An Undergraduate Textbook on Venture Capital for the World’s Second-Largest Venture Market: China

Pascal Levensohn, Class 14 Mentor

Venture Capital started in China in 1985, when the first government-sponsored venture capital firm was established. The industry built slowly until a few years into the new century. In 2006, China's total venture capital investment reached $1.78B, becoming number two globally, next to the United States; U.S. venture capital investment was $25.6B that year, accounting for 67.9% of the world total ($37.7B). While China was far behind, accounting for about 4.7% of the total, nevertheless, China became number two and has kept that status ever since.

"Venture capital" is a popular buzzword in China. Renmin University was among the first to create a venture capital major in the School of Finance and teach venture capital for undergraduates and graduates. In recent years, many universities have followed, teaching venture capital as an elective course. In late 2010, a new textbook will become available, one with an interesting background and story.In the summer of 2007, at beautiful Half Moon Bay in San Francisco, the Symposium on Building the Financial System of the 21st Century between China and the United States was held by Harvard Law School together with CDRF (China Development Research Foundation) and PIFS (the Program on International Financial Systems). It was an interesting and informative program. At the dinner table, Mr. Pascal Levensohn, a venture capitalist from Silicon Valley, and Professor Manhong Mannie Liu from Renmin University of China first met.The two immediately found their common interests: research in the field of venture capital and private equity. Mannie was working for Prof. Josh Lerner at Harvard Business School before she returned to China to teach these subjects, and Pascal was an experienced and successful venture capitalist and Harvard graduate who continues to serve as the Chairman of the Education Committee of the U.S. National Venture Capital Association. The discussion that began that night in 2007 resulted in ongoing collaboration.A year later, in the summer of 2008, Mannie and Pascal met again at the Harvard Club in New York City, where Pascal expressed his interest in collaborating on research papers. They explored different topics over email until Mannie was invited by a publisher in Beijing to write a textbook for undergraduate students in China; she in turn invited Pascal to join her as the book's co-author. Writing the book was a very intensive task, and both Mannie and Pascal worked on it for many months.The resulting textbook, Venture Capital: Theory and Practice, is in Chinese and is categorized as one of "China’s National College Major Investment Textbook Series for the 'Twelfth Five-Year Plan.'" Forthcoming in late 2010, the book has three parts and a total of 12 chapters. The Theory includes chapters on the venture capital concept, entrepreneurship, and a simple history; The Practice covers fundraising, business plan construction and analysis, investment due diligence, post investment monitoring and exit; and The Future emphasizes early stage investment, especially angel investment, as well as cleantech venture capitalists and socially responsible investment. In the last chapter, Venture Capital in China, the authors explore the amazing development of China's unique venture capital industry.This textbook combines the strength of Pascal's Silicon Valley experiences as a venture capitalist and Mannie's research as a professor, and will help strengthen Chinese college-education programs in this particular field.

Manhong, Mannie Liu, and Pascal Levensohn. Venture Capital: Theory and Practice. Beijing: University of International Business and Economics Press, 2010.

Mannie Liu Manhong

Mannie Liu is the author of many publications in private equity and venture capital in China. Her book "Venture Capital: Innovation and Finance" (in Chinese, Renmin University Press, 1998) was the first venture capital book in China. She is the founder, chairman, and Chief Economist of VCChina Ltd., a global investment and consultation firm based in Beijing. Under her leadership, VCChina has become one of the leading companies in China's venture capital market. Ms. Liu has a doctoral degree in economics from Cornell University. She served as research faculty at Harvard University from 1993 to 1997 and is currently professor and Ph.D. student mentor of Renmin University of China. She is also Financial Advisor to Beijing Municipal Government, Director of Boston China Finance Research Center in the United States, Director of VC Research Center of Renmin University, board member of World Business Angels Association, and Co-Chair of Ecological Development Union International.

Pascal Levensohn

Pascal has been a finance professional for 29 years and a venture capitalist since 1996, when he founded Levensohn Venture Partners (LVP) in San Francisco. He invests in early-stage software, semiconductor, and communications companies. A frequent speaker on corporate governance issues, Pascal has published numerous articles on venture capital trends since 1999. In May 2006, Pascal established and chairs the Working Group on Director Accountability and Board Effectiveness, a 33-member VC industry group that promotes director education and best governance practices. Pascal received a BA in government from Harvard University. He is a member of the Council on Foreign Relations, a former co-chairman of the Aspen Institute's Socrates Society, and chairman of the education committee of the National Venture Capital Association.

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