Chinese “venture capital” Startup

A few days ago, an experienced, well-respected individual in the Greater Seattle Area posted this on LinkedIn and I thought I might as well put some of the thoughts in the back of my mind on paper. P.S. I am looking at this from the financial market perspective and not from the technical/AI perspective.

I think fundamentally, the different corporate structure/strategy between US and Asian startups can be an attribution of this. For example, Toutiao and Meitu along with at least 30+ other decently-sized Chinese startups all have set up their own startup venture arm with the intent to nurture and therefore, better control the upstream and downstream of their product/content pipeline. This has traditionally been popular with US corporations (not startups) i.e. Qualcomm Ventures and Chobani Incubator, and has yet to be even touched by most US startups (with the exception of a few like Slack venture fund which aims to invest in apps that will provide value add to their omnipresent Slack product). In my past two years of light observations of Chinese venture financing markets, the amount of $ being thrown around is on 5x magnitude different if you look at the average $ financing size per stage round. Regardless of how much cash is being raised right now, one has to ultimately wonder if we have enough global capital to go around when the 5/10 year exit comes. Too much of a good thing in a short time frame can sometimes be a bad thing/minimal risk mgmt check & balance in place. P.S. this is not a dichotomy comparison + I’m coming from a market perspective .