FEBRUARY 7, 2000 VOL. 155 NO. 5

Then Pray for The Angel
After a midlife career change, investor Jim Mellon is looking for a few good ventures

Jim Mellon was in the blue skies above Florida when enlightenment struck. It happened last year after the Hong Kong fund manager enrolled at a Vero Beach flying academy. The lessons were a welcome respite from what had been two trying years in Hong Kong. Regent Pacific http://www.regentpac.com/overview/overview.htm, the investment group that Mellon co-founded, had lost $50 million, clobbered first by the Asian financial crisis and then by Russia's collapse. Soaring above the Florida coast at the controls of a borrowed Piper Cherokee, the 41-year-old Briton came to a jarring realization: "The sleekest planes parked in the aerodrome were owned by people at least 10 years younger than me. And these people had the best cars and the best-looking girlfriends."

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Cover: Dotcom Mania As Asia's Internet start-ups race toward lucrative listings, investors have dollar signs in their eyes • First, Create the Hot Start-up: Helloasia.com's founders think they can make their red-hot site 'sticky' and profitable • Then Pray for The Angel: After a midlife career change, investor Jim Mellon is looking for a few good ventures • Next, Call in The Venture Capitalist: AsiaTech takes high-stakes gambles on Internet firms • Cozy Up with The Incubator: A Hong Kong financier and his British partner hope to nurture the next big things • Now You Are Ready for The Listing: Hong Kong debut endures rough ride on the market • Or, You Can Just Sell Out: Eschewing an IPO, an Indian entrepreneur gives up his portal for a quick pot of cash Beijing Tries to Build Barriers Regulating the Internet Viewpoint: New Eras All Too dot.common What's pumping up Internet-company valuations? Hot air Viewpoint: The Sound of Asia Booming In this online exclusive, Bob Davis, president and CEO of Lycos, gives his take on the growth of Asia's Internet economy

"These people" were Internet and technology entrepreneurs, grown suddenly and fabulously wealthy riding the high-tech boom roaring across the U.S. Intrigued, Mellon started chatting with them in the academy's café. Over the triple-shot lattes popular among the Internet crowd, they told him about the "angels" who had funded their start-up companies: wealthy individuals who finance technology businesses--more often just ideas--that conventional banks or venture capital firms wouldn't consider backing. Mellon was convinced that the wave that had made his fellow flyboys rich would soon break over Asia: "I vowed to myself that I would get a piece of this."

A year later, Mellon is on the brink of fulfilling that promise. He has become one of Asia's most successful angels. He and his fund have invested $10 million in 10 start-up companies in Hong Kong, Seoul and London. Four--including Britain's Bigsave.com, which plans to list within two to three months--are now preparing flotations on either the London Stock Exchange or New York's NASDAQ, the exchange that has minted countless multimillionaires and even billionaires in recent years.

For now, angels like Mellon are fairly thin on the ground in Asia. As a result, governments are getting in on the act. Singapore, Hong Kong, Malaysia and Taiwan have all launched $1 billion-plus investment funds to kickstart their Net sectors, a top-down approach deemed necessary in a region where scars of the economic crisis still linger.

Angels tend to be discreet, the sort of people who engage private bankers to manage their net worth. But across Asia, many of them let it hang out on Wednesday nights, when they log on to e-forums sponsored by Internet and Information, a group affectionately dubbed "I and I." The outfit began to coalesce 18 months ago in Hong Kong around the online stocktrading start-up Boom.com. What began as a few nerds sharing coffee and ideas after work has blossomed into a regionwide networking group that connects moneymen with techies on the Net and in person. "The atmosphere is infectious," says Hogi Hyun, a Singapore angel who has concluded two deals via "I and I" happy-hour contacts.

Mellon tends to locate his projects the old-fashioned way--through his 20-year-old list of corporate contacts. But he says he has been reborn as an investor because of the Net's potential. If all goes well, he will nurture his portfolio of start-up companies until they are ready for their IPOs. When his leading investments list on NASDAQ and in London later this year, Mellon figures his holdings could be worth--if current values hold up--more than $1 billion. He will then have made more money in just one year than in the previous 20 he spent in Asia. "I went to the U.S. to learn how to fly," Mellon says. "And I came away an angel."

COVER STORY
• First, Create the Hot Start-up
• Then Pray for The Angel
• Next, Call in The Venture Capitalist
• Cozy Up with The Incubator
• Now You Are Ready for The Listing
• Or, You Can Just Sell Out

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