Friday, August 17, 2007
Ka-ching for Beijing
posted by Andy Leff 
China's maturing Web 2.0 industry is also an emerging VC hotbed, thanks to investors' desire to monetize growing Chinese social networks, blogs, wikis, and other Web 2.0 companies.
In fact, venture capitalists invested a whopping $200 million in growing Internet and information services firms in China during the second quarter, according to Forbes' new Acceleration: Global Venture Capital Insights Report 2007. That's *double* the amount China saw in the first quarter.
Further proof of the industry's maturation in China: Google's recent partnership with Sina, one of China's biggest Internet portals. Sina now uses Google China's search and advertising services on its portal.
Note, however, that companies receiving funding are in advanced stages of development. Many VCs burned by the dotcom burst now wait until later rounds to invest in companies, when there's greater certainty the company is financially stable and will do well in the market.
And as the Forbes report shows, VCs are investing in companies around the globe, looking for the safest and most promising returns, whether they be in China, India, or elsewhere.
So with so much VC attention on China, will American Web 2.0 companies face increased competition to secure VC dollars? Not if they take the right steps to promote their business plan.
The most important thing is to show VCs that your business is solid. Provide a clear report of your target markets and customers, marketing plans, and budget. Also show your product development road map with reasonable milestones and strategies for meeting them.
And don't forget the competition. Provide an overview of your competitive landscape, where you fall within it, and your plans to rise above competitors. Together, this information creates a comprehensive sales pitch to VCs, and helps secure the dollars you need to support and grow your business.
In fact, venture capitalists invested a whopping $200 million in growing Internet and information services firms in China during the second quarter, according to Forbes' new Acceleration: Global Venture Capital Insights Report 2007. That's *double* the amount China saw in the first quarter.
Further proof of the industry's maturation in China: Google's recent partnership with Sina, one of China's biggest Internet portals. Sina now uses Google China's search and advertising services on its portal.
Note, however, that companies receiving funding are in advanced stages of development. Many VCs burned by the dotcom burst now wait until later rounds to invest in companies, when there's greater certainty the company is financially stable and will do well in the market.
And as the Forbes report shows, VCs are investing in companies around the globe, looking for the safest and most promising returns, whether they be in China, India, or elsewhere.
So with so much VC attention on China, will American Web 2.0 companies face increased competition to secure VC dollars? Not if they take the right steps to promote their business plan.
The most important thing is to show VCs that your business is solid. Provide a clear report of your target markets and customers, marketing plans, and budget. Also show your product development road map with reasonable milestones and strategies for meeting them.
And don't forget the competition. Provide an overview of your competitive landscape, where you fall within it, and your plans to rise above competitors. Together, this information creates a comprehensive sales pitch to VCs, and helps secure the dollars you need to support and grow your business.
Labels: China, Forbes, VC, Web 2.0
