VietNamNet Bridge – Experts say it is now the right time for Vietnam to think of seeking investment capital for the science and technology development from venture funds, while affirming that Vietnam’s market has become attractive enough to lure the funds.

Representatives from different ministries and branches, and venture funds gathered several days ago at a conference on technology commercialization in HCM City, where they discussed how to build up policies suitable for developing science and technology with venture capital.

Arthur Trueger, Chair of the US-based Berkeley International Capital Fund, said Vietnam has a bigger potential than Singapore to connect with technology investors in Silicon Valley, but it has been slower taking concrete actions. “There are only four venture capital funds in Vietnam, namely Mekong Capital, IDG Venture Vietnam, Dragon Capital and VinaCapital, while the market is very big, and Vietnam’s policies remain unclear,” he noted.

Mr Trueger told Dau tu newspaper that he came to Vietnam four times to seek small businesses and introduce them to big technology groups in the US, such as Intel, IBM or Cisco. “However, no one was there to offer me information about investing in Vietnam,” he said. Meanwhile, China, Singapore and Thailand all have government representatives right at Silicon Valley, who offer direct consulting to investors and help connect them with their enterprises back home.

According to him, Vietnam needs to set up concrete regulations, guiding the investment of venture capital, such as the regulations on the investment scale, the fields in which Vietnam encourages investment, and the investment asset structure of funds. He also thinks that the Government of Vietnam should set up a management board in charge of venture investments. Once venture capital investment develops, it will be necessary to promulgate a specific law to cover this field, and to establish an association of venture investors.

As Vietnam is a late-comer, it needs to thoroughly analyze the policies applied by other countries in order to be able to compete with them in attracting venture capital.

According to Nguyen Bao Hoang, General Director of IDG Venture, which has much experience in making investments in Vietnam and has been very successful with Vinagame project, Vietnam’s most valuable asset is its workforce- onethat can create a very attractive technology market. Moreover, with low operation cost and a young population, Vietnam is a truly attractive market for businesses, both domestic and foreign. Vietnam is likely to become an important centre for science and technology development in the next 10 years.

However, making investment in technology is risky because of its long term nature. Therefore, very few governments get involved in technology development?. In order to create a Google or Facebook in Vietnam, venture funds will have to thoroughly consider all issues, including legal issues, technologies and human resources. In general, for the project to be worth the consideration the profit has to be 20 times higher than the investment capital.

Sharing the same view, Than Trong Phuc, General Director of DFJ Fund managed by VinaCapital said it is necessary to encourage the use of different credit channels in order to diversify the capital sources for the technology market.

Source: Dau tu