Bold and bountiful: China’s newest investment buzzword encourages risky capital plays
Concept of ‘bold capital’ has emerged amid national efforts to improve policy environment for investors that both encourages and forgives their attempts
Amid sluggish economic growth and weak investor confidence, China is championing “bold capital” – a new initiative to steer investments towards early-stage, higher-risk and tech-focused projects, seeking to revive risk appetites amid the nation’s uncertain economic outlook.
The term “bold capital” was first put forward by Shenzhen, China’s tech and innovation hub, in an October action plan aimed at promoting high-quality development in venture capital.
The plan aims to drive venture capital and private equity to “invest early, invest in smaller projects, and focus on technology”, encouraging calculated risks on smaller or nascent ventures that have the potential to drive innovation and economic growth.
Shenzhen’s action plan vowed a trillion-yuan (US$137.6 billion) government investment fund cluster, a hundred-billion-yuan industrial fund cluster, and a 10-billion-yuan angel and seed fund cluster by 2026, to “fully unlock the potential of private capital and strive to register more than 10,000 private-equity and venture-capital funds”.
Pestered by slashed revenue, reduced pay and unstable job prospects, the nation’s investors have become increasingly reserved and cautious in new ventures.
Investment decisions across the market have become more cautious, and the pace of fundraising and exits has slowed
