Beijing state-owned assets tolerance policy arrives.

This time, it's Beijing.

Recently, the General Office of the People's Government of Beijing Municipality issued the "Several Measures for Beijing to Establish a Growth Mechanism for Future Industry Investment and Promote the Development of Future Industries" (hereinafter referred to as the "Measures"). Focusing on the development of future industries in Beijing, 16 measures have been formulated to support Beijing in taking the lead and setting an example in the development of new - quality productive forces according to local conditions.

One of the statements has caught the attention of the venture capital circle:

Encourage and support the investment funds of municipal and district - level governments and state - owned enterprise funds to increase their investment in future industries. Follow the rules of fund investment operation, tolerate normal investment risks, and do not simply use the profit and loss of a single project or a single year as the assessment basis.

The Latest Scene of Beijing's Tolerance for Failure

Specifically, the "Several Measures for Beijing to Establish a Growth Mechanism for Future Industry Investment and Promote the Development of Future Industries" is divided into three parts, covering aspects such as improving the input system of future industry elements, strengthening the full - cycle investment in future industries, and perfecting the long - term service mechanism for future industries, and 16 measures are proposed.

Among them, the second article of the "Measures" is "Innovate and Improve the Industrial Investment System", which includes:

Coordinate and give full play to the guiding role of the government's "funds + funds" to promote the formation of a new investment and financing service system that is more forward - looking, targeted, and inclusive. The proportion of funds invested in future industries by major industrial departments such as science and technology, economy, and informatization shall not be less than 20%;

Encourage and support the investment funds of municipal and district - level governments and state - owned enterprise funds to increase their investment in future industries. Follow the rules of fund investment operation, tolerate normal investment risks, and do not simply use the profit and loss of a single project or a single year as the assessment basis. Optimize and adjust the investment guidelines for newly established funds to guide them to accurately invest in future industries.

The "Measures" also specifically clarify that reform and optimize the institutional mechanism for the assessment and evaluation of investment and financing in future industries, and promote the establishment of an innovation and entrepreneurship ecosystem that is inclusive, prudent, and exempts from liability for due diligence.

What are future industries? Recall that in 2023, Beijing issued the "Implementation Plan for Promoting the Innovation and Development of Future Industries in Beijing", targeting six major fields including future information, future health, future manufacturing, future energy, future materials, and future space, covering dozens of sub - directions such as artificial intelligence, 6G, quantum information, commercial spaceflight, synthetic biology, brain - computer interface, life sciences, cutting - edge new materials, and humanoid robots.

These industries often require huge upfront investment, and it is necessary to attract key investments for innovation entities. The "Measures" propose to actively seek support from national special funds, national venture capital guidance funds, and national emerging industry venture capital guidance funds. Encourage long - term capital such as social security funds and insurance funds to invest, make good use of medium - and long - term loans from policy - based banks, and increase investment in strategically significant sub - fields and weak links of future industries.

In addition, encourage various funds and investment institutions to invest in early - stage, small - scale, long - term, and hard - technology projects, give play to the role of long - term patient capital, and support the development of future industries. Strengthen the sorting of information on future industry enterprises, and guide the provision of differentiated investment and financing services according to the different characteristics and needs of enterprises.

It is worth mentioning that the "Measures" also specifically point out that a number of benchmark incubators serving cutting - edge technology innovation and achievement transformation will be mainly laid out in the central urban area and around relevant universities and research institutions to strengthen the connection and coordination with the source of innovation and cultivate early - stage hard - technology enterprises. Support the incubation of innovative enterprises and the implementation of major projects.

Tolerance for Failure

"Encourage innovation and tolerate failure." In the past year, more and more explorations and practices of the tolerance - for - failure mechanism in the primary market have been carried out across the country.

The latest scene was in July this year, when the "Work Guidance for the Recognition of Due Diligence and Tolerance for Failure in the Field of Scientific and Technological Innovation in Shenzhen (Trial)" (hereinafter referred to as the "Guidance") was officially issued. This is a document specifically formulated for the scientific research field. Units and individuals recognized as having fulfilled their duties will not be held accountable, which will not affect relevant evaluations and assessments, nor will it affect their re - application for science and technology projects supported by fiscal funds.

In June this year, the "Administrative Measures for Guangdong Government Investment Funds" mentioned that differentiated management should be implemented for venture capital funds and industrial investment funds in terms of performance assessment and tolerance - for - failure mechanism. It is clearly pointed out that following the rules of fund investment operation, normal investment risks should be tolerated, and no liability will be pursued for the investment loss of a single project. The loss tolerance of venture capital funds should be appropriately relaxed.

Not only that, Shanghai, Guangzhou, Inner Mongolia, Hubei, Heilongjiang, Hainan, Wuxi and other places have all introduced a tolerance - for - failure and liability - exemption mechanism for scientific and technological innovation, allowing exemption from liability for reasonable losses caused by innovation failures - where there is innovation, there will be failures; to encourage innovation, failure should be tolerated.

In order to break the embarrassing situation of "not daring to invest", the door of tolerance for failure in the primary market is slowly opening.

Recall that this year, Guangzhou proposed in the "Detailed Rules for the Implementation of Direct Equity Investment of the Science and Technology Innovation and Entrepreneurship Investment Mother Fund in Guangzhou Development Zone (Huangpu District)" that the maximum allowable loss for a single project in seed direct investment and angel direct investment is 100%, and the assessment will be carried out based on the entire life cycle of direct investment funds.

Subsequently, Nanshan District of Shenzhen issued the "Action Plan for Supporting Innovation and Entrepreneurship 'Six Ones'" in Nanshan District, in which a strategic direct investment special seed fund and an angel fund with a total scale of 500 million yuan were established, and the maximum allowable loss for a single project in the funds is 100%.

The signals are positive, but the dilemmas are also in front of us. It should be noted that the tolerance for failure often easily leads to disputes such as the loss of state - owned assets and corruption. Therefore, a practical tolerance - for - failure mechanism that meets audit requirements requires the formulation of detailed rules at a higher level.

Everyone is waiting with bated breath.

This article is from the WeChat official account "Decoding LP", written by Yang Jiyun, and is published by 36Kr with authorization.