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Abuse of Veto Rights in Chinese Venture Capital Investment

June 2019
RegulationInvestment

Abstract

China is the most vigorous wonderland for experimental endeavour, particularly in the area of innovation for high tech (hard core) and business mode (soft core). Among this innovative surge, OFO (Chinese bike-sharing company) is a good example as to how dramatic a star-up company (founded in 2014) could reach valuation of USD 4 billion in 2017 and then plummet to earth the next year in 2018. What are behind such a dramatic development are the venture capital investors who are not only witnessing but also contributing to such drama.

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Author

Portrait image of Bing Xue
Bing Xue
Partner & General Counsel, Infinity Equity Group, China

Mr. XUE Bing, based in Beijing, is the Partner of Infinity Group responsible for China-Israel (plus other Jewish circles in the US and Europe) cross-border financing & investment, investment banking and innovation activities. Bing focuses on the high-tech projects with high potential in Chinese local industrialization such as cyber security/Fintech, AI, Healthcare, Military & Civilian Integration and Modern Agriculture, and aims on realization of industrial investment return through delicate deal structure. Bing is also Infinity’s head of "Integration of City and Industry” and Global Innovation Centers, and also acts as General Counsel. Prior to joining Infinity, Bing accumulated a rich legal experience in Junhe Law Offices and French Gide Law Firm in the area of investment and financing. Bing’s PQE legal practice includes representing leading multinational companies and investment institutions in their cross-border M&A, infrastructure, project finance and PE/VC deals in China in a wide range such as automobile, finance, energy, public infrastructure, high-tech, pharmaceuticals, and consumer goods. Bing also assisted large state-owned enterprises in carrying out outbound investment and financing activities. Prior to the above, Bing served as a military officer in the Chinese military division. Bing graduated within distinction from LLM/Business Administration of Kellogg in Northwestern University, and is qualified for Chinese bar.

Company

Infinity Equity Group logo

Infinity Equity Group

Founded in 1993, Infinity Group is the first foreign VC fund as approved by Chinese governement to engage in local VC investment, and is dedicated to unlocking the full value of cross border partnerships between China and Israel/US/EU. It does so by creating innovative platforms based on creative business models, investment funds and incubation eco systems that harmoniously link people, technologies and markets. Infinity Group is well-known for its strong roots in China, its vast, global network of technology, IP and innovation, its unrivaled know-how and expertise, and its "China-Outbound" initiative, which supports Chinese companies that show leadership in the Chinese market and which have an interest in international business, M&As, and the establishment of R&D centers outside of China

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