Text丨Cao Weiyu

Source丨ChinaVoice

Another secret battle between VC/PE has started, this time on fundraising. A few days ago, I chatted with a friend who is in charge of RMB IR of a domestic first-line fund. The other party said that since the beginning of the year, conservatively counting, there have been at least 50 institutions trying to "poach corners".

"From yesterday to today, I have received three headhunting calls."

This number is a bit staggering. If you think about it, you will understand. Isn't this almost equivalent to the number of active institutions in China?

I turned to my headhunter friends for advice, but they were not surprised. A headhunter said that since the second half of last year, the demand for RMB IRs has started to increase, and excellent RMB IRs are very scarce. "If you take a list of institutions and refer to 10 GPs, at least half of them have recruitment needs for RMB IRs."

He took out a list, which densely listed nearly 20 IR positions. The demand came from RMB, dual-currency and USD funds. Up to the manager.

"It was rare for a headhunter to receive 20+ IR job demands at the same time, and being responsible for 20 jobs at the same time is almost the limit of a senior headhunter."

Talking about this, I recalled that the IR who had been poached 50 times kept sighing "Catch up".

What has the RMB fundraising market caught up with? What happened to the VC/PE market?

Insurance capital IR has become the "new favorite"

In the domestic market, VC/PE The RMB IR is a relatively "young" type of work.

In GP institutions, IR work refers to the fundraising link of "raising, investing, managing and withdrawing". The work mainly includes two parts: one is fund raising (of course, institutional partners are usually the first One is the main force, which is also a premise of this article), and the other is the daily maintenance and information disclosure of investor relations.

Generally speaking, a more mature US dollar fund is equipped with a professional IR team, but RMB fund IR was hardly even considered a professional profession three years ago. In the early years, the fundraising and even docking of domestic funds were mainly carried out by partners, and the daily communication and information disclosure for LPs were mostly carried out by financial or legal personnel. Some funds even "three-in-one" of PR, GR, and IR.

In 2017, new regulations on asset management were promulgated, and the VC/PE industry generally faced "difficulty in raising funds" in RMB. In order to solve this problem, investment institutions began to expand the RMB IR team, and some institutions even implemented radically "Fundraising for all staff".

As the RMB IR began to grow, two pain points emerged.

One ​​is that they are not professional enough, and their standards vary. The earliest RMB IR was more like a "temporary army" hastily established to solve fundraising difficulties. Most of the personnel came from various backgrounds such as finance, legal affairs, and post-investment, and there were even some "beautiful and fair-skinned" who had no professionalism at all;

Second, there is no clear quantification mechanism for RMB IR work, and the salary structure is not perfect. To put it more bluntly, after half a year of hard work, how much you get in the end "depends on the mood of the boss".

Even now, there is still no uniform standard for the salary structure of RMB IRs of different institutions, and the differences are quite large. Comprehensive headhunting information, the executive level is usually salary + year-end, and the fundraising end may have bonuses on a basic basis, but the calculation formula is different for each company. Further up, those with particularly strong fundraising capabilities, such as MD/partner-level IR, can negotiate dividends .

For various reasons, the role of the small group of RMB IRs in institutions has always been a more backstage support position, although capital raising itself is one of the most critical links for investment institutions.

But let's look at these two constraints: the first is a historical factor, and we can only wait until the market matures and the talents mature, and there is no solution; Difficult, it can be solved with money.

That's why the IR described at the beginning of the article is poached everywhere.

A new wave of changes in the fundraising market began in 2020. After the epidemic, two trends in the RMB fundraising market have become more apparent.

First, government guidance funds have become more active, and the fundraising market has ushered in a large area of ​​"living water". According to the report of China Venture Research Institute, in the first half of 2021, the establishment of local government guidance funds has been accelerated, and the scale of more than 10 billion can be found everywhere, and began to show a "sinking" trend.

Second, the liberalization of insurance capital. For VC/PE, "long-term deep pocket" insurance is one of the most ideal LPs. The RMB 7 billion financing just completed by Yuanma has emphasized the LP components of nearly 10 insurance companies. In addition, the willingness and environment of insurance funds are also improving. For example, the launch of the Science and Technology Innovation Board has made the exit environment more friendly. In addition, a paper issued by the China Banking and Insurance Regulatory Commission in November last year further cleared the restrictions on insurance funds engaging in equity investment and encouraged the signal. Very clear.

Nowadays, insurance funds are becoming the focus of fundraising for RMB funds, and IRs with experience in raising insurance funds have also become "new favourites".

A headhunter revealed to ChinaVenture that since last year, many institutions have requested RMB IR for headhunters and have experience in connecting with insurance capital and LPs. "However, insurance funds have high requirements for IRs, and such talents are also scarce. There may not be more than a hundred IRs with relevant experience in China. After all, there should be no more than 50 GPs who have received insurance funds."

The above points are objective changes in the "supply side" of the fundraising market. On the "demand side", the will of large institutions on the matter of "scaling up" is also very neat, especially RMB funds.

In recent years, the "February 8th Effect" in the VC/PE market is no longer a new phenomenon. Head institutions control the most ammunition and the best quality projects, and the scale of funds has also become the "two-eighth effect". Tickets for getting on the bus, and even the "moat" of competition-with scale, you are eligible to compete for the best and most expensive events.

"Honestly speaking, there are almost no institutions that have the ability to manage and raise funds, but they just keep their scale down." A senior IR said bluntly, "They can insist that For the sake of LP income, but the actual situation is likely to be unable to raise so much.”

For the U.S. dollar and dual-currency GP, another more realistic consideration is the uncertainty of the U.S. dollar fund.

After the Didi incident in July this year, the investment and exit environment of USD projects tended to be uncertain. Regardless of whether it is to diversify risks, respond to policies, or grasp the initiative of "ammunition", in recent months, I have heard that more than one first-line US dollar fund has started the first phase of RMB fundraising in a low-key manner, and began to build a RMB IR team from 0 to 1.

The first-line dual currency has also taken similar actions, such as increasing the RMB IR manpower, or separating it from the IR team. In addition, according to my information, the growth rate of the new RMB funds of several big VCs is larger than before.

“Thousands of LPs and Thousands of Faces”

It has become a market consensus to make RMB funds bigger. But it is also extremely difficult to win RMB LP.

In fact, RMB capital raising itself is a job that is several times harder than USD, and its complexity will also "grow exponentially" with the size of the fund.

USD LP has already been baptized in the overseas venture capital market, with a more mature concept and a longer capital cycle, and is willing to accompany a GP for a long time. A LP friend revealed that the fundraising of USD funds is relatively “easy” because the market is more mature and the relationship between GP/LP is stable. Some first-line VCs can handle the new fund with a few emails, and the daily work of IR is relatively fixed.

However, fundraising in RMB is naturally a complex and laborious task. The RMB LP market is a very fragmented market. The era of institutional LPs has arrived, and the composition of RMB LPs is also changing. For GPs, both expansion and maintenance require a lot of communication costs and differentiated personnel and strategies.

A senior IR analyzed that the current main force of RMB LPs is mainly divided into three categories, one is the government, the other is insurance capital, and the third is industrial capital and high-net-worth individuals. The concerns and demands of each type of LP It's all different.

For example, the first type of government guidance funds is mainly divided into ministries and localities. Ministries and commissions usually pay more attention to policy guidance and the degree of fit between the investment direction of the fund and the policy, while local governments pay more attention to the brand of the fund, Public relations ability and ability to attract investment, historical performance is relatively less important.

For the second type of insurance capital, foreign-funded insurance pays more attention to fund returns, while domestic-funded insurance is more stringent. They have a set of very strict investment standards and procedures. The requirements are also higher, such as professionalism, communication skills, public relations skills and so on.

"The first two types of LPs rely heavily on the resources of fundraisers," said a senior IR. It’s no easy task for the general manager to meet all of them.”

Let’s talk about the third type of industrial capital + high-net-worth individuals. This type of LP is more scattered. They may not be familiar with industry analysis and financial indicators, but they especially value fund brands and historical performance; another example is family office or industrial capital, which is less concerned about fund popularity, but generally values ​​resource coordination or personal relationships.

In the face of huge and diverse RMB LPs, the forward-looking GP has taken a step ahead and has carried out a more granular fundraising layout.

For example, for different groups, some large-scale VCs have set up dedicated toG or second-generation IR positions for entrepreneurs, and there are also first-line GPs who have begun to set up IR co-investment positions, trying to take over LPs directly. Project needs. In order to infiltrate certain regions or local funds, some GPs even directly deploy IR personnel locally to connect with localities and their three-party channels.

GP's fundraising layout is a gradual process, but it is also subject to an objective reality - whether it is fundraising or execution, IR talents are in short supply.

"100 recruitment needs may correspond to 10 candidates", a headhunter revealed, "When an organization is in a hurry to hire people, it may not only offer a regular 20-30% increase, but may Given 40-50% or even doubled, this year there have been many cases where the salaries of external newcomers have been inverted."

A headhunter told me that for the fund-raising positions he served, the annual salary package at the VP-D level can be opened to 1 million to 1.5 million yuan, while the positions at a slightly lower level are In the range of 400,000-600,000 yuan.

However, RMB fundraising IR is already a stock talent market. "To be simple and rough, the general standard is whether there is independent fundraising experience of more than 1 billion," said a headhunter, "but this number is estimated to be dozens of people in China. After all, RMB funds are not as tens of billions as they are now. recruitment".

Executive IR is an incremental market.

Currently, the context of executive layer IR is being extended and specialized. The most common ones are people from FA, PA, or tripartite wealth, with a relatively high degree of professional and experience matching; another example is the "big gold" four, with solid financial foundation; consulting background is usually a good hand in writing fund materials , the PPT is excellent; the quality of foreign private sector personnel is generally high, and they are very popular with US dollar funds; even some leading venture capital media reporters have become candidates for IR material positions, and the logic is more reasonable. I am afraid that these people understand The people in the market can write the best.

"It seems that I really want to open up the imagination and return to the specific things and corresponding abilities. There is no special setting for the background", a headhunter lamented.

The top funds are more and more inclined to "executive" rather than "resource-based" IR. When chatting with me, an HR friend said with emotion, "(resource-based) fundraising The managers have their own advantages, but they all fight alone, and no one will accept the other. Obviously every card is KQJ, and they can't beat a pair of threes together."

Deep water, multi-dimensional, granular

We discussed the surge in demand for RMB IR , setting refinement, and background extension, but at a deeper level, this also points to a more professional trend in the VC/PE industry.

"The GP target fundraising pool, the granularity of money is getting finer and finer, and the corresponding fundraising positions are also getting more and more subdivided, and even tend to be 'screwed'. Before RMB IR, maybe There are people from all backgrounds, and now GPs, in order to focus on efficient fundraising, no longer stick to conventions, but find the most suitable people,” headhunter Joshua analyzed.

"Professional combinations will be more introverted, but it is precisely because of introversion that the industry becomes more professional."

But even with a well-thought-out fundraising strategy and a professional and capable IR team, will the GP’s fundraising problem be solved?

GPs need to realize one thing: the success of fundraising is a comprehensive result.

"There are three main determinants, fund brand, historical performance and fundraising personnel", a senior IR analyst said, "As mentioned earlier, the three factors are different in different segments of LP There are different weights, sometimes brand is more important, sometimes performance is more important, and the professionalism and combat effectiveness of fundraisers are also very important, especially for comprehensive large funds, the three are indispensable, and the whole is a dynamic comprehensive process.”

A RMB LP also expressed emotion, "In the past, it was too easy for institutions to raise funds. With a few celebrity cases or the reputation of partners, it was easy to raise funds, but now it is basically impossible. It's possible."

The VC/PE industry is growing, and the competition in the same industry has already entered the deep water area. The competition between institutions has more dimensions and finer granularity. Everyone can see the fierce battle on the front line of investment, but in the invisible battlefield of fundraising, the secret battle is equally fierce and even involved.

"Just like robbing projects, RMB fundraising is also constantly crashing." Senior IR described the current daily scene. Since this year, in the offices of big RMB LPs, the visit of GPs has already begun Then on the back foot, family after family.