By Shaoyu Chang, MD, MPH, Director of Research & Asia Business Development Liaison, LSN
During JPM this year, close to 1,000 investment professionals from China gathered in San Francisco, according to unofficial statistics. What hot sectors are they looking for? How can you initiate and maintain a relationship with them? At RESI San Francisco, entrepreneurs and investors filled up the Asia Pacific Investors panel room to learn about the nuts and bolts of cross-border investment.
Moderated by Jimmy Lu, Managing Director, WI Harper Group, the panelists include:
- Judith Li, Partner, Lilly Asia Ventures
- Lu Zhang, Managing Partner, NewGen Capital
- Vincent Xiang, Partner, Frontline BioVentures
- Yao Li Ho, Business Development Director, LYFE Capital
Key takeaway points from the panel:
- Chinese investors are pushed to look overseas by the following forces: asset price, scarcity of high-quality products, and scarcity of exit in the public market. Many of them are seeking one or more of the following factors from US early stage companies: cutting-edge technologies, large sales potential in their domestic markets, and access to the US market.
- The Chinese government’s new currency restriction has impacted some transactions and created uncertainty in the future. Dual currency funds (firms that manage domestic RMB and offshore USD funds) are less affected.
- To engage a Chinese partner, it is key to identify a ‘China hook’ of your product. Large patient population is only one factor. Regulatory process, medical practice, and reimbursement should also be considered.
- A good partnership can come in different forms: direct investment, licensing, joint venture, M&A, etc. Entrepreneurs should work with experienced investors to form a partnership that is most suitable for their product sector and stage.