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JAN 24, 2007

Round-the-World Business Trip 2007. No. 2: Ceremony Honoring Alan Patricof

By Yoshito Hori
Copyright GLOBIS

Alan Patricoff is the founder of Apax. He had been a negotiating partner in the joint venture that gave GLOBIS the chance to take its first major step. It may actually be more accurate to refer to him as my boss rather than my partner.

Alan was a venture capitalist before the term “venture capital” was invented, making him something of a legend in the industry. Starting from an initial fund of 300 million yen, Apax now manages funds at the scale of two trillion yen.

In the years after I set up GLOBIS, there was no one I looked up to as a boss. The closest I had was an external director who was like a mentor to me. I acted on my own beliefs, completely trusting my own instincts. This all changed, however, once we set up the joint venture with Apax. All of a sudden everything—every decision from investments to employment, annual salary revisions, and promotions—needed Alan’s approval before it could go ahead. I had to constantly update Alan on the situation and gain his approval.

With the difference in time and distance between Tokyo and New York, all this reporting and decision making had to take place through late night and early morning email and videoconferences.

Alan was very much the boss, always relaying orders, instructions, and advice. Sometimes I disagreed, and there were times when we locked horns over the telephone or videoconference call. I’m sure these encounters played a big role in raising the level of my English skills.

In the course of our work together over the years, we really began to understand each other. I learned a lot from him. I deeply respected his wealth of experience, his way of thinking, his determination, and his global perspective. I liked his straightforward way of talking. Alan would say kind things about me to investors, like, “Yoshi never lets me down. I have complete faith in him,” although I bet he was just being polite.

As Alan’s impending retirement approached, I figured the joint venture fund with Apax would be dissolved and we would set up an independent GLOBIS fund. Of course, the main reason GLOBIS decided to go it alone was the difference in our directions—Apax favored a buyout, while GLOBIS wanted to become an independent venture capital fund—but it was also true that working with Apax held little appeal for me without Alan.

Eight full years had passed since Apax and GLOBIS first entered into the joint venture contract on January 14, 1999. Alan had turned 72 and had already retired from Apax. By this point, the disagreements that had come up during our videoconferences had already become a thing of the past.

Alan continued to be an active venture capitalist even after turning 72. He created a new venture capital fund called Greycroft and has started investing in early stage startups. I cannot help but feel deep respect for his ongoing entrepreneurship.

As usual, after confirming my schedule in New York, I contacted Alan to arrange a dinner together, and he replied that the suggested date was the same day as the reception in his honor.

That sparked my curiosity. “Would you mind if I came along?” I asked, knowing the answer was bound to be no, but Alan graciously invited me to attend.

So there I was, in a taxi on the way to his reception. The taxi pulled up in front of the Rubin Museum of Art on 17th Street, which was built two or three years ago specifically to house a Himalayan art collection.

Hiring out an entire museum for a party is not at all unusual in the United States. As I made my way through the reception area, I realized the party had already started, and everyone was chatting, wine in hand. Many were younger than I had expected. I spotted Alan in the crowd, walked over to shake his hand, and offered my congratulations. He shook my hand and introduced me to the various people nearby. Then, perhaps to mask his discomfort about being honored, he began asking questions.

“I wonder why are there so many Asians here.”
“What exactly does this organization do, anyway?”

I, too, was curious about what exactly this organization did, what precisely this award was for, and why the people there were so young, so I decided to slip away and investigate on my own.

I learned the following.

It turned out the organizer of the event was an NPO called Echoing Green, which had been set up 20 years ago by a venture capital group named General Atlantic. Echoing Green primarily provided financial support to NPOs in their first few years as startupsーthat is, they were an NPO helping other NPOs.

Despite its 20-year history, Echoing Green was still not very widely recognized, and so it established the award to bolster its public profile. The Be Bold Award was intended to encourage more people to participate in volunteer activities by recognizing those who have bravely contributed to NPOs.

Alan was among the first three people to receive this award. The two others were a CNN anchorwoman and someone who had founded an NPO concerned with education in the U.S. During speeches by the presenter and Alan himself, it became clear why a venture capitalist was being honored among this crowd.

When the time came for Alan to receive the award, he stepped onto the stage and was given the crystal shield. He grasped the microphone in his right hand and began to speak, nonchalantly swinging the shield in his left.

Alan currently divides his working time as follows:
70% Business
20% Volunteer
10% Political Activities

His volunteer activities primarily involve attempting to set up new industries in Africa by introducing a venture capital approach, a kind of “micro investment.” While the Bangladeshi economist Muhammad Yunus won the Nobel Prize last year for inventing micro finance, Alan created micro investment.

In addition to his work as a venture capitalist, for several years Alan has been traveling four to five times a year to Nigeria, Kenya, and the Republic of Mali in an effort to rescue Africa from poverty through his micro investment plan. Alan’s activities are not about donations; he is planting the roots of industry.

Alan has been a major supporter of the Democratic Party. He first noticed Bill Clinton when he was governor of Arkansas and has supported Bill and Hillary ever since. It has been said that Alan had relatively free access to the White House during President Clinton’s term of office and continues to be an enthusiastic supporter. As Hillary Clinton’s chief financial adviser, he’s in charge of all financial matters. At the reception, Alan proclaimed, “Hillary is about to declare her candidacy for president”ーa prediction that came true the following day.

On the weekends, Alan retreats with his family to his luxurious suburban villa in South Hampton, where he often holds fund-raising parties for Senator Clinton.

I, too, have recently become involved in politics. I am currently serving as the head of the support committee for two candidates for whom I have particularly high expectations: Hironari Seko and Yasutoshi Nishimura. I also engage in NPO activities through the YES! Project. While the Japanese tend to shy away from politics, such involvement is encouraged as a civic duty in the U.S. For some time, Alan has been encouraging me to adopt this mindset. He says that it’s important for business people and the public in general to make a difference in their country and the world. If we are indifferent towards politics, he says, if we do not get involved, democracy cannot really exist. We should feel a sense of duty toward our community. This is precisely the spirit I am trying to encourage through the YES! Project.

Ronald Cohen, a partner of Apax Europe, is involved in reconciliation efforts in the Middle East. He sometimes even accompanies British Prime Minister Tony Blair on trips to the region. World-class businessmen are proactive in politics.

But Alan was not receiving this award because of his 10% involvement in political activities. The award was to honor his 20% involvement in volunteer work. He even asked the audience, “What are you doing to better the world?” It was hard to imagine the “strictly business” Alan of old asking such a question.