Jacqueline Tai and her board of directors will be breaking new ground when they open their financial portal for membership sometime soon. AlphaInvestmentBank.com will be the first home-grown version of First Tuesday on the Net, and, they claim, the first in Asia to offer virtual open-ended one-stop financial services.
Going by the success of franchised Internet networking event First Tuesday and the proliferation of me-too events in Malaysia in the past year, Tai and partners may have yet another success story to tell. After all, investors still have money to spend on deserving start-ups and there will always be people looking for funding for a good idea.
But the road to success may not be without obstacles, as many struggling dotcom companies looking for that elusive pot of gold have learned.
For one thing, the portal will have to compete -- either indirectly or directly -- with other more established portals like CocoonAsia.com and IandIAsia.com. In addition, it will have to contend with an industry that, despite being focused on technology, still very much likes to do business the old-fashioned way -- through face-to-face transactions.
Still, Tai -- the portal's managing director and a merchant banker by profession -- is unfazed. She says: "Competition is always healthy. As in any other business, (I believe) there should always be more than one player."
She believes AlphaInvestmentBank.com is different as it offers more than what is available in the Asian market, and thus does not have any competition. "Looking at similar websites in Asia, they don't prepare or provide (our) kind of resources. We're not afraid to share (information)," she adds.
"Those portals in the West are not ready to receive investors outside the US. As it is, their priority is to cater to their own market."
In addition to matching start-up entrepreneurs with investors, venture capitalists and angels, AlphaInvestmentBank.com will also provide a platform for buyers to directly access sellers of private equity businesses to enable mergers and acquisitions as well as joint-venture transactions. With this, Tai and her partners strongly believe that AlphaInvestmentBank.com will fill a long-neglected niche in the local and regional investment market.
"This idea of having an open-ended portal is only two years old. It's proven to be a successful model in the US and fills a need. (For,) overnight, you're exposed to people whom you don't know. (Thus) the probability of being successful is much bigger," she explains.
"There is a need (in Malaysia). Here, it is public knowledge that small- and medium-sized industries (SMI) are crying out for help and seeking alternative sources of funding. We created the portal to meet this need."
Apart from its open-ended system, AlphaInvestmentBank.com counts its accessibility, a big resource library, strong partnerships and its affordability among its strengths. It costs nothing to place a listing on the site and for those who want more privileges, like the ability to browse and search, the annual fee is US$100 per individual and US$295 per corporate membership. InvestmentBank Asia. com, which boasts a comprehensive databank of Asean banks, financial institutions, stockbroking firms and insurance companies, promises to give users access to tools and resourceful research information to help investors invest and entrepreneurs to build and sell their business.
Tai says InvestmentBankAsia. com ensures that both entrepreneurs and investors are bona fide, and that the approval process is stringent.
"The Malaysian venture capital industry is not regulated. So in our website, we have set our own benchmarks (a RM10 million ceiling to be an approved investor and RM500,000 for individuals)," she elaborates.
In addition, InvestmentBankAsia.
com -- owned by Digital Hub Sdn Bhd, which is privately owned by Tai and her partners -- is part of 3exchanges.com. The portal is a joint venture with the Multimedia Development Corporation's Agensi Pekerjaan KWX Sdn Bhd, which owns kwxasia.com, a human resources recruitment and training centre, as well as ideasasia.com, a virtual incubator. (Ideasasia is also owned by Digital and is expected to be ready in May.)
Tai says 3exchanges.com has already been accepted by countries in the Asean region and 54 Commonwealth member countries. It is also negotiating with 10 Scandinavian countries.
This week, Tai and partners will go to Hanoi to present their business model, in the start of an extensive two-month international road show. The objective? To bring in 61 country partners to Kuala Lumpur for a conference by June.
Going by the feedback on AlphaInvestmentBank.com from some entrepreneurs and investors contacted by The Edge, Tai and her team have their work cut out for them.
As yet, it has no members, and has little to show.
The main reason for the scepticism, most industry players say, is that they prefer face-to-face dealings. Most say they would only use the portal to "improve their chances".
"Too many people have come up with concepts similar to this," notes a technology entrepreneur who requested anonymity. "The way I prefer to do it is face to face. That's because it's personal and you can show the VCs how committed you are. With a lot of portals, it's fog and mirrors without substantiation; so I'll be cautious for now."
He adds: "The VC industry is very much like a meat market. I always believe that if you have a solid business idea, people will come to you. If you keep hawking your products and nobody is investing in it, then it's a bad sign."
An investment broker echoes this view. "I guess the selling point for this is that it's free, so it wouldn't cost anything to set up there," he notes.
"It's an attractive idea but the investment community is very small. Among non-local VCs, there is a feeling of caution, so a lot of these guys will only look at referrals. On the other side, many high-net-worth investors won't just go online to look for opportunities," he adds.
Still, Tai and her partners are confident. Plans for the future are vague, with Tai only willing to go as far as to say that InvestmentBank
Asia.com's progress will follow that of other dotcoms -- it will seek venture capital in the near future and its ultimate destination will be a listing within the next few years.
Growth will come from strategic alliances. Although it is looking for new partners, it is still unsure of whom and what form the partnerships will take, only that it will expand to the 10 Asean countries, then the rest of Asia and then "westwards", says Tai.
So that membership will reach 10,000 in the first year, the company will allocate about 10 to 20 per cent of its turnover to advertising and promotions. The bulk of this will be on promoting and presenting the portal, which has a paid-up capital of RM500,000, to SMI associations and individuals within these associations.
But for now, Tai and her partners will bank on their brick-and-mortar business -- corporate finance consultancy work -- to bring in the moolah.
Digital Hub's board members include Calvin Goh, a merchant banker and Robert A Young, a structural engineer by profession.