More than ten years ago before COVID-19, I recall most of my days (and nights) spent in the office working on ppt slides and having discussions with my VPs and directors. Occasionally when they wanted to work directly on the numbers or show me how something was done, they would come over and sit at my desk space, typing away at my computer while I stood and watched how it was done. It was a simple gesture - fixing a problem right when and where it was needed, in person. And that simple gesture didn't only solve the problem (whether it was a glitch in the model or some formatting on powerpoint), it also demonstrated leadership right then and there. Today this is very different. No more in-person consultations and discussions, no more live demonstrations. Everything is done over Zoom. No more personal touch. There's a Chinese saying: "fighting the bull from across the mountain" (隔山打牛), which basically translates to trying to solve a problem from afar. So right now, that's how a lot of things are - both for businesses and down to the professionals working away at their desks (or from home). Clients and suppliers trying to deal with new normal of doing deals virtually without a handshake or sighting of the product. Employees and their line managers trying to make a project or a pitchbook work while being separated hundreds and thousands of kilometers, connected only by email or whatsapp / wechat. To take the challenge up a notch, imagine the difficulty of new joiners who may have never seen their bosses, co-workers and their office desks. Leadership and management in a virtual world is extremely difficult. It's difficult to show how things done. Difficult to foster camaraderie without a working lunch, chugging a few beers or simply just hanging out after work. Hard to show charisma and motivate others when you don't (in this case, can't) show up in person. Lots of things get lost in translation when you don't see, don't talk directly to the other party. Doing business across the front office to back office gets incredibly difficult. Zoom calls can only do much in facilitating communication in a physically disconnected world. But in order to restore the current situation back to equilibrium or the good ol' days, we'll eventually need to be able to go out and travel, meet people and forge collective experiences together.

The last few weeks had been a huge tailspin for me. I relate it to a multitude of challenges compounded upon each other - first, the physical distancing barrier, then the business-cultural aspect of it and then the technicalities of the underlying business. To add on, although the world of investment and banking is not unfamiliar to me, the scope of publicity and investor relations work remains an uncharted territory. Compared to 5 years ago (or even 15 years ago), perhaps the biggest difference is that the mindset that one takes into any job, any role, any engagement. Never take on a job purely because of money. This might be one of the most important starting points in terms of getting the right mindset. Money is of course important but the experience of taking on the engagement should enable you to grow as a person, forge new relationships, learn new things that you never knew before, and naturally add to your professional credentials. To add on: Never switch jobs solely because the pay on the other side is higher. The "intangible assets" that you give up from making that move might cost you a lot more in the future. Never wear your designation / rank like a "political shield" or a "badge of honor", and let it get in the way of what you should be saying and doing. Most of the people that I know like to flaunt their status of being a VP, Director or being in C-suite roles. That kind of ego wears off fast when things go bad. The ability to be hands-on and execute will eventually outlive ego. Never stop moving or learning. Towards the ending scenes in the movie, The Martian, Matt Damon (as Mark Watney the astronaut) talks to a class at NASA saying: At some point, everything's gonna go south on you and you're going to say, this is it. This is how I end. Now you can either accept that, or you can get to work. That's all it is. You just begin. You do the math. You solve one problem and you solve the next one, and then the next. And If you solve enough problems, you get to come home. He didn't survive the journey back home by squatting in space, flaunting his celebrity status as an astronaut and griping about how people back on earth could have done better in trying to rescue him. Whether it is a Fortune 500 company, a small medium enterprise or a start up company, the most basic mission of any organization is just "getting things done." A true entrepreneur - whether he/she is running his/her own business or working in someone else's organization - doesn't care about pride or rank. He/she just cares about getting the job done and getting paid for it. Unfortunately, 99% of the people out there aren't entrepreneurs, so they make up excuses saying that they aren't paid enough for what they do or getting the corporate title they want. And for all the people out there who think that they are "too senior" to be hands-on or doing grunt work: I still take a lot of pride in being able to build a three-statement financial model from scratch. I consistently do this during the classes that I teach at SMU and remind everyone that it is really not that difficult. If you refrain from revisiting the basics every now and then just because you think you are "too senior" to be working on models, you are going to regret it much later on in life with that kind of mentality. Keep telling yourself that you are too good or qualified for any job or you should be getting more credit for your work and you'll also find yourself in a lot of trouble when you get older.

To understand and decide whether bitcoin is a good store of value, consider real estate, commodities and other asset classes. Real estate About twenty years ago, I remember hearing folks talk about property being a good store of value, something that has that ability to stand the test of time. In some ways that is true. Real estate has not only been able to preserve capital (albeit somewhat illiquid) but is also an instrument that has proven to deliver returns through steady capital appreciation and/or rental income. Within Asia, real estate has not only demonstrated resilience through the ups and downs, but also a beneficiary of domestic consumption and growth, buoyed partly by the prosperity of its regional economic titans: China, Japan, Korea, as well as Southeast Asia. A rising tide lifts all boats. That still holds true to a certain extent today, although the returns are not as attractive. However, property is still pretty much the go-to choice for many investors flushed with cash and those in search of a relatively safe-haven especially during a recession. Property - especially residential - survives particularly well during times of turbulence and economic downturn (at least in Asia). Rain or shine, the brick and mortar stands. People continue to trade and invest in real estate because fundamentally, they know that a roof over the head is a basic foundation of life based on Maslow's hierarchy of needs. Residential property is also somewhat a good proxy to the overall global economic cycle. The more resilient the economy, the higher the value of the property. Although the initial investment outlay can be high, it is also relatively liquid. And liquidity in valuation, is a metric that tends to be overlooked. In layman terms, this loosely translates to how easy it is for an asset to change hands. For example: You can list your second-hand car for a million dollars on Carousell, but at the end of the day, it's still worth nothing if it can't be sold. The price of a share in a company is only as real as how much others are willing to pay for it, not how much you want to sell it for. Furthermore, liquidity is also driven by the availability of buyers and sellers, and also shaped by the perception of the broader market. Lab grown diamonds. Consider: A diamond is valuable only because people say it is, not because of its clarity or cut. Jewelers and advertising companies around the world have done an extremely successful job in positioning the diamond at the apex of all precious stones. But the raw material for diamond is carbon - one of the most commonly available elements found on earth, ranked many times above gold, silver and platinum. Yet despite being available in relatively large quantities, consumers continue to pay absurd amounts of money for a small rock mounted on a ring or co-joined in a necklace. To add to the paradox, lab-grown diamonds are significantly cheaper than their natural counterparts, even though they share the exact same properties and make. In fact, according to this website: "If you buy a lab-created diamond, you’d have a beautiful stone, yet no jeweler will buy it back." So is Bitcoin a good store of value? There's much talk of late about bitcoin being a store of value. I know very little about the world of bitcoin and cryptocurrencies - only limited to the banter that I read on Twitter and the news. Is bitcoin a good store of value? Only time will tell. Just like property, gold and other precious stones, it is considered a safe haven only as much as others see it. In this case, the devaluation (or eventual demise?) of the dollar is one of the key catalysts in the appreciation in value of bitcoin i.e.: Investors buy bitcoin and other cryptocurrencies because they have lost faith in fiat currency. And to take it to an extreme: They believe that the guy over the McDonald's counter will one day accept only a bitcoin-equivalent and reject cash as we know it today. Is that even imaginably possible? While this may sounds absurd, for a billionaire or any large investor sitting on heaps of cash (a commodity that is increasingly being "devalued" due to the US government committed to printing even more money over the next few years), this implies an erosion of their financial position. Based on this, it seems: Cash as we know it, is no longer king. I think that crypto-exchanges were created largely because of this phenomenon. These platforms are only viable and commercial if there is a sizeable market i.e. a significantly large pool of investors willing to seed the initiative and make the market. This is similar to early stock exchanges. They serve to provide an avenue for companies to raise capital, but also functions as an alternative route for investors looking to 'diversify' or park their money somewhere where they can, and at some point of time in the future, re-distribute (by selling) them to other asset classes. Everyone else in the 0.001% of the liquidity pool makes the market — smaller funds, family offices, retail investors, sheep, etc. Driving a paradigm shift in financial markets is big inertia. If you have written code before, you'll understand how painful and tedious is it to do software development. There's a reason why successive versions of Microsoft Windows in its early days were so slow and buggy. One can of course attribute it to processor speed and memory space (software blaming hardware), but the reality is that it's simply too lengthy and costly to eliminate the bugs by re-writing and building an entire operating system from scratch. Why demolish and re-build something when customers are willing to settle for a product with some occasional bugs and flaws? Far easier it is to patch the errors than to re-invent the wheel. So our financial system is not perfect: Benchmarking (or rigging) interest rates, opaque currency controls, money laundering, fraud, etc. But the reality is that the paper currency (since its inception a thousand years ago) still works as a medium for the exchange of goods and services. To revamp today's highly complex financial system using bitcoin or any crypto-alternative would simply take too much work, several generations of change and monetary reforms, or even require a "reset" on an astronomical scale resulting in the total lost of faith in fiat currency, sending us all back to the barter economy. Just as how asset values move in cycle with the economy, bitcoin will probably follow the same trajectory. However little we belittle the value of cash, there are many commodities and asset classes out there which serve as good alternatives to what we define as a "store of value". Bitcoin is only but just one of them.

[This is the final article in a 4-part series of articles on fundraising] Roadshows Formal investor roadshows work well with large and mature funds and companies. This is largely because the people showing up at these meetings tend to be already aware of the fund managers and investor education is minimal. If you have worked in an investment bank, you are probably familiar with ‘non-deal roadshows’ — which is basically a short briefing with prospective investors to introduce the company. No formal communication of offers are made at these meetings though there might still be interest and queries on the company’s future direction, strategy and whether they are exploring the idea of raising capital. The same way pretty much works with funds. Unless you are an established fund manager, the first step of any fundraising is almost always investor education i.e. to get the word out and let everyone know that you are in the market. A few basic approaches are: 1. Curating a fund presentation deck There are no set guidelines, no ideal pitchbooks. Ultimately when you bring your deck into a meeting, investors will see what they like to see. I personally recommend no more than 15 pages: 30% strategy, 30% team, 40% case studies and track record. If you have additional slides, chuck them into the appendices. Many GPs tend to overload the slide deck with generous servings of macroeconomic and industry data to try and “educate” investors, painting a rosy outlook of the geography or sector. I think many LPs will not say this but don’t you think that as large institutional money managers, they’d have good access to all that macro research? Case studies on the other hand can be relatively more effective as they are personal, relatable and demonstrate more credibility for the presenter. The best deck I’ve personally seen so far was at a face-to-face meeting in which the deck comprised of only two pages showing four case studies, each case study highlighting three metrics (i) entry equity (ii) exit equity and (iii) exit multiples. A 1–2 pager teaser also works just as well for less formal or extremely brief meetings, or if you are sending to preliminary prospects. 2. Leverage social media, expound thought leadership Social media platforms such as Facebook and Twitter used to be associated largely with casual and informal information shared by our personal contacts. Today, this is very different. Social media has become a ‘broadcasting’ tool to showcase not only personal experiences but also professional updates — a career move, promotion, transition into a new role or even starting a new venture. Thought leadership articles such as a written publication on a particular topic or subject can be useful in kickstarting the fundraising process. Write about stuff related to your experience, background and relate them to your investing strategy or industry. While it might all appear to be academic, this can be effective in piquing the interest of your professional circle. 3. Conferences and speaking engagements Investment focused conferences (especially those that have a strong focus on private equity and venture capital) have been fairly effective in elevating publicity for new funds coming to the market. Speaking and sharing your views on a panel discussion is another way to demonstrate thought leadership to the investor community. Because some of these events are covered by media, there is good chance that your new fund gets mentioned as part of the news reporting. In addition to that, many LPs typically also attend these events to get acquainted with new funds or share their perspectives on the macroeconomic outlooks as well as where they are allocating capital over the next 2–3 years. Some conferences also offer 1-on-1 meetings with other delegates at the venue, so look out for these features when choosing which ones to attend. While mass events may not be in the format of your traditional roadshows, they serve as an excellent non-transactional platform to meet and engage potential investors and set the stage for a more formal and orchestrated meeting down the road. 4. Enlist a reputable figurehead Getting a publicly renowned senior professional on your fund’s advisory board is a good way to reinforce credibility and galvanize initial interest amongst potential investors. It also aids publicity depending on how influential your figurehead is. However, many new fund managers equate the presence of a senior figurehead to a successful fundraising i.e. “If I have the former minister on my advisory board, LPs will invest in my fund”. Unlike the initial public offerings in which retail investors flock to buy shares of the company upon the entry of a large cornerstone investor, private funds people are not discerning and will still place emphasis on the executive team’s operating capability rather than the reputation of a few non-executive industry influencers. Much like any fundraising exercise, it is important to ask “what does this person bring to the table?” and “how does he/she create value or fit into the overall investment strategy of the fund?”. Too many people overplay the publicity card, forgetting that real substance is in execution. 5. Create a digital profile Don’t undermine the importance of a digital identity. The ease of access to the Internet these days make an online profile really easy to set up. It doesn’t cost a lot of do up a simple corporate fund website even though you have nothing to show for at the beginning. Sometimes, a website isn’t so much as to showcase (or show off) track record but for establishing some form of legitimacy. Start a corporate LinkedIn page, get on Twitter, and fill them up with content. Good things take time to accumulate and not before long, you’ll find that your fund’s digital profile and credibility will be enhanced by the fact that it has ‘been in existence’ for some time. Closing thoughts It is true that many institutional LPs do not bank with new funds coming to the market. But don’t get too caught up with the fact that you are a ‘first-time fund’. Many large PE/VC shops started as a first fund. Perhaps one of the things that many fund managers do is to focus too much on getting the money in and forgetting about building the core business — which is to identify and seek out good companies, invest in them, and then actually selling them or exiting those investment at a decent return. The process itself looks blatantly obvious but it is always not at easy as it sounds. "Most big recent successes (Microsoft, Apple, Facebook, Google) were started by people with skin and soul in the game and grew organically-if they had recourse to funding, it was to expand or allow the managers to cash out; funding was not the prime source of creation. You don't create a firm by creating a firm; nor do you do science by doing science." - (from the book, Skin in the Game) And therefore by extension: You do not start a fund by simply just raising a fund. If you actually need OPM (other people’s money) just to start a fund, then maybe you shouldn’t be raising a fund at all. Good ‘first-time’ fund managers know an opportunity when they see one and moblize their own (financial) resources to invest even if there are no LPs present. Real track record ultimately speaks louder than marketing pitches and beautiful presentation decks. If you can demonstrate lucrative returns on projects, this is effectively tangible proof that the your team and investment strategy works, and institutional money will naturally come. Starting a fund can be a costly process — no different from launching a start-up. It will not be easy, so do sufficient homework before taking that leap. Learn from the experiences of others and always remember that the best way to sell is to show that the product works. (Read Part 3/4 on structuring)

I miss Blatage cafe in Shanghai. Throwback: Blatage Cafe is located on the Pudong new area side, approximately 30 minutes by taxi (off-peak) door-to-door from where I usually stay in Shanghai (which is on the Puxi side). The small cozy cafe is along 滨江大道 on the Pudong side. From Superbrand mall (正大广场), it is at least a 20 minutes cycle on Mobike or a 40-minute leisurely walk along the river. During the spring and autumn mornings, this is an extremely therapeutic exercise especially on the weekends. The indoor seating capacity is no more than 10 and they serve an excellent flat white for 30 yuan. Although situated close to some private condos in the vicinity, somehow, there isn't a morning coffee culture where people get up early to grab coffee. Most times when I arrive at 830am, I am their first customer. Back home, the "Blatage-substitute" is 40 Hands cafe at Tiong Bahru. A lot of people ask me why I 'spend' so much on coffee when I can invest in a Nespresso machine and enjoy a cuppa from the comfort of home (I have one by the way). But just as people sign up and spend their money on regular yoga classes, I spend mine on 'coffee yoga' i.e. a faux yoga session where I substitute stretching exercises with sipping coffee (also note that a single yoga class ranges anywhere between $15 to $25 while an artisanal coffee is about $6). Just as people find inner peace and tranquility in an hour or so of meditation, I find mine through sitting by the street or in a quiet corner where I am able to reflect and declutter my inner thoughts. Not everyone understands this. But everyone needs their own Blatage coffee place. Similar to how religion provides spiritual closure to occurrences in life that we cannot rationalize, people who do yoga probably believe that it is the antidote to de-stressing from work. For me, this equates to having coffee in an undisturbed ambience even if I have to get up at 6:00 am. So, there isn't a need to architect a pricey escape into the Himalayas to seek private retreats. A lot of these can be found at your doorstep. You don’t need to fine-dine in order to enjoy good food. My favourite local hawker fare is the bak chor mee at Tiong Bahru market. You don’t need to own a car to have convenience. Even if I use Grab everyday my traveling commute expenses will probably never exceed $500 a month. And sometimes all you need is to buy a house in the right place with good access to public transportation. You don’t need to stay in a private condominium or landed property to enjoy your spatial environment. You just need the right renovation decor at home. What is the use of real estate if you wear it with a huge financial burden and/or can’t share it with your closest friends and family? You don’t need lots of money to be wealthy. In fact, you don’t even need to prove to anyone that you are wealthy. The wealthiest people are those who are comfortable in their own skin and do not give a f&*k about opinions from the rest of the world.

Some of my new year resolves include: * Drink less (no more than a glass day). * Run a marathon (an offline one). * Be selectively ignorant to people, projects and information that drain my energy and time. * Remain focused on my personal goals and the big picture. But above it all, stay humble.

Structuring and Licensing [This is the third article in a 4-part series on fundraising] Read the previous chapter on fund strategy. If you aren’t an investment professional, a lawyer or a banker, fund set up and the mechanics of how LP-GP structures work can be somewhat challenging to understand. The majority of the business community are familiar with corporate entities limited by shares. But market practice and conventional wisdom seem to dictate that most funds be structured as partnerships. It happens to be the most common and most widely acceptable structure in the PE/VC world. If this seems complicated, just remember: At the crux of every commercial entity—be it a corporation or a partnership — is decision making. Playing by the rules of the game. A typical PE fund structured as a partnership looks something like this: In the above structure, the main responsibility of operating the fund on a day-to-day basis lies with the General Partner. The Limited Partner (being “limited” by definition) contributes capital but does not have any decision-making rights (much akin to the notion of preference shares in a corporation). The ‘rules of the game’ — so to speak — are being defined in the Limited Partnership Agreement (“LPA”). Comparatively speaking, instead of the usual board of directors in a corporation, decision making resides in the Investment Committee, which is a group of people nominated by the GP and LPs (the same way shareholders nominate the board of directors). Naturally, those who contribute a larger share of the economics get a larger say in terms of who sits on the board or in this case, the investment committee. There are many comprehensive resources detailing the mechanics of both partnerships and corporations, but below is an extremely simplified table outlining the few key commercial ‘equivalents’ which illustrates how partnerships in funds operate as contrasted to a typical corporate entity: The process of ‘receiving’ investors (LPs) into the fund is all about defining the ‘rules of the game’ i.e. Formalizing them in the LPA. A fund formation lawyer can help do this, but as the fund manager, you will need to provide them the game plan, as well as the ‘boundaries’ of the playing field. Amongst a ton of many things to consider here, some of the key commercial items to take note include: (i) Amount of management fees and carried interest (profits from exiting an investment) (ii) When the carried interest will be paid (iii) Redemption — if, how and when limited partners can withdraw their capital GPs may carve out special arrangements or preferential economics for different LPs in a side letter. Nothing is stopping you from including these clauses in the main LPA but eventually, it’s really all about how generic you want this to be. Fund structures and LPAs — being legally drafted — are pretty much predicated on market precedents, which is ultimately driven by demand, i.e. the investor pool. If a structure has been tried and tested in the market, an LP is more likely to use it. This partly explains also why the popular 2–20 fee arrangement has not really changed significantly in the last three decades. Ultimately, it boils down to managing risk and uncertainty. Most investors (LPs) will try to be more conservative and stand by something which is easier to justify — for a good reason because huge amounts of institutional capital are at stake here. Is there a need to be regulated / licensed? Broadly speaking, any regulator, fund formation lawyer or sponsor will always advise you to be licensed, for a good reason: to provide more credibility, as well as to protect the interests of the most important stakeholders (the LPs) in your fund, which again in turn, drives credibility. If you are receiving money from ‘mom and pop’ investors, the answer to being regulated is always yes. In most mature fund jurisdictions, the general rule is: As long as you take monies from any institution (including accredited investors), you need to be regulated / licensed. What if I just raise capital from people I know? In the eyes of the external parties, getting a fund properly licensed puts the fund manager in good publicity, and is also synonymous with endorsement by the local regulatory authorities. Investors are generally get more comfort that if a fund is licensed, the basic regulatory checks have been done. In theory, you could even operate a “fund” without being licensed or regulated if you have an extensive proprietary network of individuals who are ready to commit capital with you. The key risk or consideration here is whether or not these investors can seek adequate recourse in the event you screw up. In reality, most funds are set up for the purposes of taking in institutional money for long periods of time. Therefore, regulation and licensing not only allows for proper governance but paves the way for raising more third party capital in the future. One of the biggest financial hurdles with getting licensed is of course the upfront expenses (potentially up to $1 million paid-up capital required). Most first-time fund managers may not be willing to part with such a huge amount of capital especially if there is no certainty in raising the fund. [This is the third article in a 4-part series on fundraising] Read the final chapter on the fundraising process here.

This is true for many investment banks. And people pay for complexity. But it's an odd world: Founders chasing publicity on social media, focusing on selling stories rather than selling products Companies (especially funds) announcing (and celebrating) an investment or acquisition in a business, almost sounding like: “Look, we bought these guys” or “Hey I pulled that off, can you?” Entrepreneurs focusing too much on beautifying powerpoint slide decks and looking for investors instead of devoting more resources towards building a real product and looking for customers. Some people spend too much time going around begging angel investors and VC funds for money to build their business. I once told a friend: Raising capital is equivalent to "cash flow from financing". Why don't you focus more on developing "cash flow from operations?". The same applies to private fund raising: If you have to wait to bring in OPM (other people's money) before kickstarting your fund, maybe you really shouldn't be in the PE/VC business. The end result is the same: solving for that funding gap. You are much better off spending your time and resources looking for customers (who are by the way, also non-dilutive to shareholding) rather than chasing after beauty pageants and roadshows month after month trying to bring in investors. I think a big problem nowadays is that many of us over-relate to what we read in social media. We constantly see how different forms of a Jeff Bezos or Elon Musk manifest themselves as visionaries of businesses i.e. people who make daring and sometimes cavalier remarks about their entrepreneurial ambitions, making headlines through that process. And what typically comes a few days later, a large venture capital or private equity firm, a middle eastern sovereign fund, or some other titan of an investor with deep pockets take a minority stake in the company. The narrative is thus complete. And weirdly for a lot of people, the brain puts one and one together concluding: "Go big, or go home" or "If I passionately try hard enough, someone will acquire us some day", or "some big company will buy us out". It's easy to get caught up with the hype and optimism. After all, there are many precedents of successful tech founders who started from humble beginnings. While it is true that if you don't die trying, you won't make it, too many folks forget that the most important part of doing any business is reeling in customers, not telling stories to investors (but what do I know, right?) I also know a handful of folks who place too much emphasis on pursuing egotistic corporate titles, lamenting on why they aren't promoted or not given nice-sounding C-suite positions. Those who crave the adulation of social media and in the process, overcompensate themselves have no chivalry. They are all doing it backwards. Real business is in working the P&L, not in fluffy words and lofty titles. There is no point in calling yourself Chairman, CEO, CFO, CIO or any permutation of a CxO, Head of Business Development or Head of Investments if you have a lousy report card to show for. It's useless to garner a thousand followers if you can’t successfully monetise your product. You can call yourself anything you want really, but at the end of day if your designation doesn't get the job done and bring home the bacon, then what is the point?

“Rome wasn’t built in a day but they were laying bricks every hour.” "The problem is that it can be really easy to overestimate the importance of building your Roman empire and underestimate the importance of laying another brick. It’s just another brick. Why worry about it? Much better to think about the dream of Rome. Right? Actually Rome is just the result, the bricks are the system. The system is greater than the goal. Focusing on your habits is more important than worrying about your outcomes. Of course, there’s nothing necessarily impressive about laying a brick. It’s not a fantastic amount of work. It’s not a grand feat of strength or stamina or intelligence. Nobody is going to applaud you for it. But laying a brick every day, year after year? That’s how you build an empire." [Excerpt from James Clear] I've seen too many people attempt to be "heroes" in their organisations. They seek the recognition, adulation, whatever you call it. But a five-minute fame is short-lived. At the end of the day, it is about whether you and the company can bring home the bacon. That's all that matters. In a fast moving and digital world that seeks instant gratification, patience and foresight, are two highly underrated attributes amongst the young and inexperienced.

Designing a fund strategy [This is the second article in a four-part series on fundraising] Read the previous section on GP team. While the background and experience of the GP naturally drives the fund strategy, there are also numerous external factors to consider, such as: geopolitical landscape, the overall demographics of the economy and market forces. These considerations are also guided by the inherent attributes of the GP (their experience and capabilities in those areas), and should ultimately shape the overall direction and strategy of the fund. When looking at extrinsic factors, the geopolitical environment forms the overarching consideration, followed by other macroeconomic factors such as: Key industries that drive and underpin the broader economy Population size and demographics Consumption patterns and habits The depth of liquidity in the market and access to capital such as commercial bank lending, public and private capital markets For example: a company based in an emerging economy such as Myanmar or Laos, without abundant sources of domestic bank funding, is more likely to rely on equity funding (or foreign debt) rather than traditional bank debt for its business expansion. The macroeconomic factors are also closely linked with the spread of industries targeted by the fund, which in turn, determine the possible pipeline of target companies. For example, the theses for designing the investment approach for a Southeast-Asia focused manufacturing fund could include: (i) Shifting of regional production bases to Malaysia, Vietnam or Indonesia due to US-China trade tensions (ii) Strong emphasis (and dependance) on the manufacturing sector as a core part of Southeast Asia’s GDP (iii) Trends of companies relocating to Southeast Asia due to comparatively lower production costs and easy access to human capital (iv) Precedents of foreign companies investing into and/or trading in the market Size matters In addition to industry sectors, the geographical location of the portfolio plays an important part in the ticket size i.e. the amount of capital to be deployed in each company. Assuming your fund is prepared to write checks for companies with more than $100 million in EBITDA, there may or may not be a sizeable pool of companies in the region that could fit the bill of a $600 million EV (enterprise value) assuming we apply a 6x valuation multiple. Access to leverage (debt) is important too as this ultimately also determines the EV and equity ticket size. Banks have differing risk appetites for different industries. Consider a real estate focused fund with hard underlying assets -Being able to get bank funding at 70% loan-to-value will enable you to just put in $300 million of equity capital to acquire a $1 billion portfolio. Minority or Control? The considerations for control of minority deals are largely driven by the ability of the GP team to create value within the portfolio, and to a certain extent, the operating dynamics of the underlying businesses. For venture deals and early stage companies, fund managers tend to allow the existing founders to retain a larger portion of shareholding so that they (the founders) remain sufficiently motivated to make the business a success. I generally adhere to these three principles: Is there a viable roadmap to exit? While it is important to build a good pipeline of deals, it is even more important to ascertain whether or not there is a viable roadmap to a liquidity event. A liquidity event could be: (i) An Initial Public Offering (IPO); (ii) Selling the business to a competitor (consolidation play) or; (iii) Someone who wants to enter the market (iv) Selling the business to another fund (v) Selling the business back to the original owners (a put option) Some indicators of whether a liquidity event in the market is possible include: Is your fund size realistic? So, you got your estimated fund size, your ticket size and your pathway to exit, but what does this mean in terms of the number of companies under the your fund’s portfolio? Let’s use a simple calculation to derive this: Consider this: Most funds charge a management fee of 1.0% to 2.0% i.e. if you are raising a $1 billion fund, that translates to approximately $20 million in management fees every year - well enough to pay the rent, accounting and fund administration expenses, as well as a sizeable headcount. However, if you are raising a $20 million round (assuming this is your first fund) or your check sizes are a lot smaller, the corresponding management fees would amount to between $400k to $1 million. If this is your first fund, you could be looking at even lower management fees of 1.0%. The bigger question here is: will this be sufficient to operate the portfolio? Will there be enough professionals to work on transactions and due diligence? Not to forget, travel expenses, due diligence costs, etc. Let’s look at some illustrative estimates: The figures above do not yet include organizational fees such as licensing the fund (could be fixed/billable hourly expenses), fund formation fees such as LPA advisory, drafting and closing (billable hourly) as well as fund administration expenses (these are generally fixed but subject to complexity). The US market has some good disclosures on fund organizational expenses from publicly listed private equity firms. They can be used as a general guide, but differs for different fund types, structures and jurisdictions. To summarize: Assuming your annual operating expenses are about $1 million and you apply a 2.0% fee structure, this implies that your minimum fund size should be at least $50 million. You can of course choose to raise less than that but may need to revisit your fund strategy and/or tweak some of the operating expenses. A special note on GP commitment For first-time funds, GPs have to practically fund themselves. If you think for a moment that you can make a living out of just collecting management fees over the fund life, then you are very wrong. In order to show ‘skin in the game’, managers are usually required to commit 4 to 5 percent of the total fund size as part of the fundraise based on a report by Preqin. Assuming a $100 million fund, this translates up to $5 million. For many first-time fund managers, this is not a small sum and most of it will probably be financed from internal resources, which can put a significant strain on cash flow. Since LPs are paying GPs to manage their monies, they ultimately want them to work towards maximizing the returns on exit rather than relying on management fees for revenue. If the first fund performs well, GPs enjoy their share of the carry, but it is usually with the subsequent funds that the GP team can really rely on the management fees for a more steady income stream. Taking all of the above into account, you should ask yourself these questions: (i) Does the fund size and strategy still sound reasonable? (ii) Is there a well balanced and realistic professional-to-portfolio company ratio? (iii) Does the envisaged team size have sufficient bandwidth to execute deals? If the answers to one or more of the above is not a affirmative ‘yes’, you might want to consider revisiting the fund size, organization set up or refining the investment strategy. Repeat this process as many times as required so that the equity story checks out in the bigger scheme of the macro-economic climate and industry landscape. Designing a fund strategy is all about research & iteration…This process is incredibly iterative and requires you to continuously challenge your investment thesis. More importantly, it plays an important role in ensuring that your overall fund strategy is coherent. (Read the next chapter on structuring)

Someone asked me about paychecks recently. "Paycheck? What paycheck? We are business owners, we don't draw paychecks." Once you've owned a business before, it becomes nearly impossible to revert and think of work-life in terms of five-day work weeks, the concept of weekends, annual leave days and monthly paychecks. The definition of work is not about clocking hours in the office and just getting stuff done. It's also not purely about meeting sales targets and looking forward to that big bonus payout at the end of the year. It is about managing resources - both people (talent) and money (financial). So we don't live paycheck to paycheck, have no golden parachutes and no notice periods / "gardening leave". We also do not 'cash-in' any unused leave days (no leave days to speak of really), have virtually no possibility of getting fired from employment or taking severance pay. An entrepreneur is constantly kept on his toes not because he is afraid of losing his job but because he fears for his survival, he fears for cash flow as well as the supply of the resources around him - both people and money. That constant worry is what keeps him alive.

[This is the first article in a 4-part series on fundraising] Team Composition Preface In the last four years, I’ve had the opportunity and privilege to speak and consult with many acquaintances and friends expressing interest in starting their own investment funds. Most of them have very decent credentials: having worked in large corporates, Fortune 500 companies, reputable advisory and consulting firms, as well as investment banks. Some had spent decades in their current roles, have acquired the operational know-how in their industries and were at a point in their professional lives where they feel a desire to take their expertise to the next level. The common denominator here is: Whether it comes down to starting a business or a fund, most people are driven by the notion that they could be creating more value than what they are doing in their current roles and achieving better monetary returns with the knowledge and resources accumulated over the years. This no-frills article isn’t a standardized blueprint, framework or a holy grail for successfully raising any private equity or venture capital fund. The perspectives shared here are personal opinions and catered generally for anyone thinking of setting up a fund, are new to this area and do not really want to sound stupid when making conversations with investors, Limited Partners (“LPs”) or other aspiring fund managers. Budgeting is an important part of this process and in part 3 of this series, I include a very indicative estimate of what are the expenses required. Every manager has a different budget and uses a different approach towards raising capital. I do not think there is a one-size-fits-all solution. Starting a fund is an extremely entrepreneurial journey. The process and fundraising roadmap for everyone is different. It depends largely on credentials, investment strategy, geographical location and organizational setup. I hope the perspectives and anecdotes trigger your thoughts on the resources required and that you find them useful, logical and applicable in the real world. Team composition is probably the most important consideration in starting any venture. The General Partner (commonly known as the “GP”) is the “product” of the business. A fund manager sells itself in the same way a retail shop sells its merchandise. The quality of the product is the quality of the team, both collectively and individually. To manufacture a great product in the fund management world is to assemble an all-star team, thereby maximizing the GP’s chances in successfully raising a fund. The most ideal configuration is the team comprising professionals from an existing private equity (“PE”) or venture capital (“VC”) shop. They have the relevant experience, track record and industry knowledge of how fund managers operate. To a certain extent, they also inherit some of the branding and relationships from their previous shops, although the key success factor in fundraising still rests solely on their personal achievements. But not everyone has that privilege to work in a PE role. So I’m not from a PE/VC shop… The combination of experienced professionals from investment banks (“IB”) and management consulting firms (depending on their level of experience and functional roles) are quite popular. Consider The Carlyle Group, which was founded by two bankers and a lawyer, and TPG, which was founded by a management consultant and a seasoned lawyer. The success of this concoction is driven by a few factors including the parties’ collective experience of working alongside the same transactions (in different capacities), but also largely because they share a common lingo — they understand the nuances and intricacies of sourcing deals, carrying out due diligence, structuring transactions and approaching business valuation. Perhaps the achilles heel in such an arrangement is the lack of skin in the game. Unfortunately (without prejudice), most bankers and consultants work predominantly on the sell-side of things i.e. their commercial interests tend to be limited up to the point when the deal is closed and fees paid. And in the process of doing so, they may not consider too much, the implications of their recommendations after the investment. Of course, the financial and operational impacts on the acquired entity are being assessed and taken into consideration during the negotiation phase and at closing. But without skin in the game, any valuation and due diligence done, bluntly put, is just a desktop exercise. Sell-side advisors and consultants today rarely bear any tangible responsibility for the future performance of the target company. Firefighters. Beyond the banking and consulting world, industry practitioners also make one of the most ideal PE operators - especially those in key management roles or C-suite positions. These people are responsible for driving top-line growth and profitability in the business, ‘fight fire’ on a day-to-day basis, and responsible for keeping up the quarterly reports to shareholders and investors. More than just technical knowledge, good operators also have the management skills in operating the day to day activities of a PE portfolio. This skillset is nurtured from working many decades across different divisions with the companies they are in. They manage the sales teams, are familiar with pricing strategies, costing and the bill of materials, are up-to-date on what competitors are doing, and at times, have the ability to forge invaluable relationships with external stakeholders across the industry value chain. What they lack in innovative financial structuring, they make up for in operating experience — something not all consultants and bankers are able to replicate. That said, a group of seasoned industry operators coming together to form a fund may not necessarily have the complete know-how in terms of fundraising, legal/financial due diligence, deal structuring, and sometimes even access to additional resources beyond their sector of expertise. Finding the right balance. For many private equity funds, having an “operating partner” onboard allows the GP to mitigate the execution ‘gap’ in the team’s collective capabilities. The ideal set-up for a fund that invests in more mature and later-stage businesses could include a good mix of experts in M&A/strategy and industry veterans. Even better if all parties had collaborated previously in some capacity, and in particular, if and how they have leveraged complementary capabilities between each other. The team should have at least two founders. Most investment funds do not have a single member. However, this model seems to work with some funds that focus on technology and angel investing. They are probably limited in their ability to scale compared to other mainstream PE/VC funds as the underlying concentration risks around one key person is just too huge. Read the next section on designing a fund strategy.

That feeling of crumbling... Here are some of the things that i had learned from these experiences: 1) Despair and greed (both) drive people to do irrational things. Being in financial distress tends to force you into doing impulsive and irrational things. However, stumbling into a lot of money (or profits) (i.e. sudden-wealth syndrome) can also be equally destructive. It leads to misplaced optimism, self-fulfilling arrogance, and impairs one’s ability to make sound decisions, which then leads back to financial distress. Success is truly the greatest imposter and you are only as free as your last trade. 2) Blocking out noise and opinions. Investing is a highly personal thing. Most people I meet so far tend to be very prescriptive about what they invest in i.e. they believe that what they say is the ‘holy grail’ based on their past experience and want to tell you what they know best. At other times, it is just pure ego doing the talking. I learned that disagreeing with them doesn’t work well. 99% of the time, it just pays more to nod and agree. After all, what's the point of proving you are right if you do not get to keep your money? I think sometimes people forget that: "What applies to you does not apply to me. Ipso facto, what works for you does not necessarily work for me." 3) Diversification is not about putting money across 50 different stocks. Diversification is not about beating the probability curve and putting capital to work across 50 different businesses. It is about setting aside an appropriate amount of cash, and with the deployed capital, to selectively invest only in the businesses which you understand. The quality of an investment portfolio - whether it comprises tradable stocks or shareholdings in private businesses - should never be judged purely on their ‘rockstars’. Media has a tendency to over-hype on successes than failure (cos' who wants to be associated with a cynic?). Be realistic and accepting that a portfolio will inevitably have winners and losers. In my opinion, people like to judge their “stock-picking” capabilities on the winners, and undermine too much the missteps they make on their losers. Collective performance of the portfolio is ultimately most important. Diversification is about risk management. And risk management is not about eliminating the bad eggs, it is about reducing the number of bad decisions, over time. 4) Make data-driven decisions. Information is a privilege especially in a digital age today. Anyone providing you with privileged information is either trying to show off, or has something to gain from doing so. Constantly keeping this in mind will enable you to make more data-driven evaluations and eventually the right decisions. The worst thing is ever do when it comes to investing is to blindly follow the lead of someone else. 5) Money is made in the sitting. Humans are gamblers at heart. There is money to be made from gambling but we are also excited by its thrill - the thrill of knowing that loads of money can be made overnight in a few minutes. Somehow, we seek that thrill and the world today has also grown so used to instant gratification. The reality is that no one grows rich overnight. You are a winner if you had been able to leave the gambling table sober with a pocket of slightly more cash than when you came in. Reality is: Stock markets exist to create avenues and platforms for companies to raise capital, not for investors to grow rich overnight. I recall once a threatening trader abusing a terrified accountant with impunity, telling him things such as 'I am busying earning money to pay your salary' (insinuating that accounting didn't add to the bottom line of the firm). But no problem, the people you meet when riding high are also the those you meet when riding low, and I saw the fellow getting some (more subtle) abuse from the same accountant before he got fired, as he eventually ran out of luck. You are free - but only as free as your last trade. - excerpt from the book "Skin in the Game", by Nassim Taleb

I have never been a good investor. Since the day I started working, I had been through maybe two or three market down-cycles. In every of those occasions, I'd always stayed out, not wanting to log into my account to see the red indicators of the counters. You'd think that people working in financial services will be more astute in terms of their judgement of public equities - what's undervalued or overvalued. But truth is: we know nothing about how public markets really work. "The role of financial markets is to take money away from mediocre and underperforming companies and put it in stable, growing, high return on capital companies. " Low risk investments such as fixed income instruments have an important role to play in the world of money management, especially when it comes to managing billions of dollars over long periods of time. "Almost all of the real money made in those areas is made only by extremely patient investors who invest once every ten or twenty years, liquidate their holdings once a decade and spend long, long periods of time in cash.” And when it comes to stock valuation, there are numerous scientific methodologies to calculate what the true value of a company is. But none of those scientific approaches guarantee any success in getting positive returns. "Trying to invest in those companies based on an analysis of value is more likely to result in opportunities missed than it is make money. An approach that is much more likely to be successful is:– Investing in high quality companies after a market decline of thirty percent, and retaining the liquidity to build positions in those companies after a fifty percent decline in the broad market averages. That takes extraordinary patience, which is a matter of personality." The goal is to be "liquid at the bottom" because "business cycles are primarily caused by the creation and destruction of debt. Those are functions of greed and fear, in other words of emotions." It is said that "a long-term investor must be a patient person. A short term trader who thrives on, perhaps needs, constant activity is likely to be an impatient person." I believe that Investing is an extremely and deeply personal thing. It's all about managing risk. Risk appetite is subjective. Each person can only figure what that is for himself/herself. No one else can do that. Once again, this is a personality issue. This is also the same reason why I do not believe in seminars and workshops that preach about obtaining wealth by punting in stocks. I have nothing against the technical aspects (charting, valuation and analyzing financial reports). But in most cases, it tends to always be about extrapolating the future, which no one really knows. "Successful investors...incorporate into their investment strategy, clear concepts of acceptable risk, what constitutes an acceptable level of inactivity and length of holding period after funds are committed. And successful investors stick to their strategy. That strategy – for instance sitting on cash, sitting on losing positions, sitting on winning positions — must be based on self-knowledge. If the strategy is out of sync with the personality, it won’t work, no matter how well it has worked for others." [With reference from https://microcapclub.com/2015/05/i-passed-on-berkshire-hathaway-at-97-per-share.]

Before 2020, I had been able to plan and book overseas trips up to Hong Kong, Shanghai, or virtually anywhere in the world within 24 hours to a week’s notice. Things are probably going to be slightly different now. A lot of people are saying that travelers and flights will come back when a vaccine is found. After reading what’s going on in the rest of the world and experiencing first-hand the situation at home, I think this is going to be challenging. Pent up travel demand can only go so far in driving the economic rebound. Fundamentally, both business and leisure travels are probably going to be less “frivolous”. What this means is that less people are going to be able to say: “Let’s book a ticket to city XXX tomorrow” or, “Let’s do a day trip to XXX”. Cross-border traveling is going to be subject to mandatory immigration health checks, both in the departing and destination cities. And the lead time to make any travel plans could easily be extended by up to 48 hours at least. This creates a lot of friction for any travel planning and also provides a convenient excuse for unwilling jet setters who might now prefer to stay put. No more spontaneous trips. Going forward, there's going to be a group of people who will think twice before making impulsive or short term trips to anywhere in the world.

Social media these days allow people to only showcase the "best" versions of themselves or what they choose to portray to the world. It's mostly about personal victories and trophies. The oopsies and slip-ups don't show up on the LinkedIn and Facebook feeds. But whenever something is achieved, the confetti and loud-hailers come out. Things are often more rosy than they sound. We often over-hype on the little successes we have and sweep our weaknesses under the carpet. For whatever excuse we have for doing that, it creates a highly warped version of what the world really looks like. And unfortunately, like it or not, most of us live and breathe in that reality.

I recently got rid of my LG TV because of the screen was flickering and I had no idea how to get this fixed without tearing the TV apart. Even so, I had no idea what was wrong with the picture and so I put it up for auction on Carousell. I managed to sell mine at $50. Not a bad deal, considering that displays these days are really cheap (as cheap as $400 for the non OLED versions) and most people would prefer to buy a new set rather than settle for a second-hand TV. So when the time came to finally change hands, the buyer did a power test on the TV and told me that the issue was likely due to a faulty motherboard arising most likely resulting from an electrical surge. This was somewhat true. The old electrical wiring in my house has been a problem and we have had multiple power trips whenever we operated the oven in baking mode. He recommended that I use a surge protector for some of my devices, which was a simple solution to the problem. How much it would eventually cost him to fix the TV, I don't know. But if he's right, and it doesn't cost much to replace the motherboard, he might be able to use it as good as new or even resell it on the market for possibly more than twice the price. It may not seem like a lot but it's still 2x on cost. If the secondary market for TV sets is large enough (which I believe it is) you are looking at a potential business involving hundreds of TVs and tens of thousands of dollars in transactions. Distressed investing is similar. Businesses that have been cast aside by unsavvy investors who are have no expertise or commercial interest in operating them get picked up by astute buyers who have an interest in these assets or the right resources to re-write their destiny. This investment approach is is not for the traditional buyer. It is not for someone who wants to run a conventional due diligence process and have all the right information lined up before investing in a company. Distressed investors have to be aggressively comfortable with the disarray (or lack) of data and fully aware that lots of on-the-ground work is needed to be done to re-assemble whatever little there is in the business. Perhaps another important factor here is whether these special sit funds also have the ability to triangulate and identify that unique pool of buyers who are interested in buying these "certified-refurbished" operating assets.

The Starbucks at Capital Towers brings back memories of how I was helping a company look for investors some years back. I was sitting with a client to debrief him on the feedback from a week long investor roadshow. It was the year that Joseph Schooling won Singapore’s first-ever gold medal. The nation celebrated. It wasn't only a victory in the local sports scene but also a symbolic inspiration to everyone that: Dreams and ideas, no matter how small they were, could come true. But none of the investors said ‘yes’ to those dreams in that funding round. We had successfully assembled a string of eleven meetings within a span of over four days, each meeting lasting around an hour or so. It had been a productive dialogue in every session. Both sides introduced themselves, talked a bit about each other, the founders, the history, the company, the technology, the opportunity, etc. But even having orchestrated a highly professional and well-staged roadshow, no one would put any money in. The week after the roadshow I met up with one of the founders of the company at Capital Tower Starbucks, where he stared at me point blank and sternly asked: “Why did Joseph Schooling win?” Erm...cos he trained hard? "No!! It was because he believed in himself!", alluding to the possibility that we didn't believe in the business enough to sell the story. Thereafter, he continued to ramble about how (Schooling) a young boy born and bred in Singapore, a small city seemingly insignificant to most parts of the world became a global champion, likening it to the company: A champion in the making. He then went on to say: “It is a no brainer! People should be lining up for this! Why aren’t investors buying our business??” As he raised his voice and slammed the table, I stood there, wide-eyed and dumbfounded with the fact that this guy was putting the blame on me for the apparent “lousy-ness” of his company. A couple of weeks later, the company put together a product demo on my suggestion and also part of a follow-up from the roadshow. We had sent memos out to the folks that had graciously sat in our meetings to inform them about the proposed two-hour session to be held in the company’s office. I thought it was a good idea. It was an opportunity to see it how the product worked in real life, and more importantly, a second chance for the company to make an impression if it hadn't done so in that first meeting. Of the 10 emails that we sent out, only two replied and eventually one showed up - largely because his office was located around the vicinity. The session went ahead as planned, but the demo was unimpressive - the platform didn't function as smoothly as we expected, largely due to some technical issues. Long story short, to put it in context: it was almost similar to selling an older version of a software --- archaic, full of bugs and over-priced. Fortunately (or unfortunately) we had only one investor on scene to watch. After that, we stopped the roadshows. That day I learned a few things: You can't put lipstick on a pig. A commercially viable product is at the heart of any start up. No company should go out there to raise institutional capital without being able to produce either (i) a working prototype or (ii) demonstrate that there are customers lining up to buy. Self-bias is a very real. What I saw in the founders was a blind and almost religious belief in their product. To the extent they weren't open to candid feedback. Having devoted almost all their time into the product, it's easier for founders to be oblivious to the shortcomings of their own business. A CEO (who is a non-founder) employed to raise capital for a startup is almost doomed to fail. There is no skin in the game. A founder that throws money to delegate a CEO for fundraising can be a huge red flag and a potential recipe for disaster.

In 1990, a psychologist quoted in the New York Times reported that people “turn on the TV when they feel sad, lonely, upset or worried, and they need to distract themselves from their troubles.” Another psychologist also said: “People who watch too much television from childhood grow up with a deprived fantasy life. For them, watching television substitutes for their own imagination.” How the phenomenon above has impacted our lifestyles and wellbeing is not new. Way back in the 1930s, a sociologist named Herbert Blumer published a paper titled “Movies and Conduct”. The observations from the research suggested that content shown on television and in the movies shape not only how young people interact socially, but also their attitudes to life and also how they choose to groom themselves. Although it was done decades ago, it isn't that different from how social media impacts our behavior and thinking today. Naturally, the adverse side-effects from watching too much TV made people start to moderate and minimize their "TV time". But did we stop watching the television and reading the news? Watching the television (much like browsing the Web on our mobile devices today) has been a significant part in our lives for a long time. In any interior design mock-up, the TV is almost always part of the living room. For many people, it might even be considered odd not to have one in the house. Not only was the TV an important part of the decor, it also enabled us to receive up-to-date information and news from around the world. And if you think about it, the time spent facing the screen in the old days isn't very different from we are indulging in Facebook, Instagram, Twitter, and Tik Tok in present day. With the Internet, those same feelings of deprivation, loneliness and worry are simply just manifested in different ways. In a similar way, the online ads that show up on our mobile devices technically aren’t that different from the conventional paper advertisements and billboards that we see on the sidewalks and highways. Every advert out there - online or offline - is reaching out to you and saying something, in hopes that they’ll eventually change your mind and perception on something: “don’t use their product, use ours, we are better.”, “do this, don’t do that.”, “Do the right thing, invest in your wellbeing.”, “Vote for us, make the right choice”. Can you blame the companies for putting out the advertisements that led you to buy their product? Were you under duress to act? Did you not have a choice? Newspapers have been around since the 17th century, and television since the 1920s. In the same way, Facebook, Instagram, Twitter and many other apps are probably also going to stay around for a very long time. Like it or not, these will become the norm for how anyone with a decent Internet connection will stay connected with the rest of the world. Along with that, our thoughts, our perspectives and bias on various topics will also continue to be shaped by them, the same way TV, movies and print advertisements have shaped civilisation since the early 1900s. Media, in its various forms, new or old, will always be a tool for commercial and political propaganda. We can choose to extricate from this dilemma by renouncing all social media, but one thing for sure is that we are ultimately responsible for how we let them influence the way we think.

Webinars and Zoom calls have now become a defacto way of life. Therefore, it should have been no surprise that Zoom launched its events marketplace last week, which involves allowing people to buy tickets for online events. I see this as a first part of a bigger plan that involves a gradual cannibalization of market share from companies such as EventBrite and XING, as well as a potential game changer for other industries such as education. Event registration and management are incredibly commoditized processes and highly competitive on pricing. While it is relatively easy for Zoom to move into ticketing, the learning curve would be much steeper for companies such as Eventbrite and XING to acquire and successfully integrate good video conferencing / webinar capabilities. The possibilities for Zoom going forward will be interesting: Ticketing & Events (launch of On Zoom). Will this cannibalize market share from Eventbrite/XING? Education (similar to Blackboard, Coursera and Masterclass). Is there a longer-term play at online learning and will this remain sustainable after recovery? Telehealth. Should Zoom make a huge move into telehealth or continue to function as the reliable connector between telehealth companies and their customers? Home electronics. Should they move into home appliances and electronics since video calls are going to be a huge part of our lives going forward? Check out Norwegian start up Neat. In each of these scenarios, the question that Zoom needs to answer is whether it makes more commercial sense to (i) acquire capabilities in this area or (ii) better off playing the role of a technology enabler to their customers (and incumbents).

Footfall has improved since circuit breaker in June. It's nowhere near pre-COVID levels but still it's better than none. Everyone is masked up except for those who are eating or having a coffee like me. The tables are now more widely spaced - which I'd always thought it should be that way. On the face of it, everyone seems to be getting used to the new normal. It's good to see some activity in the malls. It implies that the office crowd is back and that in turn drives the F&B businesses. It keeps people employed and keeps the economy running. Generally speaking, this crisis is somewhat different from the 2008 financial crisis. In theory, some jobs should only be more directly impacted than others, particularly those in the travel and tourism sectors. And savings from non essential travel should technically allow businesses to sustain operating expenses and maintain headcount. That said, as companies today have largely regional / global operations, and are significantly reliant on travel, the entire economy takes a hit. The lack of inter-city commute provides a good 'excuse' for many decision makers to withhold aggressive marketing and expansion plans, creating a further drag on revenues across the entire value chain. I imagine that the uncertainty can be unnerving. For now, let's all sit tight and I'll check back again in another three months.

This is how most employees see their income - a gradual accumulation of their savings over time. The employee lives from paycheck to paycheck with the constant fear of retrenchment as he progresses up the corporate ladder. He is concerned only with his salary, the amount of increment at the end of the year, the size of his bonus and the number of leave days. On the other hand, this is how an entrepreneur sees the business: He is not only acutely aware of the cost structure, but also motivated to be as creative and innovative as possible so as to maximise his profits. He is driven that way because with the right ingredients at the right time, there is a chance that he might be able to achieve outsized returns on his investment. Four years into trudging and bruising, I retraced my steps and got myself thinking about what makes an entrepreneur, a business owner, a founder, and what drives them to do the stuff they do. Most people go into a new venture for the money. Some do it for the publicity. Media does a successful job of dramatizing those who start a business or raise their own fund. In fact, to me, it should always be about the money. I'm not being a mercenary, it's just more commercial. Unless you are operating a charity or social enterprise, starting a new business should always be about maximizing profits. Companies are sometimes willing to provide incentives and discounts to key customers or early takers at the expense of profits. This is fully understandable. That discount is an intangible marketing and relationship building cost, and the company expects that goodwill to pay off sometime in the future. There is also a lot of fun in building a business. But beyond the fun and the congratulatory notes from supportive friends, I sometimes wonder if people really know what they are getting into? Most people are oblivious. I caught up with a friend recently and shared with him what I'd been up to the last few weeks and months. Despite all the gloom around travel restrictions and crimping of dealflow, etc, I was sanguine and I got him enthusiastic about what we've been doing, the multiple platforms we have, the result of our hard work over the years, translating to tangible and "pursue-able" opportunities. He'd loved to be part of the "action". I really don't think people really appreciate or know, first-hand, the pain and struggles experienced by being a business owner. The pain of having to put up cash for operating overheads, do payrolls, pay for expenses, source for new revenue, execute, and yet, all at the same time, not having to draw a salary for yourself. So many choose to see only the rosy side. And because they see only what they want to see, they tend to be ignorant of what it really takes to operate a business and crystallize those nice sounding opportunities. I am not trying to be a wet blanket. Neither am I belittling our achievements over the past 4 years, nor am I trying to discourage people from pursuing a dream of starting up. But the struggles undertaken by someone on the path of entrepreneurship simply cannot be adequately described through conversations, the sharing of anecdotes in webinars, or inspiring commencement speeches and classroom workshops. Some want to be heroes. Some years back, I had closed a huge cross border M&A deal. Because of its size and complexity, it drew the attention of senior management, and as a result, I got an accelerated promotion (I think). More than just the vote of confidence at the workplace, the project gave me the breadth to exercise a great deal of autonomy throughout the negotiation process. Although being relatively 'junior' at that point in time, I was effectively thrown into the deep end of the pool to learn on the job. I ran negotiations with various stakeholders in the project, piloted the financial model between two contesting bidders and coordinated the work streams between the stakeholders and lawyers. It wasn't a perfect process: I mucked up some of the translation at some of the meetings between the parties, ran into impasses at negotiations where I felt helpless, and broke some parts of the financial model. Bankers who work on similar multi-million M&A and IPO deals often wear these similar deal creds like a badge of honour when they speak to their peers or at interviews. A lot unfortunately become arrogant and get carried away by the disillusionment that they are highly sought after professionals just simply because they were on the deal team. I loosely coin this as the 'hero mentality'. It is this misplaced sense of glory and pride that makes bankers arrogant. The hero mentality also leads many disgruntled employees from large organizations into starting their own business, who would then realize after falling flat on their faces and that once you jettison the big bank brand off your shoulders, it is not that easy after all. When you are running a deal in a large institution, your clients see you as an equivalent of the company you represent and are therefore willing to do business with you. You are an endorsement of your company i.e. you are nothing without the enterprise. Don't give yourself more credit beyond that. When you are operating your own firm, clients work with you choose you because of who you are personally. You are the brand of your own business. You have a significantly smaller reach and network and no one in the market knows you unless you have a personal relationship with them. The strength and extent of these networks are often smaller and weaker than what you think they are. Assembling an M&A deal takes more than just execution. Beyond financial models and info memos, there are "hidden" work streams involving years of investing into relationships. Most clients will not deal with directly with you or pay you at a commensurate level working for a large financial institution. For them, the credibility and the branding of engaging with an internationally recognised firm is what they paid for. So if you think that you did a lot of work in executing that M&A deal and deserve more credit than the organization employing you, think again - you probably would not be able to pull it off without leveraging on the global network and brand that is on your name card. Adding it all up, it sometimes looks like the net result between being an employee and starting a new business, making profits and then eventually selling it for a buttload of cash - could ultimately be the same. Perhaps one key difference there is that: While you can certainly live as an employee with a somewhat visible income stream, there is no guarantee you can exit your business profitably as an entrepreneur. That being said, the life skills you acquire from being a business owner remains starkly different from an employee. How does one define success in entrepreneurship? Can someone be considered a successful entrepreneur even when you are flat broke? Is the goal always to achieve a billion dollar valuation on your business? Is size the definitive metric for measuring entrepreneurial success?

Full house. One weekend afternoon, we visited a cafe nearby. The store was full and as a result, we had to wait behind the glass doors at the entrance. When a staff finally came up to us, all he did was beckon at the sign that was hung at the door, saying "FULL HOUSE". No greetings, no words of "sorry we are full, please wait." He just went "tap-tap-tap" on the sign at the glass door and walked away. We left. At Starbucks, I almost always see tables with dirty cups, wet tables and used serviettes. The tables typically remain uncleared for a long time until a customer comes along looking for a seat. In one incident, I was even told that tissue paper costs $0.30 when I asked for the tables to be cleaned before I sat down. And when it is getting late, many times, the staff would often rearrange the chairs and tables loudly, sending a subtle unwelcoming message to all their customers: "Get out, we are closed". On another weekday evening, I made a reservation at a fairly busy restaurant. The guy taking the reservations told me it was probably going to be at least a 15-minute wait and took down my number to call me when he got a table. Seeing that it was really crowded, we decided to take a walk around nearby and give him the benefit of time, coming back 30 minutes later. And when we showed up, he said rather triumphantly and self-conceitedly, "See, I told you, 15-minutes". I wasn't expecting to be seated but I guess a better respond would be, "Sorry, we are really packed today and I promise to try my best." Last week, I was browsing online for a set of Marshall speakers. I stumbled upon the website of a distributor, found the product catalogue, as well as their email contact. I decided to write and ask for the stock availability before making the trip down to the outlet. However, all I got back from the business development manager was an email reply to enquire directly from their website. I ended up getting those speakers elsewhere. Maybe it’s just me and I'm particular about the little things or we are just held hostage by poor service and there’s pretty much nothing that we can do about it. Singapore has no resources, limited land and a limited indigenous workforce. But what we lack in physical commodities, we make up for in service. For many years, we have pride ourselves in being the epitome of a world-class service-oriented economy. We constantly promote our quality onboard our flagship airline. We rave about having the best airport in the world, and by all measurable terms, we claim to provide top-notch service in everything we do. Every foreigner who visits Singapore tells me it's a clean place, people are nice and good, etc. This had been my impression way back until 2004 when I made my first trip alone overseas and stayed in China for a year. I realized that good service exists in many cities in Asia. It is not unique only in developed cities but even in the emerging ones, not just in their airports but it percolates through every segment of the economy, big and small. But why is our service deteriorating? I can only narrow this down to the fact that those in the services and non-PMET industries generally don't enjoy what they do. A zero-sum culture. From my conversations with friends, co-workers and clients, I get the impression that many companies in Singapore have a somewhat 'zero-sum' business culture, i.e. For an employer, once a deal has been made to hire someone, the company has a selfish interest to squeeze as much as they can out from the employee. This means lowballing salaries, scrimping on travel and employee benefits, and even pushing staff to work beyond stipulated hours. What do employees do in turn? They find every possible means to skive, cut corners and slack off. Everyone lives paycheck to paycheck, look forward to Fridays and hate the Monday blues. They stop loving what they do and stop enjoying going to work. It just becomes a job, doing it just for the money. This percolates across the value chain in the business ecosystem. Clients often try to "suck dry" their vendors / suppliers, milking them as much time as possible. There's no more professional decency, no mutual respect for personal time and resources, just emotionless transactional exchanges. After many years, this behaviour morphs into a toxic environment whereby two parties in any business transaction will always seek to take advantage of the other. I'm not saying that all companies are like that. But the relentless and fast pursuit for profits today can be a dangerous thing at the expense of culture. From laying the tarmac on the road, sweeping the sidewalks, making coffee behind the counters, to people pushing papers in the offices - every job is still a job. How do we instill a healthy respect and a sense of pride for the people who do what they do regardless of rank and file?

A thoughtful weekend read and a timely reminder for reflecting on all bad decisions made this year and in the last four years... "Life is tricky. It is never clear when you are at your peak (and about to head downwards into a death spiral) or at your bottom (and about to skyrocket upwards to your greatest heights). Right now, you could be sitting at the very peak of your life (or you could be sitting at the very bottom of your life), and there is no way to tell which is which. It is the scary truth for all of us. This truth applies to people, companies, and countries. Change can happen gradually over time or it can happen instantly. For me, success is the greatest imposter. In life, business, or martial arts, winning is a falsehood. It seduces smart people into thinking that they are invincible. It tricks good people into believing that they are infallible. And it robs all people of reality and truth. Don’t believe the hype. And don’t eat your own bullshit. Or you will lose everything. The only antidote to the poison of success is humility, hunger, and gratitude. Stay humble. Stay hungry. Stay grateful. And outwork everyone. Always." - Chatri Sityodtong

Two people, A & B meet at a coffeeshop to catch up and talk about the recent state of things. A says, "Times are bad, this pandemic has really disrupted all my business and meetings. And I've lost so much money in one of my ventures". B nods in agreement and says, "Yes. It's really bad. I invested in this company awhile back and lost something like $5,000. It's really a struggle now". A replies, "That's not a struggle man, $5,000 is nothing. My losses are in the hundreds of thousands." Everyone's perception and threshold of money and risk are different. A thousand dollars are very different to the average person and a millionaire. Knowing that someone else lost more money than you does not make you feel better; Conversely, telling someone else that you'd lost more money doesn't make you feel better as well. Risk and reward is always equitable and pro-rata to capital contribution i.e. you cannot expect to get more than what you put in. Be rational and at peace with what you have invested and taken. A fool and his money are soon parted.

With so much negativity around closed-up economies, city lockdowns, finding a vaccine, one can't help but wonder why valuations - especially for tech firms - are sky rocketing. Long term over short term In any asset pricing exercise, there are two fundamental parameters to look at: future free cash flows and the discount rate. The future free cash flows of the assets are whatever anyone thinks it to be: three, five or even ten years out. The discount rate addresses the question of "what is my expected return for purchasing a certain stock vs putting my money into a safe haven such as a government bond". If you look at consensus data over the next 12 months, nearly every analyst on Wall Street is predicting a decline in revenue and earnings, for a good reason - sluggish economic growth, deferred order books, and overall lower discretionary spending. This indirectly tells us that: The performance of the NASDAQ shows that no one is bothered with what happens over the next 12 months when it comes to valuation. Because investors are not relying on the near-term outlook for guidance, the pricing of today's tech stocks are driven by one of the two: Future cash flows over the longer term, or Just pure hokum. If you think about it intuitively, valuing businesses based on the data estimates looking out 3 to 5 years becomes a more viable alternative because no one can meaningfully price any business under circumstances today. Times are unprecedented; It is an anomaly, a black swan scenario. Applying the 1-year forward multiple to value a business just does not make any sense. This is similar in 2000 where the surge in prices of technology and Internet firms resulted in many investors rushing in to cash-in on the tremendous growth opportunities offered. Therefore the pricing observed in the current market is a reflection of investors projecting incomes based on estimates 2 to 3 years out. The DCF models are for 10-years and they are willing to pay even if the earnings today were crappy. Discount rates reflect opportunity costs Government bonds have been widely accepted as the basis for pricing assets. It is considered to be default-free and therefore commonly used as the "risk-free" rate in valuation models. All cash flow valuation models that use the discount rate are based off this simple concept. At the peak of the dot com bubble, the 10-year treasury yield - which was the benchmark for a "safe haven" and a default-free investment - hovered at between 5 to 6%. At some point of time, investors started to doubt the rich valuations of these Internet firms, and decided they were much better off putting their money in either government bonds that gave decent returns of 6.0%, or invest in the broader market, represented by the S&P 500. One thing led to another and the bubble burst. The key difference between 2000 and now is that treasury yields today are trading at 0.72%. Which means that investors who decide to cash out from their richly valued stocks get effectively next to nothing if they buy bonds or other fixed income instruments. That, in part, is what is keeping the bubble inflated today. In addition to that, city and country wide lockdowns from the pandemic have posed a serious risk for global trade and growth. Essentially, no trading = no growth. No growth = no inflation. To climb out of this economic rut, governments around the world have committed to keeping the near-to-mid-term interest rates low (read the Fed's recent announcement in August about its inflation rate policy). So it is against this backdrop of a grim economy, the lack of other options in putting money to work and choice of taking a much longer term view on cash flows, that many investors are dumping money in equities. As I am writing this, I do realize that there are wide ranging perspectives from different people out there, as well as numerous datasets that when aggregated and analyzed, could also be used to explain the current phenomenon. But the market is irrational, inefficient, unpredictable. And I have never been a good trader. Only time will tell if we are in the early stages of a new age of growth or if bubble will eventually burst.

Zoom's share price was up 40% last week. "If we can work well together online now, perhaps it will permanently reduce the need for business travel" Work-from-home protocols, tele-commuting, webinars and virtual meetings may permanently alter business travel, which accounts for a significant portion of aviation revenues. Zoom isn't the only winner here. Given the restrictions on daily commuting, technology has become an enabler of businesses and lifestyles. Many tech-related stocks ranging from cloud computing, e-commerce to data security have benefited greatly as a result of this migration to the digital realm. Early investors in Zoom and other tech stocks were lucky. But one might wonder if it still makes sense to even buy its shares. At its peak, Zoom traded at more than 2,000 price-to-earnings, implying a dividend yield of 0.05%. “Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year" - quote from Zoom's recent earnings call Clearly investors are not buying technology stocks for their dividends. Everyone who has a positive rating on the sector is valuing it based off the scenario that we won't be returning to our offices soon. Not at least within the next 12 months. A few months ago, people had already been speculating about a second wave. This has since emerged in several major cities - South Korea, Hong Kong and Japan. The effect of the virus is also festering down south in Australia where it is currently winter. Governments are holding their breath in anticipation of a third wave towards the year end. For now, it doesn't look like the nightmare of travel bans and city lockdowns are easing anytime soon. This virus could linger around for a few years and you could be using Zoom for a longer time than you think. Right place at the right time Using Zoom underscores the innate desire to engage in a face-to-face setting. Apple has tried to do this with FaceTime in the peer-to-peer context. Skype has video calls. Polycom even offers an immersive platform which is targeted at large corporates with the budget to invest in virtual-presence-type meetings. Doing so allows their professionals based in multiple cities to communicate in real-time without the need to fly to a single location. While these paid-for-service features have not been cheap, corporates weigh the trade-off between the cost of a business class air ticket vis-a-vis the cost of an enterprise-grade platform. Video conferencing is not state-of-the-art tech. But Zoom was caught in the right place at the right time. In a world without safe distancing and masks, demand for real-time video communications and webinar broadcasts might never have evolved into the defacto standard today. Unlike Polycom, Zoom had somehow managed to make tele-presence accessible easily and quickly for everyone across all budgets during a time where the world needs it the most. Albeit the initial security issues that surfaced as a result of its popularity, the app continues to serve its main purpose of facilitating conversations between people and it connects seamlessly. Most importantly: it just works. Take a look at Apple. The technical specifications of its products are not superior to the Microsoft or Android counterparts. In fact, Apple products are pricey. But loyal fans of Apple (including me) continue to buy the iPhones and Macbooks, happy to settle for a less than top-notch hardware. Maybe it's Apple's iCloud ecosystem, or the make of the phone. Or maybe there's something enigmatic and addictive about its minimalistic design that appeals to a certain group of users. And just like how people are drawn to the allure of Apple's simplicity, if there's anything that Zoom has gotten right, it is probably the ease of installation and use. More important than usability, the majority of governments and organizations around the world have also mandated extended periods of work-from-home procedures and no physical client meetings. Very draconian you say, but who can afford the socio-economic risk of a second lockdown? What happens when the show is over? After this pandemic is over (either through herd immunity or via a vaccine), I am guessing that most people would still use Zoom in their day to day work, but the real question is how many will continue to pay for its enterprise grade functionalities? Keeping in mind our natural instincts to engage someone else in person, and also because as humans, we will probably start to forget the pain of the initial lockdowns. People around the world will likely ditch the newly formed "work-from-home status quo" and revert to air travel, physical meetings and mass events. But in the current day where airline stocks continue to battle for survival and media reporting new cases daily, it might be easy to rationalize why Zoom can trade at 2,000 times earnings. Investors and stock watchers can be restless and impatient people. In 2013, CEO of Apple, Tim Cook, told the media that "some really great stuff [was] coming in the fall and across all of 2014". This was equivalent to saying: "We've got nothing for you this year, but stay tuned next year!". Analysts and investors listening to the briefing were unimpressed and Apple's share price took a mild beating. Like the ubiquitous smart phone, video-conferencing tools are not cutting edge technology. It remains to be seen if Zoom can really deliver on growth through innovation, transformation and create sustainable value for its customers in the same way Apple had done with the iPhone.

August is shaping up to be one of my busiest months. On top of three webinars every weekend, I have a couple of two-day on-campus classes. I think Zoom fatigue is real and the offline classes provide a huge reprieve. However, the valuation and financial modelling classes always made me think about how I could enhance my existing content and in-class experience in each successive session. I don't claim to be the best and most experienced on the street, but I think where I am different is my perspective of looking at financial modelling and business valuation. Perhaps that is the unique value-add I bring to the table. I thoroughly enjoyed the 2-hour talking session last night on Zoom. I was possibly the youngest panellist. We spoke and shared our views on what to expect in the next 6-12 months, personal experiences and opinions on valuation and investing, amongst others. We also discussed the current situation around the pandemic and how people and companies should remain flexible and adaptable for the uncertainties that lie ahead. Learning on the job During my corporate finance days, I tend to be the junior 'play-maker', I don’t crave to be in the limelight. I'm happy to just sit in and meetings and watch the show. Occasionally, I get the ball, I pass, someone scores a goal, sometimes I score. Everyone gets paid at the end of the day. Everyone wins. I'm happy. Tired, yes - but happy. So I had spent most of the early chapters of my career being the nice guy, helping out where-ever I can, whenever I can. On one occasion as an analyst, a VP had requested some help for work to be done for an RFP due on Monday. An email was sent out to the analyst pool on a Friday and I was the only sucker that said yes. Sounds like a common Friday evening horror story? I ended up burning my weekend doing up the presentation deck. In fact, many weekends were like that. It was a sacrificial rites of passage as an analyst in investment banking. Someone put this in perspective for me: You're basically trading time for money. I still enjoyed what I did. I disliked the mundane work, but just wanted to show up and be a team player. As time passed, I increasingly became the go-to guy for a lot of what we knew as JIT (just-in-time) projects. It could be a comps table that needed refreshing an hour before a client meeting., a model that needed updating before a meeting, or a pitch-book that required assembly in 24 hours. I had proven to be one of the most efficient and effective analysts in the team. I took pride in what I did, and I still do today. But in the frenzy and rush of producing all the work, I had unwittingly lost sight of the "bigger-picture" investment banking business model - I just did what I was told and dedicated very little bandwidth to develop myself more professionally in other aspects. As the days passed into years, my professional growth became increasingly stunted and fuelled by the mindless monotony of spreadsheeting and churning pitch books. Compensation In negotiating any compensation, one must first ask the difficult question: What value do I bring to the table? When you graduate from school and someone hands you a $10k paycheck, you are expected to be the most powerful sponge on earth. Your job is to soak up anything and everything as fast as possible. You are the "smallest gear" in the entire system required to produce the highest torque - that’s your leverage. That leverage has a premium and that is what companies are paying for. When you eventually evolve into middle and senior management, you become the large gear. You are measured based on your ability to drive as many smaller gears as possible. A large and heavy gear which does not drive anything is both costly and redundant, and will inevitably be scrapped. Therefore in starting up any business or pursuing any career, one needs to first understand your role within the firm - are you a small gear or a large gear? Regardless of which one you are, if you can't make a difference to the organization you work for and its clients, there is really very little that you can ask for commercially. Don’t get me wrong and under-price yourself. Shoot for the sky if you can. But remember that if you ask for high fees or draw a high salary, you must deliver. And don’t get cocky. More importantly, don’t ever be complacent. 羊毛出在羊身上 Everything has a cost and nothing comes for free. It was much later in my investment banking years, and after starting a business, that I truly appreciated what revenue model and cost structure really means. As an employee, your salary is a cost to the organization, and your main job is to bring in revenue for the firm. Everything else that you do in that process is ancillary to that main task. Beyond salaries, the firm incurs other overheads such as rent, administrative expenses, entertainment costs, etc - all of which are important in supporting the operating infrastructure of the business. The firm's most critical focus is to be profitable. To do that, it needs to grow revenues as much as possible, and it depends on the best employees and sales people to achieve that goal. Usually, the people who are most instrumental to that growth will be rewarded, but in larger organisations, there is always bound to be some dislocation of credit. Don't get too quickly disgruntled when you get paid a lesser bonus than expected. Unless you run your own enterprise, your remuneration is never perfectly correlated or proportional to the firm's profits. You are just an employee, a cost center, and not a shareholder. Understanding this corporate dynamics early on in your career makes you more sensitive to not only the firm’s P&L, but also the need to intelligently source for sales and develop yourself personally. Over the years, when I started my own business and spoke with more people outside the banking industry, I increasingly appreciated the costs of customer acquisition and the value of relationship building. Your work experience gets increasingly diluted and worthless if you choose to sit behind a desk doing endless powerpoint pitches and spreadsheets. In banking, the one thing that many junior analysts (and even associates) fail to realise is the importance of doing small talk with professional parties, engaging colleagues from other departments within the bank, and even client interaction. Every individual is different. Some like to go deep into numbers, others like to hear the big picture. Some like bragging about their achievements while others just want to complain and vent their frustrations to an external party. Regardless of the shapes and sizes that people come in, the interactions - whether direct or indirect - are ultimately contributory to helping the firm bring home the beef that pays the salaries and bonuses. You can choose to systematically and independently acquire technical skills from a corporate finance manual, but there are no handbooks for learning the ropes of business from the "school of hard knocks". So don't get too frustrated if you aren't hitting home runs by showing off your beautiful presentation or financial model to your bosses or clients. Sometimes, your greatest value is in just showing up or being a small cog in a big system. Being commercial. From a statistical point of view, not every one will make managing director in an investment bank. This is not abnormal. In an ideal world, the funnel is straight, and 100% of all analysts would make associate, 100% of all associates would make VP and VPs to MDs. But the reality is that attrition happens at every rung. Making Partner or MD isn’t the pinnacle of your career. I used to think that MDs were the creme de la creme in the investment banking world. But the truth is, many of them are just successful in navigating corporate politics and hierarchy within the firm. Managing Directors are really just highly paid salesmen within the bank. They exist only because the banks believe that their relationships with senior industry people and clients can be monetized at some point of time. Their KPIs are based on the bank's revenues and not on whether they make your life easier. It is also because of this that most cultures in investment banks appear to be toxic. Don't take it personally, it's all just comes down to sales and the bottomline. As someone lower down the rung of the ladder, if you focus too much on pleasing your bosses and co-workers as part of climbing the corporate ladder, you'll find yourself rudely awakened ten years later into a miserable job. So, everyone - junior or senior - needs to learn to be commercial, and that means understanding how the business of your firm works and who the real customers are. Above all, be smart, be a good listener and nurture good analytical skills. Learn more to solve problems rather than pleasing people.

Before emails became the norm at the workplace. People worked around the boundaries of the 9-to-6 work hour regime. The generally accepted convention was that: If you'd tried to reach someone after hours, there would be no one there to pick up the phone, because everyone at the office had gone home. The only way you could try to reach out to that person again was to call back the following morning. The telephone or face-to-face meetings were socially and professionally accepted protocols. First email addresses, then came the personal computer. In addition to receiving just a verbal confirmation, we then had the ability to communicate and access a wider variety of information media - lengthy text messages, pictures and sometimes videos (bandwidth permitting). This transformation gave way to many opportunities for individuals and businesses to communicate: digital e-receipts containing information that would allow us to reduce the back-and-forth phone calls, allowing us to make collective decisions in a much quicker way. Although the speed at which we conducted business increased significantly, we were still constrained by the boundaries of normal working hours as personal computers were largely used in the office and people left their workstations at the end of the day. Laptops and WiFi. We used to access the Internet by plugging one of these cards into the side of our laptops. That enabled us to surf the net wherever that was an Internet access point - at school, at work, in the cafe, at public places, etc. More importantly, with Internet on the move, we could now send and receive emails virtually anywhere. Having access to emails at home implied that people were able to continue to respond even after the stipulated working hours. Implied is the operative word here because there are no real obligations to reply a client or your boss after working hours. But think about the potential consequences that come along with this: A competitor might beat you at responding to a potential sales lead while you were "out of the office". You might have missed that long awaited promotion at the workplace just because you failed to scratch the itch in your boss' brain on an idea for a new product launch at 1am in the morning. So, now we have started to over-step the boundaries. In the past your performance was judged based on your presence and delivery at the workplace. Today, in the digital world, you are omni-present and being judged all of the time. Responsive-ness (or in this case the lack of it) translates to missed opportunities, lower sales, and lower bonuses. This vicious cycle and frenzy of responding to emails after office hours gets propagated over the years, and clients/bosses grew accustomed to the instant gratification of having an almost immediate response from a vendor/colleague. Just think about the number of times you had felt uneasy just because a friend or a colleague didn't reply to your email "immediately". Instant gratification. Emails and instant messaging are now so cheap (and virtually free) that we are communicating and replying every minute on a daily basis. A compulsive need to reply every message. Today, my whatsapp and wechat sometimes looks like this: I used to have a compulsive need to reply to every message that comes in. The habit stemmed from years of working in a corporate finance role where every deliverable was expected to be served in double-quick real time. It was to the extent that even the mere sound of the notification (both email and whatsapp) gave me butterflies in my stomach. Half the time, it was an email coming in from someone expecting work to be done. The process was hard-wired and programmed into my nerves and I'd lived the majority of my work life (>10 years) on that instinct. It was unhealthy. Today, I am glad that I have grown out of this toxic mindset, which has obviously resulted in the consistent backlog of messages in my phone. I also do not feel any guilt for not replying someone on a timely basis. My whatsapp chat list is like my email inbox. I reply only if the matter requires my urgent attention (in which case, the person would have most likely called me), or when it is convenient for me. Email takes a back seat. The introduction of Whatsapp, Wechat, Line, etc have blurred the lines between our social and professional circles. It is the defacto go-to channel for getting things done - at home of at the office. Email is just for keeping things on the record. As COVID-19 continues to keep people at home, these communication tools will increasingly be the norm with Zoom being the latest addition to the family. It is going to feel somewhat awkward in navigating a world where nearly all business dealings are done away from the office and in an entirely virtual domain or even from home. No more visits to posh looking offices in the city area or meetings in gigantic boardrooms overlooking the waterfront bay. "It is great to meet you on Zoom. By the way, the background behind me is my study where I spend nearly most of my waking hours. This is my new suit. I'm not wearing long pants by the way. In fact, I'm probably not wearing any pants at all." It might end up becoming a new way of life. Digitization and technology makes all things possible. An example is the signing of official paper documents. Physical copies and in-person signatures might have been mandatory in the past but in today's context many companies have come to accept e-signatures as the standard. Today, we speak of work-from-home ("WFH") as if it is a separate and alternative business continuity procedure. But in years to come, the physical dimensions of what defines the office and what defines the home will be so blurred that the term WFH will no longer be relevant. The phrases: "I'm working at the office today" or "I'm working from home today", will hold no meaning. It'll just be: "I'm working" and you will be deemed to be working ALL the time.

Tasseography is the divine art of reading patterns in tea leaves. People believe that energy is transmitted through the tea leaves during the process and the resulting arrangement gives us insights of our past, present and future. Technical analysis is somewhat like tasseography, at least in my opinion. A lot of sentiments and 'energy' are embedded in the financial markets. There are possibly at least ten major events taking place in the world at any point of time, which are likely to move the markets. Some are speculative, some are anticipated, some are premeditated. It is basically chaos theory at work. A complex system at heart. I do not believe in charts. I also have zero appreciation and understanding for the creative lines constructed by chartists and punters. I once sat in a course on technical analysis many years ago. It was intriguing and captivating. Something about the way the overlays on the candlesticks is being explained and how it nicely fits into share price trends really convinces you that with the right observations and tools, you can try to predict those stock drops and spikes. But since I have never had much luck with stocks and charts, it probably means I suck at it or am just a very lousy investor. But in times like these, I can't help but take a step back and re-look at the bigger trends that have taken place over the last two decades, which is best observed through charts. This is the DJIA from 2002 to 2005. The end of 2002 was when the full impact of SARS was felt in the market. The market probably pre-empted some of that effect a couple of months before, Within approximately 12 months, stock prices had reverted back to its pre-crisis levels. One can argue that the spread of the virus at that point of time was somewhat limited by a relatively moderate travel activity globally. And it didn't stop there. The next 5 years that followed saw one of the longest bull runs ever. Was it that the impact from SARS was less pronounced as compared to COVID-19? Was it the release of pent-up demand from consumers 2002-2003? Was it the onset of globalization and the opening up of China, one of the world's largest economies, to the rest of the world? Then the worst thing happened in 2008. In September, Bear Stearns, who had heavily dealt in the securitization of assets and liabilities, was stripped and offered as a sacrifice to one of the largest banks in the US, while Lehman Brothers was taken out in the streets and shot in the head. Yet again within about two years, the DJIA had once again recovered to pre GFC levels, with the intervention of the central banks through QE and the moderation of aggressive risk-taking by the consolidation of pure investment banks into commercial banks. In the seven years that followed, saw once again, the best bull market the world had ever seen. And this is us today. Not quite pre-COVID levels based on end 2019, not that far behind. We have come a long way. The world today as compared to 2003 is very different - globalization, connected-ness, lifestyles, China, the iPhone and Zoom calls. Were we able to foresee back then in 2003 and 2008 how the markets would have turned out? How is that different today? To analyze a "complex" system of an infinitely large number of moving parts (that we have almost no control of), we sometimes need to step back from the action and make the decisions based on the big picture. Stocks go up and down all the time. Volatility is the norm. But if you believe in the mean reversion to normalization, the long-term trend is still bullish.