you, everyone!

Moderator: Good evening my friends, very happy today to "VC Life" at the scene of the interview.

today a guest at our studio guests of the investment community can be the Wizards, he is currently the partner in the largest amount of investment in which a single person, the total investment reached 230 million U.S. dollars, this has been numerous glory is the mystery guest who? We first asked him to say hello with you now.

Zhou: I am good, I am Joe Zhou, SAIF Partners Fund.

first to the United States to study science and technology the country would also like to learn

Moderator: Yes, he was a grand success of the investment fund SAIF Partners. We all know that each item to show you all the strength of SAIF. You are a university teacher from the VC, in fact, is a very large span, we would like to know the experience of this transition is, how the?

Zhou: the middle of it a few years, is graduating from college 82 years to the beginning of 2000, or have more than ten years time, I also went to the middle of the United States, for five years before the teachers, went to the United States to study or work.

Moderator: read what is it? At that time in the United States.

Zhou: I read that time of the semiconductor manufacturing process, I studied in the domestic semiconductor integrated circuit design, then think of China as a whole is lagging behind the semiconductor industry, 82 years, that time in China a year only about the hundreds of millions of dollars of investment and the share of dozens of plants, a plant millions of dollars, when I remember that TI (Texas Instruments) or Intel for a factory on more than one billion U.S. dollars, at that time, the United States want to learn, At that time, science and technology would also like to save the country, but also want to get the most advanced technology to come back.

Moderator: But in the United States for some time, your work experience is kind of how?

Zhou: I hope to learn the most advanced science and technology, go with this approach, it is 87 years, I learn from semiconductor manufacturing to the United States, after graduating from the beginning go to the Bell experiment Room points out of a company, after two years into the Bell Labs, then went through a change in the beginning in a small company, a few people 30, so that for two years inside, the inside of the U.S. companies and small companies, technology companies a better understanding of how the operation and subsequently enrolled in a large company. I remember that we have a project at the time Bell Labs and spent two years more than 22 million U.S. dollars, more than 100 people. However, inside each of us do not do, but a lot of money spent, I was one experience that is done from a purely technical management technology to do so, which for me is a change, then remember possession of two million dollars in funding. A lot of money, to do small, I was later to vice president of UT Starcom do when possession of 10 million U.S. dollars, to do great. That is not the same, so the process of change.

Moderator: how to return home later, then joined the UT Starcom?

Zhou: UT Ying Wu is the founder of my classmates, when he is at home北工大, but also the Department of Radio Science, we are not a class, we have been a lot of contacts in the United States I was 95 years when home was on vacation, do a drawing by his negotiations, he said, you come back it is such a process.

Moderator: how could he convince you to come back?

Zhou: He was drawing me, he said that now there is only one China Telecom, China Telecom, the United States a decade ago is that there is only one telecommunications company AT & T, you look at the United States now has three large telecommunication enterprises, when MCI, there is Sprint, we would like you to do now is to do a decade ago of the MCI, you are to manage the matter. This thing sounds good.

Moderator: Then you promised to come back on?

Zhou: I was promised to come back with no one没商量, (pipe) is not more money, on the 10 million (USD), I said, 10 million things to do, and to me is very attractive, I started from the back end of the year 95, then ran back and forth for some time, and later moved back to the house. That is another leap forward in technology that is to do the technology management, to make the management of an investment or an operation, this time about four years experience, for me a very great help to me career of great help.

Moderator: UT Starcom in which the work you do that? What are the project management?

Zhou: UT at the time when Softbank Investment, the investment through UT Jitong the project, so I was doing it, along with some other, when UT is in China telecommunications equipment to do business, I was also to help them do a number of other ministries and other sectors of the equipment sales, so do those two things, I was still interested in the major investment and investment management of more interest.

Chen Tianqiao has taken at least a (transition) the first step

Moderator: What was the time when the first joined Softbank Asia (that is, SAIF) of?

Zhou: 99 at the time the end of the year, Softbank in the global Internet has a large investment into China would like to prepare, through Softbank in the United States at the time a body is called "Softbank International "into China through this body, set up Softbank China, Softbank Softbank China is also in cooperation with the UT of a project, so I was passed in connection with the efforts from UT, I would very much like to.

Moderator: Softbank Asia and then in the past few years is mainly responsible for your investment project and what it?

Zhou: I first went to the Softbank China at that time, with Softbank Asia are different institutions, Softbank China they are now in Shanghai, there are a few good items, such as Focus Alibaba and Softbank media are cast in China, I am from Softbank China by the end of 2001 to the Softbank Asia, Softbank Asia (that is, SAIF) is the Cisco investment, the second phase of our 2005 , we seven partners of the 643 million dollars into.

Moderator: What are the projects for?

Zhou: We cast a lot of projects, projects to about 70% invested in China, we all know, there are some grand, for example, Acorn, ATA, I said that I voted in several projects and another partner, he voted in sheep Sunco East, while I have voted in several semiconductor companies (Jade, Shikang,莱斯康), a semiconductor back-end investment companies, etc. Alchip.

Moderator: If we talk about a grand, in fact, I think the public is more concerned about a grand, as is the case it should be said in China is currently the more successful cases, and indeed for the 40 million U.S. dollars, the investment four months after the Nasdaq market, after 20 months out of your success, 5.6 million returns, we still want to listen to you before and after contact with the grand, with the origin and the story of a grand?

Zhou: In fact, is an old story, has been a grand team effort, and Yan Yan, Jing-sheng, and Zhou Lei. I was in the case when a grand to spend more time, the latter including many of the specific pre-work is done, I do not deny.

Moderator: When did found it grand?

Zhou: I actually started in 2000 when the game industry is watching to see stand-alone, come to the conclusion that the industry can not do, when there is a prototype of online games is OurGame, around 2001 Taiwanese companies to do some online games, a fire in the north of the game is relatively the Stone Age, when there are Gamania to do something in China, I have a colleague of Wang Jing-chuan, she Gamania see, I was looking at stone tools.

Moderator: That was because the investment manager?

Zhou: right right, she later went to the TOM, now vice president in the air to do, in fact, we look at this industry, then I also know that a grand, but I know that he compared the fire in the South, but not know that fire, we later learned that their operation was very successful grand, so they want to a new level, the Chief Investment Officer Li Jun was responsible for this matter, they were invited to make financial adviser HSBC to melt the funding, of course, almost the entire Everyone knows the market this case, we know the first thing, the Yan Yan was the HSBC's teaser (summary investment) issue to the future, I was immediately made a response. I saw him at the time when the financial figures of the comparison surprised if I say that this figure is really the case that can be done.

Moderator: At that time, like the profitability of 20 million U.S. dollars, right?

Zhou: right right, then it should be in the right order of magnitude. Later, the prospectus can not remember the figures because of the added financial processing, such as accounting charge. At that time, operators are really very, very successful.

Moderator: Then you started to meet and Li-jun?

Zhou: Yes, we are in the beginning of October to meet私服started out at the time, South Korea Fangyuan code leak of grand financial situation at that time a heavy blow, so I was advised not to look at , and a grand will be dead, but I think the problem was not looked after, and we come into contact with the whole negotiation process is relatively happy, because they also think that compared to the industry, we understand, because of the relatively deep indeed to see, and we South Korea There is also a team more familiar with this also, so it can help the busy, so they think we靠谱comparison.

Moderator: But when I heard that you went to Korea to do due diligence, with the Korean company's CEO also had to negotiate right?

Zhou: Yes, I went to see the first time after the CEO found that the seriousness of the problem, in the past that this matter can be resolved, not so serious, and later went to South Korea still feel that this matter after the more serious and then we come back to this area a lot of research, at the same time the South Korean company, he was aware that a grand money in the melting, melting into the money if he will be the chip is relatively small, so he has also taken a number of action.

Moderator: how to talk about it then?

Zhou: I was a judge, as one of the reasons why the interests of both sides, this matter will be resolved, much of the interest involved, and everyone for other reasons, for example face, we all will export gas are understandable. However, interest will be to resolve. Finally resolved.

Moderator: Can you talk about the process of solution?

Zhou: the process of solution that is to say, they turned out to be a deadlock, because the original Chen Tianqiao themselves and their CEO, I do not have much between the direct exchange, the majority of both sides of the middle managers to exchange , between a lot of misunderstanding, misunderstanding the need for a third party to break it, so on our side to act as third-party role, and we invest in people as a matter of course to act as such a role, the role we had at least from my point of view I hope that they end their own, and we appear as equivalent to their back, you fight to fight in the circle, back to what we have on the table to talk about, so we (they) first time back , including the beginning we have come about directly. But I feel that every time the negotiations broke down more the closer from the bottom line.

Moderator: to talk about how much to join?

Zhou: about a dozen or so to join the team broke down each time, in fact, every time I think the breakdown is closer from the bottom line.

Moderator: Actually, it is also a running period of the.

Zhou: If you promise too much fun, and we do not think the bottom line instead.

Moderator: But at that time a grand business is 90% of the company and the Republic of Korea, you see the final investment is entirely in the profits of it?

Zhou: We understand this industry, I think that is a very high threshold of industries, but at the time the judge is that the industry before 34, he will probably account for the whole industry turnover of about 80%, or even more, when a grand game of market share would account for about 50%, so we think this is like a big stone as it is very difficult to push it up, push up on the event will be rolling their own, which is on the one hand, the other hand we see a grand layout in this area there are many ideas and strategies, as the first entry is the first, then you back into the costs and a new entrants to enter the costs are completely different, this is one thing, in fact the other hand has been a grand layout as a platform to do, so we think that a game is important, but its platform will eventually play a role.

Moderator: main fancy is a grand model may be a carrier, and its business concept is not it?

Zhou: it's team in the implementation of force was very strong, especially in the games, including its technological development capability, operation capacity, when there is a gap between second and third or the need to recover, especially I think it has done a lot of technical processing, the so-called plug-in allows us to be no way, so we did in this case deeper than the point, including the games I play, I have to call their customer service. Challenge them. Various departments to see how convergence of business and so on.

Moderator: At that time you are defeated by the time it HSBC? Chen Tianqiao Why then you have no choice HSBC as investors do?

Zhou: I think this is smart and he know why this funding should be melting.

Moderator: Why did he feel that the financial capital?

Zhou: In fact, he did not need the money, though he needed the money, it is said, the money he did not use, is used for the time being, but he was not missing this money can not do He financed a great idea, for us, he is also recognized a very important factor, for him, we are the only one able to vote, and we have been good exchanges, they recognize that we understand the industry, we In fact, there were two competitors at the time, a quickly pulled out, another is HSBC and 34 together, when Li Jun, Chen Tianqiao the idea is that in the future if they want to do something at that time the profit is not necessarily good, but a very long-term goal of things, he felt that too many shareholders may not be able to understand, we will understand and will support him. Even though we give him the terms must be strictly than another, he is to accept our Terms and Conditions.

Moderator: Then you had a grand success in this case, in 2002 in the November 28 signing of the agreement is not it?

Zhou: Yes.

Moderator: We all know this is the first paragraph you say to a grand story.

Zhou: At that time, we have devoted a large part in a grand time, I think the execution was a grand very strong, but he developed himself from a company to an overseas listing of international companies there is a gap between the gap is not so big, but there are still gaps that need to improve step by step, I believe that this aspect of his ability to learn very fast, but we do a lot of work, such as structure, including its shareholding structure, management structure, including staff options in this area, including the long-term strategic and short-term strategy, horizontal, vertical development strategy we have done some work, a grand this case interesting for us, we do realize that the case for the development of our fund is very important, although I have other cases in the hands, but I spent most of the time, there was no new look, so I think the whole process, the outcome is very good and a grand learning very quickly. And we have more luck, so quickly on the time scale up quickly, and the steps in the implementation of the strategy is also very strong, so in 2004 in the May 13 listing.

Moderator: Listed after the grand you also a number of management to help it do it?

Zhou: In fact, the process of listing is an issue that we (investors) in connection with the changeover process, in fact, in the development of an enterprise when, in the first step, the needs of first-class VC, to help an enterprise to grow, Listing the steps to actually do from the VC and we hope to pass the baton to be able to find the best dedicated to the fund so the secondary market, institutional investment, we have completed this process, completed, and their grand enough capacity, but also very strong, so I began to help others, that after the possession of less than one point.

Moderator: In fact, the story of grand talk about the time, has been talking about, you have a grand team and between the contacts, as you and the contacts between Chen Tianqiao it? What's the story you would like to talk about?

Zhou: Flyover very hard and very smart, very details we do not need a particularly large number of exchanges, I told him the CFO more than the exchange of Li-jun, as some of the specific co-operation of the business together.

Moderator: But because of your efforts, Chen Tianqiao have become the richest man in China, do you think he changed the mentality of what did not?

Zhou: I did tell the truth was that relatively few contacts, I think he actually has a lot of things to do, so he also considered this step to step, I think from an industry or so in transition, of course, there are some strategies that we did the concept of this platform in the PC, they are very dominant, at least from 03,04,05 years are dominated, in order to cross-cutting development, we must into the family of this layer, and it has been the idea of home entertainment to do such a leader, this process is not so easy in fact, no matter who is going to do this, we must suffer a setback, we must learn to be on the classes, at least I think he has taken this step came.

when entering the wind has cast make mistakes

Moderator: is indeed a grand success, but it was the case in the investment community is divided into four categories, one like you investment in such a grand success, one direction is not clear, there is a category is dead, and another is dead, everyone has errors, you had it?

Zhou: I have made mistakes, mainly in 2000 and 2001 when, at that time I have just entered this line, this line of entrepreneurs to China just contacts that have VC matter, and "这么傻also heard a good idea to put the money hit my account in to the" At that time, we contact that VC is the impression that time the Internet bubble, when we look at a lot of things, we planted fall-off, made some mistakes, I am in error then the more.

Moderator: For example, projects for which the ratio of how much is a failure?

Zhou: Of course this can not be said to be personal reasons, this environment is largely the reason, for us, you failed in a case when you will think, why the failure of of? What am I doing wrong? At that time, because we vote more than the company, relatively small, relatively fast, and follow-up of the entire capital market, funds can not keep up late, so we learned from a lot of things, including some of the whole domestic from there a lot of standard terms and conditions of, such provisions may not necessarily in the United States is a very general terms, while in China is a very common terms, which is the Chinese way of doing things and so on are identical.

For example, we have a clause called the "performance guarantee", this clause is not very fashionable in Silicon Valley terms, this has some truth, you in the United States, what things can be big or small, will, I not necessarily to write in very clear terms, I can sue you, can not be made in China bid farewell to casual people, so a large extent, depend on our understanding of things to do, so that Chinese people have a very good culture or habits, I would do it, do you punish me, I think this is a good habit. We are basically a team judged the execution of a standard, we are absolutely not use this as a means of suppressing the valuation, we hope that you can do at different stages of an enterprise can use this thing is, we have different ideas, you and the entire VC community to chat to different people, we view many of the same thing totally different, I think this is the industry's most interesting things, it is a very personal business.

areas of overheating, we must not ex-

Moderator: Your time in June last year, but also a part of financial funds, you will be in the area of investment tend to do what?

Zhou: I still hope that my argument on behalf of an individual, in fact, everyone in the risk of investment in this area, people have their own different strategies, but also the different funds at different stages should have different strategies, such as specialized investment funds that some early cases, some funds specifically for the case of growth, in fact, is not the same as the strategy, our strategy is quite partial basically is that we are more familiar with the area, such as the TMT, we are more familiar with this area, we would also like to vote in the industrial chain of vertical integration of the East and West, we will vote in a number of different comparison industry leading enterprises, the total absence of a template, I believe that everyone has a different strategy.

Moderator: the amount of your investment which is generally in the range?

Zhou: This I think is not necessarily all of the entrepreneurs or entrepreneurs are aware of the VC industry, in fact, VC is a division of labor in the industry, such as IDG's investment in so early, IDG done in China very successful.

Moderator: because to enter the relatively early.

Zhou: Yes, IDG is a strategic, systematic, due to the size of funds is the size of the system is such a system, it may be the formation of such a strategy, but also a very successful strategy, we the size of because we are here, our people here, only so many people, so we compare the size too. Our relatively large size of the Fund, we have possession of billions of dollars, including our latest 643 million U.S. dollars, we were so few people in China, nine professional managers, we are also responsible for Hong Kong office of China's total business, so few people, so we can not do a very small case, so we cast the case in general, we ask that the company's development throughout the process, we voted down the whole of the Fund may be required to at least one more than tens of millions of dollars.

Moderator: it would not have been the early fall? You will vote early so much the amount of it? Should not you?

Zhou: This means that the time has just begun and I will vote 5,000,000 (USD), which is the lowest I have a few, of course, different industries have different characteristics, for example, we in the semiconductor, the We in the chip design, we have a different idea, which I did vote in the case of relatively early, but this is not an ordinary case, and we cast a lot of numbers, we will certainly be about more than 10 million, the companies in the development process , we voted down the number, even if not 10 million first phase of the case, after will be more than 10 million.

Moderator: You are now into this than the number of funds is invested in China?

Zhou: 70% invested in China.

Moderator: now there?

Zhou: We are now the number is more than 70%,

Moderator: This year you voted in the items?

Zhou: I am up to now there are two cases, one is chips, and the other am not at liberty to say, I also voted in four follow-up projects, and fund the first phase, there are the second phase of the fund, so I add up to vote in the case of four, up to now had six cases, but I am in favor of several new cases, it is now very, very busy, doing a number of new cases.

Moderator: But in fact the market in China, the venture capital investment projects are not going to do a lot of products are cast to do service, do you think what is causing this reason of it?

Zhou: Actually, I agree with this, in fact, in the capital value, one innovative thing you have to this point of view, can represent the technology may be the chip, because it is by embodied in the new chip technology, the other is relatively optimistic about the service in the industry, because there is a continuity of services to the embodiment (turnover) will be regenerated, for example, you received a phone call come in, for example, you took a cell phone, your mobile phone number will always be with you.

Moderator: there is a continuity.

Zhou: Yes, so China Mobile will be your customers to eat, so he said that the task is how do you put a month into 1000 money 5000 money, so I personally prefer to do service in the case, for example, is a typical example of a grand service case.

Moderator: your personal investment of time or an even heavier emphasis on the technical team?

Zhou: In fact, we look at the挺多things we can not make generalizations, of course, that is, teams like the VC101 textbooks VC basis, the first section of chapter could be said that you look at the case when looking at What does? Team team or teams. I (the answer is) the first time a case may not be the team when I first looked, may be the business model is to scale. I am not the first team that is not my first awareness of this team so we shall in this case, is not the case, but the company early, the team is that it can see things only, so the team must be the most important thing. Instead, look at our business model is not recognized, the scale of how to do? How the execution team? Can not cooperate with others and so on.

Moderator: In fact, the past two years China's VC market, there are many VC or from entrepreneurs to make the transition from the entrepreneurs, how can you look at this problem?

Zhou: In fact, this is a VC in the industry to mature a process, in fact, China's VC, I really think it is starting from the last year, can not be considered in the previous VC, at best, be regarded as a business investment institutions, so the time to see the project is not necessarily the same point of view, including the decision-making mechanism or mechanisms of return or, in the last year before the 2005 before, the whole is wrong, (the decision-making) was not here last year before the real become the mainstream, so if you look at the composition of the VC, then basically you have three people, one is said to be from the people who study the financial and do investment banks, accountants, lawyers made up the circle, and the Occupational from the people, and the other one is coming from the enterprise, is to do high-level corporate managers, and CEO, to do such a VP, he has some operational experience and technical background, this is a great ...

Moderator: funds have to do to protect it.

Zhou: not necessarily. Money because we are the people to vote, and another type is a very successful entrepreneur, so in the United States point of view, may be more and more time, (the success of the entrepreneurs involved in) do when starting an investment partnership people, rather than occupational risks to the point of view of investors there, because he would like a little more casual, there is a different composition, the risk of investment in China has just started, people in all directions will appear. In addition, a sudden you come out last year was actually more than a dozen funds, the real funds in China, who did not so much a matter of fact, so you will see people from different backgrounds VC.

Moderator: this industry will have any effect?

Zhou: last year a large number of VC into China, in fact, is the beginning of the industry, but if you look carefully, many funds have not been the case in China, many of the Fund's main partners and even in the United States has not been the case, and they have a lot of a learning process, I believe that about a year after two years of such a learning process may inevitably make mistakes, may we all become smarter, but at present speaking, it is possible in the project there will be some competition. However, I think is better for us. Because we have a strategy which, we will not be pursued things hot, and I speak the truth, especially from the perspective of an industry, if it is an area of overheating in this area, then we will not be pursued.

Moderator: Why?

Zhou: 12 If you are interested in the case, very interesting, I am chasing up a recovery is still worthwhile, but if the entire field of overheating will be problem if, for example, overheating on the Internet in 2000 will be a problem, an area means that we will not be overheated reason, we in the industry VC very important success factors, that is, enter your price, (over time) your access to high prices, and the second in droves because of all the an area on the vote, meant that in addition to the first second and third in this area have the money, then the money is also the seventh eighth, who should not have their money, they also have no way to performance pressure, had no choice but to to depress the price, customers get robbed people, making the industry as a whole increase in the cost of facing such a situation, we inevitably have to suffer a setback, will suffer a setback when, after two years will be seen, so we do not even vote in this area.

Moderator: TMT But as a matter of fact the areas are very hot, you have also talked about the chat, you are also the areas of investment, why cast it?

Zhou: TMT field of very large, in fact, no need for a very narrow field of robbing you, in fact, there are many things we can do, the speed of China's economic development so fast, in fact, there are many areas we can do.

Moderator: Because of the time, we went to today's chat here, thank you very much for the support of friends, but also very grateful to Mr. Zhou Zhixiong, once again Thank you, Mr. Zhou.

Zhou: Thank you.

(the end of this chat)