Investment funds at a seminar in HCM City on Tuesday highlighted criteria they often consider when making decisions to invest in business startups, especially experiences of founders, organisational structures, and market segments for products.
According to Than Trong Phuc, managing director of DFJ VinaCapital, funds also look at the workforce of such young enterprises and their sets of working processes.
Phuc said his firm pays attention to startups or projects in the information technology sector, especially technologies that are invented in Vietnam yet can be applied abroad or developed into commercial products.
DFJ VinaCapital has spent $30 million on Vietnamese firms with a minimum investment of $300,000 and a maximum of $5 million.
Many representatives from private investment and venture capital funds expressed their concern about business ethics.
Investment risks are considered higher than before due to unclear explanations of rules and regulations, as well as quality of human resources, they said. Issues related to copyright are not properly respected, while many businesses compete by undercutting one another.
Meanwhile, Dragon Capital is looking for startups that have survived difficulties in the start-up years and are capable of absorbing investments of $10 million or more, according to Le Hoang Anh, managing director of the investment fund.
The total amount of investment this fund has spent on projects in Vietnam over the last 11 years is over $1 billion, he said.
Phuc of DFJ VinaCapital said it is quite simple for business startups to approach investment funds for capital. Representatives of startups can apply directly at the office or send their projects via email and wait for a response from the investment fund.
Owners of viable projects will be invited to the fund’s office for further discussion, he said.
Pham Hong Quat, director of the Market and Sci-Tech Enterprise Development Department, said the Ministry of Science And Technology has raised funds for commercialising products of scientific research.
The government has not yet established venture capital funds to invest in startups. Therefore, the ministry highly appreciated investments from companies and private venture funds, he said.