Since I lived in Hong Kong from 1992 to 1999 I do not consider myself impartial to what is happening there . I wrote about it at length a few years ago and that is as valid as it is today. The territory is in deep trouble with the Hong Kong government and its overlord in Beijing accelerating the erosion of the 'One Country, Two Systems' principle. And this is not a domestic or internal affair as the Chinese would like to claim. Far from it. The handover over Hong Kong to China in 1997 is agreed and documented in the Joint Declaration between Britain and China and the Basic Law, both international treaties.
Yesterday I went to downtown Vancouver to join a moving protest and a solid if sobering speech from Canadian MP Jenny Kwan. Most of the attendees were upset and some quite emotional about what is going on in Hong Kong. It was made clear that the struggle of the pro-democracy movement is Canada's fight too, which it is. In fact it is a fight for all of us who see a steady proliferation of authoritarian rule around the world, with China leading the charge. And the outcry and international reaction to it all so far are muted, giving a free pass to the perpetrators.
The best part of the protest was the end when the crowd together sang the Cantopop classic from 1993, Beyond's 'Boundless Oceans, Vast Skies' ( 海闊天空). It brought tears to my eyes, never thought that would happen to me on a Vancouver street. But then, the song not only touches the nerve of love for Hong Kong, its people and the time I spent there, it somehow captured an era that is gone and will be gone forever. Here is the original.
A story that neither we, nor Timseltown will ever come to terms with
The first time I read about the murders on Cielo Drive must have been somewhere in the early seventies when I started to read through the vast book collection in my parent’s house. I recall being mystified by a few photos taken in a hallway where a bearded guy was led to court, followed by one of three very young women all wearing the same simple outfits led in the same direction. Being six or seven years old it was hard to place these, what happened, what was going on here? What was not difficult to sense was that, whatever this was, this was so far out of anything ordinary there must be something deeply unsettling behind the images.
Over the years it became clearer who Charles Manson was and who Sharon Tate was. And to this day I wonder why Chrysler ever thought it was a great idea of naming a car ‘Sebring’ because every time you see it drive by you think of that Hollywood hairdresser who got brutally murdered alongside Tate. And then there are the infrequent touchpoints: a book, a Wikipedia entry, a discussion and the story comes together in all its unsettling gruesomeness. Because no sane human can or will ever comprehend why total strangers ritually knife an eight-month pregnant woman to death in her own home. And digging into that history, you consequently learn that Hollywood was incapable for some fifty years to look this into the eye and turn it into a movie. The wound inflicted by the drama is too deep, too violent and above all, too close to home.
Quentin Tarantino took it on, fifty years after the event. He opts for telling the story in an indirect way, with Brad Pitt and Leonardo diCaprio carrying the role of fictional observers living next door to the house of horrors on Cielo Drive. And in a strange way, finding some false and very short-lived redemption by presenting a radically different outcome of the story. As mystifying the ending to the movie may be, there is that split second you actually think Tate, Folger, Sebring, Frykowski and Parent (who does not show up in the movie at all) ended up living much longer than they did. It does acknowledge that none of us can or wants to see what really happened that night which was indeed my biggest fear going into the theatre. It will always be an unwatchable and inexplicable horror and Tarantino does appear to be making this point in a clever and compelling way.
To be clear, it is hard to see how the general movie going public gets this film. It is a long-winded expose, full of industry references and facts. This includes the ‘spaghetti western’ part, honouring the late Sergio Leone and his epic ‘Once Upon a Time in America’, note that title. That movie was, like this one, a cinematographic lust for the eye and so what does result is a beautiful painting of Hollywood in the late sixties, with Di Caprio, Pitt and Margot Robbie as Tate carrying the almost three hour epic. Contrasting the party at the Playboy Mansion with the goings on at the Spahn Ranch the movie gives you the historical context to really analyze what happened, but you will still need to have a lot of the background facts to put it all in place.
As one of my daughter’s texted after having seen it and following my multiple explanations, ‘I still do not get it’. With that she referenced the movie of course, but in a way the Tate murders will always elude us all. Still, Tarantino’s movie gives us a glimpse and enables us to come a bit closer to an unfathomable part of Hollywood history.
Tech has some nasty habits and they surface in all deals, big and small
In terms of a captivating and thus a super fast and engaging read, John Carreyrou’s ‘Bad Blood’ ranks high. And as someone active in tech and investing, this book for me was pure gold, so much is recognizable and some of it is quite instructive at the same time. In short, the Wall Street Journal’s Carreyrou started researching the billion-dollar biotech start-up Theranos a number of years ago following some tips. He caught on to what turned out to be a fraudulent disaster that famously collapsed last year. The revolutionary and unique blood testing technology propelled its founder young and enigmatic Elizabeth Holmes to instant stardom, and now she is in the dock facing a possible sentence of twenty years. Theranos was able to raise hundreds of millions of investor money, appointed some illustrious political heavyweights on its board (George Schultz, James Mattis, Henry Kissinger) while giving its commercial partners (CVS and Walgreens most notably) the runaround. A few things in the book really stand out and deserve some further attention.
Disconnect between R&D and Commercialization – the core problem Theranos ran into was in the end believing that its product was ready for the market. In order to progress and keep raising dollars for its ambitious vision, it had to show commercial traction. The product was nowhere near where it should have been for that and Holmes and her boyfriend/COO Balwani pushed so hard on their team while leading their partners in all directions but the right one, that in the end the product was not delivering at all. Although I have never seen this phenomenon to this extent, I do regularly see how founders push their teams to deliver too early, too crappy a product and then endangering the whole venture by losing client and then investor confidence. This relentless push is of course Steve Jobs in action, idolized by Holmes who even started dressing like him, with one major difference: biotech is not software, or hardware. Holmes went too far and failed hard.
The Female Founder & the Older Guys - I have seen this dynamic in the Vancouver market too where young female CEOs very often get a lot more attention than male founders and not always for the right reasons. Seasoned male investors fall in love with the company and its tech, but if you listen to them carefully that passion often mutates into something that is more focused on the young woman who is pushing the tech than the business deal. In doing so they suspend judgement and make an investment for all the wrong reasons. What is even more galling in this case is that they were really seasoned guys – Tim Draper, Rupert Murdoch – who ended up jumping into Theranos and Holmes’ fantasy without much of due diligence. Even worse, veteran politicians and military men who had joined the board of Theranos started questioning their own advisors and opted to follow with whatever Holmes and her gang of aggressive lawyers served up as unquestionable progress at Theranos. Nowhere is this sadder than when former Secretary of State George Schultz – who sat on the Theranos board – disses his own grandson Tyler who as young employee quickly figured out those things were not adding up at the company. His parents ended up $400k out of pocket in legal fees in what essentially could have been resolved amicably at the family dinner table. Was Schultz this captivated by Holmes? It is hard to believe, but it is the inescapable conclusion if you read the book.
Hype driving Financing – It is a bit of a pity that Carreyrou does not dive deeper into the financing cycles that enabled Theranos to keep tapping – at increasing valuations – into investor’s pocket books. Due diligence and proper governance were all thrown over board, the ‘fear-of-missing-out’ combined with Holmes’ ever rising star kept the machine going, unquestioned. And anyone who did raise some concern could count on super lawyer David Boies (he of the Florida recount fame) to unleash his dogs: from letters to lawsuits to surveillance.
The latter point takes me to my own personal approach to early stage tech and investing. Investors should always focus on, together with figuring out where the tech stands, the team. Theranos was a revolving door from early on (notably Apple employees being hired and fired long before the many scandals broke), many observers noted the bizarre security measures, not to mention the dysfunctional communications and absurd HR practices. That should have been the red flag early on, long before a few brave whistleblowers risked their reputations and financial health to uncover what Theranos really was.
Read the book. Really, read the whole thing.
A few weeks ago, Michel Bacos passed away at age ninety-four. It got some media attention, but not more than a few small obituaries and twitter references. I briefly mentioned it, but this week a video snippet of his funeral service appeared online and it prompted me to write about the man and his actions in a bit more detail.
Bacos had a colourful life. French, but born in Egypt, he fought during World War II and went on to become a pilot for Air France. In that capacity Bacos found himself as the captain of the ill-fated Flight 139, which on June 27, 1976, was scheduled to fly from Tel Aviv to Paris with a short stop over in Athens. There, a gang of German and Palestinian terrorists boarded and hijacked the plane and directed it to first Benghazi in Libya and eventually to Entebbe in Uganda. The plot thickened there. It turned out the hijackers were getting strong support from then Uganda dictator Idi Amin. Over the course of a few days the pressure was turned up as the terrorists sought not only a dollar ransom, but the release of a large number of Palestinian terrorists imprisoned in Israel. It put the government of then Prime Minister Yitzhak Rabin in a very difficult spot given its stance on non-negotiation with terrorists and the long distance to Uganda made any rescue attempt next to impossible.
After only a few days, the crisis worsened as the Israeli and Jewish passengers were forcibly separated from the rest of the travellers, resulting in scenes reminiscent of the Holocaust. Not long thereafter, the non-Israeli contingent was released. At that point captain Bacos and his crew were given the option by the terrorists to leave too, but Bacos did not even consider it for a second and opted to stay with his passengers. He did give that option to his crew, all of who unanimously agreed to stay on. Given the likelihood of a very bloody ending to the affair, an extremely brave and commendable move and one that would put Bacos in the history books. The captain himself did not think that much of it when he commented later:
“There was no way we were going to leave – we were staying with the passengers to the end,” he said. “This was a matter of conscience, professionalism and morality"
After all diplomatic efforts had been exhausted, the Israeli government launched one of the most daring rescue operations ever, liberating the hostages and crew, killing all of the hostage takers as well as destroying a significant portion of the Ugandan air force. During the operation three hostages were killed, as was one of the Israeli commandos, Yoni Nethanyahu, the older brother of the current prime minister. One passenger, Dora Bloch, who had been evacuated to a hospital prior to the rescue mission was subsequently murdered by Amin's security forces.
Bacos was honoured across the globe and his resumed work as captain not long after the drama, insisting his first flight back on the job would be to Israel. His heroism and the natural way in which he assumed full responsibility for his passengers under the most adverse circumstances are of course deeply commendable. It made him a hero and an example how to keep the moral high ground, even in a situation where you may not get out alive.
But at a deeper level there is more to the move Bacos made. What he did was essentially what most Europeans failed to do during the Second World War. Taking a stance and doing the right thing when ordinary Jewish citizens are being singled out for death just because of who they are was exactly what was lacking in most of Europe. And it was exactly that which contributed to the death of six million Jews. Bacos must have sensed his actions had a far deeper meaning beyond just acting morally during a plane hijack. He may never have found the right way to express it, but if you see the short video of his funeral you sense what is going on. You see French flags, a priest, some French veterans, but you hear a national anthem that is not French at all. The anthem was played at Bacos’ own special request and it is the one national anthem that expresses hope. The hope.
The flight to Bali is some twenty hours from Vancouver so I downloaded a few Netflix items on the iPad. One of them was the Bobby Robson documentary, More Than a Manager. On the way out I watched it and was blown away, so much that it kept my mind going during the two-week holiday. So as a result I watched it again on the way back. Why did it grab me, what made it so captivating?
Bobby Robson was a very successful football coach and an engaging media personality, but it was the way his life story was framed that made the movie so compelling. The makers, Gabriel Clarke and Torquil Jones let the story zip back and forth in time, but it is anchored in Barcelona where Robson managed the illustrious local team for one season, in 1996-97. In soccer terms this is the absolute top one can reach, yet even though Robson got some good results in the capital of Catalonia, the knives were out for him from day one. He had the unenviable task to step into Johan Cruyff’s shoes while the Barcelona’s management was already planning on hiring another Dutch soccer giant, Louis van Gaal. It is almost painful to see how Robson gets humiliated in this exercise. In particular as the documentary moves on and you realize what a phenomenal coach and extraordinary human being he had been.
Sir Bobby, as he became to be known, was what we today would call a ‘mensch’, which is best described as a person of deep human integrity and honour. And that was the foundation of his role as coach, his ability to deal with notoriously demanding talent and get them to do their very best. His success was driven by his ability to simply connect with the players at a human level, care for them, tell them to do better. He did that in a way in which the players would eventually go out on the pitch and do it for him as they felt they simply could not let their coach down.
Nowhere is this clearer when the filmmakers bring on Paul Gascoigne, Britain’s enfant terrible football star who throughout his life struggled with alcohol, violence, depression and drugs. Nicknamed ‘Gazza’ he was despite all the mishaps and dramas surrounding his career one of the most talented players England ever had. A talent, it has to be said, that was never fulfilled to its fullest.
Now well into his fifties, Gascoigne reminisces about the 1990 World Cup where Robson managed the England team that only just missed the final. It turns out that long after they stopped working together Robson would find time during his hectic career to call on Gazza, just to see how he was doing. As the story of the relationship between the two men unfolds you feel how the documentary is uncovering the coaching magic Robson applied and how it had kept the troubled talent going and motivated. Robson and Gascoigne last saw each other at a charity game only five days before Robson’s death in 2009. On that day, Robson, suffering from late stage cancer, came into the stadium in a wheelchair to a thunderous ovation and looked for Gascoigne who he knew was about to play. Gascoigne explains that Robson found him, had someone stop the wheelchair, looked up at the old payer and just said, “play well, play well, Gazza”.
Gascoigne cannot hold back his tears as he relays the story and nor could I watching this dramatic end of the documentary. You do not often get this raw emotion captured in such a forceful way. But also, beautiful as you realize it was only Robson who was able to put the talented player out of his misery to perform in a way that probably no one else could. And that’s what Gazza realizes too as he explains it on screen.
The emotional highlight of the documentary is also the essence of Robson and of coaching – be it in football or business – it all comes down to very basic and simple human understanding. The coach needs to get the player to do well, the players needs the coach to tell him that in the best possible, but above all, simplest way. We cannot say to ourselves when the day starts ‘do well, today’ but if someone else says it in the right way, it might just work. Gazza realized that the few good years he had on the pitch where Robson’s work and that those times were gone forever.
One of the things I keep talking about is how regional centres are taking off across Canada and North America in general when it comes to start-ups and early stage investing. Capital, connectivity and above all the ability to live in small scale and affordable towns with great natural surroundings are contributing to growth in all of these places. With our fund we now have invested in Victoria, Nelson and Squamish and I see more places like that coming into our portfolio.
Over the past two weeks I have visited Whitehorse, Victoria and Lethbridge, all places with lots of entrepreneurial activity and emerging investor networks. I did a few talks, met with entrepreneurs and discussed their plans and challenges while also trying to get a handle on how to support new angel investors in getting into this rapidly growing and exciting asset class. The short of it is: you can start a successful tech company anywhere. I am also discovering there is lots of capital and government support to help these efforts in the right direction. Here is a summary of the event I helped organize in Victoria, the photos above from left to right: the NorthLight Innovation center in Whitehorse, Yukon, the great group of attendees in Victoria and the University of Lethbridge.
On International Holocaust Memorial day, January 27, Dutch news media reported the death at age 96 of Dutch TV playwright and journalist, Eli Asser. Asser was a household name growing up in The Netherlands in the 60s and 70s, as the creator of some of Dutch TV’s biggest comedies that everyone talked about. Although I may have been too young to get all the jokes, the shows, the songs and its writer with the big moustache are etched in my mind. Yet behind the happy image of all the comedies, there was an incredibly dark history.
As Jews, both Asser’s parents and siblings were deported and murdered and Eli himself barely escaped the same fate. He wisely decamped from Amsterdam – which was the center for deportations of Dutch Jews – to the ‘Apeldoornsche Bosch’ (translated as the ‘Apeldoorn Forest’), which was a Jewish psychiatric hospital with an attached children’s center in the Dutch countryside, far away from the escalating impact of the Nazi occupation. For a number of Jews the logic was that if one could get to work there, one would be relatively safe from the onslaught of the deportations and murder, which by 1942 were in full swing. So Asser and his future wife, Eva Croiset, moved to the facility where the twentyish Eli landed a job as a nurse in training. Unbeknownst to them, the clinic’s staff and all the other residents, the ‘Apeldoorn Forest’ however had been shortlisted for evacuation, with all staff and patients slated for deportation and death. The German occupier had picked January 21, 1943 as the date for this and made the tactical mistake of sending an advance team to the facility a day before, to plan for the operation. Upon their departure it left most of the staff in the position to evaluate what would happen the next day, and more importantly the opportunity to make a run for it while they still could. This however posed a deep moral conundrum, which was this: do we escape and save ourselves from a certain death or, do we stick with the patients who need us now more than ever? Eli and Eva were torn but in the end rolled the dice and escaped that night, literally ran across the lands surrounding the facility and took cover for the rest of the war with farmers in the (then) remote province of Friesland. They survived the war.
The liquidation of the ‘Apeldoorn Forest’ has gone down as one of the most cruel and violent chapters of Dutch war history. The Nazi’s low view of mentally retarded people, in this case all of them Jewish, was on full display as patients were dragged from their beds in the cold January night, often naked and disoriented. Together with staff they were kicked and beaten into awaiting trucks that took them to the Apeldoorn train station and put on a train that went straight to Auschwitz. The staff had made an incredible effort to prepare for the trip, with packed luggage, pre-packed food and meals, prescriptions and all medical supplies carefully organized, nothing of which the patients and staff were allowed to take on their ill-fated journey. Upon their departure the SS went in and destroyed everything they could see to pieces in a long orgy of hate and mindless destruction. Denying extremely vulnerable patients these very last dignities on the road to their deaths stands as a lasting testimony to the moral wasteland that Nazi ideology unleashed on Europe.
The 1200 patients and 50 staff arrived in Auschwitz and the patients were all killed upon arrival, none of the staff survived. There is very little historical evidence to be found on the latter part of this story, however there are a few accounts that described the unloading of the cattle trains with disoriented patients and their caregivers, some of whom were shot on the spot as they lacked the ability to comply with any of the instructions they were given. Those that were not shot were gassed. The one person to have witnessed this arrival was Rudolf Vrba, the well-known Auschwitz survivor who ended up living in Vancouver where he died in 2006.
Eli Asser’s daughter, Hella de Jonge, made a phenomenal documentary on her family’s wartime story and her parents daring escape from the Apeldoorn Forest, called ‘Don’t Lose Courage’ and it is in Dutch and available on YouTube here. What Hella captured was Asser’s dark side and the guilt he had carried with him for some seven decades for having survived something that none of his family members and people in his care at Apeldoorn Forest were able to.
Eli passed away in the very week that marked the seventy-sixth anniversary of the gruesome evacuation of the Apeldoorn Forest and was announced by his daughter during a speech this Sunday, Holocaust Memorial Day. In a tweet to commemorate this day Rabbi Jonathan Sacks addressed the six million victims by telling them that we “will never let you down”. It was a statement with a deep impact as it looked back and forward at the same time. Eli Asser did indeed believe that he had let some of them down and it tormented him for more than seventy years. May he rest in peace and may we never forget and never let down the patients and staff of the Apeldoorn Forest.
By contrasting nationalism with imperialism it becomes clear why the first is so much more preferable, says Yoram Hazony in a recent book
As we are bracing ourselves for the finale of Britain’s Brexit move, there is a plethora of opinions and articles telling us why this is a reckless move, yet there are very few cogent arguments as to why exiting the European Union (EU) makes total and logical sense. The Israeli writer and academic Yoram Hazony does not make the Brexit case per se, but he sets out a compelling argument that explains the evil that has befallen mankind from empires that have subdued nationalism in favour of all encompassing dogmatic visions of a better future. One does not have to look very far – Hitler, Stalin – to find some real life evidence and Hazony makes it clear that none of these men espoused nationalist instincts, in fact they sought to destroy these and therefore any comparison of present day nationalist tendencies are nowhere close to fascism or Nazism.
Hazony explains the continuum of the tribe that amalgamates with other tribes, in turn to form a nation, which in a possible next step could become subordinated by a larger empire. And while some may think it is rich to compare the former Soviet Union to the European Union, the dynamics are similar: a dominant nation leads the formation of a union, gives it an ideological foundation that is mostly unquestionable and the resulting combination will lead us to some sort of nirvana where the sovereignty of all constituent parts has been eroded, because in a perfect world you do not really need it. And where the Soviet Union was driven by Russia, in the new world Germany is more or less the force of empire: that which it was not able to do by force, it now has accomplished through ‘peaceful means’. I would add that the EU is not primarily driven by Germany; there is a Franco-German axis that has been moving this process forward. In that process in particular Belgium and Luxembourg act as the willing henchmen (think Juncker and Verhofstadt) executing the project and dragging along the naysayers.
The essence of the book is in how we need to understand ‘nationalism’ in positive terms as something that has helped build great nations and Hazony keeps going back to the examples of the British, French and Dutch ventures as they emerged and enabled phenomenal social, economic and cultural growth. He is right and it is also why we are seeing strong anti-EU movements in each of these very countries. As a born Dutchman, I fully subscribe to his positions, as the blood and toil of the 80-year war (1568-1648) that created its independence and unique culture (the consensus model that aligned Protestants and Catholics) has been signed away without much of a proper public consultation or vote. In the 1980s and 1990s we were taught and we all believed that ‘Europe’ was a good thing, a wealth and peace creator and no one in his or her right mind should question it. We consequently did not.
My arrival in Britain 1990 however provided me with a crash course in the downside of the European project, poignantly summarized by one of my erstwhile British colleagues who asked me “When did the European Economic Union as it was always known become the European Union?” I had no answer, it just happened.
Now that I am based in Canada and travel back to Europe regularly it has been bewildering for instance to see military on the streets of Athens to enforce the country’s debt restructuring. It has essentially turned Greece into some sort of indentured servant owned by the EU, mostly as it turns out by Germany. The omnipresent EU flag is now flown alongside the national flags and the question is when will it replace native colours entirely? At least the Dutch have recently decided to display their ‘red-white-blue’ in parliament to at least have a sense of national identity in the top-down avalanche of Euro-blue. Here in Canada I often wonder how all the liberals who speak so approvingly of the European project would settle in a world where their capital was in Dallas instead of Ottawa, their currency was the Americano and where, despite all well intentioned assurances, an American elite would drive most if not all of the decision making?
The point Hazony makes of course is that the more authority you let go and delegate upwards, the likelier it is you will never get it back. In the process national identities and decision making erode and at the local tribal level the average citizen will have a hard time to identify with the group and leadership that now apparently has come to represent them. The Brits consequently have taken an entirely logical step to try and release them from the imperial EU project. Maybe they can provide a way, much like Thatcher laid out, where independent European nations live and work together without such crushing tools as one currency or one political center. An eight percent blow to British GDP may in the end be a small price to pay for freedom and avoid the demise of their nation.
The book lays out a clear argument, but in the final chapters Hazony takes his reasoning one step further by explaining how this love of empire leads inevitably to deep criticism (and eventually hate) for countries that cling to and fight for their national identity and freedom. The USA, Hungary and Poland are getting the steady stream of abuse as we all know, but in no other case is this meted out as regularly and as harshly as against Israel. The Jewish nation has been so successful for close to 4,000 years precisely because it never sought empire, as instructed in the bible where good neighbourly relations where laid out as a guiding principle. Jews also learned that no nation would lift a finger to prevent their annihilation, their justifiable claim to security has forever been shaped by that one experience, the Holocaust. The contempt for Israel is – apart from the reflexive and deep rooted anti-Semitism – driven by looking down on the Jews’ outdated attachment to the concept of nation in a world where open borders and joint sovereignty is the way forward, according to the ‘European elites’. Hazony puts it succinctly when he argues that Auschwitz helped create Israel, but Israel’s critics argue that Jews by standing up for their nation’s borders and freedom have essentially become Auschwitz. Think that one through.
Hazony’s book is a thought provoking and refreshing read. So it is sobering to see how far the European empire has moved ahead and how deep the hate is against those nations that are swimming against the tide. Yet it may not be too late, but unwinding the EU will be an unpleasant and potentially violent (Brexit, the riots in Paris) process. Letting it go forward unchecked however will not be unpleasant, it will be dark.
Photo: the EU blue alongside the Bulgarian flag in Sofia, June 2018.
In what was an otherwise busy week, I was glued to the screen watching the entire farewell ceremonies for George H.W. Bush, from the loading of his casket on Air Force One bound for Washington to his oldest son’s funny and moving eulogy to the return and internment at College Station, Texas.
One thing struck me deeply. We have now been for two years into a spectacle of continuous opposition to Trump with endless talking heads on cable news, hysteria on social media all the way to a lawyer defending a porn star who at the same time hinted at a run at the presidency, a move that was even taken seriously. Everything one could think of has been thrown at Trump, yet it seems nothing has worked in effectively opposing the current president and as of this day the deliberations as to who could beat him in less than two years from now remain unresolved. Yet, in death it seems the elder Bush has somehow unleashed a spirit of what America may need and what the presidency and real political leadership is all about. When all the former presidents, vice presidents and spouses lined up in Washington Cathedral it became more than evident how they all so differed from the current occupant of the White House. There was no need to make it explicit, the entire week morphed into a quiet and steady rebuttal of Trump and turned out to be so much more effective than all the noise of the past few years.
The presidency of Bush reminded us that the office is one that represents the entire nation and a bipartisan approach is in all likelihood the best route to effectively bring the nation together and move it forward to unity. It requires one to do what is right and in Bush’s case as former senator Alan Simpson so eloquently eulogized, making decisions that you know will eventually hurt you, but will benefit the nation as a whole. In short: country over party. The late 41st president reconnected us with a better past where it seems Washington operated on that 'kindler and gentler' notion.
Now it is worth remembering that Bush was not beyond hardball power play. In all the moving remembrances we did not hear that it were his campaigns that gave us Lee Atwater, the late political genius who is credited with forever poisoning the well of campaigning. As with any other politician, Bush had to remove many obstacles to the White House and the man who more or less simultaneously was in the mix for the same job was Kansas senator Bob Dole. Of the same age and like Bush a World War II veteran, although it is worth noting that Dole came out of the war barely alive and had forever lost the use of his right arm. The two men struggled and it was Bush that came out as the winner as president and two-term VP, whereas Dole served on Gerald Ford’s losing ticket in 1976 and lost the election as the GOP nominee against Bill Clinton in 1996.
Yet it was Bob Dole who defined the mood of this week by paying his respects to the late president in the Capitol Rotunda. At age ninety-five and bound to his wheelchair he was brought in, helped to his feet by an aide and with a trembling left arm saluted his once political rival, his fellow veteran and his former commander-in-chief. The moment captured more than a last farewell, it was a nostalgic and painful goodbye to the greatest generation. The generation that gave us deep and wise political leadership and that evaporated on us with the coming of age of the baby boomers. These were the men who had seen war in its various and ugly forms and who understood intuitively that the post-World War II world order was a unique historical gift. These men gave that order the careful and deliberate management, the smart diplomacy and above all the never ending efforts to keep as many people and nations on the same page to preserve a measure of world stability. These were the men that were in the end able to set aside differences and do what is good. These were decent men. These were the men that were patriots and loyal family members who fought for the very best for as long as they could.
In the sadness of Bob Dole’s eyes and the effort it took to make that last salute we came to realize how far we have drifted from that golden age of leaders and by consequence that formidable age of American world leadership. In Bob Dole we witnessed the passing of an era, a turning point into a deep unknown and likely very unstable future. And Bob Dole, I think, was fully aware of that sobering reality when he brought out that final salute.
Went to see Bohemian Rhapsody last weekend. Phenomenal piece of rock history and wonderfully built up to the finale of Queen’s performance at Live Aid in 1985. What always stuck in my mind was how Bob Geldof was concerned that Queen would not exactly be able to wow Live Aid, which by his estimation was more of a Boomtown Rats or U2-type crowd. It is something that does not come out in the movie that much where the focus is more on Queen’s demise in 1985 and the question if Freddie Mercury could pull of a live performance. He could and he did and wrote history, it was voted as one of the best live rock performances ever and you can watch the original here. I do it regularly, it is 24 minutes well spent.
Of course, there is always a personal memory and Queen grew on me after this performance. I never forget the devastation when Mercury announced he was suffering from AIDS in late November 1991, followed by the news of his death only about a day later. What I did not know was that he lived and died at Logan Place, which was less than a block a way from where I lived at the time on Lexham Gardens in London’s Kensington neighbourhood. It felt weird knowing he was that close to where I was when he passed away.
The summer after Wembley hosted ‘The Freddie Mercury Tribute Concert for AIDS Awareness’ which similar to Live Aid saw a phenomenal line-up of artists perform classic Queen songs (with Queen) to a huge crowd. Lisa Stansfield’s rendition of “I want to break free” is one for the books.
So that was the election for school trustee. The benefits of being an incumbent with a solid track record and a strong message about the future for our students did not resonate with enough voters, unfortunately. The low turn out in Lions Bay as a result of an acclaimed mayor and council did not help the numbers.
While disappointed I can look back on four great years. The best way to put it is that in daily business life I sometimes go to meetings with some reluctance and negative feelings. At the West Vancouver school district that never happened. I dove into meetings and events with enthusiasm and every event, be it a board meeting, a committee meeting, a school visit, it always generated positive energy. People in West Vancouver, Bowen Island and Lions Bay generally have no idea what an amazing school district they have, one of the best in BC and probably in Canada. It competes head on with private schools and delivers cutting edge and innovative education. The dedication and professionalism of all staff is something to be really proud of, it was a joy to be working with them and I actually learned a lot too. It was an honour to have been a part of it, to have contributed to it and to see it flourish and grow. I will miss it.
Now on to new things. The show, as they say, must go on.
Making capital work for the betterment of the planet
During my years in Hong Kong in the 1990s I remember getting together with a number of locals to clean up some beaches of plastic, and by that I mean not picking up a few straws and cups. Many beaches were literally covered in plastic and the assault on the city state’s beautiful natural environment was one of the things that prompted Irene and myself to eventually move to Vancouver at the end of that decade. Yet it took another good decade and a half for deep changes in attitudes around the environment to take hold and prompt drastic action, in the West, but in China too. When we left the prosperous Sino-British free market enclave the lingering question in my mind was: “what if we are able to generate so much wealth, but are not able to enjoy it in a clean environment? What is the point?
Joel Solomon, the now well-known founding partner of Renewal Funds and champion of investing in clean and sustainable businesses, asks more or less the same thing in his book 'The Clean Money Revolution': “How much is enough?” He tracks his journey from a kid with health issues in Tennessee to organic farming in British Columbia to becoming an investor and relentless promoter of clean investing and helping to create what we now know mostly as ‘impact’ or ‘clean’ investing. His thesis is very simple: capitalism in its present form is destroying the way we live, so we need to reinvent it such that the power of capital is used to create a better and cleaner world. The argument is to not only divest from all businesses that steadily destroy the planet, but also from the ones that ravage communities and exact a deep toll on humans, physically and emotionally. Rampant consumerism is what needs to be addressed and the book posits that while we may be winning the money game, we are losing access to meaning and end up deeply unhappy. I would go even further and argue that we are currently losing both the money and mental well-being games.
Solomon tracks the origins of this thinking back to the 1970s and 1980s and notes that it took a while to organize, channel and get traction with well-to-do investors to move their money from ‘traditional’ investments into ‘clean’ opportunities. Many of these clean deals became successful and it is good to read up on the success of Stonyfield Farms – probably the best and creamiest yoghurt on the planet where Solomon was an early investor – and of course Ben & Jerry’s icecream. Such ventures that are based around clear values and focus on health and sustainability are able to change the way we consume and moreover, can change and impact the values of the larger firms that eventually acquire these smaller firms. The proceeds of these acquisitions get reinvested into new clean deals and that helps to grow an ecosystem that will cast its net wider and wider and eventually change the way we live and consume.
One of the things in the book struck me. As we have abandoned the church in the West we have replaced it with a deep worship for consumption and money, which, as we are finding out, leads to depression and, judging from social media, an endless quest for meaning. Solomon realizes in his book that this worship for money has run its course as we are not only wrecking the planet but our mental and physical selves. He points to a journey where we can learn to do with less, but also with products that are better and have more quality. And we can do this while preserving our system of free-markets and making money, we are just allocating this in a different direction. The one aspect in this argument that needs some elaboration, and it may well be outside the scope of his book, is the non-physical part. If we stop worshiping money and consumption but move to a cleaner state, what values will we be living by, and will they bring us the meaning we seek in life? Solomon dives into a description of Hollyhock, a centre for learning, connection and cultural transformation which gives a bit more context to the ‘meaning’ part which is great, but it falls short of what social-political and moral structures will underpin a world where clean money will come to rule.
There are some parallels with Steve Jobs who spent his early days hanging around organic farms and promoting the same wholeness message that we find in Solomon’s book. Yet the incredible success of Apple is now a story of what I call ‘hyper capitalism’ with manufacturing in low cost centres in China, totally overpriced products, quarterly earnings calls (a practice Solomon frowns upon) and spawning a culture of call centres across the globe where employees ensure Apple’s cashflow is given a further boost. Amazon and Facebook fall in the same category of course. This dichotomy makes it clear that even the cleanest and most idealistic businesses will eventually resort to the hard-core extractive capitalism that Solomon so detests. This is not a criticism, but merely a logical question coming out of the book and one that has to be addressed as we move forward.
Although not overly political, the book picks Reagan as the one who has helped unleash the forces that are now ravaging the planet. It is a pity that Solomon does not recognize that the Reagan era brought in the free market reforms and the appeal to individualism and entrepreneurship that are creating the very companies that are now driving the clean money revolution. And it was the former president himself who always said that capitalism was an imperfect system, and we simply had not been able to come up with something better. Solomon envisions a not materially different capitalist structure of society, only steered in a different direction and focusing on different outcomes. No one could have foreseen what the liberalization of markets in the 1980s, combined with Asia’s emergence as an economic powerhouse would mean for the environment and the way we now live.
When I moved to Vancouver in 1999 the quest was to find a different way of living in an environment where the quality of life would be better than in other centres across the globe. Solomon points to Vancouver as a success story as one of the greenest cities on the planet, but as we are learning now Canada’s west coast paradise is a basket case when it comes to fostering some measure of economic equality and creating opportunity. It may be green, but it often feels more like the playground for the uber-wealthy with an almost irrational reverence for money and property values, a very limited framework to build growth for all.
The book really hits it when it talks about entrepreneurship and early stage investing and Solomon’s lessons are applicable to beyond just clean money. He takes the smart approach by investing small amounts, taking minority positions and working closely with the entrepreneur making it clear that building relationships and collaboration lead to far better outcomes than banging the shareholder dogma ‘I need a return on my money’ routine. He is prepared to take a loss and hones in on the key question when investing in entrepreneur-led companies; “how will this person function in a crisis?” Reframing the relationship between investor and founder/entrepreneur is key and the case studies in the book underline these lessons in detail. Investing is not strictly a numbers game, it is above all a people’s game.
In the end, Solomon makes the right arguments on how to move forward (including finding ways to slow population growth), but for them to really go mainstream they need to be socialized across society and the political spectrum. The new approaches will need to part ways with government-enabled neoliberal politics and market dominant theories. The emergence of new political movements on both the left and right is evidence there is growing ‘intellectual room’ to move things forward in a new direction while preserving freedom of choice. Joel Solomon’s book is a great contribution to this discussion and at the same time a great work of reference for those who want to track the origins of clean impact investing.
How a workshop on term sheets has evolved to helping build better and deeper startup ecosystems
So when I was asked by Canada’s National Angel Capital Organization (NACO) in 2015 to do a workshop on term sheets and deal structuring, I was initially somewhat hesitant. Life was busy and what possibly could I tell angel investors about terms sheets that they didn’t already know? In my mind this was all old stuff about which there was lots of information to be found online, assuming you could Google the right terms. Yet, I gave it a go and now some three years on the 4-hour workshop has evolved from a relatively dry start to a lively discussion on deal terms and start-ups with lots of case studies and some horror stories that have already provided their value in steering some investors away from bad situations. And there is always a panel discussion that brings out even more good stuff with the audiences. More importantly, there are now more and more entrepreneurs in the audience for whom this is as instructive as it is for seasoned and aspiring angel investors. And then there are lawyers and accountants and others active in the ecosystem that join the sessions. The success has now even spawned a new workshop, ‘The Art of Valuation’ and I can proudly say that I have been to places that I never thought I would ever go to. Active investing in start-ups is now happening in places as remote and far away as Whitehorse in the Yukon and they are making solid progress.
In the first week of May a marathon was organized by the NACO team, five term sheet workshops, back-to-back, over five days in Atlantic Canada. The trip took us to St. John’s, Halifax, Charlottetown, Moncton to finish in the city that was battling the floods, Fredericton. And in each town I went through the now 90+ slides with case studies, theory and a local panel. And each time I was wondering if the audience would ‘get into it’, like it and engage with it. One of the things I have learned is that in some places there are non-stop questions and an incredible level of engagement (Regina in Saskatchewan comes to mind) and in others, well, I will not mention any names but sometimes you have to beg the listeners to challenge you or ask any questions. You never can tell where the debate will go. It also means I have learned to pace, if there is no debate I automatically fill up the spare time with start-up anecdotes and when I run out of time there are ways to speed up the content delivery without the audience really noticing it.
The Atlantic region did well in this department, there was good attendance and great enthusiasm to learn. It occurred to me that each year of course new entrepreneurs come to the market to start a business and each year fresh investors appear once they have cashed out, retired or otherwise are tired of playing the real estate or stock market game. And age is totally irrelevant: I see very young angels and I see older entrepreneurs. In my own BC-based network I am working with two female founders who are well into their sixties but who share a drive that should put many young people to shame. They all want to get going and it was no different in the Atlantic.
It also makes for great encounters, in Fredericton I ran into an older Dutch entrepreneur who was somewhat familiar to me, and when I asked if he was that well-known news anchor from the 80s and 90s in The Netherlands he confirmed enthusiastically, “yes, that is me” followed by “can you take a look at my new venture?” At the same event in Fredericton, a young female entrepreneur on the panel was able to share one of the best case studies ever on dilution and convertible notes, it got everyone in the audience (and me) thinking. In Halifax I ended up talking to an entrepreneur who had put some four years into developing a pretty revolutionary travel app – yes there is still lots of space in that sector. In Moncton a biotech entrepreneur confidently told me had raised $10 million from angels for his venture and in St John’s a team of young cleantech founders told me over beers how they had been able to get a British Columbia angel investor into their deal. And the processes put in place by an angel fund in Charlottetown were, to say the least, highly professional and impressive.
Talking terms, talking deals has moved from talking to angel investors about how to avoid mistakes and do better deals, to an integrated experience that helps the early stage ecosystem as a whole. Together with Boris Mann we developed the Common Docs, which is now a prime resource for investors and entrepreneurs in all of Canada (and internationally), delivering a great toolbox to do deals better and faster and not waste lawyer's time. Taken together, all these elements have grown into something that is facilitating the diversification and growth of our economies where more entrepreneurs (again, of all ages) start ventures across many different sectors and are able to source capital from an ever widening pool of angel investors, venture capital firms and other sources. It is a great story and it gives me enormous joy to be to be part of it.
Note: the tour would not have been a success without the great team consisting of NACO staff Yuri Navarro and Elena Dudarenko, Kirk Hamilton who presented 'An Entrepreneur's Guide to Angels' and our Atlantic wizard, Sally Ng,
Photos: from left to right: Halifax, the hotel patio in Fredericton, Moncton.
How the story of diaspora and determination entered my life and how it fascinated and inspired
My love for books must have originated in my dad’s study. Many hours I spent there flipping through his shelves were I could find anything about history, psychology, geography, biology, and of course war. Lots of war. As a teenager growing up in World War II it had framed his world, his thinking and he kept reading about it until his last days. It was a deep search for the ‘why’ and the ‘how’ and the more books and studies appeared over the years, the more sources there were to try and figure out that question. Amid all of the books there was one thick volume that showed victorious soldiers in a desert like landscape, all smiling and all in color. As I must have been five or six I was able to organize events based on the color or black and white nature of the photos, and the cheering soldiers were not from the 1940s. It fascinated me although I could not pinpoint why they were so happy and where exactly they were.
The black-and white shots in other books were far more gruesome. Emaciated corpses, gallows, kids rounded up by armed uniformed men and the haunting photo of young men chased down a Dutch street by – that much I had learned by then – German soldiers. Over the decades that followed the story of the Holocaust unfolded for me and the razzia on the Jonas Daniel Meyer Square in Amsterdam in February 1941 would go into history as one of the first and more brutal exercises of Nazi persecution in the occupied nation. Of the 427 men rounded up that day most had died under horrific circumstances by the summer of that same year in the Mauthausen concentration camp. The contrast of the cheering soldiers and the terrified young men was telling.
Life in the early 1970s in The Netherlands was, by all accounts, great. The restored economy after the war had started to pay its dividends, economically and socially. The age of flower power influenced middle class life and open liberal norms where an integral part of the left’s steadily growing influence, the ruling Labour Party was above all, perceived to be cool.
And the Dutch punched way above their weight internationally: calling out the Greek colonels, protesting against Pinochet in Chile and against the fascist regime that was still governing Spain under General Franco. As fierce as the government and the many activists were about transgressions against human rights in said countries, as deep was the love for other states. Passion and support for the young state of Israel, barely twenty-five years old in 1973, constituted an article of faith in the lowlands during the seventies. I still recall the emotional embrace between Dutch Prime minister and Labour leader Joop den Uyl and his Israeli counterpart, Yitzhak Rabin. There was a deep love for Israel and during the Yom Kippur war a local artisan store in my hometown raised funds to send to the Jewish state, it was only natural that we as kids found a way to contribute a few coins to this noble cause. A small nation, up against a massive force of Arab nations armed by the Soviet Union put Israel in the position of the underdog. They could and should count on our support. And although it is hard to make the retroactive argument, we must at the time have sensed that Israel was given a shot not just because it was an underdog and a fresh young nation. Its birth and fight for survival in all likelihood carried a dark part of our own Dutch history that had to be redeemed.
As deeply rooted I was in Dutch culture my yearning for the outside world was big. America was light years away and my dad’s business trip to New York was a community event that we talked about for weeks. China was even further away and we were led to believe that Mao had figured out socialism and that the Chinese were happy denizens in their monotone outfits. Too young to understand but having the right age to be fascinated by the foreign, I yearned for everything from outside our borders, the more exotic the better.
It was in this context that our fairly progressive school implemented a weekly program of folk dances, from grade one to grade six. It was of course awkward in the beginning, but gradually we got the hang of dancing for a few hours each week, opening our world to new rhythms and foreign cultures. The dance teacher turned out to be a man of the world and had organized the visit of an Israeli dance group to our town, including a performance at the school and some homestays for the young Israeli dancers. As luck would have it, my mom served on the school board and invited the group’s leadership team for a dinner in our house. Seated next to the wife of the group’s leader, Ruth, I was taken in by what these tough and Mediterranean looking people brought into our lives, arguing loudly with each other and with their hosts. It fulfilled my need for the exotic and the more exciting things the world had to offer. The group’s leader was a quiet man and most of the attention went to his radiant wife and the lead singer in the group, Effi Netzer who as I later learned was and still is one of Israel’s pre-eminent folk singers.
There were also a few men that tagged along with the group and their role was not all that clear. They hung around the group in a disinterested way and had no creative responsibilities and I recall the ongoing debate among us kids, wondering what Gil, Dov and Moshe were up to. It was my father in the end who undid the magic but managed to up the fascination with the entire visit by disclosing that these were armed security people. He could of course not resist mentioning that they were ready ‘to go’ if any threat to the dance group would present itself. The conflict in the Middle East had somehow made its way to a sleepy Dutch suburb, some excitement, at last !
Connecting the Dots
All these impressions started to merge and make sense in one way or another as the threads provided by the horrors of the Holocaust merged with the unfolding story of the state of Israel. As impressed as a young kid can be with armed security forces in the house, it was the realization that our visitors had no other option than to bring their own protection to the table wherever they traveled. It was clear, even then and at that age that no one else would really bother to ensure the safety of travelling Israelis. On the contrary, in the few instances that they had realistically expected to rely on foreign security it had failed miserably, the wounds of the massacre at the Munich Olympics in 1972 were still fresh and raw.
So I began to stich the pieces together and after reading Leon Uris’ books Exodus and Mila 18 as well as Dominique Lapierre and Larry Collins’ ‘O Jerusalem’ the picture of Israel’s emergence became clear. A home for a persecuted people who had been given no other option than to fend for themselves, where and wherever they were, conquered meter by meter, shedding lots of blood. From expulsion to diaspora to holocaust to redemption through statehood, the Jews had been able to overcome the deepest misery history had meted out and had returned to their ancestral lands some two thousand years on. And the cheering men in the book in my dad’s office were Israeli soldiers who had recaptured Jerusalem during the Six-Day War of 1967. The story of Israel represented a form of determined self-reliance that for us as post-war, young and relatively complacent Western European kids was hard to fathom. It was exactly what it made so appealing. What for Israelis was an inborn need for survival was for us something we could only hope to strive for.
What became even clearer was that the terms Israeli and Jew are interchangeable. Many Jews - in fact most of them – were not Israeli, yet they are part of the same tribe. If there was any doubt about this it was not long after the visit of the dancers that on a hot summer day through the open windows in our neighbourhood I could her radios announcing how Israeli commandos had liberated Israeli and Jewish hostages at the faraway airport in Entebbe, Uganda. They were saved from likely mass execution by terrorists. While most passengers had been released after a number of days, the terrorists had ensured to separate all Jews from the other passengers. For those not up to speed of what happened at that faraway African airport, I encourage you to Google the name of Dora Bloch, and read on from there.
Israel’s bold military move delivered the exact evidence of the self-reliance that Israelis had to exercise in order to survive. For when it came to the crunch, the rest of the world either did not care or were too conflicted to take a position in what appeared to me to be a very simple ‘good’ versus ‘bad’ scenario. Baffling as it was, the UN found room to criticize Israel for violating Uganda’s airspace (remember Kurt Waldheim?) and Air France captain Michel Bacos who had remained with the hostages when given the option to go also came under fire for reasons no sane human being could possibly comprehend. It was all evidence of an incredible double standard against which Israel – and Jews in general – were measured, something that continues to this day in each and every international venue.
As time wore on the contours of the Holocaust started to become even clearer with online testimonies of survivors and newly found documents in archives across Europe. We had dutifully learned that it all was the work of one madman whose extreme racist views swayed a nation down a troublesome path of mass murder and eventual self-destruction. Yet we had to make some effort to find out that, what Hitler did was simply activating the deep undercurrent of anti-Semitism long existent before his emergence as a political force in Germany. And not just Germany, I might add. And although the Dutch could claim some high ground as having opened our doors to Jewish refugees throughout the centuries – proudly marketing Baruch Spinoza and Anne Frank as ‘Dutch’ wherever possible – most of Europe was drenched in deep anti-Semitic sentiments. The fact that Christianity finds its roots in the worship of an errant Jew who had challenged the orthodoxy of his nation’s beliefs and found death on the cross at the hands of the Romans whose hand in turn had been forced by the local Jewish clergy, did not help.
It took the Dutch nation to this day to acknowledge the pitiful and regrettable role it played in the persecution and death of some 102,000 Jewish citizens as rounding up the young men at the Jonas Daniel Meyer square was just the start. It was something that was conveniently swept under the carpet during our history classes and the fact that there had been some Jewish survivors was presented as evidence of the heroic efforts of the Dutch resistance. For instance, it was not until 2011 that Ad van Liempt’s book about the complicity of the Dutch police in the deportation of those Jews unveiled the fanaticism and depravity that was put on display in facilitating the Nazi occupier’s dirty work. It was a nauseating read. Again, Dutch guilt more than anything else was what drove this ‘special relationship’ with Israel.
Israel’s confidence and successes grew under holocaust survivor Menachem Begin who inked the nation’s first peace deal with Egypt and who had the clairvoyance to neutralize Iraq’s emergence as a nuclear threat by bombing the reactors in Osirak. The latter was seen as an act of aggression but by most objective standards, a sensible pre-emptive act. Israel had by the early eighties transformed itself from a young and threatened nation to a confident power player and the correlation between success and worldwide criticism manifested itself strongly after Israel’s invasion of Lebanon in 1982. And although Israel was absolved of the relentless criticism over the atrocities during that war – read Dov Landau’s phenomenal biography of Ariel Sharon – a questionable pattern had been set. The love affair with the young state had started to show its cracks and I clearly recall how among the late teenagers that we now were I had to outline the justifiable and rational underpinnings of something the rest of the world considered an unjust war. No, the invasion of Lebanon was not a pretty affair, but nor was lobbing missiles into Israeli schools located in northern Israel.
However inspiring the story of Israel’s birth and early years was to some, geopolitical realities framed the nation’s successes much differently. The ‘Arab oil tap’ and the steadily growing Muslim population in European cities would shift attention and respect away from Israel at a time when its underdog status had long evaporated. The old contours of anti-Semitism started to emerge again after an absence of only a few decades. In recent years it seems to have been unleashed in full force, note for instance how the leader of the British Labour Party recently found himself embroiled in a scandal for supporting the very sentiments we had all thought had disappeared from mainstream political discourse. It is not a coincidence that Israel’s current prime-minister, Nethanyahu has often said that what is left of European Jewry should pack up and come home to Israel.
It is indeed sad that in a city that appeared to have successfully resurrected itself from the horrors that took away most of its Jewish citizens, anti-Semitism is back as part of daily life in the city. A city whose name in Yiddish designates a ‘safe place’ something it really wasn’t in the end. As a kid I grew up not only in my dad’s study learning about the Holocaust, Jews and Israel, I grew up with people that hardly ever used the word Amsterdam. They just called it what it was supposed to be, a great and safe place: Mokum.
Then and Now
The scene in our little school was breathtaking. Some thirty Israelis in their early 20s performed dances and song in the school’s central hall and the place broke down under the incredible energy, thrill and boundless enthusiasm. We as kids went crazy, clapping and cheering, we had never seen anything like this before in our lives. It was as if rock stars had descended upon our little school. The dances apparently were just the start as we were promised a solo performance by the group’s female lead singer. The announcer, probably forgetting he was at an elementary school, could not restrain himself – nor could we – over her incredible beauty. Tanned with dark hair and on seventies-style high soles, Haya Arad banged out a song that many years later with the help of Google and Spotify I was able to discover was the Nurit Hirsh & Ehud Manor classic, Ba-Shanah ha-Ba'ah. She performed it as if she were a big star in a major venue rather than a Dutch school with some kids and teachers and parents clapping and singing along. We all went into some frenzy and the school was shaking, this was music, this was singing !
The show finally was tilted to a different level when folk singer Effi Netzer took the stage with his accordion and urged everyone to sing long with a self-composed catchy tune. To this day I can sing it and realized it revealed the deepest aspirations of all of Israel:
Time will come, hear and say
Peace is yet on its way
Together and never apart
Sing this song with all your heart
This was followed by a never ending Halellujah, Hallelu, Hallellujah, Hallelu …. “
When the group left, the now celebrated security men in tow, we begged them for signatures and encircled the bus so it took them quite some time to make their way back to the airport. The event sealed a love affair and a hope that whatever was in store for Israel, we all hoped for it to be the very best.
More than anything, the story of the Jews and their hard fought journey back to Israel impressed upon me the virtues of self-reliance and determination against all odds. But there is also a component of guilt as our post-war generation had escaped the worst ravages of history and was given access to a seemingly carefree world. And maybe even some envy, because what if history came back and it turned out that we were totally unprepared for dealing with it ? The latter question may be answered in decades to come and in that process, what better to do than pass these lessons from history on to your children?
Top: Flags outside the Menachem Begin Heritage Center in Jerusalem
Center: The razzia on the Jonas Daniel Meyer square in Amsterdam on 22 en 23 February 1941.
And: a stone’s throw from the Israeli-Egyptian border near Eilat, my two daughters and a Dutch-Israeli friend unaware of the meaning and history that this photo represents, they just had a great time snorkelling in the Red Sea.
Understanding why and what we remember through the European perspective
A few years ago I spoke some words at the Remembrance Day ceremony here in Lions Bay– and I focused on how people in Europe experienced being liberated by Canadian troops in 1945. It makes sense to reflect on that, as we need to understand what they, these brave men and women, accomplished. And yes in a way, if The Netherlands were never liberated back then I would most probably not be standing here today.
Norman Kirby was among those troops. You landed on D-Day and marched and fought all the way up to the northern parts of The Netherlands and into Germany. By late August and early September 1944, allied troops crossed into Dutch territory. It caused a real panic among the Germans and their collaborators who started to flee and whose operations were severely impacted. The war could have ended right then and there if the massive allied attack on Arnhem, Operation Market Garden as it was called and you all probably know it better by the movie about it, ‘A Bridge too Far’, had succeeded. It failed as it met fierce German resistance and it caused the allies to get stuck behind the great rivers, separating the West and North of The Netherlands from liberated territory.
What followed was a winter of hunger, plunder and terror where the German occupiers basically destroyed what was left of The Netherlands while starving its population. The place was reduced to rubble. My own father who was seventeen in that last winter had to hide when German troops raided towns and villages to capture young men to work in Germany’s readily collapsing war industry. My father survived, as did my grandfather who was interned in Buchenwald, one of the more notorious concentration camps.
Around the same time that the allied troops entered The Netherlands, Anne Frank and her family were deported on September 3, 1944 – the last transport of Jews to Auschwitz from The Netherlands. The Frank family had been following the advance of the allied troops from their place and those of you have read her diary will remember the excitement when they figured out that allied troops were getting closer and closer to liberating The Netherlands. For them it was the last bit of hope that separated them from a certain death.
The story of Anne Frank and her family symbolizes the deep horror of the Nazi occupation. Their ordeal started in 1942 in what I find to be one of the most gut wrenching things I have learned about the Holocaust. A note from the German occupiers that her oldest sister, Margot, had to report to the train station on a certain night, on her own, unoccupied with only one piece of luggage. And yes, she had to walk there on her own saying goodbye to her family, forever, in the hallway. This is one of the cruellest things one can imagine and for the Frank family it was the sign to pack up and hide, a mission which almost was successful, as we know only her father Otto managed to survive the war.
As a kid I just did not grow up with those stories, they were part of post-war life in The Netherlands. My parents would point to Jews that had survived, to people that had collaborated with the Nazi occupiers, to people who had served in the resistance, to people that had lost loved ones and yes, on a lighter note, to some of the girls who got hitched to a Canadian soldier when they finally arrived during the first week of May 1945, liberating the Dutch from five years of occupation and the ‘winter of hunger’ as it came to be known.
These stories were essential in remembering and why freedom was such a precious thing. On this side of the ocean here in Canada we learn about the sacrifices of the soldiers and the battles for freedom, but in the Europe I grew up in I had learned firsthand what it actually meant what Canadian soldiers delivered us from. My father took me to the Remembrance Day services in May and after they ended he and I would casually stroll back to our house, leaving behind a square filled with floral tributes to the fallen. He would tell me that none of the unborn would ever realize what freedom really meant. In my childlike enthusiasm I firmly rejected this notion, but subconsciously I knew he was absolutely right. Not until you have experienced what it is to see entire families disappear from your street or to sit on a darkened attic for days on end to avoid capture, deportation and death, can one come to realize the true value of freedom.
And remembering is very hard. Over time things get lost, or sometimes people deliberately forget and move on. The Dutch never came to terms with the fact that out of 140,000 Jews, only 36,000 survived the war. Next year I will travel back to attend the unveiling of the Monument of Names in Amsterdam, a monument that has the names of each and every of those 104,000 Jews on it, much like the Vietnam monument in Washington, DC. It was built by letting donors adopt the names of murdered Jews and we as a family adopted a few. In doing that you bring them back to life, a bit. But note, it took some 70 years to get to this monument and yes; Anne Frank’s name will be on it.
But, if we do not keep telling and sharing these stories, people will not remember the why and the how of war. And people will no longer fully grasp why the Dutch were elated to see Canadian troops roll into their cities in the spring of 1945. So remembering today is not only to honour the soldier, but to fully understand what they fought for, what they gave their lives for.
This was the text for my words to the Lions Bay community on November 11, 2017. The photo of Norman Kirby was made during the ceremony of 2016.
While still a free and separate region, twenty years after the handover Hong Kong’s future is more uncertain than ever
June 30, 1997 was one of those rainy days that are typical for the summer months in Hong Kong, wet, humid weather with massive downpours that tend to render umbrellas useless. Light rain started as Governor Chris Patten said goodbye to his residence in the afternoon and a torrent of rain enveloped HMS Tamar where British Forces beat their retreat, culminating when the Prince of Wales delivered the Queen’s farewell notes. Mainland Chinese officials argued that the rain washed away the stain of colonialism, others pointed out that the Gods were crying as a free and prosperous Hong Kong was delivered to an uncertain future.
Whatever it was, on that very day Chris Patten made it very clear what the new order would be after his departure: by stating that “now Hong Kong people are to run Hong Kong”. Not only was this the core belief on which he had staked his political legacy, it was vested in the territory’s constitution, the Basic Law. It basically said that Hong Kong would get to manage its own affairs and issues of defence and foreign relations fell into the lap of Beijing as the sovereign entity with ultimate control, a deal that is guaranteed to last until 2047, the fiftieth anniversary of the handover. The rationale for that timeframe was simple, Britain and China – at the time under Margaret Thatcher and Deng Xiaoping – agreed that China needed time to catch up with the city-state’s living standards and seamless integration of Hong Kong into the motherland would take some time. And that is why today, on the face of it, Hong Kong is still pretty much what it was twenty years ago: a self-governing entity separated by borders from mainland China and enjoying levels of freedom that are simply not present anywhere in the People’s Republic.
Yet things have changed quite a bit since that rainy day twenty years ago. The Hong Kong press even before the handover started to self-censor while Beijing has kept a tight lid on elections, it remains impossible for pro-democracy anti-government parties to obtain a majority in the city’s parliament, the Legislative Council. What is more, its citizens do not have a say in who gets to be its Chief Executive, effectively Hong Kong’s leader who came to replace the job previously held by the British governor. The current leader, Leung Hun-ying, is, like the first chief executive Tung Chee-hwa, a Beijing friendly business leader, a background that is seen to balance the political need to remain close to the motherland while ensuring the interests on Hong Kong’s economy are met. Next week the job will go to Carrie Lam, the first woman to hold the position and a civil administrator who will face the near impossible task to succeed where all of her predecessors pretty much failed: to get the people of Hong Kong to at the very least accept, work with and place its trust in its own administration. It will require the one thing where businesspeople and civil administrators normally fail: applying political skills. And the reason for that simply is that they’re not elected, have never really campaigned and are thus not really in synch with what the people on the street want and expect.
Back in the 1980s and 1990s Hong Kong’s powerful business elites solidly aligned themselves with the leadership in Beijing in order to ensure a stable business environment – which in Hong Kong means keep developing pricey real estate, unhindered. What is good for Hong Kong’s economy is good for local stability and that is best for the leadership in Beijing or so the reasoning went. China’s key strategic goal has always been to prove that integration into the mainland works so that the same model could be re-purposed for the main prize: peaceful re-integration of Taiwan into the People’s Republic. The warm relationship between Hong Kong’s wealthy elites and the Chinese leadership seems to have solidified the relative calm over the territory’s first twenty years under Chinese rule. But it was not always easy as China was well aware of the resentment towards the motherland. Beijing leaders reportedly were puzzled by statements from some business leaders in the run-up to the handover that ‘Hong Kong people were yearning to join the motherland again after years of colonial oppression’. Nothing of course was further reform the truth as the city-state’s population never saw itself as suffering under British rule, on the contrary.
Hong Kong’s Identity
One of the things that I recall from my Hong Kong days is the unambiguous way in which the former British crown colony’s residents define their status. In general they consider themselves to be Hong Kong residents or possibly Hong Kong Chinese, but that is more often to underline their ethnicity, not their nationality. Residents of Hong Kong are proud and when asked about it and will rarely if ever say that they are from China. And the reason for that is simple: most of them are not. In fact the very large majority of Hong Kong residents ran away from China during Mao’s reign of terror and their descendants through the years forged a very different identity, culturally and economically. Over 150 years of British rule created an ethnically diverse open market where trade, the rule of law and political stability created a turbocharged and self confident city state with its own dialect and customs that, had it not been for some historical flukes, would have remained a set of sparsely populated coastal islands with fisheries as the main economic driver.
But while business and culture flourished, having over seven million people crammed on a small plot of land does pose its environmental challenges. Even during the end of British rule it had become clear that issues like housing, development and pollution could no longer be effectively handled by a benign colonial administration. In the wake of the handover it became even clearer that the interests of a Beijing-appointed business elite stood diametrically opposed to the wants and needs of a population that despite its growing wealth had a vested interest in ensuring that the city-state would remain livable. The call for more democracy and freedom was not a hollow one, it was a genuine quest to sit at the table and determine what Hong Kong should look like. There was limited interest in it from becoming a polluted metropolis much like other Chinese urban centers where development and economic growth trumped everything else. A quick health check with the Hong Kong Chinese diaspora in places like Sydney and Vancouver will tell you that the combination of political uncertainty and quality of life was more than enough to leave for better and above all greener pastures.
All of the discontent culminated in the 2014 street protests in Hong Kong that became known as the Umbrella Revolution, a series of street protests in reaction to Beijing tightening of Hong Kong’s electoral rules. Now Hong Kong has a long tradition of outspoken politicians and legislators who have made it their life’s work to ensure Beijing’s power is kept in check ranging from the feisty Emily Lau Wai-hing to the calm and measured Martin Lee. However, these were the more traditional pro-democracy personalities who despite their disdain for Beijing’s undemocratic approach sought to play within the unfortunately tight framework in which they had to operate, always facing a pro-Beijing majority. They accepted the hand they were dealt and managed to present Hong Kong’s as effectively as possible.
But out of the Umbrella Revolution a new crop of youthful activists has emerged and they have been willing to take the debate a step further than the Lau-Lee generation. With some resounding wins during the 2016 legislative elections (which are essentially unwinnable against pro-government parties) some fresh young candidates pushed what now has become known as the ‘localist’ line: openly calling for Hong Kong’s independence from China. The most noteworthy ones were Sixtus "Baggio" Leung Chung-hang and Yau Wai-ching who both successfully contested seats in the election under a pro-independence banner. In doing so they were pursuing both a logical conclusion to Hong Kong’s post-umbrella pro-democracy movement while at the same time crossing the very line that is guaranteed to spell deep trouble: openly calling for secession from the Chinese motherland. They crossed the one line that no one was supposed to cross. And in opening the door to Beijing’s retribution both Leung and Yau were eventually disqualified from taking their seats after intentionally using their oath-of-office taking ceremony in the new legislative council to display their total disrespect for China as Hong Kong’s sovereign master.
While their actions were qualified as ‘immature’ or ‘unnecessarily provoking’ both Leung and Yau thought it would be their one and only chance to make their pro-Hong Kong, pro-democracy case for all the world to see, while baiting China into showing its hand. And through their local intermediaries China did indeed take that bait. Beijing found a legal route to boot them out of their elected seats and the Hong Kong administrative apparatus dutifully complied to ensure that the territory’s elected body remained unanimously loyal to the motherland.
The localist movement was much like the Arab Spring or the populist movements that are shaking western democracies right now: a logical outcome of unleashing tensions that the system could no longer contain. And it was an outcome that was inevitable, the young Hong Kong protestors and localist activists not only acted out what they felt as citizens of Hong Kong, they demanded exactly what they were explicitly promised on that rainy day twenty years ago: that now it was the people of Hong Kong who would call the shots in their own home. And by showing their hand now the Chinese overlords made it abundantly clear that Hong Kong’s freedom to manoeuvre under the Basic Law is and will remain minimal.
So we are into twenty years of ‘one country, two systems’ and in a way the countdown to the next benchmark date has started as thirty years is not all that far away. The Basic Law has no firm expiry date, but based on recent developments there is good reason to believe that on June 30, 2047, Hong Kong lose its unique position and will become what most have feared would be the most undesirable outcome: a Chinese city like any other.
Personal Note: I lived and worked in Hong Kong in the 1992-99 period and witnessed the build up to the eventual handover and the first few years when the territory tried to find its way under its new sovereign rulers. I had the pleasure to meet both Chris Patten (his book ‘East and West’ about his time in Asia is highly recommended reading) as well as Tung Chee-hwa and to this day remain fascinated and intrigued by what I consider to be one of the best and most dynamic places on this planet.
In a recent talk I branded Hong Kong 'turbo-cultural' which I define as 'a multicultural entity where ethnic differences are minimal and all potential tensions are subordinated to the greater good of economic success to which most, if not all, residents have access'.
Photos: Cotton Tree Drive leading from Central up to the Mid-Levels on Hong Kong Island (photo from December 2015) and localist politicians Sixtus "Baggio" Leung Chung-hang and Yau Wai-ching.
Is a monetary crisis the real threat, and if yes, what will it look like ?
While climate change appears to be the one existential threat to civilization to some and mass immigration to others, it can be argued that the far more imminent one is monetary collapse. Lionel Shriver takes on this theme in her latest novel, ‘The Mandibles: A Family, 2029-2047’. In it she paints an in my opinion unusually realistic view of how a once wealthy family is reduced to poverty and famine as the value of the once mighty US Dollar evaporates.
Shriver’s trademark approach is to take on some current issue and frame it into a unique and often dark fictional narrative with character studies that leaves you wondering if you have to read the whole book again as it is not only that good, you are still ridden with a myriad of questions about each protagonist in the book. She has successfully taken on America’s ongoing healthcare trauma in ‘So Much for That’, obesity in ‘Big Brother’ and extreme school violence in ‘We Need to Talk About Kevin’. The latter was turned into a movie with Tilda Swinton and the story leaves you wondering about the horrendous reservoirs of misery that the human mind can apparently sink to. Beyond depressing, but a captivating read. ‘The Post Birthday World’ on the other hand is far more upbeat and captures an extra-marital affair in minute detail, exploring two different outcomes: if a kiss had or had not happened. So my expectations for her latest tome, ‘The Mandibles’, were quite high and Shriver does not disappoint. On the contrary, she has taken her social commentary to a new level altogether.
It would be hard to describe the book and not give away its plot, but in short it comes down to the greenback losing its value and the countries that have so generously advanced money to the debt-addicted American nation now seek repayment by other means. The world’s reserve currency is now the ‘bancor’ and America’s first Latino president resorts to extreme measure to ensure that the nation’s debt can be repaid in order to avoid a looming war with, among others, China. As we have seen in real-life with Greece’s debt crisis, the pain of drastic monetary action falls on the citizenry and so it falls on the Mandible family whose journey we follow over a 25-year period. Again, what makes Shriver’s writing so compelling is the plausibility of her fiction. In many ways we have already and consciously started the downward journey to a world where the greenback is no longer valuable and where we have to find our way back to gold and other instruments, like bitcoin, that store and preserve value.
It is not hard to imagine a world without currencies and cash and just imagine if we did away with it all, would the physical world not look exactly as it is now? A house is still a house, with or without a mortgage contract, right? The Mandibles is almost a piece of basic economic theory explaining how the artificial monetary construct on which we have built our society is vital in sustaining our physical world and pretty much all relations that govern our lives. Once money evaporates, the world around us changes so much that our core foundations get uprooted to such an extent that everything around us falls apart and gets destroyed. Rip up a mortgage contract and your house will all of a sudden look very different, that is what Shriver’s book tells us.
So yes, although fiction, the book is a piece of social-political commentary that resonates deep in the current environment, something that Shrives alludes too when referring to the 2008 financial crisis. In her book, Keynesian budgetary policies are demonstrated to have outlived their usefulness and a tech empowered welfare state that is used as an outsourcing center for the world’s new economic powerhouses (China, India) stand out as examples of our near term economic prospects. The crowning piece however is a libertarian nirvana that has seceded from the United States. On close inspection however it is nothing less than a Darwinian struggle for survival where the absence of government supported healthcare and rampant crime are the inescapable side effects for those that seek to claim one of the last remaining pieces of freedom on planet earth.
As dry and haunting as this may sound, Shriver brings this dark vision of our future to life with some phenomenal protagonists that span four generations. The kids that are our current day millennials, the post-boomers, boomers as well as the last representative of the greatest generation embodied by the Mandible pater familias ‘Great Grand Man’ whose fortune everyone is after are condemned to each other and to figuring out life without the hoped for family fortune. As a consequence, each family member has to fend for his or her own interests. And Shriver dives right into her knowledge of self as she describes the impact of the economic crisis on the generation that ultimately carries the most guilt in our monetary undoing: the baby boomers. Obsessed by self-interest, health and eternal youth, these are the ones that have to fight hardest to accommodate the most to the unforgiving post-dollar world. One of them, Nollie Mandible, is the boomer that is able to redeem herself and is in all likelihood Shriver herself as she paints the way out of the disaster that has effectively destroyed the United States as we know it.
It did not take me long to finish the book, it was that riveting a read, blending personal fictional drama with a fairly plausible analysis of the world’s future if we keep borrowing and printing money. It is after all not that hard to fathom that at some point this century Indonesia will invade Australia, yet it takes some dark futurology to invoke it in a novel as an entirely logical outcome of a re-ordered world. Shriver does that, with both humor and substance, and has put down a book that we all should read and reflect on while we still have our hands on the monetary steering wheel.
The region’s first angel investment conference aligns entrepreneurs and funders for a diversified regional economy
Last week I attended and presented at the Caribbean Angel Investor Forum in Montego Bay, Jamaica, the first conference of its kind. Jointly organized by the Caribbean Export Development Agency and the World Bank. The goal was to put angel investing in the Caribbean on the map and seek to professionalize the emergence of a new asset class which can be a key driver for economic growth and job creation. It was hoped that it could also deal with debunking the stereotype of angel investing as some sort of game for the wealthy only. Not only do many people invest at the angel level these days, they do this in combination with offering mentoring start-ups and helping to build ecosystems that will support stronger and above all more diversified economies.
A number of angel investors, lawyers, entrepreneurs and government officials from all over the Caribbean as well as the US and Canada exchanged ideas and above all sought to learn from each other. The Caribbean has not been immune to global shifts and the Trinidad delegation pointed out that their economy could no longer take oil revenues for granted and that diversification of the economy through angel deals was a necessity for them. While each country had its own issues, it was key to bring them on all on the same page with regards to proper angel investing. It was therefore good that at the opening Tomi Davies from Nigeria laid down very clearly that early stage investing was primarily investing in people and building long-term relationships. It was relatively easy for me to expand on that theme by explaining that I had seen well-funded companies with great technologies fail, while I had seen relatively lower-tech companies with limited amounts of cash flourish simply because of the people involved.
While in some Caribbean countries the concept of angel investing has only just taken hold, others are making solid progress and have raised the bar significantly. In the latter category falls First Angels Jamaica, which has built up a small portfolio of interesting investments but above all has developed a very disciplined investment approach. At the same time they are lobbying for government and regulatory support, which will benefit all Jamaican investors and entrepreneurs. Its chairman, Joseph Matalon, opened and closed the conference and not only shared his experiences to date but pointed to the challenges in getting government support. In that he elaborated on the fact that politicians are driven by election cycles and that building ecosystems where angels invest and nurture emerging companies takes much longer. This is something we have seen in Canada as well where the focus on natural resource projects somehow always outranks entrepreneurial activity during election cycles. In any case, Jamaica’s minister of state for finance, Fayval Williams, was present to hear this message and took the opportunity to summarize the progress the island state has made and emphasizing the fertile ground it now is for entrepreneurial activity.
It was timely that the NACO common documents had just been launched so I could give some depth and materials to my workshops on deal structuring and due diligence and share some vital education with the Caribbean community. There was energy and a clear thirst for knowledge on how to negotiate financings, how to create solid working relationships with entrepreneurs, and equally important, how to get angel investors to work together: share deals, pool funds and do due diligence together in an organized way.
The best part of the conference for me were the entrepreneur sessions. A number of regional start-ups pitched their ideas followed by ‘speed-dating’ at a number of tables. The impressive thing was not only the quality of the pitches – they would easily be very competitive in a North American setting – but the visionary and global approach each entrepreneur took. They all understood that their market was pan-Caribbean and global and their plans and ambitions more than underlined that. A much needed emergency platform, an extremely energetic candy manufacturer, a Caribbean Uber-type transportation play, an in-ABM advertising deal that generated some interesting revenue streams and a platform for stroke and elderly patients brought the audience to action. It was great to have dinner afterwards with a few of them, one local entrepreneur had graduated from MIT, set up his mobile survey conversations start-up in Kenya and had now stopped at the conference on his way to Silicon Valley to talk about his Series A financing. Global thinking in action indeed.
So there is no lack of ambition and willingness to finance and nurture an emerging angel and start-up ecosystem in the Caribbean and kudos to those that have taken the plunge in making it happen. But there are some major hurdles too. Lack of capital is not one of them according to most of the participants although some time was spent on figuring out how to mobilize the Caribbean diaspora to invest back home, much like ethnic Chinese have done when their country roared back to growth in recent decades. Lack of investable deals however was the key and most cited issue. Building deal flow not only requires patience, it also is a matter of education, mentoring and changing a mindset as is engaging with local universities and possibly enticing diaspora talent to come back and start companies. Add to that the common complaint that local entrepreneurs often lack the maturity to negotiate a deal and be mentored and it became very clear where the energies are to be focused. A combination of education and trial and error will in the end yield results and this is exactly what Matalon alluded to when he spoke about the time and effort involved in building successful start-up ecosystems.
The key driver for this however in the end is success. Not until the first early stage deals grow, become success stories and generate exits, will the larger environment take notice and mobilize new entrepreneurial minds who have seen that it can be done while also unearthing new pools of capital.
While each participant came away with different insights and ideas, all of them were energized. At the same time they were armed with a good sense of reality by understanding in what areas work needs to be done going forward. The first Caribbean Angel Investor Forum was a well-organized effort and a good start to get that process going. Keep your eyes open for the next emerging start-up market.
Creating a Canadian standard for term sheets to get more and better deals done, faster
Over the past year and a half I have been conducting a workshop on term sheets and structuring deals across Canada. This is part of the National Angel Capital Organization of Canada’s (NACO) effort to encourage angel investing and in particular help tech businesses get off the ground. It has taken me to Niagara, Kitchener-Waterloo, Calgary, Victoria, my hometown Vancouver, Kingston in Jamaica and next week Regina and Saskatoon. Wherever I go there are keen and very diverse audiences willing to learn how to structure and do better deals. Having done this work for many years it is sometimes surprising to see how light the knowledge about this is on the ground and what difference an intense 4-hour workshop can make, not to mention getting people enthusiastic about participating in an asset class that was until recently the domain of a privileged few. Because yes, people are writing cheques into high-risk ventures or into funds that are trying to get a return on supporting emerging tech firms across Canada. As I have learned, the term sheet is the starting point of what sometimes can be a very long and rocky relationship, so better get it right on day one.
In the process it has become clear that Canadian start-ups often use outdated term sheets, sometimes found after a Google search or by simply copying American documents that are an awkward fit for local deals. As a board member of an angel fund, I see many founder generated term sheets and even when there are reputable advisors or directors involved, the quality is generally poor. I do not need to see a term sheet where one page is dedicated to director biographies. These are not deal terms and documents like this go straight to the garbage can, unless we find the company willing to renegotiate and rewrite the document. In most case such a joint effort yields much better term sheets and at the same time we have enhanced the entrepreneurs’ understanding of the process.
So how great it was that Boris Mann – another Vancouver tech veteran – and I got invited to project manage #NACOCommondocs, a project designed to launch a Canadian standard for Common and Preferred share deals as well as Convertible Loan and Convertible Equity, the latter also known as SAFEs, or Simply Agreement for Future Equity. As easy as it would have been for Boris and me to lock ourselves in a room for a day and bang these new standards out, they have to reflect the Canadian market place and regional opinions. And, some deep legal thought from the six law firms that are sponsoring this important project, not to mention accounting opinions. So we have travelled to Montreal, Toronto, Calgary, Victoria, Halifax and of course Vancouver where lawyers, angel investors and entrepreneurs commented on our work and at times ripped apart some of our assumptions and deeply held beliefs. Our egos, believe me, can take that. There is nothing like solid and constructive feedback that seeks to improve your product. And yes, there are regional differences. In some parts of the country angels will insist on having the ‘redemption right’ in any term sheet, whereas in Vancouver and Calgary the mere mentioning of this concept generated outright hostility. Try and synthesize those two points of view into one standard document!
But as always in life, the truth is somewhere in the middle and there are many ways is which we can bridge the discrepancies and still present a menu card from which to build a perfect term sheet for your start-up. Both angel investors and founders can now use a base term sheet with options to extend with additional clauses that will better reflect their deal. At the same time lawyers will no longer have to worry about wasting billable time on educating cash strapped company founders on what a term sheet really is. They will be able to point to the NACO website and say: educate yourself, negotiate a deal and we can help you with the rest.
As we dove into this it became clearer that there are indeed many aspects depending on if you are doing a common share, preferred share, convertible loan or a convertible equity (SAFE) deal. Tax implications, share options, vesting schedules, you name it, it is all more than just sticking a clause in an agreement. So in addition to the term sheets and accompanying educational notes we will present a number of one-pagers on the NACO portal when the project is launched April that will complement and enhance knowledge. Expect notes on tax credits, friends & family rounds and the not unimportant one that answers the question: which document to use when?
But above all the key drive is to build better companies as Canada’s economy is diversifying while at the same time being asked to compete in a razor sharp global environment. Last week’s BC Tech Summit in Vancouver made me realize how far we have come over the past twenty years and how mature start ups have become, even when (often) using crappy term sheets. There is strong momentum with many ideas and readily available capital, although we can do more to create better companies and mobilize more investment dollars. The challenge will be for solid people to combine these ingredients and build a strong technology cluster that will – as much as angel investors like exits – stay in Canada and build wealth right here.
This is my weblog and as opposed to the earlier one I ran years ago, this is not one about just politics and markets.