Transcript DFJ VinaCapital: Venture Funding In Vietnam DDART

DFJ VinaCapital: Venture Funding In
Vietnam
DDART – Diagnosis, Decisions, Analysis, Reality Test
Stanford Sunspot Team
Aditya Mittal
Meng Kiat Chua
Yuxin Chua
Ye He
Diagnosis – Problems and Opportunities
Issues:
• Brand building and Brand name recognition
• Funds raised – Clarify goals!
– Positioning (Early or multi-stage? Vietnam or SE Asia?)
– Actions (Need more funds?)
• Navigating the murky waters of Vietnam
Opportunity:
• Early movers! Great scope!
Decisions VinaCapital made
1. Focus on early to expansion stage
companies
2. Invest into Pre-IPO companies going private
3. Raise more funds from GP and LP to create
$50M fund
4. Partnering with DFJ allows better branding
5. Special interest in Internet, Mobile and
telecom penetration
Our Decisions for DFJ VinaCapital
1. Keep all of early to expansion stage
companies, but stick with proven technology
2. Invest into Pre-IPO companies going private,
increase interaction with government
3. Raise more funds from GP and LP to create
more than $50M fund
4. Stick to Vietnam and don’t try to expand to
SE Asia
Analysis – Vietnam
High Growth
But … Small Market
• Fast growing economy – GDP
growth rate third after China and
India
• Lot of privatization happening
• Rapidly increasing foreign direct
investment
• Despite rapid growth, the total
size is still relatively small
compared to other countries
• Increasing competition from
outside – Increased Volatility
• Internal corruption
8.43% as compared to 3.3% in US
$52.8B as compared to $12,455B
in US
Analysis – Internet and Telecom in Vietnam
$300M TAM as compared to $1B in US for IT in
2007
But…Vietnamese govt. planned to inject $3.6B into
the market to increase internet penetration from
15.8% to 34% by 2010.
Demographic: Most people under Age 35
Proven: E-commerce and other web technologies
already proven in other nations
Analysis – Venture Capital in Vietnam/ASEAN
From 1998 through 2007, the quality of entrepreneurial
opportunities increased and a venture entrepreneurship culture
was established. Singapore was considered by many to be the
most mature venture capital market in Southeast Asia.
Malaysian Ventures started in 1984, and was followed by 900
Multinationals and government has also taken great interest to
maintain investment funds
The high growth market of China attaracted a rush of venture
funds to China…and Vietnam can soon be seen as a “little”
China
Analysis - Draper Fisher Jurvetson Offerings
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Top notch brand from Silicon Valley
Better deal flow
Network competitive advantage
Network intelligence
Network local support, global reach
Analysis – VinaCapital Positioning
1.
2.
3.
4.
VinaCapital is the evangelist for Vietnam
Started in 2003 in Ho Chi Minh city
Needs partnerships for stability and branding
Helps DFJ in exploiting the Vietnam technology
market
5. Has $250M in the Vietnam real estate market
6. Creating $50M fund for the technology market
Reality Test - implementation risks connected with your
decisions.
• Biggest Risks are:
– Bad Legal System and high corruption
– Lack of infrastructure to find right funding
opportunities
• Hedge risk by adopting only technologies proven
in the China and US markets
• Hedge risk of increasing volatility in market by
raising more money to get better market
penetration and maintain focus in Vietnam and
not SE Asia
Reality Test - implementation risks connected with your
decisions.
• Cultural Chasms – “Do you think I should do the dance
here in Vietnam?” Tim asked his affiliate in Hanoi and Ho Chi
Minh
– The “Riskmaster” Don and Tim instantly hit it off
• Economic – don’t see a downside to helping boost the
economy
• Ethical – don’t see any downside to honestly helping people
build meaningful new companies
Thank you
Stanford Sunspot Team
Aditya Mittal
Meng Kiat Chua
Yuxin Chua
Ye He
STOP
BACKUP SLIDES BEYOND
Analysis
• Analysis of company, customers, channels,
competitors, economics, environmental
factors and ethical issues
• Diagnosis Where is this market in its life cycle? How
attractive is the market opportunity?
• • Decisions What is your marketing (or business)
plan?
• • Analysis Why is your plan the best way to go?
• • Reality Test What are the risks of your plan, and
how can we manage those risks?
• marketing leadership in cross functional
teams;
• economic analysis to assess the value of
marketing activities; and
• ethical responsibilities to customers, investors,
and the community,