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Netrepreneurs Aren't Begging for Capital Anymore The bad old days of the Asian financial meltdown are gone. Now, startups have their choice of backers What a difference a year makes. About this time in 1998, Net entrepreneurs in Asia were griping to me about a scarcity of venture capital. The regional financial crisis kept Asia off the A-list for Silicon Valley's moneymen. Asian Netrepreneurs turned to their governments for help, demanding that they put up the funds that the private sector wouldn't. But as far as entrepreneurs I spoke with at a recent conference in Singapore were concernced, that was eons ago. The question is no longer, "How does a startup get the money to grow?" It's, "How do I pick the right backer?" Fact is, getting money is practically a cinch these days. Netrepreneurs in Asia can take their pick from a number of deep pockets. American venture capitalists are back, and financiers from the Valley are on the prowl for interesting dot.coms. The Silicon Valley funds have tough competition, since Internet titans such as Yahoo! and Intel are targeting Asia, too. Throw in local powers like Hong Kong's Pacific Century Cyberbase, Chinadotcom, and Singapore's Creative Technology and Pacific Internet, and you have an abundance of choices. Instead of focusing on the best strategy to convince a skeptical venture capitalist to invest, the panelists I questioned at the conference talked about the need to be choosy. When you go to visit with would-be backers, one panelist said, you need to interview them. The millions of dollars are fine, thank you. But what else can they do for you? Another panelist at the conference likened hooking up with a venture capitalist to getting pregnant. Once the pregnancy is over, you'll have a baby that you have to take care of for years, so you better get it right. OLD-TIMER. Listening to all of this, Chua Kee Lock couldn't help marveling at the transformation that has taken place in Asia. Chua is president of Mediaring.com, a Singapore company that provides Internet telephony software. The company, which started its current business at the end of 1998, is one of Singapore's Internet leaders. (Asia is several years behind the U.S. when it comes to Net development, so Mediaring practically qualifies as an old-timer.) "Times have changed so much in 15 months," Chua says. "Now, people are saying that you must choose the right venture capitalist." Chua can afford to be choosy. He has already moved on to the next stage -- the IPO. Since its start, Mediaring.com has reported a mere $350,000 in revenue -- and losses of $14 million. No matter. Last month, it became the first money-losing company to have an initial public offering on the local stock exchange. The stock price soared on the first day of trading, rising threefold, to about 1.50 Singapore dollars, a level that it has more or less maintained since then. That kind of success must have come as a big relief to local regulators, who took a big chance with Mediaring. The IPO was part of Singapore's effort to keep local dot.coms from hooking up with Nasdaq. Thanks to the Nasdaq success this year of Chinadotcom (formerly known as China.com) and Pacific Internet, every Asian Net company seems to harbor Nasdaq dreams. Until a few months ago, says Chua, Nasdaq "was the only choice we had." That's disturbing to technocrats in Singapore and other parts of Asia who want to develop their own markets. Singapore has responded by taking some chances, with the goal of enlivening its local bourse and providing an alternative to Nasdaq. Unlike Hong Kong, which this month launched a Nasdaq-like second board called the Growth Enterprise Market, Singapore regulators decided to push their dot.coms to the main board by easing listing requirements. Mediaring was the first beneficiary, with regulators pushing through its application in a matter of weeks, rather than months. "They just went 'bang, bang, bang,'" says Hanson Cheah, head of AsiaTech Ventures, a Hong Kong-based venture-capital fund that invests in Singapore companies like Mediaring. "It was unbelievable." STILL RISKY. Not everyone is convinced that a local listing is the answer, though. For instance, the risks are higher since your stock is in a local currency -- and memories of Asia's currency meltdown are still fresh. And since Internet companies must rely on their stock if they wish to make acquisitions, having a stock priced in Singapore dollars rather than the greenback can make the task more difficult. Still, Chua seems happy with his choice. Unlike in the U.S., investors in Asia have yet to become jaded by Internet plays. There are still so few of them. "If you go to Nasdaq today," explains Chua, "there are 200 other companies going for an IPO every quarter. You go to see a fund manager, and he gives you 20 minutes of his time." By listing in Singapore, Chua can enjoy being a big fish for a change. "We are one out of one, rather than one out of 201." But given the easy access to funding that many of today's Asian entrepreneurs now have, it may not be long before the pond gets a lot more crowded. Einhorn, Asian technology correspondent for Business Week, offers his views every week for BW Online EDITED BY DOUGLAS HARBRECHT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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