Breyer sees change in China venture capital returns 

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Jim Breyer, Founder and CEO of Breyer Capital, speaks during Fireside Chat on at the East Tech West conference in Nansha, Guangzhou in China on November 28, 2018.

Jim Breyer, an early investor in Facebook and the cryptocurrency Ethereum, said he thinks investors should reset their expectations when it comes to returns on venture capital in China.

“There are segments that are extremely healthy. There are many more which are undergoing very significant valuation downdrafts as well as consolidation,” he told CNBC’s Geoff Cutmore at the East West Tech conference in the Nansha district of Guangzhou, China.

“We are no longer, I believe, in a market where people by expectation will consider 8, 10, 12 percent or more per year, many times after tax, to be a ballpark estimate of what they’re trying to do for their funds,” said Breyer, founder and CEO of global venture capital firm Breyer Capital.

He now foresees a “more profound change in what expectations should be” in the near future.

China’s industry has witnessed an influx of money from state funds over the past eight years, but that boom may not last long, he warned. “There has been an abundance of capital with an abundance of opportunity, and these kinds of trends generally don’t last and in many cases, they end badly.”

In 2005, Breyer partnered with Chinese firm IDG Capital to expand investments in China and has since opened offices in several metropolitan areas. “We fight like crazy over the very best entrepreneurs so it’s no different from Silicon Valley.”