alarm:clock

IMterviews - Wednesday, March 30, 2005

Celsius Capital's Bill Burnham: the a:c IMterview

Bill Burnham has China on his mind. He was fresh off the plane from Shanghai when we caught up with him earlier this week. Burnham was in China talking to investors and looking at companies as he prepares to launch Celsius Capital, an early stage VC firm investing in opportunities in the software and information services sectors across China and the United States.

How hot is China? Burnham told us the streets of Shanghai are already littered with "Sand Hill Road VCs" and that you could start anything from a semiconductor company to a restaurant. Celsius will seek to capitalize on this burgeoning entrepreneurial scene.

Before becoming a VC, Burnham covered Internet stocks for Credit Suisse First Boston, Deutsche Morgan Grenfell, and Piper Jaffray. You can learn more about his background here and be sure to check out Burnham's Beat, his blog.

the alarm:clock: hi Bill... a:c here…
billburn: Hi there
billburn: fire away w/the questions
the alarm:clock: Cool. We know you just got back from China – we’ll get to that in sec. First off, can you give us the background on your new firm, Celsius Capital? Who’s involved?
billburn: Celsius is an early stage tech VC fund focused on software and information services investments across China and the US.
billburn: The idea is to do "information arbitrage" across the two geographies.
billburn: Celsius was formed by myself and two former colleagues of mine from CSFB, Carlos Bhola and Woo Kim.
billburn: Carlos was head of e-commerce banking when I was head of e-commerce research.
billburn: and Woo worked with both of us.
the alarm:clock: "Information arbitrage..." can you clarify that one for the slow kids at the back of the class? Practically speaking, what will that mean in terms of your investment approach?
billburn: Yeah, I admit that's a bit of "marketing speak" but it actually has a lot of thought behind it.
billburn: When Carlos and I were on Wall Street during the 1st wave of Internet companies we noticed that Europe was lagging the US by about 18-24 months in terms of adopting new technologies.
billburn: I noticed the same thing at Softbank in terms of Japan -- Japan was lagging the US by about 12-18 months.
billburn: When I met up with Carlos last year we both felt that the same thing was happening in China.
billburn: Thus, the idea behind Celsius is that we will make investments in the US…
billburn: and then use the insights created by those investments to invest "ahead of the curve/crowd" in businesses in China…
billburn: that use the same innovations/technologies, but do so 12-18 months later and with heavy localization.
billburn: As it happens, if you look at all of the Chinese Internet/Software IPOs to date, every firm that has gone public has really been a modified copy of a US firm.
the alarm:clock: OK. But what if you see opportunities in China that have no "innovation/technology" linkage with State-side investments. Are you free to invest in those as well?