Xue Manzi 薛蛮子 (Charles Xue)
Famous Chinese venture capitalist. He belongs to the elite group of China’s ‘princelings’ since his father served as officer in the forming years of communist China and held high positions after 1949. Educated in Beijing University and Berkley University, Manzi made his fortune from his investment in the telecommunication company UTStarcom before becoming one of the most active angel investors in China.
Xue’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, Xue says investment is fun for him, adding that he doesn’t have fixed investment targets but tracks opportunities 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. His investment now covers over 100 categories and includes 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.
Xue’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 start-up founders might get complacent.”
“Basically, my investments attract follow-up investment by institutions in six months,” Xue 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.
Xue 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, Xue has invested in more than 100 projects, which he lists in a small notebook. Xue believes the core of an investment project is its organizers. “What impresses me are people, rather than business proposals. A start-up founder must be trustworthy and have relevant work experience, as well as the backup of a quality team,” he says.
Xue is also well know for his Weibo posts, the Chinese equivalent of Twitter, typically spending two hours on the micro-blogging site every day after he gets up and before he takes his child to school. Weibo has become a vital channel for Xue 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.