Inside almost every employee in Hong Kong there is an entrepreneur waiting to get out. Some just dream big, others plan and wait, but the minority – the true entrepreneurs – realize that, in the end, there is no substitute for action.

In Raymond Yeung Wing-keung’s case, that moment arrived as he approach 40. He had been with Ingersoll-Rand for several years, latterly handling a regional M&A job based in Shanghai. The career prospects were good, but the certainty had grown that if he was to strike out on his own, it was now or never.

“You realize that even a CEO is only a company employee,” Mr Yeung said. “But life has different phases, and I always knew that one day I would run my own show. I decided it was time to move on to the next stage.”

That was in 2006, and thanks to careful planning, hard work and astute management, he is making his name as a venture capitalist. As executive director of his own company, Innobiz Capital, Mr Yeung is identifying and investing in relatively young mainland companies, and now finds himself able to give full rein to diverse business talents.

“I wanted to transform myself from being seen as someone with an engineering and IT background to having a much wider business role,” he said. “I also wanted to make sure I was ready to take any opportunities that popped up.” With that in mind, he signed on for the Richard Ivey EMBA in 2003, realizing too that it would be a great way of building contacts. While taking the course, he started to formulate business plans and bounced them off classmates in order to get alternative opinions and feedback.

“The class was really helpful in providing a platform because there were people from diverse backgrounds who were happy to debate ideas and exchange experiences, and they were a tremendous help in giving me different perspectives,” he said. The course also included workshops, which examined how well-known entrepreneurs had started their businesses, and what had affected their decisions.

Spurred by these examples, plus his day-to-day experience in Shanghai, Mr Yeung concluded the important thing when running his own company would be to focus on two gaps in the market. The first related to the fact that the many smaller mainland enterprises had grown rapidly but were not equipped to contend with increasing domestic and overseas competition. To take the next step, they needed help to understand the western-style approach to financing, branding and corporate governance.

The second, not surprisingly, related to money. Mr Yeung realized that up-and-coming Chinese companies did not simply want investors with cash to spare. They wanted shareholders with a genuine interest in building a business for the long term, and advisers who could offer the latest expertise plus access to new markets.

Putting these elements together, Innobiz’s first investment in 2006 was in Deqingyuan. It was a company running an organic chicken farm near Beijing and producing eggs for the local market. An Ivey classmate had made Mr Yeung aware of the opportunity, recommending it as an enterprise with strong growth potential, but in need of extra financing and marketing know-how.

Mr. Yeung took a close look at the plans, did the usual due diligence, and finalized a deal to inject funds within a few months. The firm is now producing around 1.5 million eggs per day and has been awarded a contract to be an official supplier for the Beijing Olympics, which involved an exhaustive process of around 20 different audits, checking everything from hygiene to feedstuff, vaccinations and food safety.

Its branded eggs are now also on sale in Hong Kong, and Mr Yeung, who put up some of his own money for the initial investment, is helping the company develop a comprehensive marketing strategy. “I firmly believe in branding,” he said “To do that in the food industry shows you are really serious about quality.”

Innobiz is evaluating other projects all the time. It has recently invested in a Shanghai-based company doing outdoor advertising, and in an enterprise in Ningbo developing a new biodegradable material made from corn starch. All the signs are that, in due course, this will be able to replace plastics in the manufacture of many everyday products.

My Yeung indicated that once you have a couple of successes, things just start to snowball. These days, he receives interesting proposals all the time, and to assess them, relies on a team of part-time analysts, some of whom are also Ivey graduates, with knowledge and experience of different industries.

“You don’t need to rush into deals,” he said. “The most important thing in each case is to know the industry, the management and the people you will be working with. But I love the job and think putting in my own money and effort shows I am really serious about every project.”

South China Morning Post
Wednesday, January 30, 2008

Course puts final piece into place

For 10 years or more, Michael Fok Sze-chai had been thinking of starting his own business, but it was only in 2003 that the various pieces of the jigsaw finally fell into place.

As a Canadian qualified accountant with Big Four training and extensive commercial sector experience, Mr Fok already knew all he needed to about the financial side of running a company. He also had an impressive list of contacts, ideas aplenty, and the personal determination to work as hard as necessary to make things happen.

For one reason or another, though, it had never seemed the right time to take the plunge. Firstly, there was the economic downturn; then concerns about surrendering a steady income, or having to grapple with the mysteries of such things as sales and marketing held him back.

All that changed, however, on a day Mr Fok can almost pinpoint on the calendar. It was after a group discussion with his Richard Ivey EMBA study team, in which they had thrashed out a business plan and finalized revenue models for a possible start-up company.

This exercise was one of the course’s functional projects, designed to give each participant the chance to tackle unfamiliar business problems and gain an all-round perspective of what it takes to conclude a deal and run a successful enterprise.

“We had to put together the plan, the numbers, and present it to the professor,” Mr Fok said. “At that point, I had learned about HR, marketing and international business through case studies, and I knew how to do all the spreadsheets. Right after the session with the finance professor, I thought ‘wow I can really do this for myself as well’.” With a new surge of courage and confidence, Mr Fok was ready to set up his own firm – M & Davich Executive Recruitment – focusing on mid-level to senior finance, accounting and investment banking professionals.

He dipped into his savings, shared an office for a while, and reckoned on six months to start generating a regular cash flow. Fortunately, it didn’t take that long. Like any entrepreneur, one of his first acts had been to get on the phone to fix up a few lunches and, at one with a former colleague, the “magic moment” occurred. Her department needed a new financial controller, Mr Fok placed a suitable candidate, and since then he hasn’t looked back.

South China Morning Post
Wednesday, January 30, 2008