Venture capitalists still face many challenges in the mainland even though investment opportunities are increasing from state-owned enterprises and the private sector following China's World Trade Organisation accession, according to industry experts. At a venture-capital and private-equity conference in Hong Kong yesterday, Warburg Pincus Asia managing director Chang Sun said investors faced difficulties in China getting the right projects due to the quality and structure of mainland firms. There were few large and mature companies in China, Mr Sun said. Venture capitalists faced obstacles dealing with state-owned enterprises and found private enterprises lacked transparency. Mr Sun said it was also difficult to find talented managers to run mainland enterprises. Over-projections on the value of proposed investments often led to failure, he said. 'Getting out is the highest worry of all,' Mr Sun said, urging the mainland authorities to resolve the problem, adding that the long and complicated approval process for domestic initial public offerings adversely affected investors trying to exit investments. Vertex China Investment chief executive Zhou Fumin admitted that exiting mainland investments remained a challenge. Many start-ups were running a very tight operation under a severe capital shortage waiting anxiously for the launch of China's second board, a trading platform catering for start-ups and high-tech firms. The delay in establishing a second board in Shenzhen was limiting investors' chances of exiting their start-up investments, Mr Zhuo said after the conference. 'But we should look at the issue in two ways. The delay also give investors more opportunities,' he said. Mr Zhuo, former managing director of red-chip Shanghai Industrial (Holdings), said if a second board were established, mainland start-ups could raise funds from the board and would not need financial support from outsiders. The burst of the internet and telecom bubble and the accompanying investment slump had some positive implications, including a reduction in the valuation of start-ups. But Mr Zhuo admitted that poor company management was a common issue in the mainland. He said venture capitalists should become involved in the management of the start-ups as the failure rate was high with investors who adopted a hands-off approach. Beijing Enterprises executive director Bai Jinrong said a growing number of start-ups were seeking overseas listings, which would be one option to help venture capitalists exit their investments.