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JAN 27, 2006

The U.S. Road Show

By Yoshito Hori
Copyright GLOBIS

After lots of parties to see in the New Year, I came to the States to make presentations to investors. This “road show” started in Chicago and continued to Boston, New York, San Francisco, and LA. I tend to travel alone, but this time I was accompanied by colleagues from GLOBIS Capital Partners (GCP), Mr. Kariyazono and Mr. Honda.

Normally, I have to arrange everything on these trips myself, from preparing the presentation materials (and the presentations themselves) to logistics such as renting a car. This time, I’ve really appreciated having strong support with me.

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) and was created in 1996 with 540 million yen. Fund No. 2 was formed in 1999 as a joint venture with Apax. This Apax GLOBIS Japan Fund (AGJF) is based mainly in the USA and Europe and is 20 billion yen. For Fund No. 3, which was the focus of this trip, I decided to go back to our roots and set it up as an independent fund under GLOBIS. I embarked on this road show to present an outline of the fund to existing and potential investors.

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 naturally this means that the ratio of foreign capital is higher. In fact, I wish Japanese investors would be more interested in VC funds.

In addition to being dean of the Graduate School of Management, I am also the head of the VC firm. I’ve found that investors often aren’t persuaded unless I, as the top man, personally make the presentation.

On Wednesday, January 18, I met Mr. Kariyazono on the Narita Express and Mr. Honda at Narita Airport, and 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, and headed for the hotel near the airport, where our first meeting was scheduled for 10 am.

The people we were to meet managed investments at a foundation that is already involved in the GLOBIS No. 2 Fund, so we’d met previously and agreed to meet at an airport hotel, as they were also traveling on business.

The foundation comprised funds donated by a successful entrepreneur who put all profits gained from managing investments to charities, mainly those 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.

Our second meeting of the day was also with a current investor in the No. 2 Fund. This company had been through a series of mergers and changes in the headquarters (currently Chicago).

After the meeting, I used the sauna and went for a quick swim. I have learned in the course of 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 who were interested in our VC enterprise and graduate university.

Thursday morning, I headed for an 8 am flight to Boston by myself. My travel companions had already left on a 6:40 am flight to Michigan, where they would meet with an investor. Upon arriving in Boston, I checked into my hotel and then attended a 3 pm 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, gather students, and sponsor lectures. This is a great learning opportunity for students, as well as a chance to get to know famous people and network.

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 speeches.

It’s good practice for me to make presentations in English, a good opportunity to let people know about GLOBIS, and a good chance for recruiting, as well—three birds with one stone. I delivered my speech in English, 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 was uncharacteristically mild, the air warm and pleasant. I changed seats many times during dinner to talk to as many people as possible. The HBS Alumni Association’s Board of Directors meeting was scheduled for the next day, so I wanted to listen 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. I greeted each member, and the meeting began. Three other sessions were scheduled for the day. 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. Harvard has maintained its youth and dynamism even after nearly 400 years.

The second session was about the HBS brand strategy. The HBS brand is already powerful, and you wouldn’t think there was any real need for a new strategy, but it appears that they are always reworking it.

The third session was a section meeting. I was in charge of the HBS 100th anniversary 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; another focused on the executive program plan. We 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. At 6 that evening, I attended the JAGRASS 15th Anniversary Party. JAGRASS is a group that we established 15 years ago, although it was originally called the Boston Master’s Association. It still honors its original concept: to serve as a network for Japanese graduate students living in Boston. The group started when I was at HBS. I wanted to get to know more people, and the Boston Master’s Association came into being with Japanese students from eight different grad schools.

At first, students from HBS, Harvard 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. Then students in MBA programs from Boston University, Boston College, and the Fletcher Schoolーthe diplomat training school of Tufts Universityーjoined in. These eight schools became the organizing sponsors and created the club. Over the years, they’ve been joined by students from Harvard Medical School, the School of Public Health, and the Graduate School of Education, and the MBA program at Babson University, among others.

The founder of JAGRASS was in town as a guest speaker for the 15th anniversary. It turned into quite an exciting event. The party afterward was spectacular. I left earlier than others, since I had a plane to New York to catch the next morning, but heard that others stayed until 4 am.

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. We talked about old times over Thai food.

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 had another meeting in the afternoon.

The following morning, we were up early again and headed to four more meetings in Connecticut and New York. This, after all, was New York, the capital of capitalism. And it was also a city with a multitude of investors. We made good use of our time with a schedule crammed from morning to evening, leaving us pretty 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. We grabbed a quick bowl of noodles in Chinatown, had two meetings, and then I gave a speech 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 Japanese students after the speechーof course, one of my goals was recruiting.

After checking in at the hotel, I had dinner with a consultant from Silicon Valley. Over sparkling Californian wine, we had very meaningful discussion that ranged from VC to Go and Shogi.

The next morning, partially due to the time difference, I woke up at 3 am, so I checked my email and left the hotel at 4:30. A few hours later, I was on a flight bound for LA. My road show buddies were waiting at the hotel, and we all headed off to Century City, where our meeting kicked off at nine. An hour later, we were back at the airport for an 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. We had made the rounds to meet investorsー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’ll have to remember that for our next road show to Europe!