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Business as Theatre

Last week I spent two evenings at rather different spectator events – the first listening to Robin Klein at London Business School and the second watching David Hare’s new play about the economic crisis The Power of Yes at the National Theatre.  I have to say that I much preferred the former to the latter, not just because of the difference in ticket price I assure you! The play wasn’t the best I’ve seen – more of a Panorama-style documentary to explain to the man in the street what’s been going on.  Amusing to see actors portray Ronald Cohen, John Moulton, Adair Turner and others.  In fact the latter was sitting two rows in front of me and wore an expression of smiling relief having come out of it without criticism.  To my eye the audience was full of retired folk who probably came to see why they’d lost their pensions.  Wise then to steer clear of the stories about Madoff and Stanford and focus instead on what was wrong with the mainstream financial sector  – apparently awful people like Adam Applegarth and Fred Goodwin.  “Ronald Cohen” told us that on a scale between ‘interested in people’ and ‘interested in business’ Fred scored 100% at the latter end.

The stand-out lesson was about human nature – we are mainly influenced by our own recent past.  A long bull run and nobody remembers what went before indeed nobody remembers to even question what’s going on.  Is it enough for the banks to say ‘we had to do it because everyone else was’.  George Soros was quoted relating his own emigrant past to his personal expectation of discontinuous change.

Robin’s talk described his journey from buying into a tiny engineering business, relocating to the UK, a tense brush with a leveraged buyout, elevation to Corporate Executive and finally to a position where he was able to capitalise on the rise of the internet in consumer-facing businesses.  Now of course an investor in many early stage startups.  Some parallels with Soros’s formative years.  For me one section of the Q&A served to underline that setting up a venture capital fund staffed by analysts and deal-doers who lack mainstream commercial experience is more or less hopeless.  I am sure that’s one reason why performance in this asset class has been so poor.   Robin presented many learning points; David Hare sadly too few.


Review now available:



The Stage

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End of an era for Venture Capital

Seeing the news last night about John Moulton quitting Alchemy made me reflect on the passing of another of the old guard out of the mainstream.  Of course we’ll still hear about John and likely he’ll still do deals but Alchemy was in many ways a tangible expression of his philosophy and style for venture capital.  Can we forget him trying to do the Rover deal – promising to revive the British sports car – when everyone else thought it too hard (though of course he was thwarted).  Similarly Ronald Cohen at Apax (another house that has morphed from VC to PE).  We will forever associate them with a buccaneering era for the industry – when it was being formed and shaped.  Am I allowed to use the term buccaneer?  Hope the FSA aren’t listening.  Another figure from that era is Michael Stoddart whose Electra was one of the pioneers – he’s still involved at FFP of course.  I ought to mention that Michael was so generous in his help in moving entrepreneurship forward at London Business School – he like Moulton and Cohen had great instincts for seeing opportunities.  So many of the generation they nurtured grew up alongside each other on the BVCA courses or at 3i during its now-abandoned VC phase (another strategic cock-up).  Now who replaces these and other figures from that era?  There seem to be a lot of ‘professionals’ – by which I really mean ‘company men’  who have followed career tracks in banking and accounting.  These were always breeding grounds for VCs but of course banks and accounting practices have developed more homogeneous standards, become machines that feed anonymous executives who can navigate the internal politics.  Gone is the camaraderie of being a young ‘Investment Exec’ at 3i or sitting in those BVCA courses.  I guess you’d expect all this in a maturing industry that is growing out of its cottage-industry roots.  Am I alone though in wondering whether we’ve lost something along the way?  Some flair, a real nose for a deal, an entrepreneurial creativity that sees beyond all that expensive due diligence?  I don’t know the team that John leaves behind at Alchemy but his resignation letter is pretty clear in saying they are unproven.  How can people become so senior in the industry and not be incredibly well-known?  I’m sure the VC industry is bigger and more professional than it used to be but where are the new personalities to inspire us and to figure out where to go next in these desperate times?

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