Many established venture funds make seed investments in the form of notes convertible into a future "A" round.
The rise of local-government venture funds creates yet more opportunities for abuse.
Unlike a traditional venture fund, no one is making their living off the management fees - in fact - these fees often go into the basic expenses for administrating the "fund."
With the dynamic development of hi-tech sector, it is realized that a venture fund market is the trend and therefore is already on the agenda of the Municipal is expected that a hi-tech venture fund and an overseas hi-tech fund will be established by the end of this year.
Industrial funds and venture funds will be developed, and joint-venture enterprise investment funds will be encouraged.
Now the number of IPOs and acquisitions is rising again, but not fast enough to help many struggling venture funds.
They invest in venture funds for one reason: to make attractive risk-adjusted returns.