Legend Capital develops as leading local VC firm
By Wang Xu (China Daily)Updated: 2007-03-28 14:40
Q: Why do you say Legend Capital is an active VC firm?
A: There are two major reasons to explain that. First, we prefer to dig up companies ourselves. We find most of our portfolio companies, rather than them approaching us with a business plan. And we are usually the first-round investor as well as the leading investor. Meanwhile, once we get on board, we lend extensive help to our portfolio companies, ranging from management issues and human resources to government relations.
To do that, a VC firm needs both capacity and capability. A large proportion of our professionals have long worked in the IT industry and have a deep understanding of it, as well as the overall business environment. And they understand the needs of entrepreneurs as well as obstacles in the market. Thus we are better equipped to discover opportunities in the area, as well as helping our portfolio companies.
China's business environment is still immature, and first-time entrepreneurs lack experience managing a fast-growing business. For early investors like us, it's necessary to spend a lot of time with entrepreneurs.
Q: As a local venture capital firm, do you have any unique advantages?
A: You can say we derived from Legend Holdings in China, but we are now an international venture firm. First, we operate in line with the best practices of the industry worldwide and our investors are diversified. We have four foreign investors in our second fund and 13 in our third one, including big-names like Flag Capital and Doll Capital Management (DCM). Moreover, the venture capital market is an international arena, as all the major venture firms such as DCM and Sequoia are here. And they set the game rules.
However, as most of our professionals have experience operating an independent business, they understand the business environment and the entrepreneurial mentality. The Legend brand is helpful to enhance awareness about us, but the success of a deal relies more on our professional capabilities.
Q: Legend Capital has no operations abroad. Does that put you in disadvantageous position compared with overseas VCs such as Silicon Valley giant DCM and Sequoia?
A: Overseas VCs have more resources and connections on Wall Street, which means they may have advantage in arranging an initial public offering (IPO). But as for working out an exit plan, and predicting overseas investors' acceptance for a business model, that's also part of our service and we are equally good.
Q: Is that a reason Legend Capital invited overseas investors into its second and third funds?
A: That could be part of the consideration, but not the major part. Our aim is to become a top venture firm in China, rather than a corporate investment department or a family investment fund. So we have the responsibility to manage money from public investors. Besides, the fact we could get recognition from those kinds of investors is an important criterion for judging our performance.
Q: You also have invested in two companies in traditional industries, namely
Sunshine Paper Holding and Beijing Kebao & Boloni Kitchen & Bathroom
Furniture Co Ltd. Will you increase investment in traditional sectors?
 | 1 | 2 | 3 |  |
(For more biz stories, please visit Industry Updates)
| ||