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JAN 23, 2007

Round-the-World Business Trip 2007. No. 1: The Objectives of Overseas Business Trips

By Yoshito Hori

I am often told, “You seem to have been traveling abroad a lot recently.”

I thought about why this is true, and I soon realized the answer. It’s rather obvious, really. I’m managing Globis Capital Partners (GCP), a venture capital (VC) firm with about 40 billion yen, and over 80% of the investors, that is, our customers, are located overseas. There’s no way for me to meet my customers without going overseas, so naturally I will be traveling more often.

By the way, in terms of independent venture capital in Japan, no other company manages funds as large as GLOBIS. Now and then, companies that are backed by major corporations such as JAFCO and SOFTBANK or that are listed on the stock exchange may be able to manage relatively large funds, but it’s quite unusual for a company like GLOBIS, with just a few partners and associates, to be managing a fund at this scale.

The reason is simple: we are able to significantly expand our fund based on receiving overseas investment. If only Japanese investors were to fall under our umbrella, our funds would most likely be limited to between one and two billion yen. From this perspective, we have been extremely lucky in having access to overseas investors and to have gained expertise through a joint venture with Apax.

In short, GLOBIS has been able to display strength in VC because of our global perspective and networking.

The same can be said for our business school. The scale and quality of the Graduate School of Management, Globis University, has already made it one of the top three schools in its field in Japan. Here too, our relationship with Harvard Business School (HBS), including the utilization of teaching materials and curriculum, gives us a major advantage. In fact, GLOBIS is now one of the largest patrons of HBS. Another big plus is our well-established joint MBA program with the University of Leicester in England.

Thus, even a small company like ours can achieve a position of strength by adopting a global perspective and cultivating overseas alliances. This is why I emphasized the need to solidify our English language abilities and to maintain a global perspective in my address to the company at the beginning of this year. In order to raise the English language ability of our staff, I am strongly encouraging them to attend lectures at the Globis International School (GIS), which offers an MBA curriculum in English.

In any event, we must travel overseas for our ongoing work and this will continue to be the case for the foreseeable future. I take this opportunity to summarize what we are trying to achieve in our travels abroad.

1. Conducting presentations and investor relations: 
As mentioned above, over 80% of the financial contributions to our existing funds come from overseas investors. Clearly, visits to investors are absolutely vital. This was also one of my objectives for this current trip.

2. Enhancing our presence and extending our network through speeches at conferences and other such events: 
I have been invited to speak at the Davos Conference, technology and venture capital conferences, and other gatherings (for example, CEO conferences hosted by Forbes and Business Week). I intend to continue reinforcing our overseas presence.

3. Building relationships with overseas partners and alliance partners:
We periodically meet with Apax, our venture capital partner; Harvard Business School (HBS), our curriculum partner; and other alliance partners, such as the University of Leicester, with whom we maintain an MBA collaboration. It is also important for us to visit affiliates and facilities of companies in which we invest and to exchange ideas with other venture capital enterprises. Moreover, these trips provide opportunities for discussing such matters as contracts related to funds, accounting and the operation of overseas enterprises.

4. Constructing an overseas network through proactively engaging in the principal network in which I serve in the roles of director and secretary: 
I was previously the founding representative of Young Entrepreneurs’ Organization (YEO) Asia, and a board member of NAL (New Asian Leaders), which is part of the WEF (World Economic Forum). I am currently a member of the Harvard Business School Alumni Association’s Board of Directors.

5. Delivering speeches at business schools in Europe and America, as well as organizing and hosting recruitment dinners:
I give speeches at business schools abroad so that future business leaders will better understand Japan and GLOBIS. Obviously, I also actively seek out and recruit MBA holders. This was why I was traveling to Chicago, Boston, New York and London on this trip.

6. Participating in interviews with European and U.S. media:
I am working to establish a relationship with the press by appearing on BBC television and Bloomberg at the Davos Conference and also by being interviewed by Fortune magazine in New York.

7. Participating in overseas seminars:
Some things can only be learned abroad, and therefore I travel overseas to actively participate in training sessions. I am currently attending seminars sponsored by YPO (Young Presidents’ Organization) and YEO.

Just glance at this list and you can easily understand why I have to travel overseas more often. Since this travel incurs costs in both time and money, I try to combine several objectives every time I go abroad.

As for the objectives of my current overseas trip, which coincides with my participation in the Harvard Business School (my alma mater) Alumni Association’s Board of Directors meeting (#4 above), I decided to conduct briefings for investors in New York and London (#1 above), and also recruit for our business school (#5 above).

As a result, this business trip became a veritable round-the-world affair, passing through Chicago, New York, Boston and London, before returning to Tokyo. This was perhaps my 10th world-spanning marathon, so I am used to it. However, the weather is intensely cold in these countries, so I was determined to take good care of my health during this trip.

I headed for the United States on January 17, aboard a flight from Narita to Chicago. Unable to sleep, I was leisurely pacing around the cabin when the flight attendant told me there was a fantastic view of the aurora right then. I think we were somewhere over Anchorage at that point. Looking out of the window by the left exit, I did indeed have a clear view of the aurora. Though I have traveled overseas so often, this was the first time I had seen the aurora, which is typically only visible during winter nights.

These faint, light green curtains of light stretched out thinly across the sky. Apart from the light from this curtain, everything was in total blackness. For a while, I leaned over with my eyes glued to the window, like a child, totally absorbed by the view. I felt immersed in a world of fantastic beauty.

I arrived in Chicago later that morning. Despite what I had heard about global warming actually making winters in America warmer, the city was as freezing cold as I expected, in fact, -12°C. After doing a final check with my venture capital colleagues of materials we had put together for the next day’s investors’ meeting, I decided on the spur of the moment to buy a hat and scarf for protection against the cold.

Just before 4 o’clock, I headed to Northwestern University’s Kellogg School of Management, where I was scheduled to speak, and then returned downtown for a 7 o’clock dinner that included students from the University of Chicago. The event was quite lively and a lot of fun.

By 7 o’clock the next morning, I was onboard a flight bound for New York. Right after touching down, I held an investors’ general meeting, starting around 2 p.m. The investors had come from as far away as Los Angeles and Michigan. I can’t thank these people enough for being willing to travel so far. Three of us, including myself, had come from Tokyo on the GLOBIS side. I thoroughly went over the flow from the No. 1 Fund to the No. 3 Fund, highlighting the good points without glossing over any bad points. Then, we wrapped up.

A get-together with students from Wharton started around 5:45. I chatted for about an hour, and then made my way to Chelsea for a ceremony honoring Alan Patricof.

January 23, 2007
From my hotel in London
Yoshito Hori