Whenever a new company's market success emerges, especially in technology, it can in no small part be attributed to a venture capitalist. Besides the usual capital required for a business, venture capitalists offer a sounding board for ideas, insights on the marketplace, advice on developing business opportunities, recruiting the right management team and acquisitions for future financing. Among the diverse financial community, venture capitalists are a niche group of professionals dedicated to investing capital directly into private companies for equity; whether they are in seed or developmental stage or for a management buy-out. At present, there are about 120 professionals in Hong Kong. Though not a big number, the industry has grown steadily since it first started some years ago. In a sophisticated industry in Europe and the United States, there are more than 2,000 companies with US$300 billion invested. 'Hong Kong is still the hub for venture capital/private equity where we are able to raise money internationally,' says Allan Homeming, executive committee member of the Hong Kong Venture Capital Association. 'Almost 95 per cent of the investments we make are outside Hong Kong, but within the region. In Hong Kong, we provide funds as well as legal and accounting advice to our investors and investee companies.' In a broad sense, the venture capitalists are required to be highly entrepreneurial. 'It is like running your own business,' says Eric Chan, partner of Pantheon Ventures and an executive committee member of the association. From sourcing deals, conducting due diligence, understanding the risks, structuring the deal, enhancing the investment firm's value to cashing out through a sale of the company's stakes, the process requires a broad set of skills. 'The venture capitalist firms tend to look for specific skills like in accounting, project management, or negotiating abilities at middle-executive level, and well-rounded skills for senior hires,' says Mr Chan. These firms will employ certified practising accountants for their auditing or corporate advisory/recovery specialist knowledge, investment bankers for their experience in brokering transactions, or industry professionals for their expert knowledge. 'Prior to joining us, the executives should have five to 10 years intense analytical training,' says Mr Homeming, who is also a director at PPM Ventures, a private equity arm of Prudential of Britain. 'In addition, they should be a self starter for it is quite a proactive job.' One key factor for success is a person's judgment and experience. To be successful, professionals must assume the role of principal investor in every transaction. 'We should treat that as our own money for which we have the ultimate responsibility for its performance' Mr Chan says. 'We do not work like investment bankers who are only responsible for the documentation of a merger and acquisition deal, or a lawyer who is only for one case. We have to ensure that the investments will bring back more cash and value to its investors.' The industry in return offers rewards and bonuses to those professionals who perform. It also provides a wide range of challenges. 'Every day is a different day. This is a non-stop learning process. Every investment deal has a different management team and problems for us to work and deal with,' says Mr Homeming.