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JAN 27, 2006

The U.S. Road Show

By Yoshito Hori

After having attended lots of parties to see in the New Year, I have been in the States on a “road show” since the middle of January. That’s the term for a trip taken for the purpose of making presentations to investors. I haven’t been able to get used to this movie-like phrase, but I still use it since it perfectly captures the atmosphere.

This road show started in Chicago and continued to Boston, New York, San Francisco and LA. I always tended to travel alone, but this time I was accompanied by my colleagues from Globis Capital Partners (GCP), Mr. Kariyazono and Mr. Honda.

In the past, I had always arranged everything myself, from preparing all the presentation materials to logistics such as renting a car, and I would battle through presentations to investors on my own. This time, however, I really appreciated having strong support like them with me.

I should probably give you a little background information. GCP, the venture capital (VC) firm of the GLOBIS Group has so far established two funds. Fund No. 1 is called the Globis Incubation Fund (GIF), which was created in 1996 with 540 million yen. Fund No. 2 was formed in 1999 as a joint venture with Apax, which is based mainly in the USA and Europe; the size of this Apax Globis Japan Fund (AGJF) is 20 billion yen. For Fund No. 3, which was the focus of this trip, I had decided to go back to our roots and set it up as an independent fund under GLOBIS. So I embarked on this road show to present an outline of the fund to existing and potential investors.

Incidentally, more than 90% of the Globis Fund comes from overseas investment. You might think that I like foreign capital, but that’s not quite true. Overseas investors tend to rate GLOBIS higher than their Japanese counterparts do, and so naturally this means that the ratio of foreign capital is higher. In fact, I wish Japanese investors would be more interested in venture capital funds.

As well as being Dean of the Graduate School of Management, I am also the head of the venture capital firm. Consequently, investors won’t be persuaded unless I, as the top man, personally make the presentation. But that’s more than enough background information for this U.S. road show. Anyhow, that is how this U.S. road show was set up.

On Wednesday, January 18, I met Mr. Kariyazono on the Narita Express, and after hooking up with Mr. Honda at Narita airport, the road show was on its way. We arrived at the Chicago airport at 9 am on the same day we had left, after a 13-hour flight. We got into the car that had come to pick us up and headed for the hotel near the airport, where our first meeting was scheduled at 10 am.

The people we were to meet managed investments at a foundation that is already involved in the Globis No. 2 Fund. We already knew each other, having met many times over several years. Since they were also traveling on business, we decided to hold the meeting at an airport hotel.

This foundation comprised funds donated by a successful entrepreneur, who gave everything he owned. Profits gained from managing investments were given to charitable activities, mainly alleviating poverty and providing education. Just the thought that a GLOBIS’ investment enterprise is playing a role in alleviating poverty and addressing the shortage of educational opportunities in developing countries made me feel pretty good.

The meeting ended as scheduled, and we checked into our downtown hotel. Our second meeting of the day started at 2 pm. This was also with a current investor in the No. 2 Fund, although this company had been through a series of mergers, with many changes in the headquarters, which was now based in Chicago.

After the meeting, I used the sauna and went for a quick swim. I have learned in the course of all my travels that a sauna and a swim are a winning combination for taking the edge off electromagnetic waves and jet lag.

Students from Chicago University came to pick us up just before 7 pm for a recruiting dinner with MBA students from the school. They appeared to be interested in GLOBIS’ venture capital enterprise and in GLOBIS becoming a graduate university.

Thursday morning I headed for an 8 o’clock flight to Boston by myself. The other two had already left on a 6:40 am flight to Michigan, where I had asked them to meet with an investor. Upon arriving in Boston, I checked into my hotel and then attended a 3 o’clock meeting with the president and other key staff of a venture capital firm headquartered in Boston.

Afterwards, I headed to the Harvard Business School (HBS), where I was scheduled to speak. The lecture was jointly sponsored by the Asia Business, Entrepreneurship and Venture Capital & Private Equity clubs at HBS.

As many as 900 students attend HBS in one academic year, so there are many extracurricular activities like this. Each club takes the initiative to invite instructors, gathers students and sponsors lectures. This is a great learning opportunity for them as well as a chance to get to know famous people. At the same time, these events also enable student networking, essentially killing three birds with one stone.

Speakers from Japan are very rare at such events, and so whenever I travel around the States, if possible I visit business schools and give a speech. (refer to column: Visiting and Speaking at U.S. Business Schools).

It’s good practice for me to make presentations in English, a good opportunity to let people know about GLOBIS and useful for recruiting as well—three birds with one stone for me, too. I delivered my speech in English for about an hour and half starting at 4:30 pm, and then headed out with the Japanese students to a French restaurant in Harvard Square.

We walked over the Charles River, and although this was Boston in the middle of winter, the weather had been uncharacteristically mild, so the air was warm and pleasant. I changed seats many times during dinner and tried to talk to as many different people as possible. The HBS Alumni Association’s Board of Directors meeting was scheduled for the next day, so I wanted to take the pulse of the situation by listening to what the students had to say.

The next morning, after a sauna and a swim, I headed for HBS. The Alumni Association’s Board of Directors meeting started with lunch, and after greeting each member, I sat down and the meeting began. Three other sessions were scheduled for the day aside from this lunch meeting.

The first session featured a talk about an expansion project for Harvard University. In addition to establishing a new department specifically dedicated to the life sciences on 250 hectares currently owned, an additional 350 hectares of land had been purchased on the Boston side to beef up the cultural facilities.

All the land around the HBS campus was scheduled to become part of the campus. This was a very aggressive plan. I fully realized that Harvard still maintained its youth and dynamism even after nearly 400 years had passed since its inception.

The second session was concerned with the HBS brand strategy. The HBS brand was already powerful, and you wouldn’t think there was any real need for a branding strategy, but it appears that they are always reworking it. I should certainly take this leaf out of their book.

The third session was a section meeting. I was in charge of the HBS 100th Year commemoration event, so I asked professors to share their thoughts and ideas.

Afterwards I was shown around the newly refurbished Baker Library, and then we crossed the river by bus to Harvard University’s Faculty Club. There, the vice dean of Harvard University talked about the future vision for Harvard University.

Two more sessions were set for the following morning. One was an update of recent public relations activities, and another focused on the executive program plan. We then met again in section meetings for discussions, and came back together at lunch for a final round-up. This had been a very efficient board meeting and was certainly an example of management we could call upon for future GLOBIS Alumni Board meetings.

After saying goodbye to everyone, I got a ride with a board member who lives in Boston, and left for the hotel. Since there was a shopping center on the way, I got out and did a little browsing for a short break.

Starting at 6 o’clock that evening, I attended the JAGRASS 15th Anniversary Party. JAGRASS is a group that has carried on since we established it 15 years ago, although it was originally called the Boston Master’s Association. Actually, it is still based on exactly the same concept, which is to serve as a network for Japanese graduate students living in Boston.

It started 15 years ago when I was at HBS. My thinking had been, that as I was in Boston with all these universities, I wanted to get to know more people. The Boston Master’s Association came into being with Japanese students from eight different grad schools.

At first, students from the Business School, the Law School, and the John F. Kennedy School of Government (Graduate School of Public Administration) came together from Harvard, along with those from MIT’s Engineering and Business Schools. In addition to these five schools, students in MBA programs from Boston University and Boston College as well as students from the Fletcher School, which is the diplomat training school of Tufts University. These eight schools became the organizing sponsors and created the club.

Today, students from these eight schools have been joined by students from the Medical School, the School of Public Health, and the Graduate School of Education from Harvard University, the MBA program at Babson University and others, making the group all that more powerful.

And so the founder of JAGRASS was in town as a guest speaker for the 15th Anniversary Party. I think it turned into quite an exciting event for them. The party afterward was also spectacular. I left earlier than others, but heard later that everyone stayed until 4 in the morning. I myself was still a little hazy when I left Boston to go to New York on the following day, which was Sunday.

Sunday night I had a reunion with two HBS classmates who live in New York. We hadn’t crossed paths for years. These two, along with ex-Daiei President Yasuyuki Higuchi and I, had all been in the same Harvard Summer School class. Over Thai food, we had a lively conversation, talking over old times and general topics.

The road show was back on track Monday morning. Mr. Kariyazono, Mr. Honda and I met up at 6.40 am and went to give a presentation to an investor in Connecticut. I spoke at the Japan Society at lunchtime and then went to another meeting in the afternoon.

We met at 6:40 am again the following morning and held four more meetings in Connecticut and New York. We were utterly exhausted by the end. This, after all, was New York, the capital city of capitalism. And it was also a city with a multitude of investors, and so we made good use of our time, with a schedule crammed from morning to evening, leaving us pretty well worn out by the end of the day.

Wednesday morning we left the hotel at 6 am for San Francisco. We landed six hours later and were welcomed by the blue sky of California. I took off my coat and necktie.

After arriving in the city of San Francisco, we grabbed a quick bowl of noodles in Chinatown. We had two meetings, at 1:30 and 3:00. During the second meeting, I left the others to go to Stanford University.

I had been invited to give a speech starting at 5 at a joint program involving Stanford’s School of Education and the Graduate School of Business. This was my third speech in English during this road show, and I was really getting into the swing of it. I had tea with the Japanese students after the speech, and, of course, one of my goals was recruiting.

After checking in at the hotel, I had dinner with a consultant who is active in Silicon Valley. We had very meaningful discussions across a wide range of topics, from venture capital to Go and Shogi, over sparkling wine from California.

The next morning, partially due to the time difference, I woke up at 3 am. So I checked my email. I left the hotel at 4:30 am and was soon on the 6:05 flight bound for LA. I got into the car that was awaiting me and at 8 met up with Mr. Kariyazono and Mr. Honda at their hotel and headed off to Century City.

Our meeting kicked off at nine, and after a lively exchange of opinions, we left the meeting one hour later at 10 o’clock in order to make our 11:50 flight.

We only spent four hours in LA, and in eight days we had zoomed through five different cities. I guess this is the nature of road shows, which are at best hectic. We had made the rounds to meet investors, and as soon as one meeting finished we were off to the next. In between, you have to take a break or get some exercise, or else you completely exhaust yourself, mentally and physically.

I find enjoyment in food, shopping, meeting up with old friends, watching sports, listening to classical music, seeing operas, visiting museums, taking a sauna and swimming. While checking my email, I find some free time and have a little fun.

Needless to say, taking a break is crucial, and if I don’t find time for these other pursuits then the whole trip becomes unbearably bland and boring. This time I had company, and so we enjoyed being on the road together (of course I mustn’t forget to mention here that the road show meetings were most fruitful :->)

The next road show heads to Europe. I am going to take care of my health and get ready.

January 27, 2006
On the flight bound for Narita
Yoshito Hori