On July 1st 2010, CM Venture Capital officially opened its doors for business. CM Venture’s Chinese name “遨问” is taken from “遨游世界，问鼎未来“, which means “traveling the world and seeking the future”. After being in the US for more than 17 years of study and work, I and my partner were looking to seek the future in China.
We were seeking the future in China, not only because China was growing fast and investing a lot in innovation capabilities, but more importantly, we felt that we need to see a new model for investing in hard technology companies in materials science or manufacturing or hardware. While US leads the world in terms of technology research and R&D spending, my experience investing in materials science platform companies in 2003-2010 in the US was leading me to believe that VC model simply doesn’t work well in the sector as materials companies often take more than a few years to find the killer app that will make them commercial success, and that quite a few years is going to take fifty to more than a few hundred millions of dollars for a product company in the US
So CM Venture Capital was founded on a hunch that we can have a new VC model for this sector by doing the investments in China – same world-class technology, but easier entry to a more dynamic market, with a lower development cost, and a shorter time-to-market because China markets are more dynamic, engineering costs are lower, and execution speed faster.
Fast forward ten years, I would say our original thesis has largely worked out. We have much more work than we expected as we evaluate ~ 500 companies a year while investing only 3 -5 companies. But our companies grow fast to become industry leaders, execute fast to address market needs, and turn profitable early in its life to feed its continuous R&D efforts, generating excellent IRR for our funds.
The next ten years, we want to build CM Venture Capital into a global brand. Taking some of our key learnings from our ten-years experience in China, we will invest in and help companies in materials and hard technology areas to thrive, shorten-the-J-curve and generate good VC returns for investors as well as entrepreneurs around the world.