Chapter 294: Taking up the banner of venture capital
The speech texts were loaded onto three carts, the phone at the service desk rang throughout the entire lunch meeting, the seats in the branch venue that could accommodate 300 people were changed again and again, and the names of people who were temporarily added to the sign-in roster could not be easily removed.

"Leader, please coordinate a venue for the conference!" the volunteer at the service desk said in a serious tone.

The deputy editor-in-chief of Xinhua News Agency's Financial Newspaper crossed his arms and said, "We don't have any extra space. If you're willing to come, we'll add chairs."

"How much?"

The volunteers felt dizzy. Even in Beijing, where six out of ten people were section chiefs and four were department heads, it would not be appropriate to squeeze these people together like riding a subway during rush hour.

“We’ll add as many as we can, and keep the positions for venture capital industry personnel intact.”

The deputy editor-in-chief stressed expressionlessly that young business leaders who claimed to be representatives of venture capital should raise the banner. It just so happened that many venture capitalists in Beijing came temporarily for various reasons.

This group of talents are the actual audience of this speech. The big and small bosses in the relevant departments in Beijing are not as important as the lower-level departments that directly manage money at the local level.

Because this speech has already been delivered to the desk on the top floor in advance, to deliver it publicly now is a road that will be pierced by swords, axes and fire. If you can get through it, you will get real gold; if you can't, you will just be chopping wood.

It’s that simple, young people make their own choices.

"I am very honored to be on the stage and talk with you about the development of my country's financial investment industry. To be honest, I was a little nervous before I went on stage. A familiar friend joked with me, "Do you know that your speech today will offend people?"

Xie Jingxing raised his hand and pointed to the audience: "Yes, that's the one, Ms. Yu Nian, the general manager of China Merchants Capital. She told me to sit farther away to prevent me from getting her into trouble. The more she said that, the more I want to thank her for her professional support for my speech!"

There were friendly laughs and applause from the audience. Yu Nian nodded slightly with appreciation and reserve, but secretly he was about to bite his back teeth to pieces.

"In addition to Ms. Yu Nian, special thanks should also be given to the Institute of Finance of the Chinese Academy of Social Sciences, the Institute of Economics of the School of Finance of Jiaotong University, and the Yunnan Chuncheng Urban Investment Group."

Every time Xie Jingxing read out a name, his expression became more serious, and the atmosphere became more solemn as he squeezed into the venue with more than 400 people.

"On the Construction of Market-oriented Mechanism of Government-guided Funds", this title should be viewed in different time and occasions. It would be very calm if a university professor spoke in an academic forum.

And when a social capital investor has just won the Economic Person of the Year award, and you use such a title for your speech at the National Annual Economic Summit, and even get a series of public institutions to endorse it, are you a little confused? Are you trying too hard to improve yourself by using your reputation to command your leaders?

"According to Ms. Yu Nian, the above is the list of people who were implicated by me. I would like to say that I am really sorry to everyone. Then I will argue that I do not want to repay kindness with enmity. The venture capital market belongs to me, yours, and everyone present here."

After Xie Jingxing finished reading the long list, he paused for a moment until the audience was silent, and then got to the point: "We all know that in the past year, due to macroeconomic adjustments, the scale of government-guided funds has shown explosive growth."

"This has injected considerable vitality into the entire venture capital market. We are growing at a rate that has never been seen in any economy in the world. Optimistically speaking, my country's fiscal policy may shift from land finance to equity finance in the future."

It's like a pancake wrapped in green onions. OK, the tone has been set to the level of macro-fiscal foundation. How can this be tolerated?

Several leaders of the financial department had different thoughts, but they all pretended to listen attentively. It is a virtue to listen to the opinions of enthusiastic citizens. It doesn't matter if the young man is wrong, we will never mind it, absolutely not.

"But amid the overall boom in the market, some inevitable problems are emerging."

Xie Jingxing got into the mood, relaxed his body, supported the lecture table with one hand, and adjusted the angle of the microphone: "Some time ago, I chatted with the person in charge of a newly established government-guided fund in a certain province or city. He asked me: Mr. Xie, how many listed projects can your fund invest in in 2-3 years?"

"I felt very ashamed and even a little inferior at the time. I asked them with a learning attitude how many IPO projects they could invest in within 2-3 years. Then he was very surprised how it was possible to invest in a IPO project within 2-3 years."

The scene suddenly burst into laughter again. Xie Jing Xing did not wait for silence, shook his head and continued: "I don't understand why you are asking again. Since you know that it is difficult to come up with a listed project in 2-3 years, why are you asking me?"

"He said that this was a question asked by his leader, and he thought that Mr. Xie, who was so famous, wanted to ask for advice. But it turned out that Mr. Xie's professional level was just average."

The laughter stopped abruptly, but smiles still remained on the faces of hundreds of relevant leaders, all of them keeping their facial muscles stiff and pulling the corners of their mouths.

The venture capital industry's entire project cycle, from early-stage investment to final IPO exit, often takes 7-10 years, and even a few extremely high-quality companies take five years. They understand basic professional knowledge.

However, the chair under one's butt has to be replaced every 2-3 years. The seeds that one has worked hard to plant while in office are left for the successor to reap the fruits of his labor. This loss-making business does not allow them to understand professional common sense.

In 2-3 years, if conditions are met, we will go public. If not, we will create the conditions and go public!
This has led to many originally good and high-quality projects being forcibly inflated in violation of market rules. As the old saying goes, a little bit of tinkering can make you happy, but too much can hurt you, and forced tinkering will lead to your death.

The original speech by Xie Jingxing was a bit explicit, but after being revised by Yu Nian, he explained it from another angle: "I think the main problem that caused the government-guided funds to expect high short-term returns from the projects they invested in is 'fund mismatch'."

"The funding sources of government-guided funds are usually traditional LPs such as finance, banks, insurance and finance. The funding sources of these LPs are ordinary people's deposits and pensions, which leads to their investment preferences being unable to deviate from prudent and conservative strategies."

He looked at the audience without a script: "Then the reflection on the specific investment projects is that the guidance fund violates the market rules and has money on the books but cannot invest it, resulting in a large amount of idle funds and low investment efficiency."

"Under pressure from performance, excessive funds are forced onto projects that dare to accept an IPO and exit within 2-3 years. These invested companies, which are willing to accept any financing conditions, use their over-inflated and undigestible cash flow to make acquisitions and mergers, create beautiful financial statements and strive for IPOs, completely disregarding the actual operating conditions of the companies."

Xie Jingxing looked around: "What's worse, the sub-fund management party cooperating with the guidance fund helps the invested enterprises to be acquired by listed companies at a price lower than the market value, so as to achieve the goal of successfully listing the project in disguise. To some extent, it is equivalent to spending money to buy a listing quota."

"In the end, the invested enterprises achieved the achievement of being listed as star projects within three years, the founders became successful and famous, the government-guided funds had good book performance, and the sub-fund managers earned high returns."

"So, have the government-guided funds, as a new type of 'investment attraction' tool, really fulfilled their policy mission? Do the stocks purchased by secondary market investors really have room for investment growth in the future?"

No one could answer. Many sub-fund managers were less composed and couldn't help but look sullen, but the leaders were all calm and indifferent.

Laugh, smile when you are angry, young people are ignorant and it is not worth it to argue with them; besides, if everyone is being scolded, it is equivalent to no one being scolded. There are dozens of provinces and hundreds of cities and counties in the country. Everyone with a little economic conditions plays this way, and everyone has a working group dedicated to the listing of local companies.

There are less than 3,000 stocks in the two stock markets. It takes a skill to be able to get listed in this way. The vast majority of them do not even reach the stage of listing. The parties involved can just reap some benefits, don't be too aggressive, and exit in time.

The sun will go out in 5 billion years. Does that mean it is not alive now? Why would you care so much?

"In fact, only a few projects can be listed. Risks in the venture capital industry objectively exist, and more projects fail."

Xie Jingxing also mentioned this point on the stage, and the emotions of many fund managers and related leaders were slightly eased. However, leaders of relevant ministries such as finance and development and reform felt embarrassed and as if they were on fire.

The young man changed the subject and said, "The failure of an investment project is related to the loss of the fund. So here is a question: if the government-guided fund loses money, does it count as a loss of state-owned industrial assets?"

“Furthermore, how should the state-owned assets of the government-guided fund be defined?”

He lowered the microphone and raised the speech manuscript in his hand to indicate: "Here I have listed two representative definitions, one from the Development and Reform Commission and the other from the Ministry of Finance. The former clearly states that funds funded by the Ministry of Finance, the central government, and various local special funds belong to the Guidance Fund. Funds with a scale of more than 5 billion yuan are subject to its review and supervision, while funds with a scale of less than 5 billion yuan are supervised by the provincial Development and Reform Commission."

"The latter is expressed as a fund that is constructed by public budgets, special budgets, state-owned institutions or independent investment, or jointly funded with social funds at all levels, and is legally classified as a guidance fund, and is supervised by the unit at the same level of the construction fund."

Xie Jingxing put down his speech and said slowly: "Other relevant departments also have different definitions and affiliations. In actual operations, the construction party of the guidance fund often chooses to submit approval and supervision requests to all relevant superior departments."

"Correspondingly, in terms of lower-level units, county-level, district-level, municipal-level, public institutions, and various functional departments are eligible to establish guidance funds. Industrial guidance funds and scientific and technological innovation funds emerge in an endless stream and converge in a serious manner. The hidden costs of competition for project investment have intensified, and housing subsidies, tax exemptions, and policy support conditions have been increased in turn."

As he was talking, hundreds of people at the scene started to feel uneasy. Such heart-piercing words were extremely treasonous!
The project is there. If you don't grab it and I don't grab it, why don't we wait for him to grab it?
Even if they are all guiding funds in the same city, they will still compete with each other, and the competition may even be more intense. The hidden costs of intensified competition are borne by everyone, but the opportunity for advancement is personal.

There is no need to wait until the brother units have made progress and then turn around to be kind, courteous, frugal and modest. It is better for me to make progress first and then be kind, courteous, frugal and modest to the brother units.

"So in general, my country's industrial investment has four characteristics: strong government dominance, deep participation of state-owned enterprises, large amount of financing for single projects, and strong investment function but weak guidance."

Xie Jingxing stood up straight, his tone calm and calm: "The main problems are that the guidance fund industry system is imperfect, the management of multiple fronts is chaotic; the investment risks are not transparent, and the commercial sustainability is poor; the fund's funding sources are mismatched, and there are financial systemic risks associated with policy assets and local debts."

"In the end, in my opinion, these problems can be explained by a lack of respect for the market and the government's involvement is too dominant. Of course, these problems can also be solved by respecting the market."

Xie Jingxing exhaled deeply: "Since time is limited, I will not elaborate on this. Next, Grapefruit Capital hopes to cooperate with government-guided funds in a social capital-led way to seek solutions to the marketization of government-guided funds. Welcome leaders and colleagues to join us. Friends who are interested can contact me after the meeting."

"So back to the beginning, this is a problem that all of us have to face and solve. If this offends people, then so be it. Thank you all."

It doesn't matter to the speaker, but the listener will think carefully and interpret it.

Today I just want to point my finger at you and curse you in person, saying that the hundreds of people here are all trash, and those standing in the corners are also trash, occupying the toilet but not doing anything, just enjoying themselves.

Watch carefully and learn well, I will teach you what personal heroism is.

There was an uproar at the scene, and even the applause that was supposed to maintain the most basic scene was sparse. Yu Nian inexplicably forgot about the atmosphere, and stared blankly at the young figure with an upright back on the stage, who walked away calmly without shaking his shoulders.

"Click."

The camera freezes, and under the high dome of the hall, a lone figure is walking with his back to the shining crystal chandelier, walking towards the darkness blocked by the heavy wooden door.

The boundary between inside and outside the door is clear as light and shadow interweave.

"Looks a bit lonely," said the person who took the photo.

Someone who viewed the photo said: "The photo gives the feeling that the door could fall down but still hold up."

"She has a sharp tongue and is very powerful."

"People who have returned from studying abroad are like this. They have been brainwashed by Europe and the United States and have unrealistic confidence in the market economy."

"Don't take empty talk seriously. Young people shouldn't seek fame and reputation. They need to be disciplined." said the people who were called waste.

"It's a thankless job, why bother?"

"It's true that you didn't have any bad intentions, but you're probably a little inflated."

"Young people have good ideas, but they are too idealistic," said the bystanders.

"He dares to speak and act. No matter what, he has to take up the banner of venture capital, and I accept it."

"Just touch it a little bit to see whether it's good or bad. Real silver can't be faked."

"Those who carry firewood for the public should not be allowed to freeze to death in the wind and snow." said the moved people.

(End of this chapter)