A group of China private equity investors set aside $400m to pour into early investments in new US businesses, marking a large rise in the amount of…

A group of China private equity investors set aside $400m to pour into early investments in new US businesses, marking a large rise in the amount of capital chasing seed investments

The investment vehicle represents a step up from an earlier $25m fund raised to back investments through AngelList, an internet-based service for organising seed investments

Interest in backing high-growth tech start-ups has brought large amounts of money to established private companies that have proved they have a workable model

But it has been harder for outsiders to get in on the newest business ideas at the earliest stage

Seed investments are usually done in amounts of less than $1m, and are made by individuals, known as angels, making it hard for institutional investors with more capital to get involved

The total amount of seed-stage investments in the US last year was $1.33bn, according to research firm CB Insights, though that was still up about 50 per cent from the year before

Naval Ravikant, AngelList founder, said the availability of much larger amounts of money was a result of the excess liquidity in financial markets. AngelList

The new fund is almost twice as big as the $205m that has been invested through AngelList in the past two years. AngelList

AngelList said it was led by China Science and Merchants Capital and included the three biggest private equity investors in China

Mr Ravikant said it was independent of the online marketplace but was committed to putting the entire amount to work in AngelList investments. AngelList

“It’s up to us to make sure it doesn’t create a bubble,” he said of the China investment vehicle

The fund might have topped $1bn but was capped to limit its impact on the seed market, he said. “