TIANJIN - Young entrepreneurs are rushing to launch their dream business as investors and policy makers enthusiastically encourage a new startup trend, opening doors for people to strike gold and reverse the economic slowdown.
In the first quarter of 2015, Chinese investors staked about 260 million US dollars in angel capital, tripling the amount registered in the same period a year earlier, venture capital and private equity research firm Zero2IPO Group said on Wednesday.
The money went to finance 349 business ventures, doubling the number of projects launched in the first quarter last year, the research firm said.
Of the money invested, 43 percent was put into companies related to telecommunications and 37 percent in Internet.
Some analysts said the investment was over-concentrated in those sectors.
The Chinese government has been propping up a mass entrepreneurship scheme, vowing to unleash the full potential of innovation by cutting off policy hurdles and rolling out financial support.
It comes as the central government launches broader efforts to reduce administrative interference, bolster the private sector and reform state-owned enterprises as Chinese economy slowed to a six-year-low of 7 percent in the first quarter.
Policy makers believe more innovation and high-tech industries can help renew the made-in-China image and help support the world's second largest economy.
New efforts have caught the eye of both rich company owners and professionals as tales of fortune and declining corporate profits prompted many of their peers to leave their jobs to ride the startup wave.
The wave has seen hundreds of new mobile applications taking new approaches to taxi-hailing, healthcare and finance in the hope of catching the eye of venture capitals.
New technologies like "big data" or "cloud computing" provide a lot of new business opportunities as they offer easier access for young entrepreneurs.
"It is a golden era for both entrepreneurs and angel investors, " said Chen Bin, executive vice president of AngelCrunch, a startup brokerage firm.
According to government data, nearly 3.7 million new companies were registered in 2014, up 46 percent than a year earlier.
Statistics from the Ministry of Human Resources and Social Security showed Internet-related industry greatly contributed to the 13.2 million new jobs last year.
To garner more money in the investment pool, the central government has decided to set up a state venture capital fund.
Local governments are also moving to launch venture funds. In dozens of cities like Beijing and Shanghai, university graduates and professionals alike can be rewarded free rent or tax cuts in their startups endeavor.
State-owned enterprises are encouraged to either take part in or establish venture investment funds.
"Government-led reforms and growing enthusiasm in entrepreneurship will make China a leader in high-tech industries, " said Dai Jinping, director of Nankai Institute of International Economics.
China's startup investment, however, is still in a fledgling state compared with that in the United States. About 28.8 billion dollars was spent as angel capital in the United States last year, which financed 75,000 projects.
Guidelines issued by the Chinese government on Tuesday may give investors more incentive to finance startups. The government plans to make new rules for startups relating to IPOs and bonds.
To file for an IPO, businesses must have turned a profit for the most recent two years and have posted accumulated profits of no less than 10 million yuan (1.6 million US dollars). For startups, this means filing for an IPO is out of their reach.
As such, plans for a new strategic emerging industries board at the Shanghai Stock Exchange is being considered.
The Shanghai bourse is mulling relaxed criteria for listings on the new board, and the government will look into ways to allow the listing of Internet and high-tech companies that are still unprofitable on the ChiNext, the NASDAQ-style board.
Yinghe law firm co-founder Shen Wei said many other obstacles should also be removed for startup investment, suggesting more detailed policies are needed to protect the interests of investors and startup founders.
"The lack of standard company management can also be a risk," he said.
The government can encourage more money to pour in venture investment if tax breaks are offered to offset losses, Chen said.