Happy friday folks! Thought some of you might find this article interesting: It's about US venture capitalists looking to IPO in China From theInternationHerald Tribune U.S. venture capitalists look to China to take companies public By Matt Richtel Published: December 22, 2006 SAN FRANCISCO: For the last few years, a number of American venture capitalists have been visiting China to study how to break into the markets of that emerging giant. But one has spent time there studying exits — not from China, but from his start-ups back in the United States. Ted Schlein, a partner at Kleiner Perkins Caufield & Byers, met in Shanghai last month with local investment bankers promoting an almost surreal concept: They want venture capital firms — the vanguard of capitalism — to take companies public on Chinese stock exchanges. Schlein and other venture capitalists are cautiously thinking about it. Frustrated by the difficulty and expense of taking start-ups public in the U.S. market, these seed investors are considering overseas exchanges as an alternative place to turn handsome profits by selling their interests in start-ups. Chinese exchanges, like those in Shanghai and Shenzhen, seem like more exotic choices for now. But investors said they were giving more serious consideration to the London Stock Exchange and its small-capitalization division, the Alternative Investment Market, as well as to exchanges in Japan, Hong Kong and India. "It behooves all of us to start understanding each of the various exit options," Schlein said. The ultimate questions about Chinese exchanges, he said, are whether "they will be a viable exit strategy for non-Chinese-based companies, and when?" "I think it's a matter of when." Already, there are a small but growing number of venture-capital-backed companies based overseas that have gone public in the nations where they have operations. Much rarer are examples of American-based start-ups that have sold shares on the foreign markets. But a majority of venture capitalists said they thought the rarity if such listings was destined to change — and soon. In a report published Monday, the National Venture Capital Association found that 57 percent of the 200 investors surveyed expected a growing propensity in the industry to take American companies public in overseas markets in 2007. The chief reason for interest: U.S. markets have not exactly been friendly places of late for venture capitalists to resell their interests in start-ups. In 2005, 56 venture-backed companies went public in the United States, down from 93 in 2004 and a high of 273 in 1996. (About 37 venture-backed companies had gone public as of the end of September this year.) Venture capitalists have made a whipping boy of the Sarbanes-Oxley Act, the 2002 corporate accountability law that they say has markedly raised the cost of domestic public offerings. Talk by venture capitalists of taking companies public overseas could include some hot air, part of the industry's effort to persuade American regulators of the seriousness of their frustration. But the venture capitalists acknowledge, too, that the U.S. public markets' appetite for technology start-ups has not recovered from the collapse of the dot-com bubble. There are serious challenges to taking U.S. companies public overseas. Investors must learn new laws and regulations, and they face the risk that trading interest and volumes in those foreign markets might be so low that the experience would not yield a meaningful return. There is also the worry that less regulatory oversight means some overseas exchanges could become tarred by scandals or collapse. Of all the overseas exchanges, the Alternative Investment Market in London has drawn the most intense interest, said Mark Heesen, president of the venture capital association. But he said that it was not clear yet whether companies taken public there could yield enough value and daily trading volume to allow venture capitalists to sell their interest. "You could go public there and not get very far," he said. "If it doesn't get the VC out of the company, it's just another step along the way. Is AIM basically going to be the pink sheets of Europe, or really be an exchange?" Charles Cameron, managing director of Jefferies International, an investment bank arm of Jefferies that is advocating overseas exit strategies for some venture capitalists, said, "I'm hearing a lot of interest from venture capitalists but also some concern about what is the appropriate size and shape of a company for AIM." Some U.S. investors, meanwhile, are having success taking foreign-backed companies public in overseas markets. One of the advocates and practitioners of this concept is Dixon Doll, founding general partner with DCM-Doll Capital Management. Based in Menlo Park, California, DCM has succeeded in taking at least five Japanese companies public in Japan since 1996. Doll has made an investment in a cellphone software company in Scotland that has a partnership with a major cellphone manufacturer in Japan and, should it ever go public, Doll said he would consider doing a dual listing on British and Japanese exchanges. Read more here