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VC on The Roof of The World

[WTN-L World Tibet Network News. Published by The Canada Tibet Committee. Issue ID: 05/04/22; April 22, 2005.]

An NGO helps to acquaint Tibetan entrepreneurs with the fast-moving world of venture capital.

Red Herring
April 11, 2005

SHENZHEN - The brown felt cowboy hat atop Tselhun Tsedan Lundup stood out amid the mad press of private equity players, analysts, and entrepreneurs swapping name cards at the China Venture Capital Forum 2005.

So, too, did the handmade traditional Tibetan chupa gown and pangden apron his female associate had on to signify that she is married.

Mr. Tselhun is the chief of the economic bureau for the Tibet Autonomous Region Federation of Commerce and Industry, and head of a delegation of 10 Tibetans who came from ancient, fabled Lhasa to Shenzhen-the postmodern poster city for China's economic miracle-to learn about venture capital and what it might do for them.

"We are very interested in venture capital, even though we are not representing high technology businesses," said the lanky, deeply tanned Mr. Tselhun, who described his 11,000-member federation as a kind of chamber of commerce for ethnic Tibetan businesspeople. His delegation included representatives of construction, real estate, tourism, agriculture, and even traditional Tibetan medicine companies.

Shenzhen was the first stop for the Tibetan delegation on what Christopher LaDue, director of the Mountain Institute's Peak Enterprise Program, called a "study tour" that will also take them to Hong Kong, Guangzhou, Shanghai, and Beijing.

Mr. LaDue said the program he heads is aimed at attracting capital, finding innovative financing mechanisms, and establishing business and legal structures for Tibetan entrepreneurs-"all within the confines of environmental protection, economic development, and cultural preservation.. These things don't often go together, but people, planet and profits-those criteria make up our three-part bottom line."

In the fast-paced sessions on M&A, IPOs, expansion finance, and the regulatory environment, Mr. Tselhun and his group were somewhat overwhelmed, confessed Mr. LaDue. "They see the possibilities, but this conference has been quite technical. I don't have very high expectations," said Mr. LaDue.

Nonetheless, coming to Shenzhen helped them make valuable connections. "It's not so much about them learning the concept of private equity, but more about having faces and handshakes to put to that, and building a network of relationships, especially with domestic Chinese VCs," said Mr. LaDue.

Necessary Link

"Chris LaDue is taking venture capital in a less discussed, but more positive, direction-that of community developer," said Matthew McGarvey, who gave up a career as a tech analyst at IDC in Beijing to work in Lhasa as project manager of the Tibet Poverty Alleviation Fund. "He's creating a necessary link between the international community and Tibetan entrepreneurs."

Mr. LaDue graduated from Columbia University, where he studied Chinese economics, and worked in banking before coming to China with the intention of studying Tibetan folklore and reinventing himself as an anthropologist five years ago. But with his background in finance and knowledge of Mandarin and Tibetan, he realized that he was in a good position to contribute to Tibet's development in more concrete ways.

"The central government puts $1.5 billion to $2 billion dollars in infrastructure investment into Tibet every year," said Mr. LaDue. "The infrastructure issues that used to inhibit development are now largely resolved. But most Tibetan businesspeople are not aware of how capital markets function, or of the role of private equity. They're a long way behind the rest of China."

Time Traveling

"You can drive a half hour from Lhasa and go back in time 300 years," said Mr. LaDue, "Drive a day and you'll find people who think the earth is bowl-shaped-flat, with a domed ceiling-and who don't know that man has walked on the moon. This is a culture in rapid transition. They're time traveling."

At the end of the conference, the Tibetan delegates were in good spirits. "They're excited about the fact that there are so many other companies here looking for capital," said Mr. LaDue.

They've gotten a warm welcome, and not just out of polite curiosity. Mr. LaDue said there were serious inquiries from investors who plan to follow up on a hot pharma lead in Tibetan medicine.

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