Finding Angels Can Be a Challenge for Asian Firms
Question: My family owns a company in our home country of Malaysia that has earned a 30% return for the last two years. Are there angel investors here in Southern California who might invest in a firm like ours?
Answer: There are individual investors and angel groups that include international firms in their portfolios. However, they tend to be specialized investors, said Marshall Toplansky, chief executive of technology marketing company Core Strategies in Irvine and a member of Tech Coast Angels, a Southland investor group.
“They have a lot of international expertise in their business careers and generally very strong family connections in the countries being invested in. They tend to invest together with others who share their national or regional heritage and language,” he said.
Unlike typical venture investors, who focus on speculative technologies that can earn high returns if they are successful, investors in Asian companies tend to concentrate on operating businesses that they think can help them forge contacts in the United States and Asia, Toplansky said.
If you choose to pursue local investors, be aware that political and currency risk are an important part of the reality you’ll be confronting.
Individuals and venture capital firms that invest in Asia tend to plow some of their returns into promising companies in the U.S. and Western Europe, Toplansky said.
“The U.S. is considered a safe haven for money earned in Asia. As the world gets more volatile, investors become edgy and tend to reduce their exposure to markets where the risks are higher,” he said.
In addition, the Asian financial crisis of some years ago is still on the minds of many investors.
“The unreliable financial reporting that wildly overstated the performance of companies in Indonesia, Malaysia and elsewhere made them radioactive to many investors,” Toplansky said.
If you want to attract Southland or other U.S. investors, you will have to ensure that your company’s numbers have been audited by a reputable firm and that your accounting practices conform with U.S. accounting standards.
If your company is publicly listed, investigate funds that invest in companies in the emerging economies of Asia, such as Matthews Asian Funds.
Several larger venture capital firms in Silicon Valley also are investing in Asia, but they tend to favor fast-developing economies such as India and China. If your company is too small to interest venture capitalists, your best bet is to network in the thriving local Asian business community and seek introductions to angel investors.
You can get more information from the Angel Capital Assn., online at www.angelcapitalassociation.org.
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Communication Is Basic to Good Management
Q: I started a business and have expanded it. How can I become a good people manager?
A: Start with this core premise: As a manager, you must give attention and care to both customers and employees. Laurie Owyang, president of Los Angeles-based human resource consulting firm Humanasaurus, says good communication is the key to good people management.
“Understand and communicate the big picture. Show employees how their work contributes to your organization’s goals,” she says.
How do you do that? Keep your employees in the loop by being an accessible and approachable boss as well as a great listener. Make expectations clear.
“Focus on results, not activity, and be fair and consistent in applying policies and procedures,” Owyang says.
California has strict laws governing issues such as leaves of absence and discrimination. Educate yourself about these labor laws and comply with them. If you need outside expertise, attend a seminar, meet with a consultant or hire an attorney.
And always remember, Owyang says: “Praise in public, discipline in private.”
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Got a question about running or starting a small enterprise? E-mail it to karen.e.klein@latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.
