REDWOOD CITY, California: Venture investors and private equity firms are competing for the same deals in China and India, looking to avoid risk by funding companies that are selling products rather than untested ideas.

“The lines between venture capital and private equity are blurring” in China and India, said Navin Chaddha, the managing director of Mayfield Fund, which has investments in both countries.

“Most of the money is moving toward growth companies and larger-ticket size deals,” Chadda said at a conference in Redwood City on Tuesday.

Although there is no dearth of entrepreneurial talent in these countries, which collectively secured more than $320 billion in investments last year according to Dow Jones data, U.S. investors prefer to put their money in tested companies, panelists at the conference said.

The unfamiliar regulatory terrain, sketchy protection for intellectual property, especially in China, and stories of fly-by-night operators have scared venture firms away from funding ideas that are still on paper.

“There was a certain euphoric rush into China,” said Nicholas Unkovic, a partner at the global law firm Squire, Sanders Dempsey.

He said some initial investments in China may already have petered out because investors misjudged their local partners or the quality of talent.

“A lot of money is going to be made in China and a whole lot of money is going to be lost in China, but investors are going to get more sophisticated about this,” Unkovic said during the panel discussion, part of a two-day conference organized by Dow Jones.

Stella Xi Jin, a partner at IDG Ventures who divides her time between Silicon Valley and China, said that only a small amount of the money raised by venture capitalists goes into early-stage deals because investors want to avoid these pitfalls.

“More than half the dollars would go to growth funds,” she said.

Growth funds typically invest in middle- to late-stage companies that already have a marketable product or service and may even be profitable.

Even when funds claim to finance companies in their initial phase, the definition of “early-stage” is different from what the term means in the context of a U.S. investment.

A typical “Series A” round for a U.S. start-up would be in the range of $2 million to $12 million, but first-round funding for Chinese and Indian companies could be as high as $50 million, the panelists said.

Since fund-raising through the venture capital and private equity routes is still new in China and India, many companies seeking a first round of funding are already up and running and require more cash than a U.S.-style garage venture, they said.

Rafiq Dossani, who runs Stanford Universitys South Asia initiative, said that regulatory costs in India also keep away smaller venture investors - those with between $1 million and $2 million to invest.

But it has become easier to invest, especially in the technology sector, as the Indian government cuts away some of the bureaucratic red tape, he said.

REDWOOD CITY, California: Venture investors and private equity firms are competing for the same deals in China and India, looking to avoid risk by funding companies that are selling products rather than untested ideas.

“The lines between venture capital and private equity are blurring” in China and India, said Navin Chaddha, the managing director of Mayfield Fund, which has investments in both countries.

“Most of the money is moving toward growth companies and larger-ticket size deals,” Chadda said at a conference in Redwood City on Tuesday.

Although there is no dearth of entrepreneurial talent in these countries, which collectively secured more than $320 billion in investments last year according to Dow Jones data, U.S. investors prefer to put their money in tested companies, panelists at the conference said.

The unfamiliar regulatory terrain, sketchy protection for intellectual property, especially in China, and stories of fly-by-night operators have scared venture firms away from funding ideas that are still on paper.

“There was a certain euphoric rush into China,” said Nicholas Unkovic, a partner at the global law firm Squire, Sanders Dempsey.

He said some initial investments in China may already have petered out because investors misjudged their local partners or the quality of talent.

“A lot of money is going to be made in China and a whole lot of money is going to be lost in China, but investors are going to get more sophisticated about this,” Unkovic said during the panel discussion, part of a two-day conference organized by Dow Jones.

Stella Xi Jin, a partner at IDG Ventures who divides her time between Silicon Valley and China, said that only a small amount of the money raised by venture capitalists goes into early-stage deals because investors want to avoid these pitfalls.

“More than half the dollars would go to growth funds,” she said.

Growth funds typically invest in middle- to late-stage companies that already have a marketable product or service and may even be profitable.

Even when funds claim to finance companies in their initial phase, the definition of “early-stage” is different from what the term means in the context of a U.S. investment.

A typical “Series A” round for a U.S. start-up would be in the range of $2 million to $12 million, but first-round funding for Chinese and Indian companies could be as high as $50 million, the panelists said.

Since fund-raising through the venture capital and private equity routes is still new in China and India, many companies seeking a first round of funding are already up and running and require more cash than a U.S.-style garage venture, they said.

Rafiq Dossani, who runs Stanford Universitys South Asia initiative, said that regulatory costs in India also keep away smaller venture investors - those with between $1 million and $2 million to invest.

But it has become easier to invest, especially in the technology sector, as the Indian government cuts away some of the bureaucratic red tape, he said.

British driver Lewis Hamilton should have expected the taunts he received from Spanish fans during testing earlier this month, according to former team-mate Fernando Alonso.

In an interview last month, Hamilton said Alonso showed him “just how not to behave as a world champion” when the two were team-mates at McLaren last season. But Alonso has told Cadena Ser radio station that Hamilton had no right to say such a thing and that these comments led to the abuse. “The very next week they whistled him in Spain for saying that,” the Spaniard said. “That’s the other face of the situation. If you talk, it’s normal that they whistle.”

Hamilton - fomula one’s first black driver - was abused by spectators shouting racist slurs and wearing dark make-up, black wigs and T-shirts saying “Hamilton’s family” at the Montmelo circuit on February 2. The sport’s governing body the FIA is investigating the incident.

“If in the end it has been done, then you have to condemn it sharply,” Alonso said. But he claimed the reports of racist behaviour had been exaggerated, adding that he was treated harshly by fans in Monza after winning the Italian grand prix last year. “When I did my lap of honour, people were [making obscene gestures],” Alonso said. “That’s sport.”

Alonso left McLaren after a rocky season in which rookie Hamilton finished ahead of him. Alonso had expected the team to make him its No1 driver after leaving Renault as two-time defending champion. He has returned to Renault this season. Asked how his relationship with Hamilton is now, Alonso said: “The same as last year. Non-existent.”