IBM COURTS VENTURE PARTNERS, BRAZILIAN TECH INNOVATION

August 10th, 2004, São Paulo, Brazil — Venture investors, independent software vendors, academics, government officials, and local business leaders packed São Paulo’s Hotel Unique yesterday for an Innovation Roundtable co-hosted by IBM and Darby Overseas Investments, Ltd. But despite the local hype that flooded the one-day event with high-level participants, the event proved less a declaration of intent and more a testing ground for the technology giant.

The event drew an audience eager for any indication of funding and exit opportunities in IBM’s increased support for VCs such as Darby. Of these impressions, Jonathan Whittle, a Principal with Darby Technology Ventures and Darby’s key event representative, said “the program IBM wants to bring to the region is not an investment program” but rather is “focused on developing relationships and participating in the business ecosystem.” He described the possibility of exit opportunities through this program as “remote.”

The IBM Venture Capital Group has established partner arrangements with VCs through established programs such as Innovate Now and PartnerWorld, designed to promote IT innovation globally. According to Claudia Fan Munce, Managing Director of IBM’s Venture Capital Group, among IBM’s principal interests in the region is the promotion the benefits of open standards and Linux.

“The response was positive before we even landed in Brazil. We got a 100% RSVP positive, which shows the enthusiasm of the investment community,” said Ms. Munce. She indicated IBM’s activities in the region are consistent with broader efforts to promote local technology markets rather than investing directly in technology. Previous Innovation Roundtables have been held in locations as diverse as Shanghai and Melbourne.

“We really see Brazil as the anchoring point for the region,” said Ms. Munce. “The size of the local market is very important to really have a critical mass to work with. Brazil has a very strong government push to create a strong venture community. Additionally, both the venture community and government have chosen Linux as a preferred platform.”

Other IBM executives present included Buell Duncan, general manager, ISV & Developer Relations, and Paulo Machado, manager of ISV & Developer Relations for Latin America. Notable participants from the venture capital community included Álvaro Luis Gonçalves, head of the Brazilian Venture Capital Association (ABCR), and Randy Martinez, executive director of the Latin American Venture Capital Association (LAVCA).

“When global players such as IBM actively cultivate innovation, it can be a major growth catalyst for local markets,” said Mr. Martinez. “The entrepreneurs are energized because they are getting recognition and the investors are encouraged by the willingness of the corporation to nurture new markets. Everyone wins in a marketplace with big players like IBM.”

Mr. Martinez estimated participation in the event as roughly 80% senior level investment professionals and 20% investment-backed entrepreneurs. One such entrepreneur in attendance was Daniel Heise, Managing Director of Direct Talk, a call center solutions provider that claims Rio Bravo and e-Platform Venture Partners as investors.

Mr. Heise said he felt the roundtable “was very useful for us, local entrepreneurs, to see that a large global technology company like IBM sees the Brazilian technology development landscape as a promising one.”

“We strongly believe our competitive advantages are moving us towards a steep growth cycle and having a player such as IBM backing this up only gives us more strength to keep moving,” said Mr. Heise. “Although the primary issues discussed involved the venture capital role in developing new technology companies, it was useful to see IBM’s vision of future markets.”

Mr. Whittle felt the event was well received.

“Our interest in cosponsoring this event is that we believe Latin American investors and portfolio companies can benefit from being plugged into an ecosystem of relationships outside their home markets,” he said. “We would like to see a robust and thriving VC community in Latin America and see technology companies thriving as well. We can’t do it alone.”

Ms. Munce indicated IBM has concrete plans to continue the dialogue initiated in the roundtable, describing it as “an early-stage discussion in engaging the investing community.”

According to Mr. Whittle, the high level of interest in the Innovation Roundtable has “elevated the priority for IBM” for follow-up initiatives, including an IBM innovation team on the ground in Brazil.

About the Latin American Venture Capital Association (LAVCA)

LAVCA’s mission is to promote the growth of the venture capital and private equity industry in Latin America through research, education, networking, best practices, and the advocacy of sound public policy. LAVCA is a not-for-profit trade association serving a core membership of venture capital and private equity firms that invest in emerging companies.

For more information on LAVCA and its activities please visit www.lavca.org.

Contact:
Ramona DeNies
Communications Manager
Latin American Venture Capital Association
1 (503) 239-7449
[email protected]

August 10th, 2004, São Paulo, Brazil — Venture investors, independent software vendors, academics, government officials, and local business leaders packed São Paulo’s Hotel Unique yesterday for an Innovation Roundtable co-hosted by IBM and Darby Overseas Investments, Ltd. But despite the local hype that flooded the one-day event with high-level participants, the event proved less a declaration of intent and more a testing ground for the technology giant.

The event drew an audience eager for any indication of funding and exit opportunities in IBM’s increased support for VCs such as Darby. Of these impressions, Jonathan Whittle, a Principal with Darby Technology Ventures and Darby’s key event representative, said “the program IBM wants to bring to the region is not an investment program” but rather is “focused on developing relationships and participating in the business ecosystem.” He described the possibility of exit opportunities through this program as “remote.”

The IBM Venture Capital Group has established partner arrangements with VCs through established programs such as Innovate Now and PartnerWorld, designed to promote IT innovation globally. According to Claudia Fan Munce, Managing Director of IBM’s Venture Capital Group, among IBM’s principal interests in the region is the promotion the benefits of open standards and Linux.

“The response was positive before we even landed in Brazil. We got a 100% RSVP positive, which shows the enthusiasm of the investment community,” said Ms. Munce. She indicated IBM’s activities in the region are consistent with broader efforts to promote local technology markets rather than investing directly in technology. Previous Innovation Roundtables have been held in locations as diverse as Shanghai and Melbourne.

“We really see Brazil as the anchoring point for the region,” said Ms. Munce. “The size of the local market is very important to really have a critical mass to work with. Brazil has a very strong government push to create a strong venture community. Additionally, both the venture community and government have chosen Linux as a preferred platform.”

Other IBM executives present included Buell Duncan, general manager, ISV & Developer Relations, and Paulo Machado, manager of ISV & Developer Relations for Latin America. Notable participants from the venture capital community included Álvaro Luis Gonçalves, head of the Brazilian Venture Capital Association (ABCR), and Randy Martinez, executive director of the Latin American Venture Capital Association (LAVCA).

“When global players such as IBM actively cultivate innovation, it can be a major growth catalyst for local markets,” said Mr. Martinez. “The entrepreneurs are energized because they are getting recognition and the investors are encouraged by the willingness of the corporation to nurture new markets. Everyone wins in a marketplace with big players like IBM.”

Mr. Martinez estimated participation in the event as roughly 80% senior level investment professionals and 20% investment-backed entrepreneurs. One such entrepreneur in attendance was Daniel Heise, Managing Director of Direct Talk, a call center solutions provider that claims Rio Bravo and e-Platform Venture Partners as investors.

Mr. Heise said he felt the roundtable “was very useful for us, local entrepreneurs, to see that a large global technology company like IBM sees the Brazilian technology development landscape as a promising one.”

“We strongly believe our competitive advantages are moving us towards a steep growth cycle and having a player such as IBM backing this up only gives us more strength to keep moving,” said Mr. Heise. “Although the primary issues discussed involved the venture capital role in developing new technology companies, it was useful to see IBM’s vision of future markets.”

Mr. Whittle felt the event was well received.

“Our interest in cosponsoring this event is that we believe Latin American investors and portfolio companies can benefit from being plugged into an ecosystem of relationships outside their home markets,” he said. “We would like to see a robust and thriving VC community in Latin America and see technology companies thriving as well. We can’t do it alone.”

Ms. Munce indicated IBM has concrete plans to continue the dialogue initiated in the roundtable, describing it as “an early-stage discussion in engaging the investing community.”

According to Mr. Whittle, the high level of interest in the Innovation Roundtable has “elevated the priority for IBM” for follow-up initiatives, including an IBM innovation team on the ground in Brazil.

About the Latin American Venture Capital Association (LAVCA)

LAVCA’s mission is to promote the growth of the venture capital and private equity industry in Latin America through research, education, networking, best practices, and the advocacy of sound public policy. LAVCA is a not-for-profit trade association serving a core membership of venture capital and private equity firms that invest in emerging companies.

For more information on LAVCA and its activities please visit www.lavca.org.

Contact:
Ramona DeNies
Communications Manager
Latin American Venture Capital Association
1 (503) 239-7449
[email protected]