High Valuation Is A Double-Edged Sword For Venture Capital.

In the minds of people,

Since the opening of the gem, there has been a problem, that is, the high price earnings ratio and the high issue price, so that many companies have fallen through the issue price many times ago, which puts forward higher requirements for venture capital.

How can venture capital companies face this problem?

How to treat this problem?

Sun Dongsheng, vice president of Shenzhen Innovation Investment Group Co., Ltd., said that the high price earnings ratio, high issue price and breakage of gem are the market behavior for venture capital institutions.

"I think we should return to reason."

Shao Hongxia, vice president of Shenzhen Da Chen Venture Capital Co., Ltd. believes that the market price is below the issue price, while Gao Shiying rate is the result of growth support.

The price earnings ratio of the growth enterprise market is more than 70 times in January and about 55 times in February.

If the two level market is low, the cost of investment will also decrease, and returning to reason is the inevitable choice.

Mei Jian, partner of Shenzhen Oriental Fuhai Cci Capital Ltd, believes that the high price earnings ratio has seriously overdrawn the high growth of the gem.

From the opening of the gem to today, the whole valuation level is constantly shifting down, but at present it is still high.

Because China's GEM companies or manufacturing companies give seventy or eighty times price earnings ratio, which is quite different from the valuation price of mature capital markets, and the growth of manufacturing companies can not be geometrically increased.

What does gem's high valuation mean for venture capital?

Mei Jian believes that overvaluation is a double-edged sword for venture capital.

On the one hand, the high valuation has brought high returns to some venture capital institutions, which are more likely to be returned in the mature market.

On the other hand, this high valuation induces a high price in the primary market, which is a risk for venture capital institutions.

In fact, venture capitalists earn money in relation to the two tier market, but they do not rely on the two tier market. Ultimately, they also make money from the annual growth of their investment companies and equity growth centers.

We are very calm about the change of market price earnings ratio in the two tier market.

The investment stage moves forward to avoid overestimation.

Mei Jian said that at present, the bid price of entrepreneurs is much higher than that of those listed in the two tier market. Even so, there is a certain price difference in the one or two market.

We just raised a 2 billion 500 million PE fund before the Spring Festival.

Although in this case, we can achieve some worthwhile investment projects through effective screening and internal risk control, and those projects that exceed our valuation psychological price will not vote at all.

There are two ways: first, through communication with entrepreneurs, let him know that there are other places besides money, which can help him, persuade him to lower his valuations; two, move the investment stage through our professional level, and invest in financial data which are not particularly good projects. These projects are less profitable, and many hot money is not to be voted.

If we grasp the industry trend accurately, we dare to vote. We can still avoid the risks brought by the overheated market to PE institutions.

Shao Hongxia said that the easiest time to raise funds is often the most difficult time to invest. Now the cost of investment is very high, but there are still many entrepreneurs besides the money to look at resources and see the value-added services that venture capital can provide.

In the course of investment, Da Chen does not compete with his colleagues in price war. If the psychological price can not be accepted, the enterprise may give up the project when the price is quoted.

Now venture capital should take the following two measures: first, through the intensive research of the professional fund managers to the industry, let the enterprises feel that you really have research on the industry, you can talk to them, understand them, and agree with the development of their enterprises in the future.

Two, move professionalism forward. For those early projects, the price is reasonable if we can make a firm judgement.

Tang Zhongcheng, partner of Shenzhen Tongchuang Weiye Venture Capital Co., Ltd., said: "we are trying to move ahead with the investment stage. So far, we are not short of projects, and we can bring more projects to us through our own professional efforts."