Saturday, December 29, 2012

China's Next Export: Venture Capital-


By John Tozzi.


In April, Empower Micro Systems became one of the first tenants of InnoSpring, a new startup incubator in Santa Clara, Calif., backed largely by Chinese investors. Less than two weeks after Empower’s move-in date, InnoSpring helped the young company—which develops technology that converts electricity between AC and DC—set up meetings with 22 China-based venture capital firms in preparation for a trip to Shanghai in May. “To have that network working on our behalf is priceless,” says Jon Bonanno, Empower’s president.

As more U.S. tech startups see China as an essential place to do business, increasing numbers of Chinese investors are funding them and helping them expand to the mainland. Chinese venture capital firms backed 28 U.S. companies in 2011, nearly double the number two years earlier, according to Dow Jones VentureSource. China’s growing wealth and the government’s desire to attract tech companies have set the stage for more deals, says Gavin Ni, founder of Zero2IPO Group, which advises venture capitalists in China.

Much of the activity is driven by Chinese-born entrepreneurs who made their fortunes abroad, such as InnoSpring President Eugene Zhang. A graduate of Beijing’s elite Tsinghua University, sometimes called the MIT of China, Zhang started his career at Sun Microsystems and Cisco Systems (CSCO) before founding semiconductor company JEDA Technologies in Silicon Valley in 2002. Two years ago he helped form a $5 million angel investment fund with 24 fellow Tsinghua alumni. The fund is one of several groups that will back companies from InnoSpring. Chinese entrepreneurs “are entering into the Silicon Valley ecosystem not only as startups but as investors,” Zhang says.

Though Empower’s founders are from the U.S. and Europe, most of InnoSpring’s companies already have ties to China. Xuyang Li, founder of mobile antivirus app maker TrustGo, emigrated from China in 1993. His year-old venture has four employees in the U.S. and 40 in China, where software development is done. TrustGo’s English-language app launched in March, and a Chinese version is expected soon. “We’re trying to build an American company, but I have a deep connection to China, so we’re able to cover both markets,” Li says.

InnoSpring today is home to more than 20 companies and expects to eventually double that number. By establishing a foothold in Silicon Valley, the group says it can strengthen the ties Chinese-born entrepreneurs have with their homeland. “If you look in the Valley, there are a few hundred thousand Chinese and Indian immigrants who are some of the brightest, most motivated people in those countries,” says Richard Lim, managing director of GSR Ventures, which has offices in China and Silicon Valley. The firm has funded dozens of Chinese startups and will invest in InnoSpring companies. The incubator, Lim says, can “attract people to go back and set up enterprises in China.”

Even the Chinese government is betting on foreign startups, via WestSummit Capital, a venture firm backed by the country’s sovereign wealth fund. Formed in 2009, WestSummit invests primarily outside China, and its six partners are all U.S. citizens. WestSummit promises to help its portfolio companies navigate China’s bureaucracy, particularly in energy, telecommunications, media, and other industries that are heavily regulated or dominated by state-owned enterprises.

One of WestSummit’s companies is trying to sell technology used in credit cards and ID badges to state-owned banks and government bureaucracies. While such contracts in China rarely go to outsiders, WestSummit can help foreigners form partnerships with locals—though the government has no control over investment decisions, says Raymond Yang, WestSummit’s managing director. “We leverage government influence and [our] background to help our portfolio companies,” he says.

For entrepreneurs, the benefits of investors with strong ties to China are clear. Breaking into the Chinese market can be daunting even for multinationals with decades of experience in countries around the globe. “There are very few places where relationships are as pivotal to your success or failure,” says Chris Hartshorn, vice president at tech advisory firm Lux Research. “If someone likes you in China, paperwork disappears pretty quickly.”

While funding U.S. startups may be attractive to growing numbers of Chinese, successful venture investing requires management skills and experience that remain in short supply in China, says Feng Deng, co-founder of Northern Light Venture Capital, a Hong Kong firm that has invested in InnoSpring. “It’s not like, ‘You have money, you can do this,’ ” Deng says. “Especially for early-stage investors, you need to really understand how companies grow.”

The bottom line: As China’s wealth increases, Chinese investments in U.S. startups have almost doubled in the past two years.

Article published May 17, 2012 Bloomberg Businessweek

http://www.businessweek.com/articles/2012-05-17/chinas-next-export-venture-capital

Employer Q&A: the insider tips on Deloitte's graduate program

Arthur Wang, recruitment director at Deloitte, China


45,000. That's the number of graduate CVs their China business receives each year. 20%. That's the % of their annual graduate intake that's made up of haigui. Here, Arthur Wang, recruitment director at Deloitte China, talks to Silu about what the consulting and accounting giant looks for in its potential grad-level recruits...

How do you typically filter candidates?

We have a standard set of ten factors that are most important to us and against which all candidates will be assessed. These are honesty, communication skills, degree of 'preparedness', active learning ability, problem solving, team work, positive behavior, adaptability, managing emotions and leadership.

What do you particularly expect from oversea graduates?

About 30% of our work is on an international level, and involves liaising with global clients. Returnees have an advantage in terms of their degree of international exposure, so we welcome applications from them.

Since they have typically spent one year or more in a foreign country, we expect them to show how they have developed themselves in the highly diversified environment in which they studied, and how sensitive they are to different cultures as a result. For example, we probe them to establish if they can view a problem from a different angle or have an overall understanding of the global business environment. Independent judgment is also very important.

Candidates are also expected to have excellent communication skills, and here again returnees should be at an advantage, as an important part of their overseas education is to deliver presentations in class and to engage in group discussions.

How many selection stages do graduates typically face before receiving an offer?

Four. First, have the resume selection stage, in which applicants' academic background and performance, internship experience, involvement in students’ associations and fluency in English will all be assessed.

Those who pass this screening stage will then take a written test on their language ability, numerical logic and career preference. The third round is a case study and group discussion. Eight people in each group will discuss a business case and its possible solutions. Those who make it through that will then go to interview stage, and the final decision will be made after an interview with the partners.

Any preference for particular student majors?

Mostly, we prefer students with business-related majors - such as accounting, finance, taxation, economic, law, management, plus computer science and information systems.

Do you have any target universities?

Yes - in principle we want the top students from the top universities. In practice, there are 13 universities in the UK which are our main targets: University of Warwick, London School of Economics, Imperial College London, University College London, Manchester Business School, City University London, University of Nottingham, King's College London, University of Cambridge, Lancaster University, University of Liverpool, University of Leeds, and University of Glasgow.

How important is an internship or work experience?

Those who have such an experience will, of course, have some advantage. But we understand that for some masters students, especially those in the UK, term time is quite a short, intense experience, which doesn’t allow much spare time to find an internship. So it’s not a compulsory requirement.

What proportion of your graduate intake is haigui?

20% of our graduate program every year are returnees.

And which departments do they mostly join?

Most graduate hires prefer a job in consulting rather than audit, which makes it much tougher to land a job in the consulting division than on the auditing side - competition for consulting new starter roles is very fierce.

But not everyone is suited to the work of a consultant, and in many cases, students don’t actually know what the audit side does, so things change once they join and become more familiar with the work we do.

What advice would you give to Chinese students applying to Deloitte?

It’s better to have a clear career plan before the applying for a graduate job randomly. We ask them to choose which division they want most in the first place when filing their online application. Then their resumes will be handled by different people based on their choices. So figuring out what they want to do and what fits them first will help us to assess them more effectively. Good luck!

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Financial Services In China 2013: How Much Are They Going To Pay You?




Morgan McKinley 2013 Salary Report - Financial Services

(From Silu.com): Salary-wise in 2013 there will definitely be gold medal winners - insurance and asset management; runners-up - financial leasing, private equity, risk management, accounting and finance, and 'also rans' - corporate & retail banking and banking operations. Here's Silu's summary of the report...

Booming: Insurance + Asset Management

Reasons: regulations loosening up and market conditions becoming more favorable.

Results: products being more diversified, performance management being reformed, and ultimately - more jobs with better pay.

Recruitment opps:

*Insurance - non-life insurance are where the hot roles are with 20%-40% salary increase expected; top-paying role - Portfolio Managing Director (RMB 100K+ per month).

*Asset Management - it's true that research/analyst/securities teams are shrinking, but worry not, they are moving on to corporate finance and M&A; 20-25% salary bump expected; top-paying role - Actuarial Director (RMB 50K-80K per month).

Stable: Accounting + Finance + Risk Management

Reasons: regulatory burden should make for more opps, but economy is unstable, so they cancel each other out in terms of hiring.

Results: employer reluctance when it comes to signing off on new recruits.

Recruitment opps:

*Accounting and Finance - knowledge of local regulations and connections with regulators highly sought after. 15-20% salary increase on average while 30% for financial control and reporting people; highest salary goes to Financial Control/Reporting Director (RMB 70K+ per month).

*Risk management- asset management, leasing and PE firms want more risk professionals; salaries for junior-level professionals not changing much but senior level should see 20% growth; highest salary goes to Legal Director (RMB 85K-150K per month).

Booming sector, tough job market: Private Equity + Financial Leasing

Reasons: China's twelfth Five-year Development Plan is favoring this area - it specifically states that the financial leasing industry will be further developed and the Ministry of Commerce and the National Development and Reform Commission are revising regulations accordingly to support it; meanwhile, investment banking not doing well - giving more opportunities to PE.

Results: booming - and supposedly hiring, but the hiring actually slowed down in the second half of 2012 due to global economic uncertainty and capital market cooling down.

Recruitment opps:

*PE - lengthy interviews as usual, requirements being higher - asking for experience in local operations and M&A; salaries to remain the same in general; highest salary goes to PE Managing Director (RMB 120K-200K+ per month).

*Financial Leasing - mid--to-senior-level needs both global and local experience - tough one, hiring slowed down lately but still a 20% salary increase expected; highest salary goes to Project Management/Legal Compliance Director (RMB 55K+ per month).

Unstable sector, bleak job market: Corporate + Retail Banking + Banking Operations

Reasons: global economic recession affects everyone, but to make things worse for banks here, China doesn't have strong policies designed to support them int eh way they are doing for other sectors e.g. insurance, financial leasing, etc.

Results: business slowing down and headcount being frozen; focus on talent retention.

Recruitment opps:

*Corporate & Retail Banking - middle and front-office not hiring, but it's a different story if you have client resources in SOEs (state-owned enterprises] and MNCs - they want you; no big salary bump expected in general except for junior front-office professionals - a 15% increase expected; highest salary goes to Trade Finance/Marketing Director (RMB 60K-75K per month).

*Banking Operations - foreign banks not hiring, junior operational bankers wanted - to cut costs; product management functions are doing ok; highest salary winner: Treasury Operations Director (RMB 50K-100K per month).

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Ramon Zeng, Investment Principal, DCM
Steve Lau, Entrepreneur, Angel Investor and Founder of Eagle Fund
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Qiming Huang, Director, Silicon Valley China Wireless Technology Association

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San Jose and Silicon Valley want Chinese companies to know the investment door is wide open

by Nathan Donato-Weinstein, Real Estate Reporter
Silicon Valley / San Jose Business Journal

That was the message at a closing forum Friday during the 2012 US China Economic & Technology Summit, a daylong event at San Jose City Hall focused on technology, economic trends and international investment.The event came weeks after a new report from the Asia Society Northern California showing the state should become a top China summit: Silicon Valley welcomes investment destination for Chinese direct investment by 2020. San Jose officials want that money to come here. Kim Walesh, economic development director for San Jose, touted the large number of Chinese firms that have set up shop in recent years, noting the city's growth is slated to outpace San Francisco and Oakland combined.


"We've definitely seen more and more Chinese companies coming into our community, and we welcome them," she said. "The real estate here is a good value because of the growth that's projected." Still, Chinese investment here is in its infancy, said Bruce Pickering, executive director of Asia Society Northern California.


"At this point in time, New Zealand has more money in California than China. But that will change," he said.

Skip Whitney, a broker with Kidder Mathews in San Francisco who has worked closely with Chinese individuals and companies on real estate transactions, said service providers -- accountants, attorneys, brokers bankers and others -- need to educate themselves on how to work effectively with Chinese investors.


"You've got to understand the culture," he said.


Nathan Donato-Weinstein covers commercial real estate and transportation for the Silicon Valley Business Journal.

Originally Published Friday, October 26, 2012