Thanks. It would be interesting to complete your analysys giving us a Chinese perspective, both financial and geopolitical: Why Manus is accepting enemy money? And why XI is allowing it?
Manus is a classic Chinese product team that builds for overseas users, like Musically, before it was acquired by ByteDance that became TikTok/Douyin. Taking overseas, ideally Silicon Valley, $$ is a no brainer.
To be clear, Benchmark made a great return on WeWork by selling their shares to SoftBank at a hefty valuation, so even WeWork turned out to be a great call. https://www.youtube.com/watch?v=lcyec3pvAEY&t=1854s
Hi Kevin, thanks for such an insightful article. I’m personally happy and very positive about Benchmark’s decision to invest in Manus and become an icebreaker.
However, just playing the “devil’s advocate” - what do you think is the chance that it’s not only Benchmark’s positions in Manus that is at stake, but the whole Benchmark’s portfolio?
As reputational risks or even sanctions if the US congress doesn’t like the deal.
As far as I know, no US funds have been sanctioned for this yet, but there were examples like Walden International getting scrutinized for its SMIC investment.
If one investment can potentially ruin the whole portfolio - would the math still work?
Agree that there is always an outsized risk of reputational damage that could endanger deal flow/access for the rest of the fund. Though scrutiny is one thing, sanctions of a US VC, and not a random nobody firm, is quite another. (I also don't think there are policy tools that lets the government sanctions one of its own; sanctions are typically reserved for foreign actors.)
If Walden is any indictor, yes scrutiny is there, but its founder is now the CEO of *the* American national champion in semiconductors :)
I guess if US funds want to get exposure to the Chinese tech, a strong GR person would be the key to help them navigate and feel the boundaries of what is allowed and what is not.
At the end of the day, as far as I know, Benchmark backed the Singaporean entity of Butterfly Effect and there are some rumors that the businesses will be split into Chinese one and non-Chinese parts.
All these variations provide high flexibility for interpretation of how you define “a Chinese company”.
Thanks. It would be interesting to complete your analysys giving us a Chinese perspective, both financial and geopolitical: Why Manus is accepting enemy money? And why XI is allowing it?
Manus is a classic Chinese product team that builds for overseas users, like Musically, before it was acquired by ByteDance that became TikTok/Douyin. Taking overseas, ideally Silicon Valley, $$ is a no brainer.
Did Manus need permission to accept foreign capital?
nope
To be clear, Benchmark made a great return on WeWork by selling their shares to SoftBank at a hefty valuation, so even WeWork turned out to be a great call. https://www.youtube.com/watch?v=lcyec3pvAEY&t=1854s
Oh yes indeed, I'm well aware.
Hi Kevin, thanks for such an insightful article. I’m personally happy and very positive about Benchmark’s decision to invest in Manus and become an icebreaker.
However, just playing the “devil’s advocate” - what do you think is the chance that it’s not only Benchmark’s positions in Manus that is at stake, but the whole Benchmark’s portfolio?
As reputational risks or even sanctions if the US congress doesn’t like the deal.
As far as I know, no US funds have been sanctioned for this yet, but there were examples like Walden International getting scrutinized for its SMIC investment.
If one investment can potentially ruin the whole portfolio - would the math still work?
Hi Denis, thanks for your comment.
Agree that there is always an outsized risk of reputational damage that could endanger deal flow/access for the rest of the fund. Though scrutiny is one thing, sanctions of a US VC, and not a random nobody firm, is quite another. (I also don't think there are policy tools that lets the government sanctions one of its own; sanctions are typically reserved for foreign actors.)
If Walden is any indictor, yes scrutiny is there, but its founder is now the CEO of *the* American national champion in semiconductors :)
Thanks Kevin. It’s an interesting trend.
I guess if US funds want to get exposure to the Chinese tech, a strong GR person would be the key to help them navigate and feel the boundaries of what is allowed and what is not.
At the end of the day, as far as I know, Benchmark backed the Singaporean entity of Butterfly Effect and there are some rumors that the businesses will be split into Chinese one and non-Chinese parts.
All these variations provide high flexibility for interpretation of how you define “a Chinese company”.
Appreciate the thoughtful post. Manus investment also got coverage in Newcomer.
Might sound like a weird question but what makes them considered “the enemy?” What’s the lore on that in simpler terms?