(00: 08: 00 English)

Honored Guest: Thank you very much! It is my pleasure to have the opportunity to participate in this activity. Just now they asked me which language I preferred to speak on this occasion, Chinese or English. And I said let’s put the English PPT on the projector and we continued to talk in Chinese.

First of all, I would like to thank our emcee for comparing me to an angel or to a devil. In fact, VC (venture capital investment) is not so magical and mystical. Admittedly, VC has to deal with a lot of things, but many things are related to one’s luck as well as other aspects. Therefore, I want to tell you that the first thing you must do is not feel nervous. As long as you are not nervous, you will have opportunities, indeed! Then, I would like to make a brief introduction to myself. I am Tan Bingzhong from Fidelity. I entered into VC industry in 1990 or 1991 or so; so I have been in this industry for almost eighteen years.

The first time that I have been to China is in 1992 or so and I often consider the year 1992 to be the so-called first year for the birth of entrepreneurs. Then who on earth are these entrepreneurs? I would like to talk something about this through the introduction to myself and our Fidelity.

Even if you can not know from my accent where I come from, you must know that I come from Hong Kong. But I have lived in Beijing for almost six or seven years and I have been here on business trip for over ten years. So even I myself have no idea where my accent comes from, but I often tell my taxi driver that I come from Guangzhou and they generally believe it. This is what I want to say about myself.

A better theme for today’s activity is not how you talk to me, because talk is always bidirectional. It should be expressed like this: how you communicate with a VP. I have mentioned some of our successful cases in my PPT. I say the year 1992 is the first year for the birth of entrepreneurs for the reason that many names familiar to us originate from that year, including Alibaba. It is in 1999 that I had my first talk with Ma Yun from Alibaba, which is an interesting story. And we will come back to it later.

You may have heard of Asiainfo. The reason why you can chat and play games on Internet is that once Ding Jian together with Qian Xuelin came to us and told us that “I have a dream, that is, to build the Internet framework, the entire backbone Internet in China.” That was in 1997. We can also mention other companies briefly, for example: Hurray Holding Co. Ltd. (HRAY) and Thunder. You have used them, but no one is willing to acknowledge this, because they are pirated products. Since everything has its beginning, why don’t we choose Thunder? Piracy is only one reason. IsoftStone is specialized in outsourcing and now becomes a public company. Why do I choose this starting point to start our talk? Because I want to you to remember that there is an initiator behind every company. The reason why we achieve the roaring success today, why we can enjoy so high market value, and why we have so many employees, is because of the conversation with Ding Jian and Qian Xuelin in 1997 and the conversation with Ma Yun in Hangzhou in 1997. All present achievements are created bit by bit.

So, if you can remember nothing I said today, I do not mind. But you must remember one thing, that is, to be relaxed. As long as you are talking about yourself, you will have an opportunity. Asher once said a thousand for a year, and I said eight hundred was all right. Through this example I hope you can remember a general rule. What is it? It is that your talk should include not only what you are intended to say, but also your communication purposes.

For example, when all the boys here meet an attractive girl, what you should do is not only talk to her, but also judge her in your communication, which is much like the way a VC judges you. You may judge whether she is reliable or whether you are willing to make friends with her. This is the so-called existent communication, probably much more important than what you actually say to her. You must mention some things, or you must refer to many things in the course of your talk, for example, what your products are, what your market is, etc., as just mentioned by our emcee. That is the content and I need not discuss it here in detail.

You must understand that if a VC spends one hour talking with you, the contents you talk are only superficial, because what he would like to listen is not only your contents but also your personality, for example, whether you are reliable or not. His purpose is similar to mine when I ask whether this person is honest. You can image what I would become of when I have to talk to several thousand people every year. That will turn me into a machine. Do you know what a machine is? If what you say is not consistent with what you are, for instance, you are this kind of people to begin with, but you just say you belong to another kind of people, in other words, you are very emotional whereas you say you are very rational, I can feel this inconsistency, although I cannot tell where the strange feeling comes from. Therefore, you must remember never to talk about things other than yours, because a VC can judge a person every accurately.

Another question you must take into consideration is why I say this talk is a process of bidirectional communication. That is because on your part, you need money, while on my part, I should tell my colleagues that I must find a piece of gold among the one thousand interviewees after my talk with them. This shows that my task is probably much more difficult than yours; therefore, you must understand that in the process of our communication, in fact, we are considering whether we should tell our other colleagues his (00: 16: 24 English) further. A big behavior is involved in this decision. If I choose a wrong person, (00: 16: 42 English), I would look like a fool. Are you willing to be considered a fool? Of course, not.

If you do not want to be replaced by others, here is a knack for you, that is, to relax when you first meet a VC. Also take an attractive girl for example. When you first date her, you should not have the idea that you will turn her to your bride-to-be after the first meeting. You can have a smaller goal, such as, whether you can strive for another opportunity to meet her or whether you can turn her to a reliable person. That is very easy. Easier your ideas, less nervous you will be and more chances of success you will have.

It is very easy to talk about this. But when most people come to talk with me, I still have no idea why they get so nervous. I remember our honored guest has also mentioned this point: if you fail to start interactive communication with us in the first few minutes, you will find you have difficulty carrying on the talk. Since you expect to have a follow-up talk through your first communication, can you remember the communication details for the follow-up talk, for example, what questions the VC asked you. If you can answer this question immediately, it shows that you have impression on the first communication. It is very easy to do this. But I can say that 95% people will not do this. Today I don’t want to talk much, because that is almost meaningless. I hope you can ask me questions if you have, and I prefer to answer questions. The questions I would like to answer are not confined to how to talk with us VC. I hope you can talk about what you have done and the stories involved, and you can also talk about the financial market which cannot be avoided these years. That is all right. What about this? I think it is good. If you have any question, you can ask me now.

Q: I would like to ask a personal question, that is, how to obtain the first opportunity to talk with a VC.

Tan Bingzhong: This is a really good question. Never attempt to contact a VC in this way, that is, to directly call him or her. Why? Because you have a rather low success rate as far as a VC is concerned. Additionally, if you directly call a VC, you will be sentenced to death upon the VC’s first response. (00: 20: 50 English)

If not in this way, how can you get contact with a VC? In fact, you can find that a VC pays tremendous attention to this industry. If you really want to start your business and you know so much about this industry, it is impossible that you have no idea where VCs appear. For example, they will appear in some industry gatherings and some master-hands, some experts and our colleagues often wander about in a master-hand forum and talk with those so-called master-hands. If you are adept in this industry, you will definitely know where these VCs usually appear.（00: 22: 03 English）

That is one way, and the other way is to be in the industry. I think that is better. In addition, you can also participate in the activities held in universities as well as other activities, since I think every industry has its own activities.

Q: (00: 23: 00 English)

Tan Bingzhong: Accountants, lawyers and so on are all right.

Q: I would like to know something in the past, such as the cut-in time point of Alibaba and Thunder, their situation at that time, (00: 23: 55 English) or their situation when they need more capital to expand their market scale.

Tan Bingzhong: Good! I love telling stories. (00: 24: 14 English). Fidelity does not distinguish the prophase, metaphase and anaphase in its entry into the market, and we are willing to do whatever kind of investment. Why? Because we never know when we can come across a Ma Yun. Perhaps today, or perhaps tomorrow. That is something out of our control. When I meet him, if I think I can do this, I will enter into the market. If you ask me, I will answer that the best time is now. (00: 25: 00 English)

The story is simple. We met Ma Yun in Hangzhou in 1999, when Ma Yun and his so-called “ten Lohans” closed themselves in a room. We invested in their company, because we valued Ma Yun and his dream. He was similar to the present you. But why were we willing to invest in his company? It was simple. At that time, we were interested in Ma Yun’s judgment, and we thought that he was either a lunatic or somebody to change the world. That was our judgment. Since we had no idea what he would become of, we gave him a small amount of money to test him. This is the best method. In fact, we do everything in this way in our daily life. For instance, you go to a shop to buy something for the first time. Since you have never bought things from the shop, you will not spend 10, 000 RMB or even hundreds of thousands buying curios from the shop. You will not! You will first spend time studying the item in the shop and check whether the item gets broken after one month. If does not get broken, you will go there and buy things. If the commodities are really good, you will go there again.

In a similar way, although we first invested in Ma Yun’s company, the capital even did not reach one million. But we got good response after our first investment. Therefore, we made the second, third and even fourth investment. From 1999 to 2004, Ma Yun’s Alibaba had our investment in every financing, so in the end most people probably do not know that in addition to Softbank Corp., in fact, we were and had been the second-largest shareholder of Alibaba. Of course, now Yahoo becomes the largest shareholder, Softbank Corp. the second-largest, and our Fidelity the third-largest. This is a typical case.

Take Thunder for another example. About two or three years ago, I said to the CEO of Thunder that I was willing to invest in their company. However, he said “No, I am doing quiet well with my business and I am not willing to accept your investment. I am sorry for that! But thank you!” I said “It is all right, but we can make friends.” As a result, we found that we had time to make friends and we had been friends for over a year. In the process of making friends, we gradually figured out each other’s styles in doing business. Just as what I said just now, we had confidence and we trusted each other. Finally, I made investment and he was also willing to accept my investment. (00: 28: 00 English). That is all for my answer to your question！Thanks！

Q：……

Tan Bingzhong: Do you have a microphone I can take in my hand? So I do not have to stand here.

Q: How do you judge the candidates to invest in? In the prophase, many people would make investment, but I do not know whether there are so many people to make investment now?

Tan Bingzhong: Two questions. (00: 31: 00 English). You can know whether a team is good or not through communication. How to do this? You must master two elements, that is, time. The reason for the term venture capital investment is that investment is made quickly, but not casually. We always say that even if you know somebody, it is not the case that as long as you have products, you can come into the market. The story about Ma Yun I told just now is based on the initial impression. Only after a period of contact and communication can we decide whether our feelings are right or wrong. How to understand this point? An old Chinese saying that “Time reveals a person’s heart” can best express this point. You must present your incomparable team management concept, your market, your company, etc. in your talk. You must prepare the contents well and raise the VC’s interest. Even my youngest colleagues have learnt this point after several talks, because it is too simple.

We meet over one thousand companies and more than one thousand management teams every year. Most entrepreneurs pay great attention to their products when they start their business and then to their sales. Of course, if there were no products, you would not survive. Neither would you survive if there were no sales. But your actual feeling is very simple. For example: if you have a company of twenty employees. Just suppose that you have twenty friends and you have to ensure that every thing they do in every day moves towards the same direction. That is a very difficult task. If you have problem managing a team of twenty employees, how can you manage a larger team? This shows that one’s management capacity can be seen through very easily. As a matter of fact, details need not be referred to, because details only provide you with more evidence. The facts that his sales are not good, that his top management is involved in a fight, and that his company runs with no office system are not reasons, but consequences, which is our point of view.

I think the best way is to “do exercise to benefit the internal organs,” indeed. What does it mean? That is to visit other companies, especially those companies of twenty, or fifty employees. Their CEOs have undergone a lot to survive till today and they have many experiences to share with you, such as what troubles they have suffered from, etc. If you do not attempt to do this, I am sorry to tell you that you are not a good customer. (00: 35: 28 English)

Your another question is concerned with (00: 36: 46 English). Briefly speaking, even if it were three weeks ago, I would have to talk about (English), but I have no idea for this week. Why do we have more (00: 37: 05 English). In fact, there are reasons for this phenomenon and it occurred in Taiwan and Japan. You must remember that the first batch of entrepreneurs have all made money. Thus there arises the question where they put the money. For them, they invest either in stock or in real estate. To tell you the truth, they cannot make money in either industry. As a result, they have the feeling that they should put the money on a huge “road.” If you bother to visit (00: 37: 45 English) them, in particular those who succeeded in starting their business, you can find that they still have some user-friendly methods and rich experiences. When you make choices (00: 38: 01 English), you must be extremely prudent and very careful, because your cooperation with them is very close. If you get divorced because of the so-called personalities at odds, you should never say that at that time you were out of funds and you were willing to do that as long as they could bring some money. Never do that!

Q: (00: 38: 45 English)

Tan Bingzhong: (00: 40: 26 English)

Q: It seems to me that you describe VC very mysteriously and he can do everything and he can understand what we say very easily. You just mentioned that they had accumulated rich experiences over the years and could grasp the contents of the talk very easily. As to entrepreneurs, you just said that the relationship between a VC and an entrepreneur was similar to that between a boyfriend and a girlfriend. Suppose that an entrepreneur with strong strength and perfect performance in his project suddenly turns up before you. What present would you like to send him in your first meeting? For example, in addition to his project and himself, what way he communicates with you or what way do you think he communicates with you can help improve your love?

Tan Bingzhong: I would like to ask a question that shall not be asked. Were you born in the 80s or in the 90s?

Q: In the 80s.

Tan Bingzhong: Young but successful! Excellent! (00: 45: 44 English). The way you court a movie star is different from the way you court the girl sitting beside you. When you say you want to pay court to a girl who is a movie star, I cannot help you and can only tell you to try your best to court her. Nevertheless, there is some other way, as I just mentioned. Every person has his or her strengths. For example, you just asked how to get VC investment, and in fact, it is very easy. Take participation in a martial arts contest on stage for another example. Every person of his or her age and experiences should participate in the contest in which he or she has an opportunity to win. That is why I asked you whether you were born in the 80s or in the 90s just now. Never involve yourself in a contest in which you have to challenge heavyweight opponents. What does it mean? If you ask me (00: 47: 20 English), this is certainly a heavyweight challenge. If you say “I am sorry that my dream is not so big and I hope to do another thing.” If you say so, you will have an opportunity to succeed. That is the way you can obtain VC investment.

Q: You just mentioned that different people were characterized by special preferences so that we shall approach different people in distinct ways. If we are an entrepreneur, how should we communicate with a VC or from what aspect you hope us to start our talk? For example, if we obtain very good results of an investigation and develop a negotiation plan from lower to upper levels, how should I tell him our characteristics?

Tan Bingzhong: I have to tell you that if you find you have strength and want to talk to a VC, you may contact a lightweight one, and that if it is not the case, you can resort to your so-called family members including your parents, etc., which will turn out to be a friendly contest. Why? It is never easy to get money from a VC, indeed. In a similar way, it is also difficult to visit a successful entrepreneur and ask him to let me in. If you really ask me how to raise his interest, I can only say that you should have a deep and profound understanding of this industry so that you can demonstrate how deeply and profoundly you understand this industry with only a few sentences.

Sometimes it is your products that matter, sometimes your behavior and sometimes the achievements of your company. In a word, there should be a light spot. If you understand that there is a light spot in this industry, you can definitely find it out. If you do not know this, it means that your understanding of this industry is not enough. Why? I will introduce a case. For instance, it is very difficult to find only one company for one industry. A VC may have to talk to several companies for one industry. Take net games for example. The number of net games companies that are really successful and well-known will probably not exceed ten. Since their scales are similar to each other and you have to edge into the top few, the situation is a little bit like that in a college entrance examination and it is really like that in a college entrance examination. Why do I keep emphasizing “doing exercise to benefit the internal organs”? If you are really dependent on your company and eager to absorb investment, you must be very responsible for your company and make it extremely successful; otherwise, no one is willing to give you money.

You just asked me what to present as your most luminous spot. When you understand deeply and profoundly your industry, when you know who is the most excellent master-hand and who is the most successful entrepreneur in the industry, when you are aware of your strengths and weaknesses despite the deficiency in your resources, and when you can conclude the similarities and differences between your company and theirs through comparison, your company can come into the market step by step. You should remember that you are a pupil at the very beginning of your entry, so never compare yourself with those college students. However, you will never remain to be a pupil forever. Of course, not. A pupil can grow up to a middle school student; a middle school student can become a college student; and a college student can turn out to be a doctor, etc. But never dream of entering into a college when you are a pupil. In that case, you will waste a lot of time. I have come across too many people who are carried away by their little success and regard themselves as college students, but in fact, they are not. All successful people know their present positions well and once they know their positions, they will not be content with sitting there. (00: 52: 10 English)

When I compare an entrepreneur to a pupil, a middle school student or a college student, it shows that successful CEOs always have great dreams. Meanwhile, successful CEOs also understand that on their way to the peak, they should climb the mountain step by step and if they fail to recognize a next step, they will definitely fall off the cliff.

Q: (00: 54: 30 English)

Tan Bingzhong: (00: 55: 00 English). But that does not mean that you do not have (00: 55: 35 English)

Q: (00: 56: 38 English)

Tan Bingzhong: It is never feasible to replace the so-called managing agents or CEOs in China. This kind of replacement has never succeeded and we have never seen their success, as I just said. (00: 57: 39 English)

I am sorry for having spoken English just now. When you want to protect yourself, you must establish and maintain a good work relationship with the CEO and other people on the one hand, and have yourself to share the same boat with him, that is, to keep your train of thought in compliance with his, on the other. If you regard yourself as a judge and pass judgment whenever he does something wrong, it is not feasible. In that case, you will establish an opposite relationship with him and we never hope to have this kind of relationship with our partners. Finally, if you are able to integrate these two sets of methods, you will find it easy. If your relationship with the CEO is good enough, you will find the best way to protect yourself, that is, to let him kill one after another and save you for the last moment. Then, you are the safest one.

Q: (01: 02: 23 English)

Tan Bingzhong:（01: 02: 25 English）Although I said that the legal documents I mentioned could not help you, but these legal documents have many useful functions, one of which is to serve as an instrument for mutual communication and understanding when your CEO reads the documents bit by bit. This instrument is of great importance, and its importance can be matched with that of your communication with your fiancé before your marriage on many details, including how to spend your money, how to arrange your travel every year, whether to give birth to a baby after marriage, whether to expect a boy or a girl and whether to send it to a boarding school after having a child. If you have reached a consensus on all these aspects, what you have to do next is put your plan into practice. If you do not care for this kind of communication and enter into the cooperation with a casual attitude, I am sorry to tell you that you are rather liable to misunderstand each other.

Asher: (01: 04: 37 English)