Wutong Capital Tong Weiliang: In the era of venture capital 3.0, how can entrepreneurs turn crisis into opportunity?

In the past year, "uncertainty" has become the biggest source of anxiety in the venture capital industry, and fund managers and investors have ushered in a new cycle of investment trends and risks that are challenged throughout the chain.

In this context, where will venture capital go? What are the key factors for investors to consider when making investment decisions? How can entrepreneurs recognize the laws of capital and achieve efficient financing? Recently, Tong Weiliang, founding partner of Sycamore Capital, made a guest appearance in the live broadcast room of 36Kr Venture Capital Krypton to answer the above questions one by one.

For a long time, Tong Weiliang, as a well-known early investor in China, had a very low turnover rate. Former Partner of Gobi Investments. Today, Tong Weiliang also serves as the vice chairman of Angel United Hui, and has achieved the successful exit of many projects, representing investment cases such as Heartbeat Network (02400.HK), School Treasure Online, Microcast Easy, And Change Technology.

Here's what the conversation is about:

Talk about the industry: more optimistic about hard technology, intelligent Internet

36Kr: How do you see the hot investment tracks in the next 5-10 years? What is the investment trend of VC and PE?

Tong Weiliang: From the overall macroeconomic point of view, the form of survival based on old conditions has been broken, and the new economy is moving from the application era of business model innovation to the hardcore era, from "model innovation" to "bottom innovation". China is a big manufacturing country, but the current industrial added value is relatively low, and there will be more opportunities for original innovation and domestic substitution. Therefore, the government will encourage the development of hard technology and new infrastructure, which must be the direction of special attention of capital in the next few years.

Including artificial intelligence, industrial Internet, new energy and new materials, medical health and other tracks, there are relatively hard technology content of enterprises, have a very large opportunity to list on the domestic science and technology board, ChiNext board, investors will definitely be under this track under the heavy money, the government will also fully support.

At present, the so-called traditional Internet has become an infrastructure, and there will still be a lot of innovation on such a basic platform, whether it is ToC, ToB, industry or consumption, there are still many opportunities. Although the science and technology innovation board may not accept related enterprises, but the ChiNext board, small and medium-sized board, the main board have opportunities, including U.S. stocks, Hong Kong stocks, there are many opportunities, so Internet entrepreneurs should not be so pessimistic, there are still many opportunities.

In addition, the recent so-called outlet, meta-universe, web 3, etc. is still relatively soft, opportunities will also exist, but everyone must look at the long-term perspective of entrepreneurship, may be 5 years or even longer than 10 years, do not easily chase the outlet, I suggest entrepreneurs to do what they love and are good at.

36Kr: In the 5G era, in the tide of the metaverse, how to view the development prospects of VR and AR?

Tong Weiliang: This is definitely the future development trend, and the basic facility hardware and underlying technology are worth long-term investment. The core competitiveness of AR and VR hardware enterprises is to create a high-quality immersive experience, the VR hardware parameters are very demanding, the brand side in the AR, VR hardware development at the same time, the comprehensive ability requirements of developers are also very high, some domestic hardware manufacturers face immature technology, insufficient funds and other issues, mass production is difficult.

In addition, the development of the domestic VR content ecosystem is relatively lagging behind, and there is a lack of high-quality VR content. Even if some manufacturers can mass-produce hardware, it is difficult to form large-scale shipments due to the ecology and content.

At present, VR is mainly used in C-end or games as the main application scenario, and the application of VR and AR on the ToB side is very worth doing, which can improve production efficiency. For the consumption level of the C-end, it needs to see when Apple and Google really launch AR or VR smart hardware products, and the Market on the ToC side will really explode.

36Kr: The cycle of high valuations in the SaaS industry is fading, and the recent decline in SaaS companies listed in the United States and Hong Kong has been relatively large, will it still be a downward trend in the future?

Tong Weiliang: No, this decline is only staged. SaaS is a relatively mature industry in the United States, and it is still vigorous and constantly developing upwards. In the next 5 to 10 years, China's SaaS market will surely develop rapidly, and there are two main reasons why the current development is not fast enough.

First, the awareness of payment is not strong. China's real reform and opening up to now is only thirty or forty years, such a short period of time through the United States one hundred and fifty years of stage, for private small and medium-sized enterprises, many information infrastructure is not perfect, small and medium-sized enterprises for internal efficiency and pay, the willingness to pay for IT is actually not high, enterprises to pay for software Awareness is relatively weak.

Second, the update iteration rate of China's small and medium-sized enterprises is too fast. Information asymmetry, excessive dispersion of supply and demand, and inability to scale quickly are the three mountains that hinder the large-scale development of China's enterprise service track. If the enterprise service entrepreneur wants to do the small and medium-sized enterprise market, the cost of customer acquisition must not be too high. If the cost of customer acquisition is very high, it is recommended to do medium-sized customers or large customers, even if there is a part of the customization is no problem, customized into a modular service, the way and method of doing in the past need some adjustments.

36Kr: At this stage, which tracks are you more focused on?

Tong Weiliang: Overall, the wave of policy, market and technology-driven intelligence is the biggest technological dividend of the new wave, profoundly transforming the relationship between supply and demand and reshaping the future of the industry. In terms of investment track selection, we are currently re-enlisting in hard technology smart Internet (AIoT).

The new infrastructure will support the prosperity and development of China's economy and society in the next 20 years, of which the wave of intelligent Internet has brought systematic investment opportunities for intelligent and industrial transformation and upgrading with a strong technical foundation, and will be the biggest industrial change opportunity in the next era after the mobile Internet, the core of which is the "smart + networking" two-wheel drive of the new generation of Internet.

The evolution and replacement of smart products, the upgrading of industrial intelligence and the production end of the Internet of Things, are the investment directions we are currently focusing on. The industrial Internet, industrial brain and robot are the three major elements that we are relatively concerned about in industrial intelligence, including the production end, the product end, and the circulation end.

At present, we have invested in many enterprises in the field of industrial Internet in the supply chain of automobiles, industry, new energy, etc., hoping to form an industrial alliance, and finally use the ability of similar industrial Internet supply chains to cover hundreds of thousands of upstream and downstream enterprises from upstream manufacturing to circulation, and help enterprises in the direction of industrial manufacturing and industrial intelligence to open up the entire industrial chain. We hope to embark on a new journey with industrial intelligence entrepreneurs.

Talk about investment: pay more attention to "time and place"

36Kr: What are the key elements you consider when making important investment decisions?

Tong Weiliang: First, the time of day, that is, the market space. First of all, a start-up company often chooses a market with large user scale, high frequency of use, and is not easy to be replaced. For example, we suggest that hard technology companies in toB can see a market size of more than 10 billion yuan at least in the next three or five years.

In addition, the time of day should also depend on the time of entry, and do not want to enter a red sea or pure blue ocean. Because we are relatively likely to invest in the VC level or the early angel to the B round stage, and we are not willing to compete head-on with the existing industry giants on the main battlefield.

Second, geographical advantage, that is, relying on unique resources to form the core competitiveness of enterprises. We hope that what the team is doing so far can have a good match with the team's past experience accumulation, and have its own very distinct and unique advantages and strengths. In addition, if the team has some special resource endowments, it will be a plus.

Third, people, that is, to unify team beliefs and form teams with rich experience. Investing is always investing. No matter what stage of entrepreneurship, from the perspective of investors, people are always the most important. We hope that the core members of the team can complement each other's abilities, personalities, and comprehensive experience. If you decide the direction, you must do it quickly, not only to have strategic ability, but also to be very strong in execution ability.

36Kr: What's the secret to your ability to keep such a high investment hit rate?

Tong Weiliang: We insist on industry research as the first booster of investment, and form a research framework of "industry background + industrial chain overview + industry drive + future trend". Every quarter, each of our colleagues at the investment end has to preside over the industry research meeting, from the major track, subdivision track to competitors, including upstream and downstream to study, each track to see at least 20-30 projects, and finally select a real high-quality company to invest. It is better to miss than to make a mistake.

In addition, the comprehensive judgment of people is very important, and our interview communication with the founders, the entire partner team, as well as middle and senior executives, and even the company's customers is also relatively dense. If we know entrepreneurs very well, we can help founders mobilize more resources and walk longer with entrepreneurs.

We have always taken a steady and prudent decision-making route, will not blindly pursue short-term market hotspots, do not chase the wind, do not chase high, do not do evil. We take professionalism as the foundation of ourselves, have a reverence for venture capital, do not blindly chase unicorns, and expect the project to have three major characteristics: high moat, clear competitiveness, and cash flow guarantee.

36Kr: How can I quickly find high-quality targets?

Tong Weiliang: The degree of effort is the foundation. When we look at a project and an industry, we basically hope to talk about all the projects in this vertical industry, talk about the competitors, and then the upstream and downstream of the industrial chain will also talk about it, and after talking, they will often become experts in the industry, and then they can get to know a lot of experts in the industry, and from these masters, they will often dig into the underwater projects of the industry - low valuation, strong team, and high-quality targets that are not seen by everyone, which is very ideal. Therefore, deep and extensive communication is important.

Talk about entrepreneurship: more optimistic about the "golden triangle" type team

36Kr: Many entrepreneurs are trapped in financing difficulties, do not know how to deal with capital, how to improve financing capabilities? What are the know-hows of financing and the risks and pitfalls that deserve attention?

Tong Weiliang: Don't wait until the time when the funds are tight to raise funds, the business development of the enterprise is better, and the financing should be raised as soon as possible when it can be financed. Entrepreneurship from the micro to see the value of what they do in the subdivision industry, from the macro to see the development of the industry, and then to see the trend of the economy, and finally to see the trend of policy.

At the same time, we must learn to consider problems from the perspective of investors. This requires making friends with some investors, communicating more, reading and learning through various channels such as the media, and understanding the investment institutions of other financing companies in the track where they are located, as well as the investment institutions that have invested in this industry at different stages.

Sort out the BP, pull a list of about 20 interested investment institutions, prioritize the institutions that are willing to lead the investment, and then basically talk about the general terms, and then make more follow-up arrangements with those so-called institutions that follow the investment.

Be careful not to be fooled by the Term Sheet. Sometimes some foundations in the market use the Term Sheet as a tool to grab the project, first sign the Term Sheet with the financing enterprise, in order to lock the enterprise is not allowed to negotiate investment matters with other investment companies, but they also delay in confirming the investment, and finally can not be solved. Therefore, entrepreneurs should be cautious in their evaluation and find some relatively reliable investment institutions.

36Kr: What type of entrepreneurial team are you more optimistic about?

Tong Weiliang: I prefer the "Golden Triangle" entrepreneurial team. For example, the CEO is product-first and product-driven; the CTO is responsible for back-office technology; and the CMO is responsible for marketing operations. In any era, the most lacking thing is often a good product manager who can gain insight into users, and the CEO of the company should at least have an important product manager role. I hope that this person has a very deep understanding of users and makes products that can meet user needs. In addition, the team is also very important, to find excellent talents to make up for their shortcomings.

36Kr: What capabilities do entrepreneurs need most?

Tong Weiliang: I prefer the "three teams" of entrepreneurship, that is, there are ideals, abilities and executions. Amazon CEO Jeff. Bezos has a saying that I particularly like, "Kindness is harder than intelligence, choice is more important than talent, follow your own inner passion." "I think that entrepreneurship is still to do what you like, and the idealism of a greater probability can offset all kinds of tribulations and setbacks with a high probability and reach the perfection of the self." Because the outlet will continue to change, if there is no enthusiasm, can not persist, the probability of success of entrepreneurship is very low.

For start-ups, product capabilities are more important in the early stage, and then marketing or operational capabilities are valued, and then at a certain stage, financing capabilities and management capabilities are becoming more and more important. At different stages, the requirements for the ability of entrepreneurs are different. Among them, I personally value three aspects of ability, one is the ability to learn, and different problems can be solved at different stages. The second is organizational ability, the ability to find and introduce outstanding talents. The third is execution, which can really land ideas, quick execution, rapid trial and error, and rapid feedback. Entrepreneurs need to keep learning to evolve.

36Kr launched financing to accelerate recruitment, looking for 30 companies to deeply empower and accompany the run. After this live broadcast, Tong Weiliang will join the "Financing Acceleration Camp" of 36Kr Venture Capital Krypton, and work with many big coffee mentors to help entrepreneurs establish capital thinking, strengthen financing capabilities, and open up financing resources. Work with entrepreneurs to complete the counter-trend crossing of the economic downturn cycle.

Recruit the most promising high-quality projects to join with entrepreneurs, grow together, and evolve together.

Scan the code to register for the financing acceleration camp