Core Viewpoint - The article discusses the ongoing challenges faced by venture capital (VC) funds regarding buyback clauses, despite recent government policies aimed at increasing tolerance for losses. The anticipated positive impact of these policies has not yet been felt at the market level, with many VC firms maintaining a cautious approach to buyback terms [2][4][6]. Group 1: Buyback Clauses and Market Response - The buyback controversy has become a focal point in the primary market, driven by the pressure on VC funds to deliver satisfactory returns to their limited partners (LPs) [2][5]. - Although local governments have introduced policies to increase the tolerance for losses, there has been no significant relaxation of buyback terms across the industry. Most VC firms remain cautious when addressing buyback issues [2][4][6]. - Some VC institutions have made slight adjustments to their buyback clauses, such as implementing a "two-year assessment" mechanism, but these changes are not widespread and are often contingent on the quality of the projects [4][10]. Group 2: Government Policies and Industry Impact - Since 2025, local government guiding funds have rolled out policies that allow for a maximum loss tolerance of up to 60%, with some funds targeting seed-stage or future industries allowing up to 80% [7][8]. - Despite these supportive policies, feedback from industry insiders indicates that the anticipated benefits have not yet reached the VC fund level, with many LPs not increasing their tolerance for losses [8][11]. - The regulatory environment has become more stringent, with LPs requiring detailed reporting and audits, which complicates the decision-making process for VC funds [11][12]. Group 3: Trends in Fund Management - The combination of increased pressure from LPs and the challenges of exiting investments has led to a rise in fund extensions, with many funds unable to exit as planned [12]. - The article highlights that the adjustment of buyback terms is currently a negotiation between policy direction and market realities, suggesting a gradual evolution towards more accommodating terms in the future [12].

Core Viewpoint - The controversy surrounding "buybacks" has become a focal point in the primary market, driven by the immense pressure on venture capital funds to deliver satisfactory returns to their limited partners (LPs) amid a challenging exit environment [1][2]. Group 1: Buyback Terms and Market Response - Despite the introduction of policies by local government guiding funds to increase tolerance for losses, there has been no significant relaxation of buyback terms in the venture capital sector [1][4]. - Some venture capital institutions have made subtle adjustments to their buyback terms, such as implementing a "two-year assessment" mechanism, but overall, the requirements for project quality have become stricter [2][3]. - Individual cases of innovation in buyback arrangements have emerged, such as equity swaps to exempt buybacks, which have received approval from state-owned LPs [2][3]. Group 2: Government Policies and Market Impact - Local government policies have set high loss tolerance rates, with some allowing up to 100% loss on individual projects, yet these policies have not effectively translated to the venture capital market [4][5]. - The tightening of LP assessments has been noted, with government and state-owned LPs requiring detailed quarterly reports on project risks, leading to increased scrutiny and pressure on venture capital funds [5][6]. Group 3: Industry Challenges and Future Outlook - The combination of assessment pressures and exit difficulties has led to a new normal of fund extensions, with many funds unable to exit as planned [6]. - The adjustment of buyback terms is currently caught in a tug-of-war between policy direction and market realities, with potential for more inclusive terms in the future, albeit gradually and variably [6][7].