Like most in the under-30 crowd, China's venture capital market is in a hurry. Since 1985, when the State Science and Technology Commission joined the Ministry of Finance to establish the country’s first venture capital firm -- called China New Technology Startup Investment Company -- some 2,500 private and state-run firms have sprouted up, according to Zero2IPO, a Chinese venture capital and private equity market research firm.
Since then, the industry has been crossing one milestone after another at a steady clip. It reached a new high in capital raised in 2010 and is on its way to another record in 2011. Venture funds in China, foreign and domestic, raised US$3.4 billion in the first quarter of this year, five times higher than the same period in 2009, says Zero2IPO. In comparison, fundraising in the U.S. rose to US$7 billion from US$4.9 billion over the same period, according to the National Venture Capital Association in Virginia. “Venture capital is booming in China,” notes Gary Liu, deputy director of the Lujiazui International Finance Research Center at China Europe International Business School (CEIBS) in Shanghai.
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