Bridging the Gap: Attracting Western Venture Capital to Hangzhou

Abstract

Over the last decade, China’s economic landscape has both grown and fluctuated, impacting investment prospects. 5CGroup, located in Hangzhou, is a consulting firm which helps companies attract venture capital. Through reviewing literature, interviewing experts, and examining questionnaires, we assessed the state of Western investment in Hangzhou and found that culture, laws, historical conflict, communication, and market factors impede trust between investor and investee. From this we developed a set of recommendations for 5CGroup to assist their clients attract Western capital.

Author's Note

This research paper was completed as a part of a seven-week overseas project in Hangzhou, China. A group of students from Worcester Polytechnic Institute were divided into teams of four or five and each assigned a research topic and a sponsor. While on-site, the students were required to work and collaborate with their sponsors to understand their sponsor's needs, the motivation for their research, and how the research would be used after it was completed. In the case of this paper, myself and three of my classmates worked extensively with a Chinese VC consulting firm to explore the lack of Western investment in Chinese enterprises and discover how the firm could further attract foreign investment to the area.