Feng Li is the founding and managing partner of Tyrannosaurus Capital. From 1998 to 2005, he studied at Xi'an Jiaotong University with a master's degree in engineering, served as the investment director of Shenzhen Venture Capital Group, and founded Tyrannosaurus Capital in early 2016. Up to now, Tyrannosaurus Capital has managed a number of venture capital funds and a number of SPV special funds, with a total management fund of nearly 1 billion yuan. The fund's investment mainly focuses on the fields of IT information technology and advanced manufacturing, and the investment stage covers the early growth, expansion and maturity of enterprises. It has invested in about 50 innovative and entrepreneurial enterprises, including leading enterprises in the industry such as Core Sea Technology, Hongjing Technology, Shangmi Technology, Jinrui Technology, Jiangxin Technology, Youju New Material, Ruxing Technology, Le Culture, etc., as well as high-growth enterprises such as Shopsmith Technology, Benchmark Semiconductor, Cloud Medical Chuangxiang Technology, Guoyin Intelligence, Zhongnan Intelligence, Deep Stream Micro GPU, Lebo Technology, and Fresh Internet.
Tyrannosaurus Capital, a VC fund with a public name but a low-key personality, is about to usher in its own harvest period: in addition to Xinhai Technology, which has landed on the Science and Technology Innovation Board in 2020, there are still a number of invested companies whose IPOs have been accepted or are in the preparatory declaration stage, including Hongjing Technology, Shangmi Technology, Jinrui Technology, Jiangxin Technology, Youju New Material, Ruxing Technology, Le Culture and other leading enterprises in the industry. In addition, many of the early projects invested by Tyrannosaurus Capital are gradually growing into potential unicorns, including Shopmaker Technology, Benchmark Semiconductor, Yunyi Chuangxiang Technology, Guoyin Intelligence, Zhongnan Intelligence, Deep Stream Micro GPU, Lebo Technology, Fresh Interconnection, Chaubang Information, Longfei Technology, You sauce, Taka Original...
According to the enterprise industrial and commercial registration information and the disclosure of the private equity manager filing information of the Asset Management Association of China, Tyrannosaurus Management Company officially completed the business registration and private fund manager qualification filing and other business procedures in June 2016, and since then began the fund's fundraising and investment management and withdrawal work with a professional institutionalization system. Since its establishment for about 5 years, the company has raised and managed a number of venture capital funds and SPV special funds, during which it has successively obtained the cornerstone investment of Shenzhen Qianhai Fund of Funds and local government guidance funds such as Guangzhou and Foshan.
01
Focus on the direction of investment,
Deeply rooted in ITxin'x information technology and advanced manufacturing
It can be seen from the enterprises invested by Tyrannosaurus Capital in recent years that the investment projects of the fund include chip semiconductors, SaaS software, enterprise service informatization, cross-border e-commerce, intelligent manufacturing, new materials, medical devices, consumption and other directions, involving a wide range of fields. Li Feng, founding and managing partner of Tyrannosaurus Capital, said that since 2017, the fund's outbound investment projects seem to have a wide layout, but in fact, they are relatively focused, and the company's current human resource allocation and most of the investment targets are concentrated in the two major areas of IT information technology and advanced manufacturing.
Li Feng believes that around 2016, when Tyrannosaurus Capital was formally established, it has belonged to the stage of cooling down and clearing popular entrepreneurial tracks such as mobile Internet, mobile games, O2O, and sharing economy, and as a newly established investment institution, how to plan the direction and playing style in the next few years is particularly important.
He said that the VC investment industry has a characteristic, every short period of time will see a number of new hot words and new terms from various media reports, marking the entrepreneurial and investment track accordingly. "In just a few years, various track labels such as O2O, sharing economy, Internet finance, blockchain, SaaS, community group buying, new materials, new consumption, virtual reality, meta-universe and so on have appeared in turn."
As a venture capital veteran, Li Feng said that for the various popular track labels in the market, Tyrannosaurus Capital has its own rational analysis and independent judgment, some of which belong to the relatively long-term investment sub-track, and some belong to the short-term hot concept of the stage. In general, according to the company's own professional ability accumulation and industrial resource radius at this stage, we try to choose a certain and long-term sub-track layout.
Therefore, from the beginning of its establishment, Tyrannosaurus Capital has clearly taken the two major investment directions of IT information technology and advanced manufacturing as the main line, "In the selection of investment enterprise targets, we are mainly guided by national industrial policies and technological innovation, and we aim to promote high-quality potential enterprises to achieve asset securitization in the capital market." Therefore, we plan to accumulate a number of high-quality cases and performances in the two fields of IT information technology and advanced manufacturing through the first five years, and gradually precipitate the brand in the process of accumulating LP recognition, so as to lay a solid foundation for the development of the second five years. ”
Li Feng analyzed that IT information technology and advanced manufacturing are thick snow tracks worthy of long-term persistence, and in the A-share capital market, the number of IPOs of these two types of enterprises has accounted for more than 70% of the total number of IPO new stock issuers for many years. With the in-depth development of the fourth industrial revolution, the game between major powers, and the research and development investment in new materials, new processes and new equipment in various industries, there are huge innovation and entrepreneurship opportunities in the field of IT information technology and advanced manufacturing.
In recent years, the chip and semiconductor industry, which has attracted much attention in the media and capital market, is one of the branches of the IT information technology industry. The IT information technology industry covers hardware, software, networking, data, security, SaaS, enterprise service informatization, AI artificial intelligence and many other sub-categories. With the integration of CT, IT, and OT, as well as the localization needs of China's huge single market, it is foreseeable that IT information technology will remain a key investment area worth focusing on for a long time.
Manufacturing is also the focus of Tyrannosaurus Capital's investment. According to statistics released by the Ministry of Industry and Information Technology, during the "13th Five-Year Plan" period, China's industrial added value increased from 23.5 trillion yuan to 31.3 trillion yuan, during which the proportion of China's manufacturing industry in the world's manufacturing industry was close to 30%. Since 2010, China has become the world's largest manufacturing country for 11 consecutive years. At the same time, with the optimization and adjustment of the industrial structure, China is moving from a manufacturing power to a manufacturing power, and new materials, new processes and new equipment are also continuously developed and applied in various industries and updated iterations, among which entrepreneurial and investment opportunities are also emerging.
Li Feng introduced that Tyrannosaurus Capital will continue to deepen the cultivation around the basic disk of IT information technology and advanced manufacturing, "Which we are suitable, good at, and effective." Gushing river water, take a scoop to drink is enough. At the same time, Li Feng also said that Tyrannosaurus Capital is in awe of the investment field that is not familiar with the time being, lacks energy, or is not equipped with professional teams and industrial resources, so it is not ruled out that the future will increase the investment layout in the consumer and medical fields when the time is ripe.
02
Long Slope Snow Race Track,
Dig into inflection point enterprises
The inflection point is the investment keyword that Li Feng often mentions. "Product perspective, the company's products from the laboratory demo verification to have large-scale mass production capabilities, this is the inflection point; market expansion perspective, the company from a small number of large customer verification to the beginning of the construction of sales channels and delivery systems, this is also the inflection point; revenue perspective, the company from no income to income exceeding ten million yuan or even more than 100 million yuan, this is also the inflection point; human resources and corporate governance, the company from the founding team plus employees flat dozens of people to hundreds of people and the formation of an efficient governance system, this is also the inflection point; growth angle, The company began to extend upstream and downstream or open up the second growth curve from the original stock business cultivation, which is also an inflection point. ”
Whether it is investing in angel rounds, A rounds, B rounds or Pre-IPO rounds, Li Feng believes that the underlying logic and inherent standard essence of investment are unified, and they are all high-quality potential enterprises with explosive growth inflection points. Regarding the portrait of high-quality enterprises, Li Feng briefly summarized three points: one is to try to invest in enterprises with high-speed growth, especially enterprises that meet the law of marginal diminishing effect in growth over time; second, try to invest in enterprises with independent research and development thresholds, or market brand precipitation potential; third, try to invest in enterprises that are compliant in operation, neat and manage efficiently.
The shop maker technology known in the industry as the Chinese version of Shopify is a typical investment case of Tyrannosaurus Capital's "inflection point logic". In the 4 years since Tyrannosaurus Capital invested in the company as the first round of investment institutions in 2017, Shopsmith Technology has developed into a leading enterprise in the cross-border e-commerce D2C industry, and the company has obtained multiple rounds of investment from well-known institutions such as Sequoia Capital, Yunjiu Capital, and Qianhai Fund of Funds in the follow-up process of development.
Li Feng recalled that in the summer of 2017, when Li Junfeng, CEO of Shopmaker Technology, first visited a temporary office in Nanshan District, Shenzhen, the company had just established less than 5 employees, the system was still in the demo pre-research stage, and the company wanted to complete the system's launch and obtain the introduction of seed customers, thus entering the next development inflection point, and the fastest estimate would take 2 years. Investing in such an early company at this time requires not only deep knowledge, but also decisiveness and courage.
Li Feng continued to pay attention to the development of SaaS and enterprise applications at that time, and from 2017, he began to see that in addition to the centralized B2C business empire represented by Amazon, Shopify, a SaaS e-commerce service platform that adopted the D2C model, suddenly began to show a significant growth trend in its business and market value.
Li Feng believes that this is an inflection point for industrial development that deserves high attention. From the perspective of philosophical dialectics and the underlying logic of commercial humanity, centralized B2C e-commerce and decentralized SaaS model of D2C e-commerce themselves belong to a balanced relationship of complementarity and long-term coexistence. For China's massive manufacturing factories, brand owners and trade exporters, they have experienced the traditional B2B export trade model represented by the Canton Fair in recent decades, and the B2C platform export sales model represented by Amazon, which has two big waves, and at this moment, the D2C model is judged in the general direction with a high probability of rising and developing into a new wave. Manufacturing brand owners and exporters adopt the D2C self-built station model, with the help of the SaaS platform and services of shopsmith technology, without the need to e-commerce talent team, you can generate a one-stop independent domain name of the world's major export destination countries and have a complete e-commerce function of the website, and in the system efficiently built-in docking Internet advertising traffic delivery interface, social media network traffic interface, financial payment settlement interface, three-party logistics interface and other complete functions, both to comply with the online shopping habits of overseas consumers, It can also meet the rigid needs of the majority of manufacturing industries going to sea.
In terms of team, Li Junfeng, the founder of Shopsmith Technology, served as the head of many international business lines of Baidu before starting his business, and created a number of Baidu international tens of millions of traffic products, mainly engaged in overseas advertising traffic algorithms and advertising system monetization and other businesses. After many exchanges, Li Feng described the founder as "comprehensive in terms of international vision, business products, IT technology, 2B business, company management and other aspects are relatively comprehensive, which is very suitable for starting a business on the golden track of D2C cross-border SaaS platform".
Based on the above investment logic, Tyrannosaurus Capital decisively intervened in the second half of 2017 and became the first round of investment institutions in the history of the development of shopkeeper technology. Today, four years later, Shopsmith Technology has developed into the industry's leading flagship, and the annual transaction volume of the platform has rapidly exceeded the inflection point of one billion US dollars in just two years since its launch. Benchmarking foreign companies Shopify in the NASDAQ market value of up to about 200 billion US dollars, Li Feng firmly believes that this is a long slope and thick snow track, the ceiling is very high, "we have enough patience to accompany the enterprise from the early stage of entrepreneurship all the way to grow into a towering tree, to help Chinese manufacturing, Chinese brands, Chinese domestic products in a more scientific and effective way to successfully go to sea, to the world." ”
03
balanced configuration,
Take into account both early and mid-to-late projects
In addition to the inflection point logic, another important investment strategy of Tyrannosaurus Capital is "balanced allocation". Li Feng explained that Tyrannosaurus Capital will take into account the relatively robust and explosive balance of the portfolio according to the attributes and scale of the funds managed, "at present, about 50% of the funds are allocated in the early stage of corporate growth (A, B round and part of the angel round), and about 50% of the allocation chooses the project target in the relatively mature pre-IPO or expansion period." The goal of adhering to the above allocation strategy is to strive to achieve a DPI of the fund's exit return greater than 1 or higher as soon as possible, while also striving to take into account the upper limit flexibility expected by the fund's final return multiple. ”
Li Feng said that the idea of "balanced allocation" is to keep the right and surprise, in the case of striving for liquidity and security, do a good job of flexible allocation, and finally submit the answer sheet to the LP with DPI.
Li Feng made it clear that in the future, with the growth of the scale of Tyrannosaurus Capital's management funds, it will continue to adhere to the allocation of a certain proportion of early projects, because "the more early and middle-stage entrepreneurial projects, the more uncertain their future development is, the more they correspond to huge investment return multiples and odds", at the same time, this is also the gene of Tyrannosaurus Capital.
Talking about the origin of this gene, Li Feng recalled that when he was engaged in the investment business of Shenzhen Venture Capital Group 10 years ago, the atmosphere of the primary equity investment market and the business focus of RMB venture capital funds were basically based on Pre-IPO and mature PE projects in the middle and late stages. In 2012, there was a period of suspension of the IPO with greater impact, and the management of Shenzhen Venture Capital Group once again mobilized and called for the investment business team to dare to break through the comfort zone of PE projects and try to increase investment in early-stage projects. At that time, Li Feng, as an investor active in the front line of Shenzhen Venture Capital business, quickly responded to the call of management, actively participated in and led the investment and allocation of early projects, and thus began to accumulate the operating system of the full cycle of angel, VC, PE and Pre-IPO projects.
It was during that time that Li Feng led the investment in a number of entrepreneurial enterprises such as Zhangtao Network Technology. In just two years, Zhangtao Network Technology, a high-tech enterprise with zero income and zero profit, and a listed company have exchanged shares for listing through major asset mergers and acquisitions, becoming the first classic exit case of the China Securities Regulatory Commission's "2014 Revised Edition of the Administrative Measures for Material Asset Restructuring of Listed Companies", winning the annual gold award for outstanding equity and venture capital projects of the China Venture Capital Commission, and also becoming one of the historical landmark cases in the securities investment industry to study the A-share merger and reorganization policy.
In recent years, Tyrannosaurus Capital has invested in a large number of representative projects such as Shopmaker Technology, Benchmark Semiconductor, Cloud Medical Chuangxiang Technology, Guoyin Intelligence, Zhongnan Intelligence, Shenliu Micro GPU, Lebo Technology, Fresh Interconnection, ChauBang Information, Langfei Technology, You Sauce, Taka Original, etc., all of which belong to the star start-up enterprises that participated in the investment in the early stage of the enterprise. Li Feng said, "Early projects and middle and late projects are mutually symbiotic relationships. Because of the selection of high-quality mid-to-late projects, we also have more patience to configure early projects and accompany them from dark horses to white horses. Because of the escort of high-quality high-resilience and high-growth early-stage projects, we also have more confidence to configure relatively stable mid-to-late projects. In addition, we invest in the research and due diligence of early projects, fully adopt the same strict and meticulous standards as the middle and late stage projects, and because the scale of early project financial data and customer samples are small, we often need to spend more time and energy on the research and tracking of the business level and the upstream and downstream industry chain. ”
04
Investment is a marathon,
Test endurance and speed
Regarding the scale and goals of fund management, Li Feng frankly said that when he first founded Tyrannosaurus Capital, he had planned to do large-scale rapidly, but after 5 years of deep cultivation, he also had new thinking about the scale itself, "In fact, not only is it the start-up enterprises we invest in, or our own development and growth process as a fund management institution, it is very important to be able to pursue quality growth and quality replication and expansion." Once the bottleneck of the stage is broken, and the inflection point of quantitative change to qualitative change is crossed, the scale itself is actually a natural progression. ”
Li Feng believes that the VC industry is always facing non-standard assets of various investment rounds, and the core value of investment institutions is to determine the risk and value of investment targets, as well as to help start-up companies explore and tap the second growth curve together, "I believe that equity investment in the next two decades still belongs to the sunrise boom industry, such a huge non-standard asset management industry will accommodate a number of super-large-scale comprehensive investment institutions and a large number of other unique boutique investment institutions at the same time. The entire industry will work together to contribute due vitality to the sustainable development of the national economy and the environment for innovation and entrepreneurship. ”
Li Feng loves sports and has participated in marathons for three consecutive years. Up to now, he still maintains the habit of running, and usually places running shoes and sportswear in the car, so that it is convenient to "switch between movement and static" in the gap between work or business trips, "run by the river", "run by the sea", "run in the park", "run in the gym in bad weather". Li Feng said that running this sport seems boring but the advantages are also obvious, which is convenient for fragmented time to exercise, and can also empty the brain to talk to himself during the running process. In the process of running, he wanted to understand some truths, such as "the fastest shortcut in the world, that is, not to take shortcuts", such as "slow is fast, less is more", and then "the general rushes the road, do not chase the rabbit".
The establishment of Tyrannosaurus Capital, from the beginning to accumulate performance precipitate brand, this is a new marathon. Today, Tyrannosaurus Capital has been established for five years, which means a greater test of endurance and speed for Li Feng. With each step of consolidation, you can "run" farther. Facing the next five years, he is always ready to take a new step.
