PACIFIC BASIN ECONOMIC COUNCIL
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Additional Info: Policy Statements Speeches Photos Speakers & Noted Participants Featured Biographies Registration Media Information Conference Statement Regional Vitality in the 21st Century April 6-10, 2001 — Tokyo, Japan Mr. Chin Lin President China Venture Managment Good afternoon, Ladies and Gentlemen: It is indeed a great pleasure to be here and to speak about venture capital. In this afternoon's session, we will talk about the role of venture capital, business incubation and the venture spirit in today's economy. But first, I'd like to share with everyone - who are the venture capitalists? Once we are finding out what kind of animal they are, then we can talk about the role they play, and then we can talk about the business they can create and most of all, what kind of venture spirit they should have in today's fast grow economy. The venture capitalist, everyone knows. They are a kind of person, but wear so many different hats. He has to be a business manager, a financier, a technologist, a marketer, and a good negotiator, and of course, he must be the one with good vision, and look into the future to spot the opportunities. The venture capital business is not just investing, because many hats they wear. They should utilize their expertise to help their portfolio companies to grow. Of course, they are carrying a great responsibility to make money for the investors, but this is all related. The growth of your portfolio companies, the better return to your investors. We don't sell, when our portfolio companies turn sour. We don't back off, when they get into trouble. We build trust, synergy, and support between us. We are true partners! Because of this kind of relationships, we can talk about the business incubation. There is no other better investment opportunities than the one created by your trusted partner. The ideas one after another, the so call "deal flow" will continue surface bigger they grow, the better you get. In Taiwan, the venture capital business is one good example. We started in 1985, with two venture funds, China Venture Management Inc. is one of them. And in 1986, the Taiwan government granted tax incentive and the venture capital business start to mushrooming. Today, nearly 200 venture firms, with total US$3.5 billion dollars invested in 5,000 plus technology companies. In today's Taiwan Stock Exchange, more than half of the total transactions were technology stocks. That is no surprise at all. What I am saying is, Taiwan started with nothing sixteen years ago, fortunately, the government set up a good structure and foundation to encourage business entities to form venture capital funds, which create opportunities for entrepreneurs to do the start-up, as sixteen years later. In year 2001, the government steps back, totally hands-off the venture capital business. We are on our own, and after all, fund investors get profited, entrepreneurs become millionaires, and the nation's economy moved a big step forward. I always encourage my colleagues not to worry about the market's ups and downs. Do your homework well. The oppoortunities always there. The fundamentals of venture investment are still the same as Mr. Author D. Little made the venture investment in the early 60s. A thorough due-diligence and evaluation process is absolutely necessary for your daring investment decision. Once you've decided to invest then trust and support your portfolio all the way. By the way, to make the investment is easy part, the hardest part is to maintain your portfolio for many many years. I never worry about "too much money for too few deals." Once you build up your reputation, the deal with come to you. I also do not worry about providing funding to companies yet to turn profit, because venture investment basically is a long-term investment. It takes years to nursling your portfolio companies, to grow and become an enterprise. What I worry about is basic human being lost the entrepreneur spirit, that means the end of our business, but that seems unlikely. So, we have nothing to worry about!