19 - Intellectual Property Exploitation

Summary

iGlobe Treasury was another example of a successful joint venture between Singapore and New Zealand companies. Mr Bishop introduced iGlobe Treasury as an early stage venture capital fund that helps young New Zealand companies grow. It was a partnership between Singapore based iGlobe Partners and New Zealand Treasury Merchant Finance. The Fund was also backed by the governments of Singapore and New Zealand. It served to exploit international property by using Singapore-New Zealand partnerships established by cross border venture capital funds.

Small-scale companies in New Zealand required considerable nurturing in the expansion stage. They also needed to be outwardly focussed, as desired growth could not be achieved within the domestic market alone. iGlobe Treasury assists companies by creating unique intellectual property (IP) for them in order to optimize their growth potential. This unique IP involves developing a suitable structure for international business, building an international management team, charting business plans and finding partnerships.

iGlobe Treasury Fund's objectives hence were to serve New Zealand early stage technology companies to partner with Singapore commercialization skills and networks in order to internationalize their technology. Since its launch in June 2003, the Fund has 6 investee companies.

Benefits of Partnership

Partnerships can reduce downside risks and increase the potential upside to the investor. Mr Bishop highlighted the benefits of Venture Capital (VC) partnership:

1. Cross border co-investment increases international trade;

2. Leveraging IP technology through partnerships can lower risk and increase investor returns. As more returns are experienced by investors, it will attract more capital;

3. Early stage co-investment linkages provide a stronger basis for partnership than general cooperation arrangements because fund mangers and investors have more financial incentives to maximize returns. Hence they actively assist in partnership cooperation;

4. Cross-border VC funds provides a valuable conduit for formal cross-border linkages as the VC manager is a dedicated, focused third party, mandated and rewarded for maximizing returns; and

5. IP is a key asset which can be exploited for all parties and leads to longer and stronger long-term partnership. It also generates greater cross-border economic gain.