By Heather Somerville
San Francisco, 7 January (Reuters) – New renewal management policies have intended to stop Chinese entry into American research, but US China's investment has been stopped at the beginning of technology, because both investors and startup founders abandon the deal in Washington's investigation.
According to New York's economic research firm Rohdium Group, Chinese venture funding in the US startups was $ 3 billion last year, before the new regulatory regime was approved in August, the crowds of investors and tech companies collapsing to complete the deal .
Since then, In the startups, the Chinese Venture Funding is gradually slowing gradually, gradually showing interviews with more than 35 industry players.
U.S. President Donald Trump has invested in the new law, which is a US tax. Expands the government's ability to prevent foreign investment in companies, regardless of the country of the origin of the investor's origin. But Trump, especially in China, is strategic US. Something has been baffling about the handling of technology.
The new rules have yet to be finalized, but the tech industry's senior people have said that this decline has increased rapidly.
Attorney Nell O'Donnell said, "Deals involving Chinese companies and Chinese buyers and Chinese investors have virtually stopped", which has left the US. Tech companies have introduced transactions with foreign buyers.
Lawyers spoke to Reuters that they are rewriting the terms of the deal to make sure they get an investment stamp from Washington. Chinese investors, including large family offices, have gone far beyond the transaction and the US. Stop taking meetings with startups. In the meanwhile, some entrepreneurs are removing Chinese money, as they are afraid of long-term government reviews, they can raise their resources and acceleration in resources where market speed is important.
Volley Labs, Inc., a San Francisco-based company that uses artificial intelligence to create corporate lifting materials, is keeping it safe. In 2017, an offer from Chinese investors was rejected last year, accepting cash from the Beijing-based TAL Education Group as part of the financing round.
Wallley CEO Carson Kahn said, "We have decided for optical reasons that it will expose investors coming from that country which is now very much through business tension and IP strain."
Silicon Valley's venture capitalist Reuters told that they know at least ten deals, some companies are included in their own portfolio, which have been separated because they need the approval of the inter-state group called the Foreign Investment Committee in the United States. . Named for fear of bringing negative attention towards their portfolio companies.
CFIUS is a government group that reviews foreign investment for potential national security and competitive risks. The new law extends its power. One of them: US Ability to check previously excluded transactions from its transactions, including efforts by foreigners to buy minority stake in startups.
China is in Crosshairs. The Asian Giant is a technically technical investor, considered to be important for its global competitiveness and military power. Chinese investors have bought shares in companies with roles of follow-up companies, including Uber Technologies Inc. and Life, as well as data center networking company Barefoot Networks, Automated Driving Startup Zoos and Speech Recognition Startup AISans.
(For the graphic of Chinese adventure investment in U.S. Tech, see: https://tmsnrt.rs/2SBHUVh)
Chilean money loss Silomone Valley is not likely to spell Dumesdey. According to Data Provider Pitchook Inc., investors from around the world have gone to the US for the first quarter last year. Startups invested more than $ 84 billion, which was more than funded before the end.
Still, China's funding is US. Companies are helpful in getting into the world's second largest economy. Wali's statement acknowledged that rejecting Chinese investment could make its overseas expansion even more difficult.
Kahn said, "Those who are operators and entrepreneurs, have suffered this strain."
It is a radical shift for Silicon Valley. Including geo-political rivals like China and Russia, the US Money from all corners of the world, including secular, often flows historically by governmental investigation or regulation.
Red Whiton, a lawyer with Shepard Mullin, said that he recently advised CFIUS approval for their investment offer in six companies, only two people have chosen to file a paperwork. Others have abandoned their deal or are thinking about whether to proceed.
Whitton said "we look at foreign investment in the United States is a generation change."
China's investment has decreased between the sharp strain between Beijing and Washington. Trup has exploded China for its massive business surplus and its underhand strategy is to acquire leading American technology for what it claims.
The nations have brought billions of tariffs on each other's goods. And the use of telecommunication tools made by Trump China's Huawei and ZTEe are US. Considering the executive order to stop companies, the US The government has accused the spying.
The CFIS is emerging as one of the other powerful linkages. US Administered by the Treasury, it includes members from eight other government organizations, including Defense, State and Homeland Security departments. The mysterious committee does not disclose much about the deal that it reviews. But its latest annual report said that Chinese investors had filed 74 CFIs from 2013 to 2015, which is the highest in any country. The President has the right to make the final decision, but trunk-down from CFIUS is usually enough to eliminate the deal.
Washington showed its toughest tendency before passing the new law, while in March Truppe of Singapore-based Broadcom Ltd By blocking the $ 117 billion adverse bid for the acquisition of Qualcomm Inc. in San Diego. The CFIs said that takeover will make the United States poor in competition for the development of next-generation wireless technology.
A White House spokesman did not respond to the request for comment.
In November, CFIUS launched a pilot program that foreign investors would suggest the investment committee of any size in specific "critical techniques". The scope of that word is still defined, but the working list includes artificial intelligence, logistics technology, robotics and data analytics – the bread and butter of Silicon Valley.
Research company Rodhamm had predicted that China will be eligible for CFIUS review under new rules for three-quarters of Venture Investments.
Only some Chinese investors have re-considered the threat of investigation.
Peter Kuo, whose company, Silicon Valley Global, and Chinese investors to the US Connecting with startups, he said his business has dropped dramatically. In 2018, he said that a Chinese investor did not take part in the companies that bought them.
"The CFIS killed our organization, but it blocks many startups, and most of them are American startups," said Quo.
Army's safe side
Some security experts What does the long-standing security for startups appreciate for the safety?
Bob Erkman, the founder of Cyber Security Startups, a venture capital firm based in San Francisco and Maryland, says that there are limited number of bad actors about what we are concerned about, how they can access our intellectual property It is very intelligent about it. " .
Rodhium calculates that from 2000 to 2017, the average 21 percent of Chinese venture investment in the United States comes from state-owned funds, which are at least controlled by the Chinese government. In 2018, this figure reaches 41%.
But some tech industry players say that to test Beijing, Washington is casting a clean net in its enthusiasm.
"Many innocent professionals have been arrested in place of the administration with China," said Silicon Valley company China's newly born partner of Neontham Capital, whose funding mostly comes from foreign investors in connection with China.
Adding to Silicon Valley concerns, the Federal Bureau of Investigation has played a more active role in the Chinese investment policy.
Senior industry leaders, startup consultants and venture capitalists, who refused to recognize the sensitivity of the two businesses, told Reuters that they were recently warned by the FBI to deal with Chinese investors. Two people did not name the Chinese companies interested in the FBI, but the US. Told companies dealing in companies related artificial intelligence and autonomous driving technologies.
There is still to see if any of these is influenced by reaching the goal of gaining dominance over the advanced technologies. China still stays with the levels of funding to oppose the source of money. Can invest in technology And Chinese investors are redirecting funds to promising companies in Southeast Asia and Latin America. Meanwhile, the US Startup is overwriting deals terms to avoid CFIUS review. Lawyers told Reuters that the strategies included provisions to prevent foreign investors from obtaining proprietary information and to deny them board rights, veto rights or excess equity in the future round. Jeff Farah, general council of the National Venture Capital Association said, "People are properly concerned about ensuring that people are on the safe side of the fence."
(Reported by Heather Somerville; edited by Greg Mitchell and Marla Dickerson)
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