Question

What is the motivation difference between Chinese venture capital investments and western nations venture capital investments?

Answer 1

The major objective behind venture capital investment is to invest in the early stage company and exit when the company are mature or at later stage with multiple times the investment. This is one thing that is common between venture capital funds be it from either western or Chinese. The issue comes up if they are backed by the government then things become slightly complicated because in that case those venture capital firms constantly interfere in the management of the company. This is especially true for companies which are in industries which is sensitive to nation security. Most of the venture capital firms in western countries are backed by individuals or business people or high net worth individuals so they are more concerned with increasing the return on their investment and least interreference with the management of the company but in the case of Chinese venture firms, some are backed by people who are close the central government of ruling party and they consider their country interest to be their priority along with high return potential, so anything that goes against their culture they will try to restrict it or control their organization culture.