Page 148 - How China Is Winning the Tech Race

Any entrepreneur with venture capitalists in tow must learn to deal with
such flash points and let go. One major concession he’s made is giving outside
investors a 50 percent ownership stake in his start-up. The shares went to
Venture TDF and TDF Capital, as
well as to Granite Global Ventures,
which invested $8 million in
“At some point, we do need to help him find August 2005. Such a large holding
a very capable COO and expand the company by outside investors is almost
a little more aggressively.”
unheard of in the West; but a clause
Tina Ju, in the contract allows the founding
managing partner, team to gain a larger stake if
KPCB China and TDF Capital certain financial goals are met.
How the shares will be divvied
up as Oriental Wisdom prepares to
raise more capital is uncertain.
Getting the right mix is likely to be a tension point in contract talks. It’s only
human to expect a financial reward for so much challenging and pioneering
work, but the team must balance a need for capital against ambition to benefit
from the results of its labor. That, of course, is the dilemma of any start-up.
As it is, Oriental Wisdom is balancing Chinese traditions and thought
with current global business practices. There’s no mention of going public yet.
The young firm has got to break out of “smalldom.” The management issue
must be resolved amicably too. But Oriental Wisdom has several favorable
attributes: a highly dedicated, fully charged CEO with a mighty heart, plus
the huge market opportunity in financial services and mobile marketing.
Silicon Valley startups should be so lucky. Now Liu must turn Oriental
Wisdom into a moneymaking machine. After all, he does not want to let
down his investors or, for that matter, his country.
The next innovative Chinese entrepreneur I profile is a toned-down
version of Liu, also a native Chinese with no work or education experience
outside his homeland. Nonetheless, he has taken the bold step of creating a
new technology for China that is beginning to catch on globally. His software
is based on the ubiquitous cell phone—a way to keep the world connected
wirelessly with mobile text messaging anywhere, anytime, for free. What
could be better?

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