Peter Mao, Panda Capital – An Acclaimed Technology Startup Investor

peter mao panda capital

Peter Mao is a noted venture capitalist in the Chinese startup ecosystem. Peter has backed and mentored some of the most well-known and successful technology startups. He is a recipient of several prestigious awards.

In 2015, Peter Mao co-founded Panda Capital with 3 other uprising star investors Adam Li, Tony Liang and Ryan Li in China. Prior to Panda Capital, Peter served as VP of Qiming Venture Partners and has played an important role in the investment and management of Xiaomi, Yunzhisheng, Xiaoyi, Intelligent Automation, and FraudMetrix. Peter has rich experience in technology startup investment and currently focuses on new opportunities in entertainment, social network, consumption upgrade, and new technology areas. His portfolio includes Mobike, Atzuche, Face++, Qiniu, Roborock, Insta360, etc.

Peter was named “40 Business Elites in China under 40” by Fortune Magazine ( Peter was the only VC investor in the list), “Top 30 Best Angel investors in 2017“ by GEW, “Top 30 Best Angel investors in 2016” by China Venture and Hurun Rich List, “40 Best Investors under 40 ”by CYZONE, “The Most Potential Star Investors under 35” named by Zero2IPO Group etc. Peter has a B.S. degree in computer science from Jilin University and an MBA from Cheung Kong Graduate School of Business.

Read on to know more about Peter, his pro tips on securing investment for your startup, and much more.

What background and domain expertise do you have? What makes you turn into an investor?

Peter Mao: I was a software engineer, did a lot of coding. The software development experience provides me a very different angle of view looking at the startups.

As an investor, what kind of startups have you invested in? How did you find those startups to invest in?

Peter Mao: Simply put, we only invest in tech-powered start-ups. And we try our best to invest in truly disruptive companies, not the ones who provide only incremental values. We really want to change the world through venture investment.

There are various deal sourcing methods we’re using but nothing special. The key is that we insist not to invest random deals. Which means that we’ll always try our best to identify a couple of verticals to focus on and cover most of the deals in those verticals.

What would be the core factors that you decide “Not” to invest in certain companies?

Peter Mao:

  • Small addressable market. NO big customer needs
  • Not right timing, not on the trend
  • Weak team
  • Just a nice-to-have thing, not enough differentiation.
  • Anything illegal or evil

What would be the KPI that you usually check about the startups’ growth? It may diverse in each industry like LTV, CAC, MoM, etc. but would be helpful to understand more about your additional investment factors.

Peter Mao: We usually use different KPIs for various industries. Besides those, the common ones that you didn’t mention above but we also often use are:

# month of cash left

What is the investment range and In a typical year, how many startups do you invest in? And S.Korea headquartered startups have a chance to get investment from you or should be headquartered in certain countries?

Peter Mao: We focus on early-stage investments in China only. Since culture plays a very important role in the early stage venture investing and we don’t understand deeply about other cultures. Our typical check-size is around $3~5M USD and we normally invest 10 deals per year.

Can you list one company that you have passed (rejected) investment before but think you should have invested in that company. If there is any, why do you think you have missed that investment opportunity?

Peter Mao: There is NONE yet. However, I’m sure that I will definitely miss some deals along the way. There are more than 5000 deals closed per year in China. Missing opportunities or even not looking at them is quite normal. Although I was not a deal team member looking at Didi seriously, I didn’t think Didi is a good investment at their early time either. The valuation of Didi was only around $85M USD post money back then. It was a big miss.

The key reason is that I didn’t look at this deal in a development point of view. Didi only had taxi-hailing business model back then and the local government really put a lot of regulations against them. However, a venture capitalist should always try to look into the future. My lesson is that as an investor, you should always focus on the customer needs first.

What are the main factors that startups fail as per your experience after getting investment and how can they prevent mistakes in advance from your personal perspective?

Peter Mao: It’s all about the CEO in the end. Mistakes can’t be prevented. We just have to pick the right person.

What’s your advice to entrepreneurs who have a chance to meet investors like you? What are the top 3 questions that you always ask the founders?

Peter Mao: Just be honest to an investor and to themselves.

  • What’s your vision?
  • What’re your insights?
  • How are you gonna do it differently

What’s your general thought about the term “Global” and What are the important factors (criteria) for Korean startups to consider for international expansion?

Peter Mao: Globalization is all about culture output. The economy of your mother country should be powerful enough to do this. I think China and Korea should focus on Asianization first given that the US is still the most powerful country in terms of culture output. 

As you know, our company name is “beSUCCESS”, what’s your definition of the term “success” as an investor or as an individual human being?

Peter Mao: As an investor: Make the world a better place through investments

As an individual: Be happy most of the time

What are the one or two things that you would do differently if you could go back to 10 years ago?

Peter Mao: I’d be more focus and aggressive on investing in e-commerce, delivery, video, and mobility. 

When you have a chance to come to Korea next time, what kind of Korean entrepreneurs and startups you want to meet?

Same as in China. Those who want to change the world to a better place. Interesting ideas and people.

You can follow Peter Mao here.

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