The valuation of domestic startup companies also faces a sharp drop in the blind pursuit of high valuations.

Earlier, investors were too unwilling to say that the venture capital was overheated and the valuation was too high. One is who has no financing projects on hand, and the other is the Dora entrepreneur. The hatred, "VC certainly hopes that the valuation will fall." Whoever wants to say a few words publicly, the reaction around is quite a bit "I respect you as a man". Nowadays, in addition to talking about the hot spots in the industry trend, the “bubble” has become the “talk” of investors at home and abroad.

The enthusiasm for entrepreneurship in the past two years has pushed people's expectations for market growth, magnified the ability of the Internet to solve practical problems, and easily expanded the "burning money" expansion of startups with large investments. Many unprofessional investment institutions and investors surged. Entering the market, jointly "created" one after another valuation myth. As the revenue slows down and the losses increase, the market is also gearing up for valuation, and intends to rethink.

Although the bubble is global, it is clear that the US agency has taken a step forward in the callback valuation. According to CB Insights, the venture capital company CB Insights, the "Unicorn Age Casualty System Real-Time Update System" shows that as of March this year, 64 companies (from 2015) have been downgraded by failing to meet their performance expectations. And this does not include Air B&B, Drop Box, Uber, Ever-note, Snapchat, Dropbox, Zenefits and other star companies. And this wave of trends will soon spread back to China's venture capital market.

A recent article in the Economic Observer reported about several changes that are taking place in the Chinese venture capital market:

Change 1: "The investment rate of mainstream early-stage investment institutions has slowed down."

According to the data, as of the end of June, there were 24 projects invested by Sequoia Capital China Fund this year. In contrast, Sequoia China had 40 investment projects in the same period last year. IDG Capital has 24 investment projects this year, compared with 63 in the same period last year. In the past two years, there have been no more than 20 projects invested by Safran every year, and there have been 9 investment projects this year. ”

Change 2: The scale of fundraising for angel investment institutions is shrinking, and the pace of investment is slowing down.

According to the public data of Zero2IPO, in the first quarter of 2016, China Angel Investment Agency established a total of 19 funds, of which nearly 1.85 billion yuan was raised, and the number of funds decreased by 38.7%. The amount of funds raised was reduced by 45.2% year-on-year, and the pace of the project was significantly slowed down. On the other hand, although the number of angel investments has decreased, the size of a single investment has increased. In the first quarter of 2016, China’s angel investment institutions invested 353, a year-on-year decrease of 32.1%. The disclosed amount exceeded RMB 2.236 billion, a year-on-year increase of 7.8%.

Change 3: The number of VC fundraising in the first quarter of 16 years decreased year-on-year, but the average fundraising amount increased significantly

The average fund raised by a single fund reached 630 million yuan, up 85.5% year-on-year, 2.3 times the average fundraising scale of the fund in the fourth quarter of 2015. In the first quarter of 2016, the number of funds raised by Chinese and foreign venture capital institutions to invest in mainland China decreased by 35.6% year-on-year and 43.5% quarter-on-quarter. However, the newly-raised funds of the fundraising scale can increase the capital invested in mainland China by 15.2% year-on-year and 30.9% quarter-on-quarter.

Change 4: More and more foundations in the professional industry

The valuation fell, but according to Mark Suster, a well-known high-income investor on bothsides, “Most investors don’t want it. Even if it’s not what you think.” In the long run, “They want the company’s Valuation is more rational, which seems to bring more returns to them.” For entrepreneurs, high valuations are not necessarily good, and once they grow less than expected, they will encounter more challenges and Dilemma. Some time ago, there was still a news that a company was smashed because the valuation was too high and the company could not find a break in the capital chain.

Jingwei’s venture capitalist Zhang Ying recently said when sharing internally:

Recently, I have seen a lot of fund bosses in the middle and late stages. Various domestic gold owners have strongly felt that the market is getting colder and financing is getting harder and harder. Whether it is a fund or a company, many people will have gold problems. Congratulations to the founders who have received at least 1.5 years of cash; if they haven't gotten together, they will try their best to speed up the price reduction and deal with it with the sole purpose of getting the money; but those companies that are still blindly optimistic, you are waiting to die.

I am here almost every few days to remind everyone, because I have seen too many failure cases, there are too many real-time data on hand, knowing which companies are now having huge cash problems, why do you have a good hand now? I will be cheeky here twice to remind everyone that they don’t mind the valuation early, and they will get financing quickly.

My team and I have continued to remind you that if the company doesn't listen and still pays attention, it will be stubborn. On the day we are desperate, I will stop all the investment and financing, and let the company fend for itself. The business environment is so cruel. The loss to us is one of the 1/330, 330 companies.

I have to admit that the world is totally different now. What investors want to know is how you break even. Don't tell me too much growth and GMV. No matter what industry, if you can handle the growth and balance, after that point, you are the winner.

Blindly optimistic, still pursuing high valuations, still smug about his own achievements, is still expanding subsidies, cash is less than 6 months, there is no fierce adjustment, financing has not been the first big thing, still imagining a huge amount of investors Support, are the symptoms of the eve of death.

Sorry, it seems that I have poured cold water, but the good medicine is not bitter~