Pied Piper

London a great city for many reasons but my favorite: who knows what pleasure around the next bend? In this case, pictured, I poke my head into St James's cathedral at 11AM to find this wonderful, serious, trio warming up for a noon-time performance. I have them all to myself for about 20 minutes allowing me to reflect upon the the piano with some mild regret - I never paid attention despite my mom's best efforts (my grandparent's imposing Steinway in my parent's living room). The last thing I and Tom Sawyer wanted to do on a summer's afternoon was practice the piano. As life repeats, I feel momentary pangs of guilt that ours not more exposed to music (and I do, dear reader, include the trumpet). There is a balance between structured activities and a kid's freedom and, for now, the kids fairly loaded up. Exhibit A: this blog. We cannot do everything so let us hope we at least do things the Shakespeares sometimes enjoy.

Esher Colts & Crystal Palace

Eitan and I out the door by 8AM for his double-header at Esher in Surrey - to retain KPR's top-of-the-league a double win needed but instead we get a split winning the first and tying the second match in a wild 4-4 thrilla. Eitan scores a go-ahead left footed shot moments before the first-half ends but Esher come back firing and soon up 3-2; KPR ties then Esher 4-3. With a minute to go, Eitan scores the equaliser and our side erupts in joy. It is a cracker, too, spreading two defenders and a gentle tap into the net. His a safe pair of boots the dads comment. 

Eitan's team-mates pound him and he ducks their affection with a charming bashfulness. But wait - the game not over! Esher races down the pitch while our boys distracted and their striker, a strong kid with wavy hair, hits a drifting shot that sails above our defenders towards the top goalpost for a certain goal .. we watch .. Maxime, our splendid goalie, somehow gets a hand on the ball and forces it over the top. Whoopee! Today Maxime the hero as the boys smother him with love before lining up to shake hands with the other side. (Eitan: "In every picture you take of me my hair is messy or untidy.")

From Esher we drive to Crystal Palace so Eitan can swim in the British Gas County Championships which are held at the National Athletic Center. I am so used to grody London pools that a well-designed 50-meter indoor pool, even if dated, catches me by surprise.  Our frogger in two relays and begins by leading off the 4X50 medley relay - backstroke not his best stroke yet he gives his all, coming in last of eight. Later, his 4X50 freestyle team wins their heat - I get a big thumbs up and happy grin as he looks up for me in the stands - but his squad disqualified for an early start. What ref would do this to the 9-10 year olds? For Pete's sake. Eitan is sanguine: "we still won anyway."

Sonnet spends her Mother's Day with Madeleine, who is up late last night making a card: "you are a very good cook" she notes lovingly.

Trampoline

Our neighbours Helen and Martin have a bouncer in their backyard, pictured, which receives a joyous whoop! from the Shakespeares. They are invited to give it a test-run. Eitan says, looking at the photo, "I think it was really fun and big. Uhhhh" (his contented sigh similar, dear reader, to an extra serving of desert and I raise an eyebrow). Martin meanwhile an electrical engineer and I admire the wiring which he did on his own. In the dining room, for instance, a master control connects 16 switches to each ceiling light - or, as Martin says, "to confuse everybody." Me, I think it is genus. It reminds me of Arthur. Their house has all sorts of fun peculiarities like the fold-down stools in the kitchen or the bunson burner like stove. They also have a wonderful border collie, my favorite dog ever, and a pet rat (Madeleine notes that the cage a good one - she should know ). Helen and Martin's daughter engaged yesterday - bravo.

Carnaby Street

I am on Carnaby Street (parallel to Regent Street and South of Oxford Street) and walk by American Apparel - pictured. What's up with the porno? Carnaby once London's fashion and all that - 1958 saw the first boutique, His Clothes, followed by I Was Lord Kitchener's Vale, Mr Fish and Cecil Gee (each had bespoke tailor's shops), Kelptomian, Mates, Ravel and on and so on. By the '60s, Carnaby popular with Mod and hippie styles while designers Mary Quant, Marion Foal and Sally Tuffin set up their stall; there were underground music bars like Roaring Twenties - here, The Beatles, The Who and Rolling Stones jammed into the morning hours (the legendary Marquee Club just around the corner on Wardour Street) and shopped and socialised - it became Swinging London's coolest destination which eventually stormed North America when Time Magazine noted in its cover story: "Perhaps nothing illustrates the new swinging London better than narrow, three-block-long Carnaby Street which is crammed with a cluster of "gear" boutiques where the girls and boys buy each other clothing."

Today Carnaby a rag tag of its formal self. No doubt it is crowded with shoppers spilling from Liberty's or nearby Asquascutum but it lacks the jazziness that made it famous. There is a good shop for trainers and a vintage clothing store or two and a few fashion bazaars but overall it can be done in fifteen minutes - thankfully, no Starbucks but neither Vivian Westwood nor Ossie Clark. Surrounding us is Soho which retains its cool maze of back streets connecting high-end boutiques to "adult entertainment." Looking up, the architecture amazing - I see Victorian and Art Deco against modern chic and awful 1960s. It is a fascinating area to meander even if the '60s' crown jewel has faded from its once glory.

Image from American Apparel website.

Miss Trunchbull

Madeleine's Year 3 afternoon honour Roald Dahl, who the kids have been studying, with performance and song. Here, our hero plays Miss Trunchbull. Recall Trunchbull from Dahl's "Matilda": When Matilda's teacher appeals for Matilda to be moved up in school, the cold and bitter headmistress (pictured) refuses. Miss Trunchbull's treatment of her students border-line child abuse, tossing youngsters out of windows and locking wrongdoers in a closet lined with spikes, called "The Chokey." Trunchbull gets away with it because the stories of her abuse sound too far-fetched for parents to believe. She also tries to exploit students' weaknesses, forcing an overweight Bruce Bogtrotter to eat a gigantic, multi-layered chocolate confection before the entire school - he succeeds, much to her annoyance. Miss Trunchbull stops short of physically beating the children only because it is illegal - she is often frustrated by this. To make matters worse for Matilda, Miss Trunchbull has bought a defective used car from Matilda's father and because of this has developed an irrational hatred for for Matilda.

Madeleine for her part plays a good role (She: "On a scale of one to ten, I was ten nervous") and Sonnet and I in the first row lending our encouragement. Between us and the stage, the other classes march in and we spot Eitan and Eitan's hair: it strikes me that he looks like a stoner. Long and feathered, covering his eyes and uncombed, he slouches alongside his friends and suddenly I have a different view of my growing up boy. Soon he will be dating, as did classmate Charlie Fox who went on a double-date to the movies, chaperoned by Charlie's nanny. Charlie only two years older. Sonnet and I agree: a brave new world awaits.

"Psst! My idea of a perfect school is one in which there are no children... at all."

--Agatha Trunchbull

Rock Slide

Sonnet and I have travelled this road in Glenwood Canyon, pictured, on several occasions visiting her family in Colorado (thank you, Silver). Happily they are fixing the thing before we arrive this summer. It reminds me of the KKH but I guess this the state of US infrastructure nowadays. I recall Sonnet reading "The Red Badge Of Courage" while the kids slept passing this spot on the highway. She was in the passenger's seat.

Christmas Cake

Photo of Toky by Munar Kumar (via David). I do not otherwise know Munar but understand that he is a successful hedge fund manager and travels to Japan. His image captures the strangeness of the world's largest metropolitan economy with 35 million people (source: PricewaterhouseCoopers). NYC, by contrast, has 17 million. To put Tokyo's size into perspective, London the largest city in the world from the 18th century to 1952 when Tokyo surpassed us becoming the world's second city with over two million.

My love affair with Japan formed in the second or third grade when we had a wonderful nanny Taka (my mom remained in contact with Taka until recently). Taka was a gentle soul who patiently taught me some Japanese and was always Katie's and my confidant. Then it seemed perfectly normal to have her in our house, though how strange in reality - this was the 1970s, after all, and being a single Japanese woman in America .. unusual. Taka a member of our family and the real gift she gave me was Godzilla. For several years I dreamed of the green, fire breathing lizard and his pals/enemies King Kong, Mothra, Destoroyan and Rodan, who had claws like Alexander McQueen. The movies strictly pulp but how I loved them. Mandatory trips to San Francisco's Japan-town followed where yours truly spent his allowance on Japanese action figures and comics, all words in Japanese, but so what? There were fabulous photographs of dudes dressed up in monster suits doing battle on top of miniature cities which all seemed very real to me. This my Harry Potter or Manchester United moment.

I have not visited Japan yet I am fascinated by their culture so one day I will. Most Westerners suggest Tokyo a difficult city for outsiders: no English and citizens unhelpful if not racist. Of course I love Bill Murray's "Lost In Translation" but Tokyo only a hint of the film's intended disorientation; really that was about Scarlett and Bill longing for something, mainly each other. Allow me: final exams, junior year at Brown in springtime. I am studying in a deserted brownstone next to Sayles Hall on the main campus. The hours unusual since, well, cramming. I meet a woman doing the same and we hang out for three days and nights, mostly studying but also talking and smoking and looking inside. Nothing physical but oh, the possibility - yes, to be 20 years old. I never saw her again after that. This is what I think when I see this photo of Tokyo city.

Madeleine knocks on the door. Me: "Who is it?"

Madeleine: "Me!"

Me: "What's the secret password?"

Madeleine: "Let me in."

I open the door for her and Sonnet.

Madeleine: "Can you believe I got it the first guess?"

Tuesday Any Day

A quick report: breakfast at The Wolseley with a quant guy on the UBS trading desk. Coffee with Joseph at Starbucks; bus ride home and some work. A bunch of phone calls. It is cold and grey (go figure). Tonight I will go to Emirates to see Arsenal vs. Porto in the Champions League quarter-final with Jueren, whose son plays for KPR. Eitan jealous but sometimes those are the breaks.

On Being An Entrepreneur In England

Desperado the mouse - I know how he feels. Being an entrepreneur difficult anywhere but just try starting something in the UK. Oy vey. In Europe in 2009 in my business 136 funds raised $74 billion, or half by number and capital then 2008. This represents about 30% of all capital raised in '09. European buyout funds raised $37 billion or about half of all funds raised in '09. Real estate accounted for 18% and - here's the rub - venture capital raised $5 billion or 7% of the total, according to industry expert preqin.

In the US, venture fundraising about twice that of Europe or $15 billion in 2009 - levels equal to 1992 levels or way down. So .. less money going to private equity and less to the VC subset, though the US still sponsors many more GPs.

This trickles down to the start-up communities who are, at best, under-valued in Europe. A bad thing given the impact of venture on the economy: According to the NVCA, in the US in 2008 venture capital-backed companies employed over 12 million people while generating $3 trillion in revenue. This is 11% of private sector employment and equal to 21% of US GDP. These datas do not include the "ripple effect," ie, hospitals and corporates better run thanks to email and IT. And so on and so forth.

So back to me: it is no good to dream of starting a company if there is no love. It does not help if exits (IPOs or m and a) far and between+high capital gains taxes which further erodes returns. In short, the Great and the Good (which is not me, dear reader) who do go out on the plank must have the potential of getting rich. Unfortunately in England I have found skepticism, jealousy and regulation - not to mention lousy weather and poor communication. Not surprising I have also found a depressed entrepreneurial spirit. At my age, some or many of my (MBA) peer group should exploit its experiences and networks - if not now, when? By failing to do so, our society loses the limited venture capital to China or India nor releases its best talents. We must choose between being Disney World or a modern world and the first step from up top.

"Let the work of change begin."

--PM Gordon Brown

You've Got The Love

Eitan reads an American book "A Diary Of A Wimpy Kid": "Dear Auntie Lorreta, thank you so much for the awesome pants. How did you know I wanted pants for Christmas? I love the way they look on my legs." Eitan cracks up ("pants," dear reader, is underwear in Britain. And: "All my friends will be so jealous when they learn that I have my very own pants."

Sonnet up and out the door at the crack of dawn, setting the alarm for 8AM in case this "lazy lunker" (as Madeleine would say), moi, is not out of bed. Sonnet, as many of you may know, is taking a five-month work-leave from the V&A to spend time with the kids and me and, most importantly, herself. The museum has been a ten year effort and before that, the Courdault Art Institute which brought us to England in '97. Our transition not easy - me knowing not one person nor suited for the climate - but her strength and guidance has brought us to a wonderful place which educates our children and allows us to live if not thrive. She is deserving of her time.

Me: "Madeleine do you have anything to say for my blog?"

Madeleine: "No."

Me: "How about something better."

Madeleine: "Dad."

KPR V. Target

Eitan this afternoon following his semi-final cup match, which the lads loose to a good team, 3-nil. Eitan says: "I was disappointed" and gives no further commentary, full stop. He now does his home work. The poor kid does not like Sunday evening and, like me, has anxiety before the new week. Or sometimes it is the Blue Meanies. I used to have this especially bad in New York with the responsibility of a new job I did not fully control and found overwhelming. Sunday then, in fact, the worst. Sonnet cheers up the mood by offering "Harry Potter." She knows how to make everybody feel good.

So the football match: KPR plays Target, and we drive to the Cranmore Boys School in West Horsley, Surrey for the action (Eitan: "this is, like, in the middle of no where"). No sat-nav, no-way. It is a beautiful sunny day like we have not had in months but bitterly cold - I wear a down vest and down jacket and stomp my feet to keep warm. The boys anxious and it shows: Robert blocks a cross pass - hand ball! - and Target draws blood on the penalty. Their kids big and fast, and know how to play together using fast-breaks, open pitch and competent passing to keep KPR off-balance. One little dude flicks the ball so adroitly around ours that I think of a movie reel on fast-forward. He is that quick. Eitan is neutralised and while he is able to skirt around individuals, Target's depth wears him down by the time he is near enough for a strike. By half, Target leads 3-0 and our coaches huddle up the boys for a new strategy: "Get in there and play!" (Eitan tells me later). While KPR does not score the second half they stymie Target from increasing their lead; our goalie Maxime makes several heroic saves including a full body stretch parallel to the ground Super Man style. Wills, the sun of a taxi driver and KPR's defensive backbone, delivers several crushing tackles. By game's end, KPR has redeemed some of the first half and rewarded with donuts. The rest of us huddle around and urge the scrum towards the parking lot and warm cars (Eitan and his chums would happily play until sundown). We eat M&M's on the ride home and listen to Aston Villa v. Reading in the FA Cup semi-final.

Eitan: "You know, Dad, every song you sing is awful."

Me: "Some might say it is a good thing that I like to sing."

Eitan: "Some might not have ever heard you sing."

Me: "Oh, says the choir boy."

Eitan:

Green Boots

Eitan shows us his new boots. He is now a size 'four' in juniors. I recall when his feets smaller than my hand. Our favorite flowers vase has the boy's foot imprints from age one month - Katie did this for us when she first met him. So any ways, Eitananticipates his semi-final Cup game in West Horsley or about an hour's drive off the M25. Late game time kicks off at 1:30PM.

We visit Mitch and Rachel and their friends for dinner and wine last night. Camille a costumier for film and has all sorts of table-engaging histoires. We talk about movie sex scenes where the actors tape flesh coloured under-pants over their bits - g-strings apparently do not work since the backside booty crack visible. Only recently, Camille taped a merkin onto Nicole Kidman's patch. Now that is intimacy. And, should you think such scenes sexy, imagine at least 20 (mostly men) on set and maybe four or five takes. For someone like Kidman, who charges over $1 million a day, the pre-takes performed by her 'double' right down to the covering. No time wasted and nothing left to chance. Apparently she and most actors are friendly and professional when it comes to the tape-job.

Mitch and Mike also have good stories - they met at Selfridges dept. store (London's Macy's) straight from college in the Exports and Accounts Department where they issued VAT reclaims. Now all first jobs generally horrible and this one especially offers humorous opportunity. In one instance, Mike informed his colleagues (often ladies at Selfridges for >30 years) that he was an Intuit with certain religious obligations --on a certain day, Mike wore a skull cap and brought a rug to work and told his colleagues and customers that he had to face the North Pole and rock in prayer on the top of every hour. We crack up. This brings back loving absurdities from my summers painting houses in Providence, Rhode Island, which remain some of my favorite treasures today.

Kids have gotten into pop music and we all bust up over the radio song "gotta get that boom-boom-boom" by the Black Eyed Peas.

Munich

I go for a jog following the plane, where we find this enormous cement field in the middle of Munich. I assume I pose on extremely valuable real estate and wonder: why fallow? Of course it is reserved for Oktoberfest which, I am told, sees six million people descend upon the city and 600,000 at once on this spot - the world's largest fairground. Germans and tourists gather inside white tents and drink beer from 10AM until 11PM when the police shut things down. This year the 200th anniversary. The celebration lasts 16 days and, a taxi driver informs me, not unusual for someone to drink more than six litres in a day. Women, he adds, show their tits. Sounds like fun to me.

Our first meeting in offices overlooking this space. We joke, of course, about such convenience - but really it is just the opposite since parking disappears in an instant.

"It feels like a kegger at the psycho ward."

--Wired Magazine on Oktoberfest Etiquette

David

Here is David, who I have been running around with this week. We are at the Paris airport heading for Copenhagen. David my age and investing venture capital for his career. Before HBS he was with start-up UroMed that went public; post business school he ran Forge Ventures which was a joint venture with Mayfield, Enterprise and Johnson & Johnson to buy medical companies. He then became Partner at Hamilton BioVentures, where he produced top-quartile results for the fund he invested and now Correlation Ventures.

A problem with any partnership that an individual might be very good while his colleagues suck (private equity funds usually set up as partnerships - a General Partner or "GP" manages the money while limited partners ("LPs") contribute the capital; they spilt the updside 20%:80%+some management fee to the manager usually around 2% yearly on the dough over the fund life). This phenomena pronounced in venture as 'exits' few, even during good times, and often skewed to one principal in the firm. A bad fund absorbs the winners to repay the LPs and individual success might net .. nothing. Imagine, for instance, you are the guy who invests $50MM of a $200MM fund; your decisions return 4X while the rest of the fund nil. Despite producing $150MM of capital gains you get .. zilch. This not a happy scenario yet not unusual given the industry's awful performance since '00. During this time, too much money concentrated around a few large firms unable to make small bets where the real money is. Nobody gets rich putting >$30MM into a financing which needs a >$500MM exit to get some multiple. Not too many of those going around (yet <$200MM m&a's happening all the time in the United States). Pity the few who are good.

Madeleine on the trumpet as I write - four times a week for ten minutes practice (Sonnet and I sign her recitals). She is harnessing the power and while it might not be exactly music it is something .. good.

Me: "You are really getting into music I see."

Eitan: "Yes, like mom said - cheesy pop music."

Eiffel Tower

Eiffel kept a small office on the tippy top of his edifice. Presumably there was an elevator back then.

The Eiffel Tower, the tallest building in Paris, is the most visited paid monument in the world. Millions ascend it every year, including us with Mary and her crew in '08 (time flies). The thing built for the 1889 World's Fair and the facts: 324 meters tall equal to 81-one stories and the tallest structure in the world until the Chrysler building surpassed it in 1930. Excluding the broadcast antennas, EF the tallest in France until 2004 when the Millau Viaduct surpassed it. Bastards. And while the tower an iron structure, weighing aprox. 10,000 tons, it has a low density weighing less than a cylinder of air occupying the same dimensions as the tower. The walk to the first level over 300 steps, as is the walk from the first to second. The third and highest level is accessible only by lift.

I take this picture shortly before an afternoon meeting from the Trocadero, site of the Palais de Chaillot, in the 16 arrondisement across the Seine from the EF. The first time I was here in '81 with my family visiting Aunte Marcia and Uncle Larry who lived in the 14th near the Bois de Bologne when Larry running a substantial business for Citicorp as an expat.

Me: "Did you practice your trumpet?"

Madeleine: "No. I didn't have time."

Me: "You had time to watch a movie last night."

Madeleine: "Why do you have to be so harsh?"

Eitan (in the car to swimming) "Montrose is the perfect city."

Me: "Yes?"

Eitan: "It is so clean. It is not dirty like Waterloo."

Madeleine: "Or Hammersmith!"

Me:

Eitan: "You would never find a cigarette on the ground."

Madeleine: "Why does Huckleberry Finn smoke a pipe?"

Me:

Rodin

In Paris, I have a few free hours and, since sunny and spring-like, we go to one of my favorite museums. I am reminded of how sensual Rodin's works - pictured. Rodin's sculptures warm and intimate, provocative, nothing like the base materials of his craft -we look at something otherwise a formless marble. I learn that Rodin's older sister Maria died of peritonitis in a convent in 1862. Rodin was anguished and felt guilty because he introduced Maria to an unfaithful suitor. From her death, Rodin turned away from art and briefly joined a Catholic order. Father Eymard recognized Rodin's talent and, sensing his lack of suitability for the order, encouraged him to continue his sculpture. Without the Father, there would be no Thinker. Or Gates Of Hell or The Burghers of Calais. These things often a razor's edge and, just sometimes, we may appreciate a gift to humanity.

Me: "Have you kids ever found any money?"

Madeleine: "Once I found twenty pounds at that hotel."

Eitan: "I found five pounds, a two pound coin, two pounds and a 20p"

Madeleine: "You found 20p? I did not know that."

Eitan: "It's true Madeleine."

Me: "I once found £120 pounds at a cash machine. Somebody left it there."

Madeleine: "Did you steal it?"

Me:

Madeleine: "That must have been sooo nice."

Me: "how many pennies in a dollar?"

Eitan: "100."

Me: "So if I have a quarter, how many pennies in that?"

Eitan: "25."

Me: "And if I subtract a dime from a quarter, how many pennies left?"

Madeleine: "I am never going to understand this American money."

Self Portrait XV

So I start my week with Correlation Ventures in London then the Eurostar to Paris that evening (photo in hotel). Travel takes its toll, so I better believe in the funds I am selling (and investing with) and with Correlation I do. Recall this a group who brings heavy quantiative analysis to VC, which has not been done before yet, we believe, holds promise given the industry's inefficiencies. Anybody who has raised venture capital, as I did with Ezoka.com, knows it is a disruptive if not torturous process (Ezoka was pain-free and I used to say the easiest thing I had ever done though my biggest mistake a piece of shit partner. But that was my decision and my responsibility).

US venture firms raised under $15 billion in 2009 or levels not seen since '92 or '93. 2010 will be lower. Some (most) believe this a good thing: early-stage companies better valued and capital efficient; fewer "copy-cat" businesses formed; fewer bad ideas funded (who can forget justballs.com) and, one would expect, fewer failures and less disruption. Or, as we say: the industry right-sizing. The data shows us the great vintages - where investors make a killing - follow poor fundraising years. 1993-1998, for instance; Bill had '97 fund that did net 6X return to limited partners before Metro PCS went public and valued around $23 billion at its peak in '02. This returned the fund again several fold.

The other thing about venture: human bias messes things up. If the VC does not like the entrepreneur, she is unlikely to invest in the plan no matter how good. Follow-on rounds, which the data tells us a bad bet, account for more than half the capital employed. Why? Investors must justify their Board seat and time; she does not want her investment to fail. She likes the founder and so on and so forth. A better strategy: back a different, better company. There is plenty of selection.

Correlation aims to reduce the emotional drag nil by using the hard-facts. Fund investors raise an eyebrow – remove experience and intuition? Implicity, the belief that only the best VC knows Google when Google a business plan. We think the data knows better. And while this may be so, one clever fellow asks: “will this Jumbo fly?”

In photo, I am in Paris and missing Sonnet and the kids. It is a long week ahead and tomorrow meetings then Copenhagen.