Over recent years, no economy has expanded at a rate like China’s. Due to the huge changes in the country over the past decade the business landscape of China has completely changed.
As a result, many foreign investors from the US and Europe are hoping to get involved in this rapidly growing market, encouraged further by stories of brave business entrepreneurs who have struck it rich here. However, foreign investment can be quite difficult, with domestic policies, a lack of regulation and loopholes making it tougher for investors.
Angel investment is high risk and the stakes are higher as there is less financial protection. Because of this, early stage businesses find it quite difficult to obtain financing, even from their own country. Compared to over a few hundred thousand active angel investors in the US, some cite that China’s figures are more like a few hundred – most of whom are well known Chinese investors and often successful entrepreneurs themselves.
Still, the concept of angel investment has started to generate attention in China, particularly among heads of private companies who are looking to make investments that would allow them to expand in their industry. In most cases, investors are familiar with the industry sector they are looking to invest in, and invest in businesses which should offer high returns in relation to the initial investment. Most business angels in China will play it somewhat safe, by implementing an exit strategy for the investor to “cash out” when the business starts to grow.
Even with the limitations in place, many recent high tech industries and businesses have succeeded in China because of angel investment, be it from abroad or domestic. Both local and foreign businesses have used the Chinese branch of the Angel Investment Network to form partnerships with investors. A wide range of business proposals from Chinese entrepreneurs is also available on this site, covering a variety of industries, from medical & technology, to mining, energy & real estate.