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Archive for the ‘Globalization & VC Firms’ Category

An interview by Cherry Zheng from last September (with a nice photograph to boot!):

*** INTERVIEW BEGINS ***

European venture capital firms universally hold a prudent attitude towards the entry into Chinese market. As a result, only a few of them entered China. On the other hand, quite a large number of them, which include Amadeus Capital Partners Limited (“Amadeus”), are always observing the Chinese market actively and forming relationships with local VCs and major corporations

Amadeus invests venture capital in new technologies from offices in London and Cambridge, UK.  Since its inception in 1997, Amadeus has backed more than 60 companies in the UK and continental Europe, covering computer hardware and software, mobile and fixed communications technologies and medical technologies. Amadeus manages a total of GBP288 million of assets, raised through five funds including two seed-stage funds.

In his role as Business Development Partner for Asia at Amadeus, Shantanu Bhagwat (“Shantanu”) has 18 years of broad international experience in the broad technology sector, in Europe as well as in Asia, where he once worked in Japan and India. Shantanu has already visited China several times and continues to find opportunities to get familiar with this country and understand the developments even better.

(more…)

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In a post on Intel’s new global investment strategy, EETimes Chief Editor, Richard Wallace remarks that, “Venture capitalists, however, tend not to be very global in their outlook, or their capital placements”.

I will comment on that another time (the former is probably not true anymore while the latter may still be the norm – for very good reasons)…nevertheless, this excerpt from Richard’s post is thought provoking:

“My read is this: when it comes to venture capital investing in the high technology sector, Intel is going global, and as goes Intel, so goes the globe.

So a good contrarian investment strategy to the 20-minute rule would be to keep a close eye on the emerging technologies and the emerging markets that Intel invests in.

You may also want to jump on to this post: 20-minute rule & the Global Entrepreneur 

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* This is Richard’s label – neat!

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Richard Wallace, Chief Editor of EE Times Europe penned a great Op-Ed in last month’s issue (Nov 6 – 19) on “Doing better than the 20-minute rule”

Richard was referring to the well-known aversion of VCs to invest in regions and geographies that are not in close proximity to their base (see e.g. “It’s Not the People You Know. It’s Where You Are” and “The VC Stampede to Asia”)

Richard writes,

“Call me naïve but isn’t there more to capital’s role in the economic system that merely cloning Silicon Valley start-ups and creating safe harbors? Isn’t venture capital about risk, and the rewards that can accrue to risk takers across the full spectrum of the global economic system?”

He further says that Europe has been following the California model of VC investing for a much shorter time and therefore has less to feel defensive about. But,

“…in Europe the problem is exacerbated by the fact that technology-experienced entrepreneurs are only just starting to become high net-worth individuals,  potential VCs”

If you agree with Richard’s observation that “like capital, technology has no nationality, is constrained by no borders, and entrepreneurial-driven ‘ecosystems’ can thrive almost anywhere…”, the lack of attention to Asia amongst European VCs is puzzling.

Amongst “European” VC firms*, I know of only ourselves, Quester and 3i as firms that have been devoting time and resources to Asia over the past few years.

Richard’s conclusion is sobering:

“In the world of global technology story telling, there are a lot of great places to hunt.

Is the VC industry really that different, or is it just out of touch with the global entrepreneur?

Any remaining followers of the 20-minute rule – in Silicon Valley or elsewhere – beware”

P.S. I must mention here the work that Alpesh and Sheetal, both good friends, have been involved with for some time now. This is the Global Entrepreneur Programme of the UKTI. Its primary purpose is to help entrepreneurs choose UK as the base for their new venture and provide support & facilitation along the way…A rare example of bureaucratic foresight.

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* I am aware that Joe Golden at Accel and Gerard Montanus at Atlas have been travelling to China a lot and George at Benchmark + Sonali at Atlas are both well familiar with India…but Accel, Atlas and Benchmark all came to Europe from US and I assume (therefore) are more plugged into “globalization” and what it means for venture firms than their counterparts in Europe.

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From the press release A portion of NEA 12 will be used to continue NEA’s expansion into the rapidly growing markets of China and
India.”
 

Apparently more than 10% of the investors are from outside the US amd it makes sense for NEA to look overseas for opportunities and leverage this network of new LPs. The firm already has an office in China and India may be next.

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In its latest monthly bulletin, go4venture (a tech-focused corporate finance advisory firm in London) notes that,  

it is…worth pointing out are two “native” US investors (i.e. with no European office)…(made) an appearance in
Europe, both as lead investors:
 

  • Tollwood Venture Capital (www.tallwoodvc.com), a $180 million first-time fund (2002) specialising in semiconductors, which led the investment round in Cavendish Kinetics. This is their first investment in
    Europe.

  • VantagePoint Venture Partners (www.vpvp.com), a leading venture and private equity firm with over $2 billion under management, and specialising in what they describe as “financially, structurally, and/or technologically complex deals”.

These two deals are examples of the trend frequently seen by Go4Venture when working with its clients: the increasing internationalisation of the venture capital industry. This trend is driven by sector expertise, with VCs delivering higher value-addition than in the past. Like many other industries, venture capitalism is becoming increasingly sophisticated, particularly in Europe where progress towards more professional VC firms is noticeable. 

VantagePoints’ investment was in SolarCentury (UK), which completed a €8 million Series A round of funding. The company designs, installs and maintains tailor-made solar photovoltaic solutions for homes and other buildings….

And as the bulletin noted, “This is an unusual example of a Series A (at least first VC institutional round) led by a VC from a different geography”

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Annual report from Ernst & Young, this year’s theme is “Transition”.

Rich source of data and opinions and a must read for anyone interested in global trends in venture investing.

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Interesting survey sponsored by NVCA last year which revealed that while the trend of US VCs expanding globally was unmistakable, the United States itself remained the most attractive investment target for venture capital (VC) firms worldwide. 

Amongst the VCs who indicated that they would invest abroad, China and India were the clear choice in terms of investment destination.

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