Venture capital industry development in the Hong Kong and Pearl River Delta Region

Abstract

Venture capital has been the initial source of capital for some of the most visible new firms in the United States for the past decades. The well-known multinational high-tech companies such as Intel, Apple Computer, and Microsoft, were all backed by venture capital funds at their inception. Thus, it is well recognized that venture capitalists play a crucial role in supporting many new high-tech firms to grow into successful, if not multinational, companies. Nowadays, other countries in Europe and Asia are also attempting to establish high technology industries of their own for the sake of restructuring their economic systems. As a result, venture capital has naturally become an issue of concern. In this thesis, I will use the Hong Kong and Pearl River Delta Region as a case study. I generalize the factors that are influencing venture-capital development and review the current development of venture-capital activities. I also investigate the investment profile, investment style, competition, and other important elements, of venture-capital firms in the region, especially in Hong Kong. This research was conducted through review of current literature and personal interviews with practitioners in the Hong Kong high-technology industry and venture capital industry development. The goal of this thesis is to draw a conclusion on the potential of the development of the venture-capital industry in the subject region.