China Venture Capital and Innovation: Valley of Jade or String of Pearls?

November 23, 2009

More than 100 entrepreneurs, investors and tech industry executives came together in Silicon Valley, Shanghai and Sydney last Thursday night for the Advance Enter the Dragon videoconference.

Moderated from Silicon Valley by Dr. Larry Marshall of Southern Cross Ventures and from Shanghai by Joseph W.K. Chan, Partner and Head of China VC & PE, Pillsbury, panelists addressed the unique opportunities for innovative Australian and American companies in the world’s two largest marketplaces – the US and China. While much is known about the investment climate and protocol in Silicon Valley, little is on record about China. Will its formidable entrepreneurial spirit be able to foster an investment climate that will turn it into a Valley of Jade, or merely a string of pearls?

Among the highlights of the 90-minute videoconference:

  • China truly is a land of opportunity. Whereas in Silicon Valley investment opportunities are typically in technology, in China, they are more broadly based – across clean tech, consumer and industrial sectors.
  • Since 2006, China has been second only to the US in total VC investment made. In the past, the VC investment made in China was typically from foreign sources at an 80-20 ratio, but in the first half of 2009, the investment has been 80% domestic to 20% foreign.
  • While in Silicon Valley investors are known to put their money behind “two guys working in a garage,” in China there is no such thing. Resources are so cheap and so available there are 15 engineers on the job from the start. Things move really quickly in China.
  • 37% of the world’s products are manufactured in China. It is in the process of transitioning from a manufacturing economy to an innovative one. This will probably shift within the next 10 years.
  • The government in China has begun to stimulate demand, rather than just supply.
  • China is still using technology invented 10-15 years ago to create products, rather than creating the technology (as is done in the US). This makes the US and China tech markets symbiotic and complementary.
  • The biggest challenge in China right now is to help companies grow and develop so that they can begin to really innovate their own ideas.
  • Like the US, in order to do business in the China market, you need to be present in the marketplace. Things happen very fast in China and if you are not there, on the ground, you will miss out in your dealings and negotiations.

  • Digislide, Spinergy Secure Funding from South Australian Innovation and Investment Fund

    November 23, 2009

    Entrepreneur Luceille Outhred, the founder of miniature projection technology company, Digislide (ASX:DGI), and the CEO behind clean energy companies Spinergy and H2Oasis Energy has secured a $1.2 million government grant to further advance opto-electronics and clean technology research and development. Digislide was awarded the funds under the South Australian Innovation and Investment Fund. Two other early expansion technology companies, Spinergy and H2Oasis Energy, were co-applicants with Digislide for the funding.

    Last week, Digislide made news when they announced they had secured $18 million in capital investment commitments from London-based investment company, GEM Global Yield Fund Limited.

    Both Digislide and Spinergy have showcased at ANZA Gateway to the US summits; Digislide in 2005, when it was a co-winner of the Guy Manson Hottest Technology Award, and Spinergy in 2009.

    Red Lizard Software Wins ANZA’s Tech23 Prize: Company Most Ready for US

    November 11, 2009

    by Viki Forrest, CEO ANZA Technology Network

    It’s my pleasure to announce that Red Lizard Software has been chosen to receive ANZA’s Tech23 prize, which is awarded to the company we saw at Tech23 last month who demonstrates great potential for the US market.

    Red Lizard Software’s Goanna product cleans up software bugs for developers, reducing the time programmers spend testing and debugging. Red Lizard estimates that software bugs are a $100 billion (USD) problem. And, they have a solution that can remedy this expense within minutes. The upshot is that higher quality software gets to market faster.

    Read more about Goanna here.

    Our prize for Red Lizard Software is a slot in our 2010 Gateway to the US program. Valued at $3,995 (USD), Red Lizard will have the option of taking part in a US market analysis workshop next year in Sydney, then working with a US-based coach who will get them ready to pitch in Silicon Valley to potential US investors, partners and others from the tech community who can further facilitate US market exploration and entry.

    Congratulations to Red Lizard Software. We look forward to working with you!

    Enter the Dragon: Shanghai, Sydney, Silicon Valley Venture Capital Forum, November 19/20

    November 10, 2009

    enterdragonsvIs Shanghai the next Silicon Valley? Will China’s formidable economic presence on the world stage bring entrepreneurs and venture capitalists together to build solutions for the next generation?

    Come find out the answers to these questions and more when Advance presents “Enter the Dragon”, a video conference linking Silicon Valley, Shanghai and Sydney, November 19/20. Click here for times and location in each city and to register now.

    Learn more about: China’s emerging opportunities for innovative entrepreneurs in the global economy; the difference between Silicon Valley and China VC ecosystems; building your global networks for business opportunities; navigating a foreign market with trusted resources; China’s growing clean and green tech market opportunities; how Silicon Valley’s innovation and Australia’s unique blend of resources, clean fossil fuels, water and solar technologies will neatly fit in this vast market sector as the world reshapes itself in the next two decades.

    Panelists include:

    • Ford Tamer, Operating Partner, Khosla Ventures
    • Matt Jones, Partner, Nth Power
    • Ron Cao, Managing Director, Lightspeed Venture Partners, China
    • Alison Leopold Tilley, Partner, Pillsbury, co-leader South East Asia team
    • Darren Ho, Managing Partner, CMHJ China
    • Tony Surtees, Executive Director, Prime Digitalworks Pty Ltd
    • Dr. Mannie Liu, Director, Renmin University, Venture Capital Research Center
    • Victor Westerlind, General Partner, RockPort Capital Partners

    Moderated from Silicon Valley by Dr. Larry Marshall, Managing Director, Southern Cross Venture Partners and from Shanghai by Joseph W.K. Chan, Partner and Head of China VC & PE, Pillsbury.

    This event is FREE to ANZA TechNet and Advance members. Sponsored by Advance, with support from ANZA TechNet, Southern Cross Venture Partners and Pillsbury. Click here to register as well as to get the locations and time for this event in Silicon Valley, Sydney and Shanghai.

    Accepting Expressions of Interest in the ANZA TechNet Gateway to China Pilot Program

    November 2, 2009

    We’ve had a number of enquiries into the Gateway to China Pilot program since we sent out an e-blast yesterday, so we have re-posted the link for the Expressions of Interest here.

    This Pilot program will be open to Australian entrepreneurs looking to get into the China market. If you are interested (or know someone who is), please follow this link and enter a brief description of your company by 9 November 2009.

    We will have more information for those who express their interest shortly after the closing date for registrants given above. The Pilot is still in its planning stages, but as of now ANZA TechNet will tentatively be holding FREE workshops in Australian cities in February 2010, with a 1-week trip to Shanghai in March 2010 to meet with China-based coaches who will help you navigate the complexities of the China business culture, explore business opportunities and learn more about doing business in the China market.

    While many companies will be invited to the FREE workshop, only five will be chosen to go to Shanghai.

    If you’d like to register your interest, click here. To find out more details about the Pilot, contact ANZA CEO Viki Forrest at