Asia Catches .Com Fever

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Jim Mellon was in the skies above Florida when enlightenment struck. The Hong Kong fund manager was taking lessons at a Vero Beach flying academy, on a break after two trying years in Hong Kong. Regent Pacific, an old-economy investment group that Mellon co-founded, had lost $50 million in the Asian financial crisis and Russia's collapse. Soaring above the 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."

"These people" were Internet and technology entrepreneurs. Intrigued, Mellon started chatting with them in the flying- school cafe. Over triple-shot lattes, they told him about the "angels"--wealthy investors who finance technology businesses (more often just ideas) that conventional banks or venture-capital firms wouldn't consider backing--who funded their start-up companies. "I vowed to myself that I would get a piece of this," Mellon recalls.

A year later, he is on the brink of big success. He and his fund have invested $10 million in 10 start-up companies in Hong Kong, Seoul and London. Four of them--including Britain's Bigsave.com an e-commerce emporium--are preparing flotations on the London Stock Exchange or NASDAQ.

Mellon tends to locate his projects the old-fashioned way, through his 20-year-old list of corporate contacts. But if all goes well, he expects to make more money in just one year than in the previous 20 he spent in Asia.

the venture capitalist [dot]com ASIATECH TAKES HIGH-STAKES FLYERS ON REGIONAL INTERNET FIRMS

In 1985, Hanson Cheah was a sophomore at M.I.T., studying robotics and dabbling in Project Athena, a pioneering electronic network. The Malaysian native met a freshman from Singapore, Wong Toon King, and invited him to join Phi Beta Epsilon fraternity. Wong declined. He was studying on a government scholarship and was worried that the frat-house party scene might affect his grades. "I thought he was a pretty cool guy until he turned us down," jokes Cheah, now CEO of the Hong Kong venture-capital group AsiaTech Ventures.

Instead, Wong became something much more important--a computer geek, who joined Singapore's National Computer Board. Cheah returned to Malaysia and took a job at Solectron, a technology assembler in Penang. Then came the Internet explosion, and the two M.I.T. graduates, who had remained friends, saw the light. Says Cheah: "We figured this was something we were born to do."

Cheah raised $18.5 million from family, friends and associates, then launched AsiaTech Ventures, the region's first venture-capital company geared exclusively toward Net investments. In Singapore, Wong quit his job to set up SilkRoute Holdings, a pioneering Web-design company, which in turn created Advanced Manufacturing Online (AMO), an online component-exchange system that matches users and suppliers. AMO has sales of nearly $5 million. When Cheah learned what his former schoolmate was up to, AsiaTech put $1 million into AMO. It was the first Asian Internet venture for either man, and coming only a month after the start of the Asian financial crisis, it looked especially risky.