Ulaanbaatar, Mongolia, July 8, 2010 - (ABN Newswire) - Frontier Securites COO Yuji Iwasaki Interviews Adam Bornstein, Senior Vice President from CDIB Capital.

Amanda Lee reported on the growing trend of niche players in China’s private equity market in Monday’s South China Morning Post:

Global private equity firms continue to dominate investments in mainland companies, but smaller players are finding their way into the market. CDIB, which has just a tenth of the capital managed by such large funds, are beginning to find value in niche sectors in China.  Adam Bornstein is hoping CDIB Capital’s US$20 million investment in Dalian-based Chemphy, a manufacturer for pharmaceutical companies such as Japan’s Sumitomo Chemical and Germany’s Bayer, will meet this year’s financial budget so that its share sale will be on track. CDIB aims for a return that will double its investment.

To read the complete SCMP article click here

Foundry Group recently invested in Next Big Sound, an online music analytics and insight business based in Colorado. Jason from Foundry writes:

As part of this future there will be new opportunities created to service these new direct-to-fan and Internet marketing models. We believe a key opportunity involves data. Currently, the industry-norm data report is from SoundScan. For thousands of dollars per month, industry professionals are able to see how many CDs and digital downloads have been purchased along with how many plays have occurred on terrestrial radio. We believe that this report is already mostly irrelevant. 

Sweet! This is encouraging as it further supports our investment thesis behind Feilio (Noank Media), a platform that measures digital content usage, that data will not only drive new opportunities in the music industry but also form the foundation for next generation business models. While it has taken longer then scripted for the industry to come around we remain optimistic that the tide is turning.

Francis Yeung reported on Touchmedia in today’s South China Morning Post:

Mainland digital outdoor media specialist Touchmedia has completed a new round of financing, raising about 100 million yuan (HK$113.59 million) to expand its business, sources said. The financing was led by CDIB Capital, with investors from previous rounds - TLC Capital, Qiming Ventures, and Mustang Ventures - and founder Micky Fung and his affiliate companies.

To read the complete SCMP article click here 

I guess I’m being lazy these days and just borrowing content from other sites but so be it. This morning, I was reading the New York Times and came across an article titled “Investors Pay Business Plans Little Heed, Study Finds” by Brent Bowers. The article reads:

Researchers found that venture capitalists, who screen hundreds or thousands of solicitations each year, pay little or no heed to the content of business plans. Instead, the study said, because they make decisions “under conditions of high uncertainty,” venture capitalists rely on instinct and their expertise in ferreting out information by other means to evaluate the prospects of a business.

I’m not sure this is entirely true, at least within confides of our fund. Don’t get me wrong, no one wants to page through 50 pages of rambling market analysis and financials however what we are interested in is the entrepreneur’s logic and thought process. Furthermore, we want to see what the expected milestones are for success and how the company expects to spent our cash

All of the above can be mapped out in 10 to 11 PPT slides. In fact, just use the template we provide here.

More to our point, KPMG, in 2008, polled regional investment managers in Asia and asked them what were the top four causes of deal underperformance - the results: (1) misleading historical performance data, (2) over-0ptimistic market forecasts, (3) misreading the target’s existing and potential market penetration, and (4) poor business plan.

Anyhow, writing a business plan is a good exercise even if it is just an excel spread sheet that clearly maps out business assumptions.

A new article about our portfolio company Feilio (Noank Media) in today’s New York Times titled “Building the Tools to Legalize P2P Video-Sharing” by Janko Roettgers. 

Would you be willing to pay your ISP five bucks a month to be allowed to download as much as you want from torrent sites and other file-sharing hubs? The idea of legalizing P2P through such a flat-rate licensing scheme has been getting more and more traction within the music industry in recent months. Noank Media CTO Devon Copley believes his company can be an essential part of such a flat-rate model.   

Click here for entire article.