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Venture capitalists around the world are having second thoughts about the value of some of their earlier investments. Over the last year, 102 companies were obliged to raise financing at a lower valuations than during earlier funding rounds, according to CB Insights. While only a few Chinese companies are on the list of so-called down rounds, that will not last long as more Chinese tech firms will be forced to raise money at lower valuations, says Tommy Yip, managing partner at US$210 million-under-management Unicorn Capital Partners. Mr. Yip, founder of the Hong Kong-based fund-of-funds, predicts companies that raised massive series B and C rounds at extremely high valuations, especially O2O (online-to-offline) and P2P (peer-to-peer) start-ups,  may be forced to raise money at reduced prices in order to survive. "I think for companies like Didi Chuxing, they have pressure from existing investors to go public sooner. But if you look at the capital market, it’s not a great time for companies like Didi to go public because an IPO today means a down round from a valuation stand point," Yip said during an interview with China Money Network on the sidelines of the HKVCA Asia Private Equity Forum 2017 in Hong Kong. Chinese on-demand local services provider Meituan-Dianping and Chinese smartphone and smart device maker Xiaomi Inc are in similar situations. The peer review and Groupon copycat Meituan-Dianping raised over US$3.3 billion at a post-money valuation of US$18 billion last January, while Xiaomi's gross worth was set at US$45 billion when it last raised US$1.1 billion in 2014. Investors of both companies have been reportedly seeking to sell shares in private markets at significant discounts. That could hurt other Chinese companies looking to raise money, especially overseas. Qudian, an installment online shopping platform previously known as Qufenqi, last raised money in October at a valuation of RMB7.5 billion (US$1.09 billion), down from a pre-IPO round two month earlier valuing the company at a RMB10 billion (US$1.46 billion). Qudian is now rumored to seek US$500 million to US$800 million through a New York IPO during the first half of this year, at a valuation of US$5 billion. Will U.S. investors buy shares at that price? We will soon find out. You can listen to our conversation above or read a Q&A below. Don't forget to subscribe to China Money Podcast for free in the iTunes store, or subscribe to China Money Network weekly newsletters. You can also subscribe to China Money Podcast's Youtube channel or Youku channel. Q: Why did you leave Emerald Hill Capital Partners to establish Unicorn Capital Partners? A: We believed it was a really good timing. I left Emerald Hill back in the end of 2014 and founded Unicorn Capital Partners with my partners in the beginning of 2015. Over the past few years in China, we actually went through a very interesting period, what we call venture capital 3.0 period, where we see a wave of younger venture capital professionals coming out of top firms to start their own venture funds. At that time I believe China was going through an inflection point in technology, media and telecom (TMT) sector, where the economy is starting to shift from the old economy to the new. I think in the next five to ten years, the new economy, mainly TMT and healthcare, will be driving a lot of the growth. We are currently managing two funds, both U.S. dollar funds. Our first fund, I know this is a bit confusing, is actually called Fund Zero, and our second fund is called Fund I. Together, we manage approximately US$210 million. Q: How’s did your fundraising process go? What was your fundraising target? A: We started the fundraising directly after we established the company back in January 2015, and luckily, it was quite smooth. It was a little bit more than our target of US$200 million. Q: China's venture capital sector has experienced a boom and is perhaps adjusting to...