• Wednesday, October 07, 2015

Tips from China's pioneering angel investor Charles Xue

Staff Reporter 2013-06-20 09:02 (GMT+8)
Charles Xue speaks at a Weibo conference in Zhejiang province. (Photo/CNS)

Charles Xue speaks at a Weibo conference in Zhejiang province. (Photo/CNS)

Charles Xue is billed as the pioneer of angel investment in China, with investment covering over 100 categories including hairdressing, goat's milk, e-commerce, community service and mobile internet. But in recent years he has abandoned an independent investment style and switched to a partnership model instead.

Xie's investment career began with property investment in the US, from which he made US$1 million which formed the seed money for his subsequent investments. His legendary achievement is his investment of US$250,000 in UTStarcom, which generated US$125 million for him following after the company went public.

According to Guangzhou's Southern Metropolis Daily, Xie says investment is fun for him, adding that he doesn't have fixed investment targets but tracks opposrtunities that he finds innovative and interesting. His investment choices are quite capricious, he says, and he regards investment as kind of game. He seldom carries out painstaking research into ventures in which he is considering investing. "I don't pursue maximum profits or engage in systematic investment study, which would run counter to my playful nature," Xie says.

Xie is an enthusiastic user of Weibo, the Chinese equivalent of Twitter, typically spending two hours on the microblogging site every day after he gets up and before he takes his child to school. Weibo has become a vital channel for Xie to seek out potential investment targets. His account has 10 million followers, many of whom use the site to send him investment proposals — so many, in fact, that he has hired interns to help him screen them all.

"High visibility and a multitude of fans has greatly contributed to my investment work," Xie confirms, adding that such benefits also include fundraising, valuation and shareholding.

Xie's investments in various ventures range from hundreds of thousands to several millions of yuan. "Most of my investments have yet to become profitable and some don't even have any revenue yet. My stake is typically 10%-30% and I never hold a majority interest — otherwise startup founders might get complacent."

"Basically, my investments attract follow-up investment by institutions in six months," Xie adds.

In Chinese investment circles, a renowned institution or angle investor can include their intangible assets such as branding and social resources in their investments. "For a contribution of 1 million yuan (US$160,000), I may be able to claim 15% stake, compared with, say, 10% for a common investor," Xie says.

Xie is quick to make decisions, as evidenced by his investments in 30-40 ventures in one year. "Reports that I typically make an investment decision in five minutes are not an exaggeration," he says.

According to the Southern Metropolis Daily, Xie has invested in more than 100 projects, which he lists in a small notebook. Xie believes the core of an investment project is its organizers. "What impresses me are people, rather than business proposals. A startup founder must be trustworthy and have relevant work experience, as well as the backup of a quality team," he says.

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Wang Yilin (王宜林)

Wang Yiling is the chairman of China National Offshore Oil Corporation. Born: 1956 Birthplace: Ganyu county, Jiangsu province Country of Citizenship: China Profession: Politician Education: ...