Leading Chinese venture firm Haiyin Capital has partnered with the National Council of Entrepreneurial Tech Transfer (NCET2) to launch a fund for spinoffs from American universities. The American-Chinese University Growth Fund will provide at least $1 billion from Chinese VCs to American university startups over the next 10 years.
The fund will focus on start-ups emerging from the NCET2 University Startups Demo Day, in which U.S. universities submit their top federally funded start-ups. The judges of the event select the 40 most promising companies, and it is these that will receive support from the new American-Chinese fund, alongside U.S. venture capital firms.
“China has over three trillion dollars in foreign reserves resulting from decades-old trade imbalances, and we would like to get some of that money back to fund the commercialization of federally funded university research and to create jobs in the U.S.,” says NCET2 executive director Tony Stanco. “Partnering with Haiyin Capital to systematically syndicate the venture capital deals in China allows us to do just that,” he adds.
“With appropriate technology safeguards,” Stanco says, “this joint venture is a tremendous win-win situation where Chinese investors can invest in America’s high-performing innovation economy for financial returns, and American university-based start-ups receive much needed gap funding to commercialize research and create American jobs.”
NCET2 will work closely with Congress, the White House, the Department of Defense and the Committee on Foreign Investments in the U.S. (CFIUS) to ensure that the investments are strictly for financial returns and to protect U.S. technologies and assets. According to Stanco, individual universities and start-ups aren’t well equipped to assess these kinds of international deals.
“Providing a review pathway through a vehicle like the American-Chinese University Growth Fund is very important to ensure that national strategic interests are protected, while at the same time giving the universities and start-ups the peace of mind that the transactions are safe.”
Haiyin has invested in more than a dozen American tech companies, most of which were spun out of universities. Yuquan Wang, a founding partner at Haiyin, says the reason is that tech entrepreneurship is much more advanced and widespread in the U.S. than in China.
“As a private investment fund getting money from institutional investors and private business sectors in China, Haiyin Capital believes that our investments in U.S. high-tech start-ups by partnering with NCET2 will bring consistently high returns to our investors, and should at the same time help the U.S. start-ups become successful,” Wang says.
Source: Digital Journal