DragonVenture Inks M&A Fund Management Deal with Canton Venture Capital

Guangzhou, CHINA - December 10, 2001

	Media Coverage:
	Economic Daily
	Singtao Daily

From left to right:  Brad Lee, Vice President of DragonVenture Inc.,
and Wang Hong Mao, General Manager of Canton Venture Capital Co.

Following news of a US$60M fund to be jointly raised with China's largest venture capital firm, Shenzhen Venture Capital in mid October, Silicon Valley based cross-Pacific venture capital firm DragonVenture, Inc. today announced it has entered into a definitive agreement with Canton Venture Capital Co., Ltd. to jointly facilitate and manage cross-Pacific merger and acquisition deals.

The collaboration agreement will focus on U. S. publicly traded companies looking to invest in or outright acquire a China company that is already profitable and growing. "This is a win-win scenario." Tony C. Luh, Managing Director and co-founder of DragonVenture elaborated, "For a U. S. company looking to tap into the vast China market, acquisition is the fastest and most efficient way; for a China company, being acquired will translate into an immediate liquidation event versus waiting at least another two to three years to go IPO in China."

Canton Venture Capital Co., Ltd. and DragonVenture will jointly facilitate these cross-Pacific M&A cases by providing up to US$5M in investment in each completed deal.

"We are very enthused and encouraged by the strong entrepreneurial growth in China today." said K. Bobby Chao, chairman and co-founder of DragonVenture, "While we are trying to help some publicly traded U. S. firms tap into the vast China market, we see a win-win combination in these M&A deals." Mr. Chao was one of the original founders of Cadence Design Systems (NYSE: CDN), the largest electronic design automation software developer and vendor in the world today.

"Canton Venture Capital is very pleased to be working with DragonVenture to help many profitable companies in our region obtain cross-Pacific M&A opportunities with their counterparts in the U. S." said Wang Hong Mao, General Manager of Canton Venture Capital, "This creates an exciting avenue for many of our blue chip startups to have an 'exit' event now rather than two to three years down the road. This also gives certain U. S. companies an effective and solid entry into this much coveted yet unfamiliar market."

About DragonVenture, Inc.

DragonVenture, Inc. is a premier cross-Pacific venture capital, consulting and soft incubation company specializing in bridging the U.S. and Greater China marketplaces. DragonVenture manages funds that invest in emerging companies in the areas of telecommunications, Internet infrastructure, IC & Semiconductor, and Linux. The company provides cross-Pacific consulting services and facilitates cross-Pacific strategic alliances and/or partnerships, and mergers and acquisitions through DragonVenture's M&A Fund. DragonVenture, Inc. is headquartered in Silicon Valley and also has a branch office in Beijing, China. DragonVenture has made investments in 8 startups in the U. S. from the first fund it manages. In addition, DragonVenture is working closely with numerous U. S. firms on their China strategy while assisting a handful of Greater China companies to expand business horizons into North America.
For more information please visit www.dragonventure.com.

About Canton Venture Capital Co., Ltd.

Canton Venture Capital Co. Ltd. was founded in December 1999. With a registered capital of 300 million RMB, the company's major businesses are venture investment in the high-tech field, establishment of venture investment funds, as well as investment consulting and assets management. The mission of CVCC is to push for the commercialization of new products, industrialization of new and high technology, and improvement of socio-economic efficiency through various kinds of venture investment. Backed by the city government, CVCC helps small companies and individuals in the process of commercialization of high-tech products and related services. Based in Guangzhou, CVCC's business covers the pearl delta area and southern China. CVCC's effort is to make Guangzhou a center for technology innovation, the base of high technology industrialization, and the hub of new and high-tech products. CVCC's objective is to enhance the continuous growth of the local economy.

Toward the 2000s, Canton Venture Capital Co. Ltd. will become an integral part of the investment system in the area of Guangzhou. The total capital injection into the company will likely be up to one billion RMB by the year of 2003. CVCC is looking forward to cooperating and collaborating with investment institutions, individuals, and research institutions with strong R&D capability. Together we can contribute to the development of science and technology, as well as the general competitiveness of the local economy.

While CVCC is open to reviewing projects from different fields, the main areas of emphasis will be in telecommunication, Internet, computer software, biotechnology, Chinese medicine modernization, and agriculture modernization.
For more information please visit www.c-vcc.com