be blown up into fireworks without leaving a penny.

Xie Jingxing accepted all of Mr. Ma’s inspiration. Yes, he didn’t understand chips, but he had some knowledge of capital operations.

It is a sin of arrogance for venture capitalists to start a project from scratch. They must regain their respect for the market and respect every outstanding founder with humility.

Use 100 billion fires to burn the wasteland.

【央行决定，自2014年11月22日起下调金融机构人民币贷款和存款基准利率。金融机构一年期贷款基准利率下调0.4个百分点至5.6%，一年期存款基准利率下调0.25个百分点至2.75%。】

The computer screen was dimly lit, and the latest financial news released after the secondary market closed this afternoon came into view.

The long-awaited interest rate cut that had been brewing for half a year finally came out. Xie Jingxing proudly raised his glass in silent tribute. This would be the source of hundreds of billions of torches.

On November 11, the Shanghai Composite Index rose sharply at the opening, and the non-bank financial brokerage sectors collectively rioted during the trading session.

The account group of the Grapefruit Capital Active Strategy Securities Investment Team doubled the funds from 150 billion to 300 billion, quietly lying in the positions. From morning to afternoon closing, 300 billion turned into 310 billion.

(End of this chapter)