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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!
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DFJ VinaCapital: Venture Funding In VietnamDDART – Diagnosis, Decisions, Analysis, Reality Test Stanford Sunspot Team Aditya Mittal MengKiat ChuaYuxin 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 • Focus on early to expansion stage companies • Invest into Pre-IPO companies going private • Raise more funds from GP and LP to create $50M fund • Partnering with DFJ allows better branding • Special interest in Internet, Mobile and telecom penetration
Our Decisions for DFJ VinaCapital • Keep all of early to expansion stage companies, but stick with proven technology • Invest into Pre-IPO companies going private, increase interaction with government • Raise more funds from GP and LP to create more than $50M fund • Stick to Vietnam and don’t try to expand to SE Asia Focus! Stay Targeted!
Analysis – Vietnam High Growth But … Small Market Despite rapid growth, the total size is still relatively small compared to other countries Increasing competition from outside – Increased Volatility Internal corruption $52.8B as compared to $12,455B in US • Fast growing economy – GDP growth rate third after China and India • Lot of privatization happening • Rapidly increasing foreign direct investment 8.43% as compared to 3.3% 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 - Draper Fisher Jurvetson Offerings • Top notch brand from Silicon Valley • Better deal flow • Network competitive advantage • Network intelligence • Network local support, global reach
Analysis – VinaCapital Positioning • 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 • Has $250M in the Vietnam real estate market • 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 MengKiat Chua Yuxin Chua Ye He
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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,