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writing | Wang Lin, Zhai Yuanyuan, Xi Rui
Source: Tech Planet (ID: tech618)
After two months of unemployment, Zhai Yuan finally decided to become a delivery rider like 170000 undergraduate students and 60000 graduate students.
He used to work for a waist investment agency, mainly watching Internet tracks. Two months ago, his team was "completely destroyed". The company was kind enough to give them "N+1" compensation.
Instead of giving himself a break, he kept on looking for a job. "Even big factories have reduced HC (staffing), and investment institutions must not have the money of big factories to support idle people", Zhai Yuan explained that he was so anxious to find a job.
Investors are naturally alert to risks, but Zhai Yuan did not expect that it would be so difficult - he sent resumes to almost all investment institutions that are still hiring, but did not receive a reply; He thought about not working as a business analyst in a big factory, but there was no "pit" in a big factory; Or go back to his hometown to take the civil servant exam, but when he thought about the income of civil servants, he gave up.
"I can do nothing but invest," he told Tech Planet disappointedly.
Investors used to be an envious industry. The post-90s and post-95s who just entered the industry have not yet taken off their childishness, but talk about hundreds of millions of projects. In sharp contrast, most new investors, like ordinary migrant workers, have a base salary of 12000-15000, live in rental houses and eat rice with yellow stewed chicken. If they can't invest in projects, they may be passed at any time.
The experience of TikTok CEO Zhou receiving capital is a dream career path for all investment managers. He hit Xiaomi in DST, went to Xiaomi as CFO, and then jumped to TikTok.
But now, the "low fruit" of the Internet has almost been picked up, and the once booming consumer industry is cooling down. More and more investors have found that it is unrealistic to want to repeat the myth of weekly funding.
There are fewer good projects, and LP (limited partner investor)'s wallet has shrunk. The era of four or five projects a month is gone forever. Most investment managers now face the reality that they can't complete one project in one year.
The investor even lost his job
The wind of layoffs from Internet companies has swept into the venture capital circle.
A few days ago, the post-95 consumer investors left Shanshan from an investment institution, which was an involuntary choice. The company assigns the number of layoffs from top to bottom. The investment team with more than 30 people needs to reduce 7-8 people, and his M&A team is eliminated directly.
The immediate leaders were also worried about their unemployment, so they provided several people with alternative plans, such as going to the company they invested in to do post investment work. However, the condition is that the salary and treatment will be reduced by two-thirds, and the company needs to move from Beijing to the second tier city where the investment company is located.
Accepting the harsh conditions of disguised layoffs and "staying alive", Xiang Shan resigned directly, and struggled with Xiang Shan for nearly half a month. During this period, he called his different friends every day, and his friends advised him that it was important to keep his job first because of the bad environment.
For half a month, Xiang Shan still went to work in the company every day. He was still in the same office with his former colleagues, but he no longer had the right to discuss projects. The frustration and gap were unprecedented. Finally, Xiang Shan failed to convince himself to learn to compromise. After struggling for half a month, Xiang Shan finally decided to quit.
People usually cherish their first job very much. Even if they leave, they have imagined countless occasions of leaving with a sense of ceremony, saying goodbye to each colleague. However, the resignation came quickly and violently, and Xiang Shan didn't have time to greet anyone.
Not only Xiang Shan. Hong Hao's team just experienced indiscriminate layoffs last year, "some of our staff below the investment director were all laid off". Hong Hao works for a trust fund, and his group mainly focuses on the primary market: Internet+technology.
The scale of funds managed by the company is very large, so Yu Honghao appointed another investment manager to exchange business, and the other party always concluded that "you must be a local tyrant company".
Investment managers almost never thought that one day they would be laid off. Unlike large factories, which support 100000 or more people, investment institutions are more like a "sophisticated" team, and few people earn enough money. Layoffs are rarely seen in the investment industry.
This makes the investment managers who are born with keen sense of risk realize that the situation may not be good. As a result, after losing their jobs, Xiang Shan and Hong Hao began to deliver resumes and communicate with headhunters every day, forming muscle memories.
In half a month, Xiang Shan talked about more than 20 headhunters. The headhunter's feedback is that there are almost no "holes" in investment posts in the consumption field. It is extremely difficult for consumer investors to switch to technology when switching to the track. The latter has a certain technical threshold.
Hong Hao's situation is not very optimistic. As an investment manager, his achievements are not bad. He guarantees at least one project every year, but his resume has been submitted to almost all institutions related to him, but most of them are not hiring.
Hong Hao and Xiang Shan realized that the best time might have really passed.
Hot ten years: see more than a dozen entrepreneurs a week, and invest in three or four projects in January
The past decade has witnessed the vigorous development of the Internet in China and the booming investment industry in China.
The list of shareholders of early generation super Internet companies such as Alibaba, Tencent and Baidu is dominated by overseas institutions, and there are not many local institutions, while the list of shareholders of companies such as Byte Beat, Fasthand, Didi, Pinduoduo and Xiaomi all have at least one local first tier fund.
After 2014, VC/PE firms increased sharply.
According to the statistics of CVSource investment data terminal, 796 funds were disclosed to be raised or established from January to November 2015, with a total target raising scale of US $162.606 billion, reaching the peak in recent years; From January to November 2015, a total of 1055 funds were disclosed, and the disclosed amount of funds raised was 47.295 billion US dollars. From January to November 2015, 2506 cases were disclosed in the domestic venture capital market. In 2013, the number was 1335.
The market seems to have endless hot money. It only takes one and a half months at most for a small and medium-sized institutional investor to raise a fund of 200 million yuan.
Talents always flow in the direction of money. It is said in the industry that the number of investors in China's primary market reached 200000 in 2017. An institutional partner described the situation at that time with "crazy shopping". When exaggerated, three or four projects could be invested in a month.
This boom will last until 2020. It's just that the Internet investment boom has shifted to the consumption field.
Song Qing, an investor of an investment institution, told Tech Planet that in 2020, when the projects are concentrated, he needs to meet a dozen entrepreneurs a week. Every day from morning to night, in addition to talking with the project staff, we also need to do internal reports, and communicate with peers and FA (financial consultants).
In the outside world, investors represent the cognitive ceiling of the industry. They can predict the development trend in the next 3-5 years or even 10 years in advance. With a large amount of money in hand, he is in charge of the power of life and death of startup companies. Their personal wealth accumulation speed is also very fast. They not only receive higher salaries than their peers, but also can get rich dividends (investment award+follow-up award) by virtue of their investment projects at the end of each year.
More importantly, after the project exits, the investment institution will give a part of the income to the executive team, which is Carry.
The investors who hit the dividend of the times accumulated their personal wealth crazily. If you are discerning, you can create hundreds of millions of wealth through an investment target. It is reported that the quick investor, Carry alone, has received 100 million yuan. The consensus in the investment circle is that the VC wants to make money, and what he earns is Carry.
The accumulation of investors' personal wealth is strongly tied to the ratio of good cases. Most investment managers generally only need one year to invest in one project. Last year, Song Qing invested in two projects. The maximum annual bonus of his organization is 12 months' salary. Song Qing received 7-8 months' annual bonus.
Zhai Yuan told Tech Planet that the income of an investment manager consists of a base salary and an investment award. The base salary can basically meet the daily expenses, and the investment award is the big head. If he is the main person in charge of a project, he can get half or even 70% of the bonus, about 100000 yuan. This means that if four projects are invested in a month, and each prize is 100000 yuan, the prize will be 400000 yuan, and the return can be described as rich. That's not Carry.
As for the accumulation of investors' personal wealth, Song Qing believed that the highest financial return period was from 2020 to 2021, when the source of records and project quality were also the best. Two or three rounds of financing for a project, investors would have a high income by virtue of one project.
The investment logic has changed, and one project cannot be invested in half a year
In the past decade, China's local investment market has followed a common logic: as long as it grows crazily and gets into the first echelon, there will be a steady stream of financing to continue its life. Expansion is their priority, not profit.
But now, the investment logic has changed. In the second half of last year, investors began to mention that "we should maintain the company's ability to generate blood", that is, we should make profits from the invested companies. The requirements for profitability of the company become higher, and the track is more cautious.
In the past, investors believed that only those categories with a market scale of more than 10 billion yuan had the opportunity to grow into large companies. But now everyone's thinking is that large category means fierce competition, and "you must have strong logic to support whether to make a move". Of course, the more important requirement is profit.
Song Qingmingxian, as a front-line investment manager, felt that his work had become idle. Now he only needs to meet four or five entrepreneurs every week, and the workload is directly halved.
But he did not dare to slow down. The news that a head organization, which accounts for half of China's venture capital industry, has cut down its consumption group and optimized TMT has frightened every front-line investment manager.
During the Shanghai epidemic, Song Qing was forced to work at home, and he was anxious every day. There is no way to travel, interview and research, but we still need to find new projects to stabilize the boss's mood. The general direction of the peers in the venture capital circle has turned to the universe and Web3. Although their organization has declared that it is firmly optimistic about the consumer track, the boss has reassured several investors who watch the consumer track, saying that they will not lay off workers or remove the consumer group, and will not move to look at consumption. But everyone's heart is not unshaken.
The Internet and the consumer track, which used to be a big fire, are now facing the reality that they can neither push cases nor find good cases.
Half of this year, the Song and Qing dynasties have not launched any projects so far. Now he has no expectation for the year-end bonus, and thinks it would be good if the whole organization could invest 1-2 projects. An investor who focuses on the direction of autonomous driving told Tech Planet that now he basically lives on his monthly base salary.
The market has cooled down. Shanghai Venture Capital Guidance Fund released a set of data at the end of May. Among its investment GPs, 47% of institutions' fundraising progress met expectations, and 53% of institutions' fundraising progress was affected by the epidemic to varying degrees, more or less reducing the target fundraising amount.
Raising money has become extremely difficult. An institutional partner told Tech Planet that VC had communicated with LP very early, and many of them had signed agreements but had not yet made payments. At this time, it is very easy to have a fork in the market. The whole market is not working, and many LPs will tear up their agreements and stop making payments.
An investor said that many US dollar investment institutions were divested by LP, which was equivalent to no bullets directly. The situation was very tragic. LP is willing to pay according to the agreement, and there are almost no projects that can be handled by the organization.
A second tier institutional partner said that, unlike last year, institutional investment projects are not as easy as last year's, and projects that can be invested or not will be looked at again last year, but will not be looked at at all this year. The organization is rational, and the project is also rational.
There are fewer projects and less bonuses, and investment managers have begun to downgrade consumption. Zhai Yuan told Tech Planet that he used to order large cups at Starbucks, then canned coffee from Nestle, and then instant coffee. I used to buy socks from Adidas and Nike, but now I have to buy 9.9 packages for Pinduo. I used to buy CK for shorts, but I don't pursue brands anymore.
All of this sends out a signal: there are not so many projects and money, and investment institutions no longer need so many investors.
A partner of a second tier organization told Tech Planet that we did not recruit this year. Maybe other companies are like this. Because the impact of the epidemic is really too big, it is very difficult to raise funds now, so there is almost no money. How can we recruit?
Where is the way out for VC investors: turn to FA and start their own businesses?
Many investors and investment institutions began to find a way out.
Some investors have become knowledge bloggers on the video number. They mainly provide entrepreneurs with business management consulting and coaching, with the cost ranging from 20000/year to 100000/year.
Liu Min used to be a partner of a small investment institution, but now she is a partner of a cross-border e-commerce company. She is optimistic about the Southeast Asian market. The reason is that since there are no good projects to invest in, it is better to start your own business when you see the right ones.
Liu Min occasionally watches some projects. She works in FA. "Now, except for the big fund, it's hard for us to raise money. We'd better be steady and live first."
But FA is not an easy job.
According to CVSource investment data, in the first quarter of 2022, the average value of investment transactions in China's VC/PE market dropped precipitously to only US $27.3173 million, a quarter on quarter drop of 25% and a year-on-year drop of 22%. In May 2022, there were 393 investment cases and the investment scale was 6.303 billion US dollars. After the year, under the repeated impact of the domestic epidemic, the investment market continued to sink, and the investment scale in this period fell to the freezing point, less than 10 billion US dollars.
If VC doesn't invest, FA will naturally get no share.
A former FA in the consumer industry has been reducing his work in the direction of FA since last year. Most of his time, he participated in an entrepreneurial project unrelated to consumption, focusing on enterprise services.
The transformation of consumer investors is difficult, and Xiang Shan is worried that it will not be possible. In terms of skills, he believes that investor interview and research is a relatively weak ability and has no skills. "The end of the universe is the civil servant exam" has become the industry consensus. He is wondering whether to take the civil servant exam. "After all, civil servants will not lose their jobs."
When he left, Xiang Shan set himself half a month to look for a job. But now, he feels too optimistic and decides to extend his time to look for a job.
Investment is inherently a risk game, and they are the best catchers in the wind. This year, most investors began to change their careers, from consumption and the Internet to technology, metauniverse and Web3.
An investor said that the current investment is really terrible, only to see the expansion of Web3. In the new cycle of controlling inflation, the best thing is to stay still. There is a threshold in any field, but investment is to learn, but the biggest threshold for the investment industry is to raise funds. Now it is really difficult to raise funds.
But technology, the metauniverse and Web3 are not as bright as expected. A FA told Tech Planet that he had recommended the project of Meta Universe to a well-known institutional partner last year, but the other party's answer was, "There are too many projects and too much chaos. We won't do it for the time being".
No action means no mistakes, and it also means that the daily expenses of investment institutions can be minimized, because investment managers do not have to fly around every day to do interviews and due diligence.
"If you can lie flat, lie flat" is the most true aspiration of most investors.
(Note: Zhai Yuan, Xiang Shan, Song Qing and Hong Hao are pseudonyms.)
(Statement: This article only represents the author's view, not Sina.com's position.)
