(Yicai) Nov. 25 -- Despite the general caution shown by China’s venture capitalist firms over the past year, emerging industries such as advanced manufacturing and new energy continue to attract  significant levels of investment.

The vision of transforming human life and the allure of high-risk returns continue to draw venture capital to small tech startups, especially early-stage ventures, Yicai learned during a limited and general partners' summit at the 18th China Venture Investment Conference held in Shanghai last week. 

One Shenzhen-based robotics startup, which is less than two years old, “has no shortage of funds or investors,” said an employee. “Our chief operating officer meets several groups of potential investors almost daily.

“Those that can bring us industry chain empowerment and make a quick investment decision are more likely to make it onto our list of investors,” the person noted.

Investors tend to rush in when a startup reaches the stage where it can show progress in its development, the employee said, adding that the funds raised by domestic robotics startups are at present mainly used for research and development, with only a few starting to invest in commercial expansion.

Meanwhile, investors are stepping up their post-investment help for startups, according to CICC Capital Chairman Shan Junbao. They are increasingly offering direct support, such as securing orders or facilitating collaboration along the industrial chain, he said. “This kind of practical support is more realistic and tangible for early-stage tech companies.”

China’s VC market has been a major source of funding for startups, particularly in the tech and manufacturing sectors. But a generally more conservative investment environment has accompanied the economic slowdown of recent years, which is particularly evident in the financing rounds for startups.

They are taking much more time to go from Series B to Series C, according to Yang Xiaolei, chief executive of equity information platform CVSource.

VC firms are flocking to invest in early-stage and small-scale projects or take part in mergers and acquisitions, but systematically overlook scale-ups, Yang added.

Market activity is shrinking. By Oct. 31, the number of newly established VC managers this year was only one-10th of the number that exited; leading to a rapid falloff. “Excluding state-owned capital, there are very few market-oriented managers left,” Yang noted.

Their thinning ranks could lead to greater financing pressure on startups, ultimately hampering innovation, Yang pointed out.

Editors: Tang Shihua, Emmi Laine