Vietnam venture capital – potential unlocked

Vietnam’s Ministry of Planning and Investment (MPI) has shared a circular (a regulatory document, in Vietnam speak) for improving the legal environment for venture capital investing in the Socialist state. The circular is now – since 16th April – open for public comment. The aim of the circular is to improve the ease of setting up and running VC funds in Vietnam, and importantly for the MPI Agency for Enterprise Development (the AED), make it easier and more attractive for angels and VCs to invest in Vietnamese start-ups.

Ho Chi Minh City skyline. Credit to Heathrow.com

Ho Chi Minh City skyline. Credit to Heathrow.com

Vietnam’s promising start-up ecosystem. 500 Startups announced their $10 Vietnam fund in March, while FPT Ventures has a Seed Fund and Golden Gate Ventures maintains a rep focused on Vietnam. Another Vietnamese government arm, the Ministry of Science and Technology (MoST), published their intention to launch a VC fund in 2015.

The early-stage funding comes as a welcome addition – for Vietnamese start-ups between Ho Chi Minh City and Hanoi – as there is a modest number of PE/VC funds operating in the region, and they have tended to invest in more established businesses. The VCs operating in Vietnam since the early 2000s are: Mekong Capital, IDG Ventures Vietnam, Dragon Capital and DFJ Vina Capital.

The government’s embrace of equity funding for Vietnamese start-ups represents a change in the funding landscape. Through 2014, public efforts to support venture capital and entrepreneurship primarily focused on increasing the availability of credit for start-ups. Though Vietnamese policy-makers had ambitions of making Vietnam more “Silicon Valley-like”, they translated the idea of venture capital investing into debt finance.

Amongst other proposed changes are such that its quicker and easier for VC funds to be set up. Existing regulations limit VC fundraising as the minimum fund size has been VND50 billion. Going forward, fund structures can be set up with smaller sums and:

  • VC funds can be set up within three days
  • Funds will not be regulated by the Securities Law in Vietnam

These regulatory changes represent an improvement in the legal environment for start-up fundraising in Vietnam. And, arguably more importantly, they indicate the Vietnamese governments further understanding in start-up financing, and interest in improving the start-up ecosystem.

Robyn Klingler Vidra
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Robyn Klingler Vidra

Lecturer in International Political Economy at King's College London
Robyn Klingler-Vidra is a Lecturer at King's College London in the Department of European & International Studies, a Senior Research Fellow at the Coller Institute of Venture at Tel Aviv University and the Research Manager for the World Economic Forum Global Competitiveness Ranking Executive Opinion Survey for the United Kingdom.

Robyn’s research focuses on government efforts to build venture capital markets as a means to promote innovation, economic growth and entrepreneurial clusters. She leads the World Economic Forum’s UK Executive Opinion Survey on global competitiveness and is an instructor for LSE Enterprise executive education courses on capital markets, economic competitiveness and innovation. Her publications include peer reviewed journal articles on the development of venture capital markets in East Asia and how policy models transform as they diffuse. She has also published a number of policy papers on economic growth and a working paper on the social impact of business.

Before returning to academia, Robyn spent eight years in the financial sector, working as a financial institutions' liability underwriter, a research manager at an expert network firm and an investor relations manager at a fund of hedge fund. Her public sector experience includes internships with the Economic Section of the US State Department Foreign Service and in the Westminster office of a UK Member of Parliament.

She received her BA from the University of Michigan, was a visiting scholar at the National University of Singapore Lee Kuan Yew School of Public Policy and completed her MSc and PhD in International Political Economy in the International Relations Department at the London School of Economics & Political Science. Robyn was the first-ever winner of the BISA Award for Teaching Excellence by a Postgraduate Student and holds the Postgraduate Certificate in Higher Education (PGCertHE).
Robyn Klingler Vidra
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Robyn Klingler Vidra

Robyn Klingler-Vidra is a Lecturer at King's College London in the Department of European & International Studies, a Senior Research Fellow at the Coller Institute of Venture at Tel Aviv University and the Research Manager for the World Economic Forum Global Competitiveness Ranking Executive Opinion Survey for the United Kingdom. Robyn’s research focuses on government efforts to build venture capital markets as a means to promote innovation, economic growth and entrepreneurial clusters. She leads the World Economic Forum’s UK Executive Opinion Survey on global competitiveness and is an instructor for LSE Enterprise executive education courses on capital markets, economic competitiveness and innovation. Her publications include peer reviewed journal articles on the development of venture capital markets in East Asia and how policy models transform as they diffuse. She has also published a number of policy papers on economic growth and a working paper on the social impact of business. Before returning to academia, Robyn spent eight years in the financial sector, working as a financial institutions' liability underwriter, a research manager at an expert network firm and an investor relations manager at a fund of hedge fund. Her public sector experience includes internships with the Economic Section of the US State Department Foreign Service and in the Westminster office of a UK Member of Parliament. She received her BA from the University of Michigan, was a visiting scholar at the National University of Singapore Lee Kuan Yew School of Public Policy and completed her MSc and PhD in International Political Economy in the International Relations Department at the London School of Economics & Political Science. Robyn was the first-ever winner of the BISA Award for Teaching Excellence by a Postgraduate Student and holds the Postgraduate Certificate in Higher Education (PGCertHE).