Global Themes

On Globalization & Venture Capital

Live Blog – Day II at Red Herring Asia, 2006

mainpic.jpg Hong Kong, 30th Aug ’06

Safa Rashtchy started the conference this morning by sharing his insights on Asian markets and how to be successful in this region. I found the presentation to be more oriented towards China than the rest of Asia. I made the point later on that it would be unwise to ignore India when it comes to consumer uptake of digital content.

I mentioned that half the Indian population is less than 25 years old, consumer spending makes up 67% of GDP (second only to US in the world) and discretionary spending on digital content is already visible in e.g. the $2-$3 that mobile subscribers spend on ring-tones. I missed Richard Joung’s (with JAFCO, Korea) presentation but returned just in time to hear Alex grill him about a remark that he made regarding trusting (or to be more accurate, not trusting) your employees – if anyone reading this remembers/heard the actual remark, pl. correct me here. 

Yoshito Hori followed with some interesting slides and data on Japan. I was impressed to learn that there have been more IPOs in Japan in the last four years than US 747 vs. 617 (includes all exchanges). Yoshito also stressed Japan’s premier position when it comes to telecoms and mobile technology. He mentioned that broadband fees are the lowest in the world (with some of the highest speeds) and mobile TV is already a reality in Tokyo.  Here are Yoshito’s slides

Post the Keynotes, I joined a panel moderated by Kaiser Kuo on Local vs. Foreign VCs. My other co-panelists were Max Burger-Calderon from Apax, Po Chi Wu from Dragon Bridge Capital, Rocky Lee from DLA Piper and good friend, Ray Leung from HSBC Private Equity.  Some of the points that came up during the discussion: 

  • Where do you draw the line between “local” and “foreign VCs”? – Are “local” firms with Partners who have long experience in US/European markets still “local”? What about foreign firms with strong local presence? What about IDG in China?
  • The dichotomy may be false – there are hybrids that exist AND and there may be great advantage in having them both on your Board
  • The key criteria to choose one over the other must be: what value are they adding? In case of foreign VCs, are they opening doors for you? making customer calls, introductions etc.? in case of local VCs, do they mentor well? Would they be able to help you with product strategy? Do they have market knowledge?
  • Some kind of local presence is a must – It is difficult to make consistently good returns in “flying-in, flying-out” kind of venture capital.
  • Foreign VCs may bring on some additional value in terms of access to (and familiarity with) exit markets – this may be particularly relevant for Chinese companies since local exit market is ye to fully develop; Fortunately, this does not appear to be a problem for India 

I had to miss the afternoon sessions but it was great to be here…met some exciting companies and managed to re-connect with several friends and acquaintances….very worthwhile. 

Find of the day:

Instant China Journalism Template by Kaiser (yes, Kaiser Kuo!) 

August 30th, 2006 Posted by | Emerging Markets, Venture Capital in Asia | one comment

1 Comment »

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