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Regulation Macro

Hubei raises seed fund loss tolerance to 80% in fiscal tech reform

Hubei province will raise the loss tolerance rate for seed funds investing in the “0 to 1” stage from 50% to 80%, with a maximum tolerance of 100% for a single project, the provincial finance department said at a press conference on fiscal-financial coordination for tech innovation. The province will also exempt early-stage funds from revenue-based performance assessments, judging them instead on the number and quality of seed projects cultivated.

Original source

AI take

This shifts public capital toward genuinely early-stage risk, where private funds rarely go, by removing the revenue-based scorecards that push state money into later, safer deals. The design matters as much as the headline tolerance: judging funds on projects cultivated rather than returns changes manager behaviour, though it also raises the question of how quality gets measured. Whether other provinces mirror the model, and how the 100% single-project cap is applied in practice, is the open question.

Generated by AI for reference only.

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