Acer's nurturing plan wins praise

Venture capitalists yesterday welcomed a plan by Acer Group chairman Stan Shih (施振榮) to set up a "post-incubation" center that aims to help technology start-ups through their first few years of business.

The post-incubation center will be located in Acer's NT$200 billion Aspire Park (龍潭渴望園區) technology and community showcase in Longtan, Taoyuan County.

"There aren't too many successful incubation projects in the world because they do not offer enough help on commercialization," Shih told the Taipei Times in Taoyuan.

"The post-incubation center can help with financial arrangements, marketing, legal issues and personnel development issues. We will help companies to grow in the first three to five years and continue to give them good advice," the 58 year-old Shih said.

The core of the post-incubation center will be Dragon Soft Capital Co (中華智融), a concentration of talent from the Acer Group which will offer advice and experience to successful candidate companies, Shih said.

"The incubation process is more than just having the baby," Shih said.

"The Acer Group has raised many babies, most of whom are successful, but there have been a few failures, so we have the experience to offer to new companies," he said.

Most venture-capital funds give money to new companies, but concentrate their advice on firms in which they invest a large stake.

The new center, however, aims to give hard advice from the moment companies make their first approach.

"I think it's going to be a challenge," said Eric Chang (張銘志), vice president of Hotung International Co (和通國際) which has a portfolio of 190 companies.

"It's a brand new project, [the kind of] which nobody has really put their efforts into before. It will create a brand new investment model for the investment community," Chang said.

Another start-up investor agreed.

"Acer has a lot of resources," said Charles Lee (李建樂), senior manager at Premier Capital Man-agement Co (首席), which has five funds with a total of US$100 million to invest in venture capital projects.

"Its contribution will add extra value to Taiwan," he said.

Dragon Soft Capital is expected to start operations in January, and will be spun off as an independent company a year later.

Shih plans to invest NT$100 million in the project, with Acer maintaining a 20-percent stake in the company after the spin-off in 2005.

Companies that seek advice from Dragon Soft Capital will be able to pay for it by offering shares in the new company, or by making arrangements to pay after they turn profitable, Shih said.

In some cases, Dragon Soft Capital may stump up the cash for investments with the most potential, he added.

The Acer Group is no stranger to investment funds. Asic Entrepreneur Co (安芯) and Darly Venture Inc (創利) both belong to the group. Asic recently pumped cash into K-Best Technology Inc (全波科技), a developer of wireless technology for mobile telephones.

"It is essential to have a good parent company like Acer now that we have developed our product to the production stage," K-Best president Tung Yu-wei (童玉瑋) said yesterday.

"It did not make sense to have them involved at the beginning when we were focusing on research and development," he said.