MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | DR. Y.Y. WONG
PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | DR. Y.Y. WONG
Regional Vitality in the 21st Century
April 6-10, 2001 — Tokyo, Japan
Dr. Y.Y. Wong
Ladies and gentlemen, welcome to this session. The session is entitled "The Role of Venture Capital, Business Incubation and the "Venture Spirit" in Today's Economy". Before I start, let me give you a quick background to some of the areas that we'd like to cover to bring us up to date. Now since the dot com crash in March last year which some has labeled as the dot bomb, it has been a difficult period for the info com industry. Many dot coms have just disappeared with the share prices of some market leaders down by 98% from their peaks. But not withstanding that, we cannot afford to dismiss the reality of the Internet revolution. I was in Silicon Valley last week, there are no more major long traffic lines, the mood is much more subdued, previously every time I meet someone, they would joke with me and say that IC meant more than integrated circuit, it meant Indians and Chinese. Today B to C means Back to College they tell me and B to B is Back to Banking, incubators they say are really incinerators. But jokes aside, the VC industry has expanded at a phenomenal rate since the 1990s. In 1990, venture capital investors invested $3.4 billion into 1317 deals. For year 2000, the National Venture Capital Association reported that venture investors committed $104 billion to 5458 deals and Venture Economics reported that traditional private equity funding reached $60 billion. The final tally for year 200 swelled to some US$160 billion. With the NASDAQ now more than 60% below its March 200 peak and the IPO market virtually shutted, many industry observers fear that much of that money is tied up in illiquid possibly worthless private companies. The same industry insiders even wager that as much as half of the US$200 billion invested by all VCs since 1997 might never been recovered. Others believe that there is still a lot of cash around and unlike mutual funds, VC funds normally only draw down cash from investors as deals close. Although raising money for private ventures is becoming harder for all but the most respected firms, at the end of the day, VC business is still US driven. Over 70% of all money raised globally is invested in America, close to 25% of all global investments in the VC business are targeted at Silicon Valley start-ups. Some VCs acknowledge that many venture capital funds are now preparing crisis strategies and are keeping most of their money in reserve. And that a substantial part of the VC community is not resource constrained at the moment. That is contrary to popular perceptions that the industry had over extended itself and is short of capital. Looking ahead, there are also those who believe that VCs need to understand the businesses, the investing and improve their management skills. Ultimately, venture capitalists should realize that it is the entrepreneurs and the venture spirit who are the heroes and the drivers of the business they fund. There are numerous debates going on but there is no denying that technology is all about hardware and software, but businesses and start-up is all about heart ware and spirit ware. To help us find answers to these questions and debunk myths, I am delighted to say that we have a brilliant panel of time tested experts to share their thoughts with us and we will start with Mr. Chin Lin, one of the early investors in the Silicon Valley. Mr. Chin. Thank you Mr. Chin. For our information, just in case those of you do not have his biography. Mr. Chin is the President of China Venture Management Inc., which is the first high technology venture capital fund in Taiwan established in 1986. He has served on the Board of a number of high tech companies both in Taiwan and the United States. He is also a Board Member of Taiwan Capital Fund Ltd., and the Taiwan OTC Fund listed on the Irish Stock Exchange. Mr. Lin also serves as Advisor to the Executive Yuan Development Fund in Taiwan and he is the Executive Director of the Taiwan Venture Capital Association. He received his Bachelors and Masters Degree from Michigan State University. Now we want to move on to another distinguished speaker and I'd like to introduce you to Mr. Yoshitaka Kitao who is the President and CEO of Softbank Finance Corporation. He is also concurrently serving as Executive Vice President and CFO of Softbank Corp., a position he held since 1995. Mr. Kitao started his business career at Nomura Securities. Today he serves on 16 different Boards mostly in the capacity as Chairman and CEO. He was born in Hyogo prefecture. He read economics as the famous Keio University, Japan and also the Cambridge University in the United Kingdom. Mr. Kitao. Thank you Mr. Kitao. It takes some time from all the information that we see. Please hold your questions until the different speakers have shared their views and now we want to call upon Mr. John Lewis of JP Morgan Partners. He is the head of JP Morgan Partners in Tokyo office and before joining JP Morgan Partners, Mr. Lewis was a member of Chase Manhattan Bank's Merchant Banking Group in Hong Kong. He has also worked in Chase Merchant Banking Group in New York on leverage acquisitions. He holds a Bachelors from the University of Virginia and an MA from the John Hopkins School on advanced international studies. Thank you Mr. Lewis. Now we have the last speaker, Mr. Vijay Fozdar. Mr. Fozdar is President and CEO and Board Member of Asia Demand Inc. Before that Mr. Fozdar was Managing Director and Founder of Bristol International. He has over 25 years experience in Asia, extensive private and public sector relationships in the region. Mr. Fozdar has served on various committees in US including the Dallas Mayor's Trade and Investment Task Force, the Bankers Association for Foreign Trade and the International Franchise Association and he is invited to lecture to US governments, universities and his work is published in many publications in the United States. Mr. Fozdar. Well, thank you very much. We want to express our gratitude to all the panelists Mr. Chin Lin, Mr. John Lewis, Mr. Kitao and Mr. Fozdar. Thank you very much for coming. |
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