Hong Kong should be a financial capital to all - including tech start-ups
Yat Siu says outdated thinking in Hong Kong's banking industry is denying local technology companies the short-term financing they need to develop and thrive, harming the city's economy

Much has been said recently about Hong Kong's role as a city for technology start-ups. The fact is Hong Kong is surprisingly unfriendly to technology companies. We have low taxes, rapid company creation, efficient business practices and world-class infrastructure; why don't we have a thriving tech start-up community?
While Hong Kong's infrastructure bears a resemblance to Silicon Valley, we have less focus on software engineering or information technology. Google chairman Eric Schmidt recently made a similar point, saying Hong Kong needs to develop more technology talent. While this certainly wouldn't hurt, I don't think it's the main problem because we already have good technical universities and an abundant supply of students. Plus, Hong Kong has no trouble attracting talent (especially senior talent) from overseas.
True, in Hong Kong, there is a lack of a software programming culture and limited interest in entrepreneurship among young people, who tend to prefer "safer" sectors like finance or property. But the real problem that frequently hinders Hong Kong's more ambitious start-ups is a lack of carefully thought-out and structured support from the finance community.
Hong Kong is a financial capital and a keystone for much of the business activity in Asia, yet it offers technology start-ups little assistance compared to what we see in Silicon Valley - or even compared to the assistance regularly provided to other Hong Kong industries.
Why doesn't the finance industry support technology the same way it supports the film, textile, trading and manufacturing industries?
In our early days as a business-to-business electronic messaging services provider, Outblaze faced significant delays in customer payment; in many cases, these delays were disruptive to business. To mitigate the problem, we attempted to raise financing against outstanding invoices, a common practice known as "factoring".
We ought to have been a sound risk for any bank, because we were backed by a good payment history and long-term contracts with reputable international businesses. However, unlike the local companies which regularly solve cash shortages by obtaining letters of credit, we struggled because no bank was prepared to offer us financing. We were forced to close each cash flow gap ourselves, which put extreme pressure on our company.