The THREAT to Silicon Valley's Tech Dominance: Chinese Venture Capital

"The rise of China's venture market "signifies a shift from a single-epicenter view of the world to a duopoly"

Silicon Valley, the "king" of venture capital is facing growing competition from its Chinese counterpart. Here is an interesting WSJ article that provides a profile of the industry:

A decade ago, nearly three-quarters of the world's financing of innovative, tech-heavy startups and young companies took place in the U.S., with American investors plowing money into mostly U.S.-based venture firms.

Now, a surge of new money-mostly from China-has helped drive funding totals into the stratosphere and has transformed the venture landscape, according to an exclusive Wall Street Journal analysis of venture funding data.

Asian investors directed nearly as much money into startups last year as American investors did-40% of the record $154 billion in global venture financing versus 44%, the Journal's analysis of data from private markets data tracker Dow Jones VentureSource found. Asia's share is up from less than 5% just 10 years ago.

That tidal wave of cash into promising young firms could herald a shift in who controls the world's technological innovation and its economic fruits, from artificial intelligence to self-driving cars.

Controlling innovation comes down to investments in emerging technologies. While US venture capital has largely been focused on producing high returns, China's main focus is on strategic investments that can compete with US innovation. With the growing rate of Chinese investment, Silicon Valley's tech dominance may soon come to an end.

Can you see China overtaking Silicon Valley as the king of VC?

Where will the VC market go from here?

Any other thoughts?

Comments (2)

Best Response
Apr 16, 2018 - 5:03am
Winnfield, what's your opinion? Comment below:

This kind of stuff sounds really impressive but pretty much never works.

Quick example: people don't really remember, but around 10 years ago or so, Sovereign Wealth Funds (SWFs), primarily coming out of the Gulf states, were considered de-stabilizing, strategic investors who would snap up these high intellectual-property assets while the West was deleveraging or buying houses for losers.

No one's talking about them now.

Foregoing market discipline rarely makes for good investments.

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.
  • 2
Aug 14, 2018 - 2:12pm
earthwalker7, what's your opinion? Comment below:

Dolor incidunt voluptatibus in distinctio. Minima commodi assumenda fuga. Libero accusamus at natus a sint repudiandae officia. Fugiat nemo enim consectetur.

Start Discussion

Career Advancement Opportunities

July 2022 Investment Banking

  • Jefferies & Company (▲03) 99.6%
  • Lincoln International (= =) 99.2%
  • RBC Capital Markets (▲07) 98.8%
  • Bank of America Merrill Lynch (▲01) 98.4%
  • Houlihan Lokey (▲06) 98.0%

Overall Employee Satisfaction

July 2022 Investment Banking

  • Lincoln International (▲06) 99.6%
  • Jefferies & Company (▲11) 99.2%
  • Greenhill (▲07) 98.8%
  • Rothschild (▲01) 98.4%
  • Evercore (▽01) 98.0%

Professional Growth Opportunities

July 2022 Investment Banking

  • Jefferies & Company (▲04) 99.6%
  • Lincoln International (▲04) 99.2%
  • RBC Capital Markets (▲09) 98.8%
  • Houlihan Lokey (▲07) 98.4%
  • Bank of America Merrill Lynch (▲04) 98.0%

Total Avg Compensation

July 2022 Investment Banking

  • Director/MD (9) $661
  • Vice President (37) $394
  • Associates (191) $246
  • 2nd Year Analyst (117) $162
  • 3rd+ Year Analyst (17) $156
  • 1st Year Analyst (369) $150
  • Intern/Summer Associate (78) $147
  • Intern/Summer Analyst (292) $92