Dark Horse offers a bright business idea

Trying to be an integrator of mobile games and movie promotions, Peng Qiang's firm is neither a games tech company nor a studio.

But its business model would be hard to copy, decided Ren Zhongxian, an investment director with the venture capitalist Dark Horse Fund.

Beijing-based Dark Horse is just one of hundreds of PE/VC funds active in China today.

The country's private equity/venture capital industry has grown so rapidly that Ren - a 32-year-old young man with a master's degree in computer science from Manchester, UK - can be a manager of a multi-million yuan fund with a string of impressive deals already under his belt.

Dark Horse was launched by a much larger and more complex entrepreneurial network headed by Niu Wenwen, the former editor-in-chief of China Entrepreneur, a business magazine with an official affiliation that now publishes another title, The Founder.

Niu's network also owns iheima.com (which literally means the love for dark horses), a social networking website specializing in helping startups connect with venture capital investors.

"I bumped into Peng at an investors' club in July," Ren recalled. "And I became interested in the idea - the mobile and the movies - two big things in young people's lives but which so far have not been connected by a business."

So Ren went back and wrote a one-page report to Dark Horse's investment committee and got its approval to explore the opportunity further.

But the management of Dark Horse is not all that complicated, Ren said.

"Ours is an angel investment (investment in the early stages of development of an entrepreneurial organization) fund. You don't hope to get an elaborate set of financials from a startup anyway."

With three investment directors, the 90-million-yuan ($15 million) Dark Horse Fund has so far made around 20 investment deals.

But the business' evaluation is by no means casual. The key to its success is its ability to make an idea work, Ren said.

"I asked myself: Should I look for someone with an online games industry background, or someone with a movie market background? I know the IT industry well, and I can tell you programmers don't usually look to explore opportunities in new markets."

What Ren liked about Peng was his experience of having had a previous failure with an Internet venture. Also, that he had thought it would be a mistake to stretch its value chain too far and that he had wanted the lightweight company not just to focus on one operation.

"You don't hear that kind of thing from someone who does not have ambition."

Ren said he would not have been impressed if Peng had just wanted to run a mobile ticket-booking service. "There are already people doing that," Ren said.

"And it is not as easy to get paid as one may think," Peng said.

When Ren was convinced he was dealing with an entrepreneur with a flexible and quick-to-learn mindset, the deal was signed in September.

Will Crazy Movies develop as he wants? Will Peng remain true to his original idea?

Peng is hoping that by the end of the year the company will roll out more games and sign up more movie companies.