GMIC – The Money Side of Things

Panel includes:

• Deng Feng, Founder and Managing Partner of Norther Light
• Fan Bao, Chairman and CEO of China Renaissance
• Rob Trice, Sr. MD of SK Telecom Ventures
• Gavin No, Founder and CEO of Zero2IPO
• Tim Chang, Partner of Norwest Venture Partners

Investing in China

• “A move from me-too plays to more innovative plays. Instead of things going from US to China, China will become more innovative.”
• “In the US everyone is talking about the 5 big companies (Facebook, Google, Groupon, Zynga, LinkedIn), but there are more opportunities out there to become huge. Lashou has the same growth trajectory as Groupon, so things definitely move very quickly here so we have to be in China.”
• “The goals are different to the US. In the US, they look for more acquisition but here it is for IPO”
• “There is enormous demand for high growth companies here.”
• “There is a lot of money floating around in China but in Europe, there are not many entrepreneurs there. In China, they can leverage low cost for global distribution. Although China remains a hard competitive market.”

Characteristics of Successful Companies

• “Pick the right big market. The entrepreneurs that we pick that do well are excellent executioners. You have to out execute, outperform your competitors. You also have to understand how to work the capital market. It’s very important to pick the winner because in China, it’s usually a winner takes all market.”
• “Companies especially in small countries, should think globally and see that as their addressable market.”
• “There are two types of entrepreneurs. One is technologists, that are like artists. They are very motivated to see their idea come to life but sometimes don’t think about things from a business perspective. Other entrepreneurs just want to do business, as long as its a good market and business model. These people are okay with changing their ideas as they go. These entrepreneurs tend to do better.”

Where do you put your money?

• “Data mining and analytics companies will be very valuable in the future and are very difficult to copy. Cloud computing is also another hot area”
• “The pain point I see at the moment is Android mobile payment.”

Are we in a bubble?

• “The supply and liquidity in the market is so big, that’s why it’s pushing up valuations.”
• “We are in a bubble but it might last for awhile. When you have so many companies that are valued so highly but not profitable that’s when there’s a bubble. People talk about Facebook being valued so highly but at least they are profitable so if the bubble pops they will still be in business.”