Dingman Center’s StartUp 2.0 – Fidelity Asia Ventures Tells China Entrepreneurs How to Capture a VCs Attention

Benson Tam, partner at Fidelity Asia Ventures, offered advice and insight to China entrepreneurs.

For an aspiring entrepreneur ready to take a business to the next level capturing the attention of an investor is critical. For the investor, finding investment-worthy prospects is also a quarry that can be elusive.

How does a successful match get made?

This was one of the key questions the Smith School’s Dingman Center for Entrepreneurship answered for approximately 100 early-stage entrepreneurs in Beijing during a workshop, “How to Capture a VC’s Attention Before it’s Gone,” on Sept. 19. The workshop was part of a series offered in conjunction with the Smith School’s 2008 China Business Plan Competition.

David Dingman at the event with Asher Epstein, managing director of the Dingman Center.

Asher Epstein, managing director of the Dingman Center for Entrepreneurship, pointed out that the most successful pitches are those that are the easiest for venture capital (VC) investors to see future value in. The most difficult pitches are those that are for unproven or untried business ideas.

“Once you break even and you’re looking for growth capital it’s a much easier pitch to the venture capital community,” said Epstein. “Because once you show you know how to make money, it’s much easier for the venture capitalist to understand how you’ll make them money.”

Featured speaker Benson Tam, a partner at Fidelity Asia Ventures, shared advice, personal stories and insight, including his first impressions of Jack Ma, the enigmatic founder of Alibaba.com. The company is one of Fidelity’s high-profile success stories. Fidelity Asia Ventures is a primary sponsor of the 2008 China Business Plan Competition.

It boils down to chemistry and trust more than anything according to Tam. The bottom line is that the investor has to have faith in the management team. And in China, he says, the chief executive officer is an essential and irreplaceable part of that team.

Anyone who is investment worthy understands their industry says Tam, and knows where the insiders hang out – be it literally, for example at association events, or virtually, such as in online industry chat rooms. This is where Tam and others like him will also be – scoping out opportunity. The kiss of death advised Tam, is to try and make a pitch via a telephone call.

“If you claim you know so much about the industry then you must know where the experts, the gurus, usually hang out,” said Tam. “Sometimes it’s on the Internet. In China, it’s often in chat rooms. My colleagues, we go to the Web chat rooms where the top programmers or the top entrepreneurs hang out.”

To the benefit of entrepreneurs, any time can be the right time for a VC to make an investment. There is no particular stage of development that is exclusively targeted. “We are stage agnostic and we are stage agnostic for the very good reason that frankly it’s very difficult to find a good entrepreneur,” said Tam. “And when you find them, that’s the right time to back them.”

Attendees and investors had ample opportunity to find each other immediately following the session during a cocktail reception honoring the Smith School’s 2008 China Business Plan Competition semifinalists. Several semifinalist teams were in attendance.

Each year the Smith School holds the China Business Plan Competition – which awards $50,000 in cash prizes to aspiring entrepreneurs – in support of the growth of world-class innovation and business leaders in China. This year the competition is themed “Go for the Gold” and the final event and awards ceremony will be held at Beida University’s Guanghua School of Management on Oct. 29.

“We’ll see you all at the China Business Plan Competition on the 29th of October,” said Epstein before encouraging participants to take further advantage of the resources offered by the center. “The Dingman Center should be viewed as a resource to you in building your venture.”