One of the founders of “dry” tencent five have 5 years experience in vc: li qing nine companies can’t vote!

from: sina science and technology

cloud network hunting note: once li qing is one of the founders of five tencent company, this article shares his investment failure in actual combat experience, 5 years can be summed up as “nine firms cannot cast” : an inter-bank business, ability is not strong, the founder of discord, communication difficulties, distracted, shareholder structure unreasonable, blind optimism, too slow, too soon, and that is the ideal relationship between investors and entrepreneurs in the spirit of contract under good teachers and wise friends.

have the following for li qing speaking notes:

I came out from tencent for five years, probably in 2, 300 million in angel investment, investment about 50 companies, a company listed last year (rice), and a company in the market, there is a company sold $100 million sold (seventh avenue to sohu swim). In the enterprise, we are 2 million investment 100 million yuan, 2 years handed over 20 million individual income tax (laughs).

in the past five years, we come across a lot of entrepreneurs, many projects, some success, there are also some failure. I found success always have in common, failure always has a variety of reasons. We, too, in summary, what kind of companies fail, why will fail. I focus on share in summing up the experience of failure.

first, not for the business in the industry. play games such as the original person to do the electric business, the original do Internet community to play games. Now under the Internet environment, this kind of cross-industry business failure probability is higher.

may someone said there will be a problem “was always the wrong when you tencent also cross-industry business.” Yes, when we entrepreneurial Internet industry has just begun, don’t forget to tencent earliest and participate in the construction of shenzhen telecom Internet, ma in embellish newsletter is to do paging centers, CALL machine and IM are very similar, we are make communication was born.

in this industry more mature, if you make cross-industry business professional experience often not enough, so it is easy to result in failure.

second, don’t have a comprehensive quality is not high or the company core capability is not strong. investment game company, for example, your core research and development ability, one can not, this project basically, the probability of success is not high.

there is one kind is the overall quality is not high, but someone ask “why do you project for comprehensive quality is not high?” Sometimes in the case of a bubble, we head for a fever. We will find that after 3 months, we will regret it, then how can vote for the project?

last year under the condition of the investment environment of foam we voted for a number of projects, the amount of lead to close during the first half of the year the company a lot more than last year. Recently, I found that gay how all in the computer in the office, in big screen of the computer, I ask, “the boss, the above two companies closed, only the computer, the computer is doing art, large screen, have moved back to our own use.”

third, don’t throw not harmonious, easy to split the founder of the company. 2, 3, individual cooperation, the product has not come out team will make antinomy. Once there is a “partnership entrepreneurship than marriage more difficult to maintain the relationship between”, because the marriage relationship just returned home before 12 o ‘clock at night, basically is assured. Divorce is equally divided, property assets still exist.

however, if the business partner dissolved, so we threw money basically zero it, turned into a pile of computer. I am very deep understanding of IDG chief Hugo shong ten years ago (weibo) said “business fail nothing”. There was once a online game company do the general dissolved, our investment of only 4 million, 9 million, left more than 40 of the computer.

so, said the wedding can be married off and half of the assets, but a dissolution of entrepreneurial team, asset reset immediately, this is a very typical failure lesson to us.

4, college students entrepreneurship. they that have not been tube, it is not easy to go to tube. Kai-fu lee (weibo) said, “a successful CEO is supposed to be married gave birth to a child, love, marriage, talks will communicate with others. Have children, he can learn to have a sense of responsibility.”

we had one or two college students entrepreneurship, especially the talent level of college students’ entrepreneurship is bad. We had a lot of kung fu and his communication, only to find that he is hard to manager, and there is the founder of the following can be hard to recruit good, experienced people. People will think the boss just graduated, emotional intelligence has a problem to communicate with people, why should serve him?

about a project we have voted for more than four years, the current situation of company now and we invest in the basic four years ago. Although there is no death, but that’s basically it. In fact we didn’t let him close to response the government called for the “stability”, provides at least more than 20 jobs.

5, will focus on one thing. I want to be with all of the entrepreneurs say that business can concentrate to do one thing. What is a “thing”? Can only develop a game, can only make a product.

I have seen several projects, in the first game when not successfully made two, three, had his cost is not big, but made two games at the same time, the cost is large, cash burn very quickly, easily lead to company to close.

in the electricity industry, B2B and B2C business can’t do it together. Investment newsletter to a very famous failure case is Rutland custom shirts. This project then I sent for employees, it is alive, make hundreds of thousands of year. There are two pie opinion at that time in the company, it is directly to the enterprise, the second is directly to the individual, so later B2B and B2C mixed together, failed.

entrepreneurs should learn Zhou Hongyi, only do one thing, by the user to do first. Tencent, do only one thing — QQ early.

6, not arrange unreasonable stock companies. there are a lot of projects at startup shareholders arrangement is not appropriate, interests are not balanced, there is no room for other better people. When we invest in his shareholder structure has been the case, we are very painful, want to ask him to send some options also is only a little, it will be very hard to absorb good talent.

in the past few years, we have also tried to spend money to buy old shares, readjust the shareholders take oh, we bought the old shares for hundreds of thousands, millions of adjusting the structure, then without exception all failed. This is a very valuable experience, any shareholder structure is not appropriate, we don’t vote.

7, entrepreneurs blindly optimistic or very closed, not very willing to communicate with investors prone to failure. is a beginner, planning the games he does about what time can finish, then he will think that this is certainly no problem. We communicate with him, he is not willing to communicate with us. After a period of time when we came to see him again, this project has been running out of cash flow.

there is a more fun, we had just finished for him, after four months, has spent half of 2 million, he launched four iOS game team at the same time, he only do one thing, to do is to have a chance to slowly. And then his own very confident of say: “I’m sure the first game can make money”, then failed, to the second paragraph or so, the last didn’t do it. So said it’s the first step is to put their cash flow to protect good, don’t blindly optimistic.

8, too slow result in failure. Before the , there is a client company we threw it two years ago, had planned to 9 months to do the game, and while the page was not so fire, swim and likely to be successful. But he delayed the time, until a year later, come out products. Great changes have taken place in the market, swim side basically no chance. I mean the end of tourism is relatively low investment rate of 2 d end, now only tencent this rich man dare to take 50 million to 100 million to do 3 d end have a chance, a small company has no chance.

all fighting skill only fast break, if you are planning for a long time, in a constantly changing market environment, and when you first entered the market of ideas are not the same.

9, learn to hide themselves. Founder there are some companies, especially very like high-profile exposure in the media, to attract new competitors and giant into, the company will often fail miserably. For a case, the rice business, we won’t tell others hai-bin wang to the people around (taomee founder) doing, only he do in quietly. Do more than a year, until the market other companies know that, with competitors before chasing too late.

if you haven’t started to do is make public, such as “sing” I know, is often not successful. You may suddenly flood in, tencent QQ music change put you down. Business must be very low-key to enter the market, not market success, don’t be too high. Do investors can be very high, because we want to attract entrepreneurs to make us money, but entrepreneurs can’t be too high, must be required to do your business, until forced to exposure.

because today there are a lot of entrepreneurs, I’d like to speak a little the relationship between investors and entrepreneurs.

first, as the entrepreneurs, we need to speak “contract spirit”. we vote today you accounted for 10% of the shares, accounting for 20% of your shares, accounting for 40% of your shares, as long as you at that time, the moment is willing to, we both sides is fair, not after a period of time, come to think of it, said “oh you share me more than a 30% stake in the”? Will not be able to have such idea.

second, entrepreneurs must have the passion, also should have the fear of the professional managers. in a company, you are the entrepreneur is a CEO, the CEO is to work for the board of directors, for shareholders, so you want to have the fear of the professional managers, to know that you are responsible to the board.

third, qualified investors are entrepreneurs to mentor, goes the “dripping of grace when yongquan”, besides, we also don’t know you don’t the “spring” chung chung, we also don’t know.

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