Page 175 - How China Is Winning the Tech Race

communist principles of building a harmonious society and of sharing wealth
before making individual gains.

T racking the milestones

LatticePower has passed several major milestones. The biggest was in
February 2007, when the Chinese tech start-up broke ground for its new
plant in a ceremony attended by numerous high-level government officials.
Equipment has been imported, and production is supposed to start by March
2008. Some 500 employees were to be onboard by year end 2007, up from
100 in late 2006.
Revenues are projected to be $50 million in 2008 and $200 million
within five years. The goal is to be profitable within two years. Initially, most
of the plant’s LEDs are meant for local markets, but global customers could
be next. Jiang says he is confident that LatticePower will attract a multina-
tional clientele and names the cell phone maker Nokia as one possibility.
Investor Sonny Wu was tipped off in 2000 about Jiang’s breakthrough
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research by a senior official from the Chinese government’s Ministry of Infor-
mation Industry. Then, in 2001, Jiang’s colleague Wang Min showed a pre-
liminary business plan to his former college classmate Alex Pan. The same
year, Pan visited the scientist in Nanchang, and he and Wu, both veterans of
semiconductor and telecom businesses, began tracking the scientist’s research.
Shortly after teaming up to establish the Chinese venture firm GSR in 2005,
they invested in the LED research start-up.
Few start-ups have benefited from as much hands-on investor mentoring
as LatticePower has from GSR, which is named after a part of China’s mighty
Yantgze called the Golden Sands River. GSR helped Jiang protect his
inventions from being ripped off by obtaining international patents through
lawyers at Fernandez & Associates in Menlo Park, California. Many Chinese
start-ups do not appreciate the importance of putting up high barriers around
research, an essential step for success in international markets. LatticePower
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has filed for several more patents in addition to the 15 already granted.
Attorneys were hired to form LatticePower in early 2006 as a Cayman
Islands corporation to facilitate two-stage venture capital financing of $10
million followed by $35 million 18 and a possible listing of the firm on an
overseas exchange. Additionally, four MBA students were packed off to

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