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By tech bubble? To this, we disagree. But what is undeniable is that the industry start-up boom in the number, and the fledgling successively obtain high valuations, and these circumstances really increased the difficulty of investment. Therefore, when investment subvert our innovation, a pair of eye is particularly important.

In fact, now situation of science and technology investment is completely new technology companies as a cash cow. Established relevant data show that less than four years of public technology companies after nearly nine times the formal valuation (record 40 years), and its corresponding old stock prices have surged.

In order to further study of this new generation, we have collected a series of listed (not less than $1 billion but not more than 4 years or is still privately owned) young information technology companies. (more than $1 billion valuation of the company accounted for more than 90% of the nasdaq stock market value.) Look first at the nasdaq new generation, a real star of tomorrow in among them, the next apple, amazon and Google's rising is only a matter of time.

A conservative estimate, the proportion of young company () in the valuation of more than $1 billion enterprise as a third, more than just the level of the late 1990 s. But there is a marked difference, compared with the peak in the fourth quarter of 2000:8% (or 6%), privately owned start-up number soared to 67, or about half of the enterprise under the incubators are privately held. And many investors may not be aware of the important trends, namely technology markets partially opaque.

The tech bubble, bubble or capital

Thanks to the generosity of the wind investment this injection (to 2014 year-end annual inflow of 26 billion), these newborn to as eye science and technology, capital is relatively abundant. Accurate, this is one of the largest a 14 years years inflows, the level of more than $1999 in 22 billion (though it is only half the landmark $2000 in 52 billion). At the same time, the stars make full use of such a good financing environment. Roughly speaking, in the past 12 months 82% of private start-up financing, the proportion is 62% from the same period last year.

At the same time, the financing channel is also gradually perfect, senior vc, diversified ecological system composed of the incubator and angel investors become the solid backing, private equity funds, of course, the source of the party (that is, to those who seek high returns) individual investors are also included. Can say, the financing main attraction is in contact with the rapid development of the next generation of enterprise based on Internet. Although the number of Internet companies on the public stage accounted for only 13% of all technology companies, but they are in the new generation of listed companies, 78% of the share for other types of companies.

Internet stocks premium reasonable?

In this era of truly respected revolutionary innovation, we can understand network derivatives. History, Internet has maintained a high premium (in contrast to other department of science and technology), especially those who can in the limited capital on the basis of rapid expansion, with a strong network effect backed) of young enterprises. But we are very concerned about the new generation enterprise valuation, especially in private markets. Because history shows that the long-term benefit of the investment risk is extremely small.

In our analysis, the general public technology stocks at least experienced eight valuation (already beyond the record of a few years ago when the Internet bubble). However, privately owned start-up company valuations more, average closer to 25 times. Both combined, the number of up to 15 times, it has become a big obstacle to future investment success.

Want to know, venture capitalists at the direct impact on the public equity markets. The new generation enterprise some may be a star of tomorrow (at the initial public offering a star), some will be now listed technology companies mergers and acquisitions. But if large listed companies still impetuousness, spend money like water, so private markets of the tech bubble is by no means alarmist. What's more, in 2014 only 17% of the new technology company can remain profitable when initial public offerings, also is higher than 14% of the Internet bubble in 2000. But for many people, this is obviously not a good news.

For innovation and a larger network

So how can investors in a variety of investment portfolio to real subversive innovation? We think the key is to cast a larger net for innovation, and actively explore the unknown boundary. Today, the technical indicators and IPO channel show that innovation mainly focus on the Internet. But it is not at all. Although it is true that some successful Internet companies are more likely to stand out, but innovation is ubiquitous, development of new material plane Hexcel (giant) composite materials, committed to the development of the driverless cars Mobileye, study the human genome sequence Illumina and delve into electronic devices panasonic is the epitome of the battery.

And, of course, the comprehensive research methods can be effective. If only from a top-down perspective, to focus too much on young and rapid development of network enterprise, ignoring its such as bubble valuations of the error is inevitable. Bottom-up concept guide, on the contrary, we choose carefully, and limit (or help) to avoid excessive contact innovation system. Whether this is is to identify the company has real change force and the best way to potential returns.