U.S. venture capital is considered one of the key style innovation, but even in the United States, most of the venture failed. Venture Capital has been able to make money, not because of commercial success, but through an initial public offering (IPO) and will pass on these investments by the public. In this case, even if the investment behavior of their public shareholders in the eyes of a failure, and venture investors still make money.

In the U.S., everyone knows that only a small part of venture capital funds to the ultimate benefit. In other words, only a few venture company to make money, and most have failed. This is in the past two years, the U.S. venture capital market, the reasons for the rapid decline.

A lot of venture capital failures during the recession years before the rise of prosperity can be concealed, because the venture capitalists can invest in the failure of the sale to the public. But today the United States no longer has Gains in particular. Because of this, many venture capital funds are forced to close because of low income.

Nowadays more and more people realize that American-style venture capital model can only be a good time in the economic environment is running smoothly, because this period will be sufficient liquidity in the investment company failed to sell the public, or the joint of several risk joint venture investment company to support these projects. The problem now is that China is not already set by the U.S. economic boom is only the onset of mode? If the answer is yes, then the future, if faced with the economic environment, situation, China will go from here?

Better products or better performance?

Most of the U.S. venture capital product-centric, it seems obvious, are not the purpose of venture capital to create a truly great product and it commoditization? However, behind this view, a more deep-seated issues to consider.

Experienced venture investors and business people are well aware, that the founder of venture capital investment enterprises, and the performance of managers in the business success of the process of playing a significant role. Warren Buffett has a pet no one know that he is human, rather than investment products.

To the success of i Phone and its founder Steve Jobs as an example, the results are Steve Jobs or iPhone? Obviously, if there is no Steve Jobs, Apple's products many not be invented or commercialized. So in a sense, Jobs is the real product. In other words, Jobs is the performance of a product, it can bring iPod, iPhone and iPad's available.

Clearly, investment in products that can not succeed is not the United States most of the top venture failed. On the contrary, failure to the fact that venture capitalists do not know the performance of founder and management team is a successful commercial product booster.

In most of the venture capital firm invests in, the founders and management team have successfully developed a product expertise. But in some companies, the founder and management team's performance will not make the company has a good financial position.

U.S. venture capitalists have the ability to analyze an investment project in the "products" do not have the analysis of "performance" capability. In many cases, they look down on this problem, and that this "soft" issues is not worth wasting their time. Many investors have over-estimated their own assessment of investment projects or management team, founder of the capacity of personality and character.

Investors have a range of tools and techniques to analyze the products, business plans, financial and technical. United States, most venture capitalists have MBA degrees, which makes their analytical skills for their investment is very confident, even overconfident.

However, most of the MBA did not have the analysis and understanding of the behavior of professional skills, especially those who can to push the idea into a successful commercial product behavior.

Another important fact to add, whether in the United States or China, no venture capital people have a set of tools to analyze the behavior of how the company can be successful in the early days. Most venture capital in this area who are new to the existing character and competitiveness of the assessment tests are not effective, because these tests have proven the performance and contribution to the enterprise or nothing to do.

Of course, the U.S. venture investors have recognized the importance of management behavior, but the problem is, they did not find a particular way to help their deep understanding of these acts, and make the right investment decisions. Is particularly important that they have no management activities associated with the financial results of the tools or methods.

This explains why the U.S. venture capital industry can only be the normal operation of the economic boom. Lack of proper assessment of the risk management performance model means investors can not time poor in the economic environment to make sound investment decisions. In the economic downturn, not the public, government or other risk-friendly investors to save them like an angel.

Overall, the U.S. venture capital industry has a systemic flaw: it can not make a good period of economic downturn and investment decisions, because it can not afford to invest in the company's managers are about the behavior and performance of reliable analysis .

The United States ignored the new method

New research areas, such as behavioral economics and the emergence of behavioral finance, in order to solve this problem provides a new way. However, the U.S. venture capital and innovation developers who hopes the emergence of new products, while also resisting the new method can solve the problem.

The new approach in assessing the business managers and investors act to provide a new way of thinking, there are two main aspects: Suoyou managers in the cognitive bias Duhui led them to make wrong decisions; informed decisions are based access to a wealth of information basis.

The results of the study the impact of the venture capital industry is very far-reaching. First of all, most of the venture capital invested in the enterprise managers there have been mistakes, even fatal bias, even if the enterprise "product" itself, well, this bias can lead to poor investment performance or investment failure.

Second, some investors rely on an analysis by the MBA model to design, but the systematic destruction of the possibility they are looking for good projects. The basis of these conclusions is that the law not be applied mechanically to obtain enough information will cover up the truth, which confirmed the risk from another perspective, some investors, in particular, and the amount of funds they manage are growing rapidly, it is hoped as soon as possible like the United States succeeded in creating Microsoft, Google, and companies like Apple. However, as we have seen, venture capital investment is one of the most difficult.

All the indications are that China's venture capital model used in the United States, which means that the risk of investment in China and the United States will face the same problems. That is when China's economic prosperity, China's venture capital returns will be very good. But in fact the success of the Chinese rarely venture, while China's venture capital investment followed the failure of the sale to the public or the destruction of small-scale failure of U.S. investment patterns.

Worse is that the economic downturn, China's venture capital will be the same as most American counterparts suffered a crushing defeat.

So far, no indications that China's venture capital performed better than the United States.

They, like the United States, venture capitalists, not understanding behavioral finance and the economic behavior of these new subjects, new subjects did not know the cause of the development of what it means to them.

Creating the Chinese model

There is an alternative approach, that is, the venture capital business in China requires a fundamental change in investment patterns, and that is investment "behavior" rather than vote "products." Once accepted this change, they can act as an economics and behavioral finance theory, began to develop links behavior and model the behavior of financial results.

The process of developing this model, China's venture capital business to be in groups than the existing research-based theory further, to extend it to the individual level. This approach in my own company has proven to be effective.

In other words, a new China venture capital model must attach importance to product issue, into the behavior patterns of the variables considered. The result is the behavior and products produced variable integration. While this integration occurred very occasionally in the United States, but it contributed to the best investment the United States cases, such as Google and Apple. Therefore, the Chinese investor behavior through the introduction of variable factors, to revise and strengthen their professional review model, which can go beyond the current widespread use in the United States and has been introduced into China's model. Stage in the professional review, one must address the behavior and performance of the financial value of the relationship.

These results imply that China's wind analysis, and to more of their planned investment to the company's founder and manager behavior. In other words, their professional review Xuyao from products such as Fangmianzhuanxiang conduct, failure to do so that they will 一样 U.S. counterparts and therefore not be O.K. investment results.

Of course, this does not mean that China's venture capital can not be very successful because many Chinese entrepreneurs and managers are all excellent with innovative thinking. But China's investors must know that their work is not just to find good in the products, but more important is to find a way, like Bill Gates, Steve Jobs Huozhe innovation awareness and capacity with outstanding entrepreneurs.

China's venture capital must be ahead of the U.S. technology-based investment model, which requires developing a more sophisticated behavior patterns Instead, this behavior can be management practices and associated value-added, and with the right combination of product innovation with an estimate together. This approach by investors than the U.S. approach is more advanced.

If China's investors hope to create the next iPhone, would be to find the next Steve Jobs, have to use more than the U.S. investors, innovative approach. Means that investors in China must have their awareness and ability of innovation, not just the risk investors like the United States as a broker to do all aspects of capital.