Food for thought:Choosing smart entrepreneurs

http://www.bjreview.com.cn/business/txt/2007-07/02/content_68115_2.htm
"When we have a bunch of entrepreneurs brief us about a project, the smart ones are the preferred choice," said Luh. "But I don't want to invest just in high IQ scores. IQ is the mother of wisdom, but the two vary drastically, with the latter being far more important.

"Oftentimes, a company can have very good products, industry outlook, innovative technology, market and development potential, but problems with execution. Should there be any deviation in the course of execution, the people are accountable for such failure," Luh explained. "One with inadequate capability can still grow to be capable, but nothing can be done if he is found wanting morally. That is how wisdom is different from IQ."

Luh offered an example to illustrate his idea.

In 2000, the DFJ Dragon Fund extended investment to a few companies started by graduates of Tsinghua University. They presented clear and accurate schemes in every aspect. Luh was particularly impressed by the team leader, a former student who had experience and outstanding achievement overseas, and a deep knowledge at home and abroad. Soon after the investment arrived, however, the leader started to disagree with his partners and threw himself into an internal fight for power.

"Plus his personal integrity was also in question," Luh explained.

The guy bought a car for himself and registered it under his own name with the raised funds. When asked about the issue, he showed no regret and made up excuses.

"The case cost us a lot of money and much time," said Luh. "So we now attach great importance to the personal integrity of the entrepreneur. We always want to put our investment in the hands of smart entrepreneurs, who care about corporate culture, credit standing and branding.

"Of course, most of the entrepreneurs are very young, and age is related in some ways to wisdom," said Luh. "It is impossible to expect these young entrepreneurs to have too much wisdom. But wisdom can be nurtured step by step and it will grow in practice just as Buddhism refers to the root of wisdom. In most cases, given a little help, people will come to an understanding."

(Xinhua Finance)