The wind of change is blowing across Venture Capital. Not confined to a specific market or geography, the relationship between VCs and the companies they invest in has shifted culturally and economically. There is a sense that models are in need of a change to safeguard otherwise resilient sectors such as tech from the fated'bubble' scenario that many sceptics see on the horizon, and with this, the deal structures and ultimately ROI is also changing. With a series of disappointing, or worse still, failed tech IPOs hitting the market over the past year, a rather grey cloud is beginning to shadow the world of start-up financing. You needn't look far to see how even the biggest names in the market have got it wrong; Uber, Lyft, WeWork, Slack, and Spotify are all trading way off their initial listings – which for their venture backers isn't boding well for forecasted targeted IRR.

Miniature robots stage a group dance at a smart manufacturing conference in Nanjing, East China's Jiangsu Province on December 7. Photo: VCG Some insiders claim that bubbles are already growing in China's artificial intelligence (AI) sector, following the rapid expansion of the industry. Firms that lack long-term strategies to counteract the emergence of such scenarios may go bankrupt sooner rather than later. Like many attractive industries at their early stages, China's AI domain has been favored by both private capital and the government, Zhu Pinpin, founder of Shanghai Xiaoi Robot Technology Co, told the Global Times on Monday. "To some extent, we expected a bubble, as investors and governments pushed forward expansion of the industry," he said. Opportunities in virtual reality and AI have grown exponentially recently, with both considered good bets on the venture capital (VC) investment circuit, according to a quarterly report that KPMG released in October.