W harton a l umni C l u b o f N ew Yor k | S p rin g 2 0 1 5
GLOBAL CONVERSATIONS TOUR
Dean Geoffrey Garrett
WHARTON ALUMNI ANGELS NETWORK Matching Alumni Investors to Startups!
executive committee President Kenneth Beck, WG’87, P’16 CEO Connection email@example.com Executive Vice President George Bradt, WG’85 PrimeGenesis Executive Onboarding firstname.lastname@example.org Vice President, Finance Rosemarie Bonelli, WG’99 Rabonelli@aol.com Vice President, Marketing & Communications Jeff Greenhouse, WG’99 Scripps Networks Interactive email@example.com Vice President, General Counsel Blair Duncan, WG’85 Upper Manhattan Empowerment Zone firstname.lastname@example.org Vice President, Career Development Charles S. Forgang, W’78, P’11 Law Offices of Charles S. Forgang email@example.com Vice President, Business Development Regina Jaslow, W’97 Penn Club of New York firstname.lastname@example.org Vice President, Volunteer Services Diana Davenport, WG’87 The Commonwealth Fund email@example.com Vice President, Programming Jennifer Gregoriou, W’78 Jennifer Gregoriou, Management Consulting firstname.lastname@example.org Vice President, University Relations Udayan Chattopadhyay, WG’01 Ergo email@example.com The Wharton Business School Club of New York 1324 Lexington Avenue, Suite 409 New York, NY 10128 Phone: (212) 463-5559 Club website: www.WhartonNY.com
Geoffrey Garrett – Dean and Reliance Professor of Management and Private Enterprise, of the Wharton School of the University of Pennsylvania
Letter from the President
Spring 2015 istening is an essential skill in this social economy. It’s also an old fashioned skill, as practiced by Dean Geoffrey Garrett, on his Wharton Global Conversations Tour stop in New York. It was symbolic of the kind of listening he wants to pursue with alumni year-round. This issue highlights how WCNY continues the Wharton tradition of listening to your needs and providing amazing value. Be part of it! WCNY listened to alumni investors who wanted a high-powered affinity group to facilitate camaraderie, learning, and yes, investing! The Wharton Alumni Angel Network, WAAN, has surpassed expectations with educational events, three pitch nights, and eight investments. This resource was created through the substantial efforts of operating committee members: Deb Bardhan, WG’11, Corey Luskin, WG’94, Lesley Stroll, W’80, Amy Pan, WG’12, Michelle Fan, W’13; along with a steering committee of prominent investors. The Wharton Real Estate Investment Group, led by Celina Kuoch, WG’98, Nick Petkoff, WG’02, Eric Bashford, WG’88, host high profile events for that important sector. Read here about their most recent event – Technology Companies That Are Changing the Face of Real Estate. The President’s Forum brings top influencers to an intimate setting, allowing you (if you sign up on time) to meet them and discuss topical issues. Read how Gerard Baker, Editor-in-Chief of The Wall Street Journal, shared how his organization is winning in a tough industry. It is reassuring to have Bill Haddad, W’89, on the WCNY Board of Directors. His intelligence, knowledge of all things legal, good cheer, and his involvement in WAAN, as a Steering Committee member, are truly appreciated by the Club. Speaking of lawyers, WCNY has a new affinity group, the Wharton Legal Network. Lew Tesser, W’74, has assembled a leadership team and held an initial meeting. Read up, if you are in the legal sector, and would like to be involved! Lastly we look at three local alumni making things happen. Two entrepreneurs, Caroline Strzalka, C’00, WG’05 of itsbyu.com and Carmen Feliciano, WG’11 of Penny and Mary, are helping brides: one with do-it-yourself floral arrangements, and the other with worry-free planning. Linda Habgood, WG’98, a director at Delphos International, works out of New York, to provide public funding to major projects in emerging markets. Be inspired by these alumni (I know I am) and do not forget to: “Take the Call” Kenneth Beck, WG’87 President | Wharton Club of New York Chief Executive Officer | CEO Connection T 646.416.6991 | F 646.292.5129 firstname.lastname@example.org www.ceoconnection.com
Wharton Club of New York Magazine Publisher Kenneth Beck, WG’87 email@example.com
Editor Kent Trabing, WG’01 firstname.lastname@example.org
Editor-in-chief Peter Hildick-Smith, C’76, WG’81, P’13 email@example.com
Design Director Joyce Chan, W’06, C’06, firstname.lastname@example.org
Social Media Umang Malhotra, WG’11 email@example.com
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Matching Alumni Investors to Startups – WAAN
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The Wharton Alumni Angel Network Matching Alumni Investors to Startups!
The Wharton Alumni Angel Network (WAAN) enjoys a rich ecosystem of alumni coming together focused on a clear goal. After one year, WAAN has built up a membership base of 60 accredited alumni angel investors who are looking to invest in earlystage opportunities. They not only attend, but also review applicants, host pitch nights and cut checks. To date, there have been three pitch nights, 21 presentations and eight companies receiving funding. Investors need to be Wharton or Penn alumni. Entrepreneurs who pitch do not have to be alumni.
WAAN's goal is to be a go-to destination for entrepreneurs who are looking for smart capital — and for capital looking for smart entrepreneurs, thus creating a startup ecosystem. The WAAN team is accomplishing that goal along three paths: Education
Teaching those who want to learn about and get involved in angel investing Mentorship
Leveraging alumni who are knowledgeable and successful investors Capital
Connecting promising opportunities with smart investors
Following are excerpts of conversations with WAAN's executive team
On education Deb Bardhan, WG'11, is the glue holding the team and programs together: "From the beginning, we sought to learn from successful models of other investment clubs. We started last year and grew quickly, with blockbuster education events. The inflection point was when investment members became more involved in running the Club, to make it sustainable. Members talk to one another instead of through the WAAN leadership, moving away from a hierarchical structure." Lesley Stroll, W'80, organized a series of sold-out events featuring well-known angels. For one event, Brian Cohen, who is Chairman of New York Angels and Founding Partner of New York Venture Partners, shared his perspective on the status of angel investing and answered questions from attending Wharton alumni.
Lesley Stroll, W'80, Vice Chair of Education and Events with an investor
I asked Lesley her thoughts on WAAN's approach to education: "There is no secret sauce when it comes to angel investing. Instead of trying to find that secret sauce, we keep it simple, providing seasoned angels as well as newcomers with an opportunity to join together in the due diligence process and gain access to greater deal flow…. All successful angels have their own rubric to make investment decisions, which is why sharing ideas and information is the best kind of networking that there is. Educational events provide angels, as well as the ‘startup curious,’ an opportunity to add to their toolbox.”
Wharton Club of New York | whartonny.com | Spring 2015
Club On Applicants. Amy Pan, WG’12 Vice Chair of Deal Flow
Corey: "We continually solicit feedback on the types of applicants that investors would like to see. We began with technology in the first pitch night, and then got feedback to diversify — reflecting the interests and backgrounds of our investors. Now, we have applicants across the board — food, software, healthcare IT, services and more. Amy Pan, WG’12, manages the sourcing and screening of entrepreneurs. The WAAN team works with active individuals and groups in the startup community to match promising entrepreneurs with our investors. Amy: “One of our goals is to drive innovation and progress by supporting exceptional founders and teams. Our members have experience across multiple industries and functions, allowing WAAN to engage with a diverse set of entrepreneurs solving an equally diverse set of problems.”
Deb Bardhan, WG'11, WAAN Chair and Member of Steering Committee
On mentorship Deb Bardhan: "If you are a startup and are looking for advice and guidance on different facets of your venture, such as how to reach customers, WAAN is a resource. If you are an alum thinking of getting involved in angel investing, WAAN has a strong showing of seasoned angel investors willing to guide and answer questions. Similar to Y Combinator or Techstars, the main value here is connecting people." Corey Luskin, WG'94, leads the outreach effort to investors. He also emcees the pitch nights, and oversees investors' participation in helping to run the group: "Our team was relatively new to investing — so we asked members who were full-time early-stage investors to look over the shoulders of newer investors and review the terms. There is an acquired ability that comes from reviewing a thousand business plans. They can look at a plan and say, 'I have seen this in one shape or another. I know the three key questions to ask. I know the variants of this type of plan that others have proposed. And I know the problems that others have run into.' That's why we're fostering collaboration where people put their best thinking on the table, yet without groupthink."
Corey: “We want the vetting process for applicants to be competitive. To actually filter and vet is an incredible amount of work. Typically, we will have 150 companies apply, and we narrow that down to seven finalists who actually pitch. For the first pitch night, our executive team performed the vetting. As WAAN grew, our investor members have taken that on, which is awesome, and means we are truly functioning as an ‘investment club.’ One distinction that’s important to understand is that we are not a fund. Some angel networks form a fund that members invest into, trusting an investment committee to decide where to deploy the funds. WAAN is here only to facilitate, bringing investors and opportunities together. From there, investors make their own investment decisions — and there is no pressure to write checks.
On communication. Michelle Fan, W’13, Operating Partner for Social Media and Communication
Michelle Fan, W’13, handles marketing communications and follow-up after events. For each pitch night and education event, Michelle reaches out to members and relevant groups. She responds to questions from members and potential members to the WAAN website or through the WAAN LinkedIn group. In addition, Michelle administers the applications for basic memberships which are free for alumni, and premium memberships, which are $150 per year. “Since my role covers all functions of the organization, I can really see how different groups, angels, entrepreneurs and even basic members, interact with one another and grow our network. Many members have told me how much they have learned from WAAN. As have I. “
Corey Luskin, WG’94 Vice Chair of Angel Outreach Read articles online at readwny.com
Club How to apply to present to investors at WAAN pitch night. Corey: “Go to the WAAN website. Click on the Entrepreneurs tab, and then select the Submit Application button. This allows you to upload your business plan and supporting documents, and answer basic questions about your product, team and financial model. It is possible to upload videos. The website allows the WAAN team to click through the applicants. Some applicants are diligent about providing all we ask for, while others write an introductory paragraph, and that’s it. It’s almost impossible for us to respond to something like that, so by default, they will be excluded from the screen.”
These seven startups presented on April 1, 2015.
AdmitSee A social media platform for college
applicants to share their application materials
CreativeWorx A B2B datamining platform that captures and analyzes how employees work
An education tech company that builds native mobile training suites for corporations
ICDLogic Developing software
for medical coding and clinical documentation improvement
Showcasing the innate beauty of solar energy through stunning design
Stylinity A social commerce
platform that connects the dots from influencer to purchaser.
Zakipoint Delivering a SaaS-based tool, integrating healthcare data, provider, program, plan and pharmacy
The first check.
Bios of WAAN’s Executive Team Deb Bardhan, WG’11, WAAN Chair and Member of Steering Committee, has more than 10 years of experience in innovating and bringing to market cutting-edge technologies and products. Deb is currently the CEO and Co-Founder of Xpand, a company developing technologies for the new generation of workforce needs. Xpand's flagship product has widespread 6
adoption among Fortune 1000 companies. Prior to founding Xpand, Deb led a $200 million business segment at Thomson Reuters. Deb previously worked as a venture capitalist and began his career in the Algorithmic Trading Group of Goldman Sachs. Deb got involved because, "At Wharton, as an entrepreneur, you have a lot of support. But once you become an alum, it's difficult. I try to help other entrepreneurs by providing a network for them. WAAN was a way to make a sustainable effort to help alumni become a part of the startup ecosystem." Corey Luskin, WG'94, Vice Chair of Angel Outreach, is an investment banker with England & Company, where he works with growth-stage companies and investors on a wide range of strategic and financial
| Wharton Club of New York | whartonny.com | Spring 2015
Ed Mintz, WG'01, is a physician and individual investor who consults for venture capital and hedge funds. In reference to the April 1 pitch night, Ed noted: "I found my first meeting incredibly interesting. The companies were well-vetted, and my fellow angels seemed polished, collegial, and quite capable of evaluating and participating in deals. If I were starting a company, I'd be thrilled to get an audience with this group, as I think the potential investors who I met could add a lot of value to startups."
r ty Ma
What’s so exciting about WAAN is that, as a result of the education, mentoring and the attention to detail, investors are writing checks. The first one was written by Marty Isaac, W’85, during the first pitch night. Marty is the CEO of HooplaHa, a fun website focusing on positive news. Marty: “I think WAAN is a terrific way to learn about early-stage companies. I’ve participated in all three meetings, and the quality of companies presenting seems to get stronger each time. I’ve invested in one company thus far, www.slidejoy.com, and intend to invest in more.”
needs. He has extensive experience in mergers, acquisitions, divestitures and financing transactions primarily for media, information services, financial services and technology companies. Corey was previously Head of Corporate Development for Bisys and Innodata, leading acquisitions and corporate venture initiatives. Corey graduated from the Wharton MBA program in 1994 and is a CFA charter holder. Corey: "I got involved in WAAN for three reasons: 1) In my work as a banker, by definition, I deal with later-stage companies. However, I'm constantly meeting earlystage companies. So, I thought, why not refer them to Wharton Angels? 2) The networking benefit on the angel side. They are an extraordinary group of high-powered folks. 3) Ultimately, as I get into it, I'd like to do angel investing."
Michelle Fan, W'13, Operating Partner for Social Media and Communication, is currently an Analyst at BlackRock, specializing in portfolio composition and allocation advisory. Previously, she worked in buy-side investment research and in academic research, where she conducted due diligence on different equity investment opportunities in Asia/Pacific. Michelle was the CFO of Un-Buttoned General Partnership, an apparel startup born on the Penn campus, prior to her graduation. While she was at Penn, Michelle also played key roles in devising and executing marketing strategies for various organizations. Michelle is a holder of the CAIA (Chartered of Alternative Investment Analyst) designation. Michelle: "I joined WAAN because I have always been interested in investment and entrepreneurship. My role within the group really enables me to learn about both sides, while getting involved operationally. My colleagues on the Operating team are incredible to work with, and they are all so passionate about making the organization a success. It's been truly an amazing experience." Amy Pan, WG'12, Vice Chair of Deal Flow, has 10 years of experience advising and building companies, with a focus on product management and operations. Currently, she is responsible for strategy and development of the core platform product at Contently. Previously, she was on the product team at AppNexus and began her career as an investment banker and private equity investor, focused on investments in technology, media and healthcare. Amy: "I loved being a part of the entrepreneurial community at Wharton, so WAAN was a great opportunity to get involved again, while actively supporting startups and creating a network of likeminded people. Personally, I find it inspiring to work with entrepreneurs and enjoy keeping an eye out for new ideas." Lesley Stroll, W'80, the Vice Chair of Education and Events, has been an entrepreneur since the third grade, when she sold sharpened pencils to her classmates. Since then, she has built, advised and invested in a number of startups. Currently consulting at the Stamford Innovation Center, she is developing programming that connects the startup community with the entrepreneurial ecosystem. Lesley is also a Core Mentor at The Refinery, an accelerator for women entrepreneurs. As a business development expert, she brings a unique
combination of keen strategy, insight and a strong execution skill set. Lesley: "I immediately understood that WAAN was an opportunity to bring together smart ideas and smart money. I believed that the alumni of the best business school in the world were capable of coming together to form a highly relevant investor community, and I am very proud of the fact that we have."
WAAN's Steering Committee Members
A core wisdom in the beginning of WAAN was to bring on a strong steering committee to guide the formation of the affinity group. Ryan M. Bell, W'05, worked at Bear Stearns in mortgage structuring and securitization, and then moved to Fortress Investment Group where he is in the asset-backed lending group. Ryan was immediately drawn to WAAN by his interests in both startups and angel investing, and is eager to help WAAN, grow. Peter Borum, WG'13, was born and raised in rural Kentucky, and in his senior year at Stanford University, he led the Stanford Daily's advertising department to its best revenue performance in history. He started Aspirént Marketing and PR in 2009, and sold it to Revstone Private Equity in 2010. While at Revstone, he began the Executive MBA program at Wharton until returning to New York City to co-found Reelio. Will Chen, WG'06, G'07, is a Principal in the tech and telco team at Apax Partners. He joined Apax in 2007 and is based in New York City. He serves as a Board Director for Paradigm and Epicor. Prior to joining Apax, Will worked at Bain & Company and Goldman Sachs, advising clients in the telecom and technology sectors. Will holds bachelor's and master's degrees from Stanford University, and a master's in international studies from UPenn. Daniel Etna, C'82, W'82, is Partner in Herrick's broad-based corporate law department. He plays a primary role in deal-making negotiations, including strategizing, structuring and drafting. Dan frequently lectures on private and public company topics, as well as those relating to sports law, and has been quoted in The Wall Street Journal and Forbes. Dan is on the Board of Directors of The Dwight Freeney Foundation, and is the Editor-in-Chief of the Corporate Quick Hit, Herrick's bimonthly newsletter. William Haddad, W'89, is a leading capital markets and M&A practitioner in New York City, as Partner with Reed Smith
LLP. He has worked on a full range of securities offerings and transactions, with a particular focus on international listings, and mergers and acquisitions in the U.S., China, Europe, Australia, Eastern Europe and Israel, including over 100 capital markets transactions. Bill is on the Board of Directors of the WCNY (see our feature on page 14). Eugene Lebedev, WG'10, is the Founder and CEO of Qrency, creator of Qramel. com, an easy and intuitive way to link digital content with physical things. Prior to Qrency, Eugene served as Assistant Director of Wolters Kluwer Corporate Legal Services where he led a global team of technology professionals to enhance largescale customer-facing Web applications. Eugene has previously worked at First Index, Gatelinx and Artificial Life. Eugene is a graduate of St. Petersburg State University in Russia. Mona Nandedkar, WG'08, is a financial services and IT executive and entrepreneur with over 20 years of experience working with Fortune 500 companies across North America, Europe and Asia/Pacific. She brings both corporate and entrepreneurial experience, having built and managed technology and operations units, serving B2B and B2C markets, spanning more than 100 countries. Mona holds a master's degree in computer applications and a bachelor's degree in mathematics from the University of Mumbai. Jonathan Tamir, WG'90, is currently responsible for the faculty practice group at Westchester Medical Center, which is made up of more than 200 primarily procedural clinicians and is growing quickly. Prior to this, Jonathan was the Vice Chairman for Finance and Administration in the Department of Internal Medicine at the Yale University School of Medicine, a department with a budget of over $220 million and over 400 faculty members with about 70 full-time clinical staff. Benjamin Williams, ENG'01, WG'13, is a Co-Founder of Reelio. Growing up in Connecticut, he was an Eagle Scout, and at UPenn, he founded and ran two profitable IT businesses. Ben received his U.S. Navy commission upon graduation and served as a naval officer, including two combat tours. After the Navy, Ben worked for Lockheed Martin, where he helped found the new ventures division, taking it from inception to about $250 million in annual revenue.
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GLOBAL CONVERSATIONS TOUR
Geoffrey Garrett: Dean and Reliance Professor of Management and Private Enterprise
Dean Garrett joined Wharton in June 2014 and, early this year, embarked on the Global Conversations Tour, which came to New York City on February 10, and concludes in Boston this June. Dean Garrett joined Wharton in June 2014 and, early this year, embarked on the Global Conversations Tour, which came to New York City on February 10, and concludes in Boston this June.
In his New York conversation, his on-stage partners were Silas K. F. Chou, PAR’14, President and CEO of Novel Enterprises Limited, and Mona Bijoor, WG’05, Founder and CEO of JOOR. Silas’ company purchased Tommy Hilfiger for $25 million in 1989, and sold it eight years later for $2 billion. Silas was also an early investor in the fashion house Michael Kors. He owned more than half of the company when it went public in 2011, and sold its stake last year. Mona’s company, JOOR, serves thousands of fashion brands and over 90,000 retailers. To catch the lively insights and humor of these conversations on video, please visit the WCNY Magazine website, http://readwny.com.
Dean Garrett clearly appreciated being in New York: “There is no doubt that New York area alumni are an amazing asset for the school. You do us proud, very proud, every day. I travel to New York City frequently to meet with many of you and I always look forward to those conversations which range from the latest trends on Wall Street, to new startups in the region, to the ever changing Manhattan skyline. I am always so impressed by the energy and expertise of our New York alums, the innovation you bring to your careers and the One of my mantras in industry, and the commitment you life is to listen to as have to Wharton. many voices as you can to get If you are at as many ideas as Wharton, then you want to spend a lot of time in New York — because it is the center of finance. Every day, I go to my office and see ‘1881 — First Business School in the World’ etched in stone. It says the ‘Wharton Business School of Finance,’ but then it says ‘… and Commerce.’ Commerce is an old word, with new meanings that we can explore.”
Dean Garrett asked Silas how his family, went from being one of the quintessential clothing makers in China, to owning you can.“ international fashion brands? Silas: “I didn’t go to college. I wanted to go into business with my father – that was about 40 years ago, when the fashion world in the US, started designer brands for the middleclass market. I told my father that I wanted to make ours the biggest apparel factory in the world, and control my destiny — by manufacturing for brand names. We were
lucky to get in with Ralph Lauren. Then we had the chance to buy Tommy Hilfiger.” The Dean asked Mona: “It strikes me that the combination of immigration and innovation, drove the US miracle in the 20th century, and can continue to do so in the 21st century! So tell me Mona, what does America mean to you?” Mona: “I’m American, but have Indian values. My parents came in the 1960s when America brought in highly skilled labor to the US. I grew up in Buffalo, New York, among physicians and engineers, who were so grateful to be here. They wanted to stay in America, and send their kids to the best schools, to Wharton! Today it has become difficult for educated immigrants to stay in America. I hope the H1-B Visa legislation is passed, because that heyday of the 1960s needs to happen again.” Editor: “I reached out to the Dean, about his approach to the tour.” His response: “A piece of advice that I have always subscribed to is to meet as many people as you can, as soon as you can.” After almost twelve months in this role, and meeting literally thousands of students, faculty, staff and alumni from around the world, I can say two things. Wharton is incredibly good at an extraordinary range of things and the Wharton community is unbelievably
engaged and invested in our success. The Global Conversations Tour has been useful for me to meet as many people as I can, and it has been my real pleasure getting to chat with people like Silas Chou or Mona Bijoor about the state of their businesses, the world in general and the relevance of their Wharton experiences. All these conversations have not only helped me get to know alumni, but also to see the strengths of the institution and the opportunities to grow. Wharton has a preeminent position in the world of finance. But the school is so much more. What makes Wharton great as a whole is our rigorous focus across the board on data and on analytics. This is going to be more important than ever before in a big data world. The division between leaders and analysts will erode, as leaders will make better decisions based on the ability to analyze big data. We tend not to get as much attention or credit as we should for all the innovation and entrepreneurship at Wharton – it is in our DNA. I’d like to turbo charge innovation among students, not only the ideas and products themselves that may or may not succeed, but also the mindset of innovation that will stay with our students forever. A lot of entrepreneurship occurs in New York in finance with Wharton alumni creating hedge funds and private equity firms.
Geoffrey Garrett is Dean and Reliance Professor of Management and Private Enterprise, and Professor of Management at the Wharton School of the University of Pennsylvania.
Dr. Garrett was a member of the Wharton faculty in the Management Department from 1995 to 1997. Prior to his return to Penn, Dr. Garrett held several academic appointments. He was the founding CEO of the United States Studies Centre at the University of Sydney, and he later served as Dean of its business school. Prior to returning to his native Australia, Dr. Garrett was President of the Pacific Council on International Policy in Los Angeles and Dean of the UCLA International Institute. Most recently, he served as Dean of University of New South Wales Business School in Australia. Named one of Australia’s “Top 50 Most Influential People in Education” in 2012 and a highly cited political economist, Dr. Garrett has held continuing academic appointments at Oxford, Stanford and Yale. He is a Fellow of the Australian Academy of the Social Sciences, a Trustee of the Asia Foundation in San Francisco, a Member of the New York-based Council on Foreign Relations, and serves on the editorial board of Global Policy. Dr. Garrett is a well-respected commentator on global business, economics and politics in major media outlets, such as the Los Angeles Times, China’s Global Times, Le Monde, The Times of India and South China Morning Post. Additionally, he was a speaker at TEDx Sydney and has contributed to Foreign Affairs. His academic publications include Partisan Politics in the Global Economy, The Global Diffusion of Markets and Democracy and The Encyclopedia of Political Science. Dr. Garrett holds a B.A. (honors) from the Australian National University, and an M.A. and Ph.D. from Duke University where he was a Fulbright Scholar.
Technology and globalization, the same two forces affecting business are equally important at a business school like Wharton. We are a major player in online education for two major reasons. We want learners all around the world to be able to get a taste of Wharton. We want to experiment in online pedagogy in ways that will help us improve tech-enabled education on campus. We have a fantastic facility in San Francisco. Our alumni network in Silicon Valley is extraordinary, and I don’t think the world knows that, so it’s part of my job to tell people that. Our student body is global. So is our faculty; and so is our curriculum. But in the 21st century, while the world will continue to come to the US, America will need to go to the world too, which is why we opened the Penn Wharton China Center in Beijing in March, have partnerships with INSEAD, in France and helped found business schools in India, Singapore and Thailand. It’s not enough to say we are global, we must be global. Reflections on the tour
Takashi Yoshizaki, WG’10, of www.artbeat. net commented: “It is reinvigorating to get connected with fellow Wharton alumni
Dean Garrett listening to Mona Bijoor, WG'05, and Silas Chou, PAR'14
and learn how they impact society. The Global Conversations tour event in New York showed the future of our Wharton community. I’m grateful to the Dean who conceived the tour and made it happen.
in fashion tech and retail startups. I found lessons for many of the startups I work with, in Mona Bijoor’s insights on how she built her startup Joor to solve a pain point for her customers.”
Sapna Shah, W’93, C’93, of www. redgiraffeadvisors.com. “I do angel investing
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– KT |
He explained that the traditional model — “We write news for readers, and people who want to reach those readers buy ads” — is still valid. That being said, newspaper print advertising revenue has declined in the U.S. by 65% in the past 15 years. Print advertising has been largely replaced by digital advertising, but the bulk of those digital dollars has moved to digital “native” organizations (organizations that are born on the Internet). Worse, a huge amount of content that people used to pay for can now be had for free. Thus, Baker told us that, when he received his promotion to Editorin-Chief, a friend joked he was like the last governor of Massachusetts before the American Revolution. Why then does he feel so optimistic? First, he explained, until a few years ago, newspaper journalism suffered from massive overcapacity. The traditional newspaper model was built around the great regional newspapers, such as The Dallas Morning News, Chicago Tribune and The Los Angeles Times. They covered not only news from the local area, but also news from around the world, because they were “the” source of news for their regions. When Baker was the White House Correspondent for the Financial Times, a full 80 correspondents had their own assigned places, and another 80 stood in the back. Many newspapers had foreign correspondents. As the Digital Age arrived, it became clear that you didn’t actually need all those journalists.
WCNY President's Forum
Editor-in-Chief of The Wall Street Journal
Thriving in a Tough Industry! Gerard Baker, Editor-in-Chief of The Wall Street Journal (WSJ), hopes you are one of the 2.3 million paying subscribers of the WSJ. He also would like to invite you for a beer if you have superb ideas on how to monetize an additional 19 million monthly, non-subscribing readers! Gerard Baker was invited to speak at the Wharton Club of New York President’s Forum on March 10, by WCNY President Kenny Beck, WG’87. He proved to be entertaining and illuminating as he offered up the bad news for the news industry as well as his prescription for it. 10
| Wharton Club of New York | whartonny.com | Spring 2015
Today, newspapers continue to close or close their print editions — such as New Orleans’ The Times-Picayune and Detroit Free Press. Local papers, like The Seattle Times, cover local news. However, the national papers stayed strong. The WSJ has 1,800 reporters around the world, providing the highest quality news from across the globe. While advertising declined, circulation has increased to 2.3 million, the largest selling newspaper by far in the U.S. Baker added, “We still sell 1.3 million printed copies every day. The other 1 million daily readers are digital, and who are increasingly consuming on mobile.” Asked about the opportunities to grow and maintain readership, Baker offered four prescriptions. First, expand cultural coverage. While the WSJ is first and foremost a business newspaper, it has successfully broadened into culture — for example, its appeal to fashion through the popular WSJ Magazine. Also, its luxury real estate portal, Mansions, is one of its most well-read sections and brings in new subscribers. Second, grow globally! Whereas 15% of the Financial Times is in the U.K., at the WSJ, 85% of its readership is in the U.S., so it has a nice opportunity for growth. 2015 acquisition News Corporation’s of Indian media company VCCircle, on top of other recent investments, will enhance its position on the Indian subcontinent. Third, be relevant. One thing the paper has discovered is that young readers, when presented with the WSJ for the first time, value content relevant to their careers and the content on personal finance.
Why Brits Run America's Big News Publications
As content proliferates, the demand for quality that you can trust has increased. People need a guide that they can depend on.”
Fourth, and most critical: Earn and keep your reader’s trust. Baker explained, “As content proliferates, the demand for quality that you can trust has increased. People need a guide that they can depend on. At 125 years, the WSJ has the good fortune to be more trusted by more people than any other news source around the world. I claim no credit for that — I’m the beneficiary of that. That is something I have to protect.”
Did you know that The Wall Street Journal, The New York Times and Bloomberg News are led by Brits? Gerard Baker advanced his selfdeprecating theory on why this is so. Speaking with a clear English accent, he told us he considers it a wonderful privilege to edit The Wall Street Journal, and is sometimes asked how he came to edit the world’s greatest newspaper — and why Brits are managing top American news agencies. He worked closely with Mark Thompson at the BBC, who is now CEO of The New York Times, and he attended Oxford with John Micklethwait, Editor-in-Chief of Bloomberg News. He explained that the answer may be that certain types of Brits have a self-image, a sense that they still have a role to play beyond their real power or abilities. He said this may best be illustrated by a joke about British selfesteem. One day, God calls down from heaven to President Obama, Chinese
President Xi Jinping and British Prime Minister David Cameron. God tells them, “I have very important news for you. I need you to go back and tell your people that the world is going to end tomorrow.” President Obama returns to America, goes on national TV and says, “There’s good news and bad news. The good news is that there is a God, and we God-fearing Americans have been right all along. The bad news is that I met him and He told me the world is going to end tomorrow, and we need to get ready for that.” President Xi Jinping returns to China, goes on national television and says, “I have bad news and, frankly, worse news. We atheist Communist Chinese have been wrong all along — there is a God. Even worse news is that I’ve met Him, and He said the world is going to end tomorrow, and we need to get ready for it.” David Cameron returns to London, appears on national television and announces, “Great news! God considers me one of the three most important people in the world!”
So, despite the decline in the core business, the demand for business and general news reporting that is reliable and objective has never been greater. Several alumni at the event asked how he perceived the future of the U.S. He shared that he recently had lunch with Lloyd Blankfein and asked him a similar question, “Where do you see the most energy and optimism? Baker thought Blankfein might say China or Brazil. Straightaway, Blankfein responded, “Silicon Valley. That is where the most exciting things are going on, where the intellectual power is.” In addition, Baker believes that the transformation of U.S. energy production is one of the significant economic stories of the decade and is changing the global economic equation. In contrast, he perceives that Europe’s global relevance is declining, and it will be messy, with the rising tide of populism. People are tired of waiting for the government to do something. An alumna asked about what it takes to be hired as a reporter at the WSJ. Baker told her that the normal ratio is 2,000 applications received for 20 positions filled. His best advice, he said, is to focus on a specialty. One of the defining characteristics of readers is that they are looking for reliable expertise.
Gerard Baker, chatting with alumni at The President’s Forum
Mr. Baker, a native of England, assumed the role of Editor-in-Chief of The Wall Street Journal on January 1, 2013. Prior to this, Mr. Baker served as Deputy Editor-in-Chief of The Wall Street Journal and Dow Jones Newswires.
Before joining the WSJ, Mr. Baker was the U.S. Editor and an Assistant Editor of The Times of London, where he wrote news and commentary for Britain’s longest continuously published newspaper and oversaw U.S. coverage for the paper and online editions. From 1994 to 2004, Mr. Baker worked for the Financial Times, first as Tokyo Correspondent, where he wrote about the country’s financial crisis, and then, from 1998 to 2002 as Washington Bureau Chief, where he led a team of 10 correspondents and provided extensive reporting and analysis of the Federal Reserve. From 2002 to 2004, he was the Financial Times’ Chief U.S. Commentator and an Associate Editor. Mr. Baker holds a degree in philosophy, politics and economics from Corpus Christi College, Oxford University.
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Wharton Real Estate Investment Group Hosts
Technology Companies That Are Changing the Face of Real Estate
Panelists were Geoff Lewis, Richard Sarkis, WG'07, Jonathan Wasserstrum, and Alex Kopicki, C'03. Nick Petkoff, WG'02, was the moderator.
The Wharton Real Estate Investment Group (WREI) put on a sold-out event featuring the leaders of Technology Companies That Are Changing the Face of Real Estate. Held in Manhattan on February 5, 2015, the panel was moderated by Nick Petkoff, WG’02, President of Better Brokers, LLC. The audience-centric setup gave maximum time to the panelists to introduce themselves, discuss how their firms bring technology to the real estate sector, and enjoy plenty of interaction with the 60 or so real estate professionals in the audience. 12
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The panelists were:
Richard Sarkis, WG’07 , CEO of Reonomy, which provides validated commercial real estate research Alex Kopicki, C’03, CEO of Kinglet, an online marketplace for those seeking smaller furnished office space Jonathan Wasserstrum, CEO of TheSquareFoot, offering technology that makes it easy to search for the perfect office Geoff Lewis, VP of Honest Buildings, which brings building owners and contractors together, with $500 million in deal flow
Richard Sarkis expressed confidence in the confluence of technology and real estate, having just received $13 million in Series B funding for his Manhattan-based company, Reonomy. I asked him to expand on some of his comments, and his experience at the event. Richard, you mentioned that the main competitor to your service, is the actual hours required to pull together the data from primary sources, cleanse it, validate it and piece it together, and that large companies put millions of staff hours toward that exercise. Alternatively, you spoke about Reonomy as almost a black box. It collects the input of raw unedited, unvalidated data on commercial real estate, and then applies Reonomy’s proprietary data science, engineering and product-centric tools — and out comes simple, easy to use, relevant data for, say, an investor or bank loan officer. How is that possible? Reonomy is a technology company at its core. We have a world-class team of data engineers, data scientists and developers that helped us structure and validate the data, as you point out. But, frankly, that is just a starting point. It’s not the data itself that truly matters, but more so, what you do with it. Our job is to present the data in such a way that it is most useful to our end users as part of their day-to-day workflow. That means taking an incredibly complex and sophisticated back-end data engine and coupling it with a simple and elegant front end that drives the end users toward insight and action. How have WCNY events like this, and being a Wharton alumnus, helped you along the way? The events and the Wharton alumni network have been great resources at every stage of building and scaling Reonomy. From getting access to folks to validate early ideas during prelaunch, to introductions to large potential clients as we grow, Wharton has been an invaluable “calling card” for me. Geoff Lewis of Honest Buildings also shared his experience of the event. I loved the WREI event. Many of our customers actually happen to have graduated from the school, so it was great to be in a room full of smart, forward-thinking folks who understand how technology can make their businesses more efficient. The panel also did a nice job of pulling together interesting real estate tech companies that are having a real impact on the way the business operates. Nick, you’ve organized a number of these real estate events for the Club. I like how you facilitate efficiently and stay in the background. Can you talk about why you’re involved, and what you do professionally? I am involved because I love real estate and investing. The impetus for the Club was to get a like-minded group of people to think about, discuss and invest in commercial real estate in New York City, the most exciting and dynamic market in the world. Professionally, I have been in real estate in New York City since 2005 and worked at Massey Knakal (now Cushman and Wakefield) for nine years as a sales broker. In 2014, I launched my own brokerage company, Better Brokers, LLC, focusing on New York City retail and mixed-use properties.
Richard Sarkis, WG’07
It was great to be in a room full of smart, forwardthinking folks who understand how technology can make their businesses more efficient.” What events has WREI held over the past 12 months? We try to do three or four events a year. On January 29, 2015, we hosted a panel with Robert Gray, Jody Kriss and Evan Denner on Real Estate Outlook and Opportunities. That event was moderated by our Chair, Celina Kuoch, WG’98, Managing Partner of Nexus Hill Capital. On June 2014, we held Crowdfunding in Real Estate: A Night With Crowdnetic, Realty Mogul and Fundrise, also moderated by Celina Kuoch. – KT
The Wharton Real Estate Investment Group is a community of Wharton alumni who are
engaged in commercial real estate investments. Through educational seminars, breakfasts with industry leaders and special events, WREI provides members with a forum for visibility and exchange, spotlights the accomplishments of Wharton alumni in the real estate industry, and offers further knowledge about real estate investments. Group Chair Celina Kuoch and Vice Chairs, Nick Petkoff and Eric Bashford, WG'88, invest so much energy in these events for the benefit of alumni and this industry. For more information on getting involved and future events, contact WREI at its WCNY website page or email@example.com.
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Series / Theme the business of relationships
ReedSmith William N. Haddad, W’89
Reed Smith LLP, Partner Board Member and Secretary of the Wharton Club of New York Bill Haddad is congenial. As a natural listener and encourager, (perhaps that comes from being a father of six) he is a re-assuring presence on WCNY’s Board of Directors. Bill is also a leading capital markets and M&A practitioner in New York. He has worked on a full range of securities offerings, and transactions, with a particular focus on international listings, and mergers and acquisitions in the United States, China, Europe, Australia, Eastern Europe, Israel and Ireland. Bill has been involved in more than 100 capital markets transactions, providing a unique familiarity and strength in the area of initial and follow-on public offerings, special purpose acquisition companies, shelf-takedowns, registered directs, PIPEs, at-the-market offerings (ATMs), mergers of public and private companies, going-private transactions, private equity and venture capital formation and investments, 144A debt offerings of public and private companies and rights offerings. What do you do? I’m a partner at Reed Smith, a global law firm that has been around since 1877. We have 1,800 lawyers around the world, located in all the international money centers, and throughout the U.S., Europe, the Middle East and Asia in all the main business centers. We offer a broad spectrum of advice to medium and large companies. For myself, I work mostly in three areas. I help companies go public, representing companies or underwriters to engage in the process of financing. I help clients buy and sell companies in the merger and acquisition space. And I help public companies with their day to day securities questions and filings. I’ve practiced for 20 years, been a partner for 11 years, and a partner at Reed Smith for approximately 4 years. What is a typical day like? My day is spent in board meetings, counseling clients on the issues involved in being public, in raising money, in going public, and helping with their business needs. To be a successful lawyer, you do need to be a great lawyer and you also need to be a valued business adviser. For example, clients ask, what do I need to do next? I say “raise money” they ask: “Where do I go?” Then I refer them to someone in my network of funds, family offices, and investment banks. Can you tell us about some interesting transactions? Last year, I represented a company publicly traded in South Africa that did a ‘rights offering’. Goldman Sachs was the underwriter and they raised $500 million. Besides being tremendously successful, it was interesting because the firm was based in South Africa. As
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part of Reed Smith, I advised them on U.S. securities laws issues. The professionals, meaning the Goldman Sachs team, and the lawyers for both Goldman and the issuer, were based in London. Most of the group meetings were in London, just for convenience. Then I represented a Chinese group, in their majority control investment into a NASDAQ listed company. They invested approximately $25 million and acquired the necessary voting interests, to give them considerable control of the company. Recently, I represented a high-net worth family office. They made a significant purchase of a U.S. precision machine company. There was equity, there was Mezzanine debt, and there was senior debt in the transaction. It was a very successful deal, and now they are looking to do a follow-up transaction. How do you judge if there is a successful deal? Great question. Not everyone knows this, but not every deal closes. So, this deal closed! All sides are happy that it did close, with the way it closed, and content with the terms. And they are going forward with another transaction. What has changed in your work in recent years? What does not change is that you have to continually provide good service, good advice, constantly think ahead for your client, how to protect your client, how they can be successful. In terms of the financial world –we do live in a world that is more liquid. Multiples on M&A deals and available money indicate that in the U.S. the markets are in good shape. Valuations are back up, and confidence is back up. The real change, and this may not be related to 2008, but events seem to happen quicker. Can you give an example? In the oil and gas sector - prices were recently over $100 per barrel. Now because of the weaker economies in Europe and China and the production of oil from shale, the price per barrel can be as low as $50. It’s like a tax break for consumers. Or the way the stock market moves – a few months ago it was 600 points down in one day, partly because of technology trading. However, because of liquidity, there is so much cash that those who saw an opportunity, brought it back up 400 points the same day. Another example is so many industries being interrelated. So, when Russia invades Ukraine, that has a rippling effect. How do you think about managing your clients’ risk? Client’s come to me with transactions or a problem they need to solve. I try to handle it as effectively and as quickly as possible, to
It’s like algebra: You are constantly trying to solve for problems in a transaction.”
close the deal while protecting their interests. It’s like algebra, you are constantly trying to solve for problems in a transaction. In that M&A deal I mentioned, in the final week new due diligence issues arose, things in the financial documents, issues that had to be solved.
you can, to develop your network, and your skill sets. Make the investment in your career, because you just don’t know what’s going to work out sometimes. You know if you look around the globe and if you’re living in the U.S., the opportunities here, you have to recognize that we hit the lottery being in the U.S..
The other way I help them manage risk is to anticipate. For example, I have one early stage biotech company trying to raise several million dollars. My advice to them was that on a parallel path, they needed to keep raising money from various sources – because I’ve seen biotech companies run out of money while they were growing. I’m always reading documents from the SEC – to help clients anticipate securities issues. Having done a number of transactions in various environments, also helps me to give clients the benefit of that experience.
Why was your path to Wharton? I was interested in business, so I attended as an undergraduate. My major was Entrepreneur Management and Accounting. Afterwards I worked a few years at Ernst and Young, and then I attended law school.
What core part of who your personality helps you to be successful? It may surprise you – but when I think of who I am – and what has made me successful – I think it’s work ethic. If people ask me what I’m looking for in new associates that we hire, I just think that work ethic is crucial. It can’t be overemphasized. I’m operating 24/7. I wake up in the morning, I’m already checking emails, and I may have a late night call with Asia or another foreign jurisdicion, because of the time difference. Second, it’s a little underestimated – but I really think our Wharton education is the basis of an ongoing practical base of business knowledge. I am asked daily, for business advice, that education combined with basic acumen has made a difference. What do you wish students understood today? Have a global skillset. And be prepared. My sons are in the Boy Scouts, and I’m active as a leader. Their motto is to Be Prepared. I’d say to students that you got into Wharton because you made preparation a priority. Now prepare for the world we are in which is global, which requires as much intellectual agility as you can develop. I would tell them to take advantage of every opportunity
What is your role in the Wharton Club? I’m a member of the Board of Directors and the Secretary of the club. And I’m on the Steering Committee of the Wharton Alumni Angel Network. I’ve been active for 14 years in the club. Previously I was an officer, the VP of Business Development which included the affinity groups. In fact the hedge fund affinity group started from a breakfast I had with Jason Breemen, WG’02 I asked him, “Why don’t you start a hedge fund affinity group?” He created the Wharton Hedge Fund Network (WHFN). Jewell Huijnen, WG’03, took over, and hit it out of the park. At the Board level, we meet several times per year. We try to execute the strategic vision of the Club to create more opportunities for members and alumni. I make sure minutes are in order from the various meetings. Being a father of six is an accomplishment in the modern age. How do you balance that with your corporate life? I have a saintly wife, a woman of patience. She does a great job. It’s not for everybody, but we love it. Our first two children went to Penn, so that was nice. It is all – consuming, but if you are passionate about something, then it comes naturally. People say do what you love, and that’s what we do. While there is never a dull moment with six children, it is the most rewarding thing you can do with your time.
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Caroline Strzalka, C’00, WG’05 and Christine Strzalka
Flowers and Weddings Caroline Strzalka, C’00, WG’05
Co-Founder of itsbyu and Vice President of Digital Content Sales and Global Development for Scholastic Media I felt daunted by Caroline Strzalka. She knew Big Bird on a firstname basis, and made Elmo into a video game. That was 2010, and Caroline had just become Co-Head of the Wharton NonProfit and Social Impact Affinity Group. She was also Director of Business Development for Worldwide Media Distribution at Sesame Workshop. Today, Caroline continues her career in kids’ content as Vice President of Digital Content Sales and Global Development for Scholastic Media. On nights and weekends, she works with her sister Christine on their own creative endeavor, itsbyu. This doit-yourself (DIY) kit service enables anyone to become a florist. Caroline shared her journey as a side-hustling alumna. Can you describe itsbyu? Itsbyu sells kits that empower anyone to create their own floral designs — and save 50% of the price that a florist would charge. It’s perfect for weddings, home decorating and dinner parties, proms, and really for any occasion. We send you everything you need to make your own flower design — the flowers right from the farm, the tools and accessories, and an online streaming video with step-by-step instructions. We also offer a subscription bouquet delivery service and DIY perfume kits, and will soon even have kits for kids. What is your market? We see our entry customers as millennial brides-to-be. They see that it’s fun, easy and much less expensive to make their own flower designs. Plus, there’s huge bragging rights and immediate Instagramming! They return for kits that let them make their own beautiful cornucopia for Thanksgiving, a wreath for the door or a fairy garden with their kids. How did Wharton play a role in starting your own company? Wharton planted a seed in me that said, “I can do this.” My majors were marketing and entrepreneurial management, and I always kept in the back of my mind the idea of starting my own company — a place where I could create my own company culture, and make something really cool. At Wharton, I was Editor-in-Chief of the yearbook The Wharton Review, rowed with the Wharton crew
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team, and was the Community Service Chair of my cohort. I have a lot of energy — it’s one of my superpowers. What have you learned? 1. A startup costs more than you think. Multiply your estimate by four in terms of time, opportunity costs and money. 2. The devil is in the details, and there’s more to do than you think. We had to customize our own e-commerce platform. We had to launch with enough product to make the business compelling. We had to switch developers and videographers. 3. Customers expect perfection. You don’t get a second chance to make a first impression. 4. You have to sacrifice almost everything to start your own company, but it’s very satisfying to be able to point to something you built. I work at my corporate job, go home, eat a quick dinner and then work until about 1 a.m. on itsbyu. I lost some friends, but also gained friends and new contacts in the process! As business partners, my sister and I have become much closer. 5. Allocate more money for marketing than you think — you need to educate customers about who you are. How is the outlook after your first four months? We have received such favorable responses to our open beta, and a lot of potential customers have been writing to us with kits that they would like to see. Be on the lookout for a full launch of the site this summer, with a ton of new products at different price points! You’ll also be hearing a lot more about us on social media, in blogs and maybe even on TV! How have you been involved with the Wharton Club of New York? I enjoyed volunteering as a student. So, once I settled into my work, as an alumna, I tried to involve myself again. I was Co-Chair of the WCNY Non-Profit and Social Impact Affinity Group from 2010 to 2014, where we had some wonderful events. I also mentor Penn and Wharton alumni, and participate in Wharton Women in Business and Media and Entrepreneurship. You can reach Caroline at firstname.lastname@example.org
Wedding Planning Carmen Feliciano, WG’11
CEO & Founder Penny And Mary Carmen Feliciano wants to make sure your wedding transitions seamlessly from inspiration to the perfect event. Carmen came to the U.S. from the Philippines to study at Wharton, with aspirations to make positive change, using technology. What could be more positive then helping couples enjoy stress-less weddings? What problem do you help clients solve? Wedding planning is a project management nightmare. You have finite resources (time and budget) to plan and execute a perfect wedding that you will hopefully only have once in your life. Current wedding websites just add to the feeling of being overwhelmed because they focus mainly on inspiration and retail. Our platform, Penny and Mary, helps clients to first organize what they want and then facilitate action using their “Plan”. Our visual and collaborative tool helps clients engage those helping them to make their weddings happen, whether it is mom, the wedding planner or potential vendors. Planners also love our tool because they want to know the couple’s vision of their wedding so they can execute it well. For example, I have a wedding planner as well, and I use our platform to communicate what I want for my own wedding. How did you come to create Penny and Mary? My co-founder was a maid of honor five times, and she was helping her friends to plan their weddings. It was so inefficient! She approached me about creating a solution in this space because of my experience in both technology start-ups and consumer products. How has being a Wharton alum in New York City played a role in your life and startup? I didn’t have family in the US when I moved here for my MBA, so Wharton plays a big role in both my social and start-up life. Specific to Penny and Mary, a lot of Wharton alumni have been instrumental to our success so far, and I try to take the call from fellow classmates on the same start-up journey. I mentor and interview Wharton applicants. The Wharton Alumni Club in NY also produces great entrepreneurship events that I try to attend whenever I can.
(Top l.) Carmen Feliciano, WG’11, with co-founder, Yina Liang, WG’11 (r.) Carmen Feliciano
My dream is to contribute to a world where everyone can dream big. My journey from a small town in Southern Philippines to Wharton was founded in my love for reading.” What is your dream from here? My personal dream is to help others dream big. My journey from a small town in southern Philippines to Wharton, started with my love for reading. So while at Wharton, I founded a nonprofit called Kendii, which promotes writing and creativity among young people in the Philippines. Kendii awards students who submit good work in fiction, poetry and essays. Kendii also holds writing workshops in a few high schools. We currently reach over 20,000 students and have garnered support from local celebrities. When you don’t have resources, how have you dealt with that, whether it be connections or capital? You need to be bold. Cold emailing people is not exactly fun, but you need to just do it and be thoughtful when you do. If you don’t have a lot of money or resources, you need to work on selling your vision to the people who do - whether investors or early employees. I’ve also seen the power of simply telling people what you need. People generally love to help. Lastly, you do have talent. You need to be generous with it and give back as well. You can reach Carmen at email@example.com. Read articles online at readwny.com
Helping to Finance
a More Stable World Linda Habgood, WG’98 Delphos International
US Government assistance to the world is big business. Through the Overseas Private Investment Corporation (OPIC) and other development finance institutions (DFIs), billions of dollars in loans are made to companies and projects in emerging markets. The purpose behind these loans is to strengthen the global
economy and build more stable nations that will require less aid. It can be a win-win for everyone involved. Implementation is key. How do the best projects navigate their way through complex rules and requirements of the DFIs? How do project sponsors, with less integrity, get weeded out? How is the default rate of loans minimized? The process begs for an advisory firm which deeply understands all the stakeholders and can facilitate the complex details of the transaction. Linda Habgood, WG’98, graduated the Wharton Executive MBA program, (WEMBA), ready to accomplish just that. Linda is an owner and director of Delphos International, a specialized advisory firm that assists companies in achieving their emerging market strategies by using the financial resources of the US government, foreign governments, and multilateral organizations. Linda’s career illustrates how one can use a finance background to make a big impact in the social sector. She agreed to answer a few questions about her work.
Linda’s career illustrates how to use a finance background to make a big impact in the social sector.
What kind of companies or projects come across your desk at Delphos International? Anyone in an emerging market who is expanding a business, starting a business or looking to perform a feasibility study for a project. We help these companies and project developers connect with long-term capital that is often unavailable locally. Our value add comes from knowing the relevant sources of capital that are resident in the export credit agencies, DFIs and trade promotion agencies around the globe and helping to match our clients with the best ones. What problem would a client typically come to you with? A client might say: “We want to expand our solar business into Latin America. We’re having difficulty getting long-term capital from our commercial banks, most of whom pared back after the economic crisis.” Or a client in Indonesia might tell us: “Our local banks don’t have the project finance products we need.” Or: Someone with a number of business opportunities will come to us, needing a project finance team. We can help in all of these scenarios, and in most cases, help a client to identify the most effective capital in the shortest amount of time.
Linda Habgood, WG’98
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What is the role of Delphos International? In almost all cases, we are an extension of a client’s finance department. We bring in the emerging markets finance specialty. Being located in New York and Washington DC, close to the international finance organizations such as such as OPIC, World
Linda’s career illustrates how a finance background can make a big impact in the social sector.
Anchovy processing in Peru and solar solutions for cell towers in India are just two examples of businesses that Delphos International has raised long-term, low cost debt capital for.
Bank, Export-Import Bank, and The Inter-American Development Bank means that Delphos also offers clients an office down the street from its lender. What was your path to Wharton? Wharton was the perfect solution. I came into my undergraduate studies knowing that I wanted to work in finance and publicprivate partnerships. I tailor-made a major for myself, and with perseverance landed a job at Chase In Chase’s international Credit Audit department, I learned to understand the components of performing vs. non-performing loans. For example, a borrower may be creditworthy, but problems can still occur if a loan isn’t documented properly, or perhaps the financial analysis underlying the loan is faulty. Every day in Credit Audit, we encountered a case study in Lending 101. Later I began working at OPIC, which had long been a dream of mine. Right after starting, I received an offer for a full ride to a top business school, but I turned it down. I wanted to keep working, and asked OPIC if they would support me in applying to WEMBA. I was accepted and OPIC was very generous with its flexibility and its financial support. How did WEMBA help you prepare for your work? WEMBA was fascinating and terrific for me! I took my workplace experiences to the classroom and my classroom experience to work every single week. It reinforced my foundations in accounting and finance, building my critical thinking and group dynamics – and helping me to identify and craft successful business concepts and transactions. The WEMBA program allowed me to move from OPIC to Delphos International, where I have since moved from a VP to a partner.
WEMBA Program Director Howard “Howie” Kaufold, Cathy Maloney and Diane Sharp were all critical components in my experience at Wharton, and made the experience richer. Their support was invaluable. What’s your ongoing connection to Wharton as an alumna? I try to accept any request to support the School. For many years I have supported the career counseling program at WEMBA. Most WEMBAs stay with their companies, post-graduation. However they still need to prepare to advance in their careers, or just be better at what they do – and of course their skills are greatly enhanced through WEMBA. I do as much as I can because I received so much help from others along the way. I speak at Wharton Women conferences, and am always open to ways I can stay involved in the school or club. To give alumni an idea of your profession, what are the steps to finance a large development project? What makes it challenging is that it is never the same. You can draw on past experience, track record and professional skills, but there are always going to be surprises in emerging markets! The preparation before approaching sources of capital is important. Once we determine that we are working with a group that we believe will be well received by the government agencies, then we put the story together—the business plan, the model, and the risk-mitigation analysis. So much of being able to find a suitable investor and/or creditor for a business or project is to make sure the story is understandable and comprehensive. What we bring to the table is working knowledge of the programs and the process of the government agencies, so we can help find the best fit for a client. Then it is about anticipating, Read articles online at readwny.com
Alumni Delphos International assisted Wananchi Group – a leading East Africa media conglomerate which includes the internet service provider, Zuku-- in a series of debt and equity raises totaling more than $400 million in commitments.
Ms. Habgood has spent her entire career
in credit and finance. Based on her experience as a banker, advisor and principal, her forte lies in underwriting and structuring transactions to meet the needs and requirements of strategic and financial investors and lenders. Ms. Habgood has worked with a diverse domestic and international client base to design and arrange innovative financial solutions. She has arranged hundreds of millions of dollars in longterm, limited recourse debt financing and equity for private investors, and has visited, performed due diligence and worked on financings in over 70 countries. Previously, Ms. Habgood was a senior project finance officer at the OPIC and a corporate finance banker specializing in secured lending and leveraged leasing for Chase Manhattan Bank, NA. She received her MBA from the Wharton School of the University of Pennsylvania. Ms. Habgood is a registered representative and holds a FINRA Series 7 Securities License. She received her BA from William and Mary.
communicating and effective negotiating in order to bring, in many cases, a dozen project participants together to financial closing. What proportion of the companies you look at do you take on as a client? Not everyone is well-suited for government capital solution, so while we don’t track the stats, I probably move forward on one in seven opportunities that I see. Oftentimes, a government agency will recommend to a strong developer, that they come talk to us, which helps us in our screening. Who hires you? Our largest class of clients is the equity investors, business owners or developers of a project. They find themselves in an emerging market and the local banks are not able to provide them with the growth capital they need. We offer access to the world of international development finance and a finance team to support them in the process of obtaining the capital they need. Second, we also work for the government agencies themselves. We are on the approved list of advisors for OPIC, the US Trade and Development Agency and the U.S. Export-Import Bank. Many of these agencies are not capital constrained, just human resource constrained, so we help expand their deal processing capacity. What is different about doing finance in an emerging market? One challenge is that the regulatory systems in many emerging countries are still evolving. Another vulnerability is the election cycles. For example, we were working with a group that was installing solar solutions for rural telecom towers. Their installation rate declined to almost zero in advance of the last presidential election because every vehicle in certain states were reserved to move election campaigners around the countryside. There are also capacity issues. Even if you get the financing; a company may face challenges in reaching full operations in these typically less developed environments. For example we had a client with a large infrastructure project who could not obtain sufficient concrete on time. 20
| Wharton Club of New York | whartonny.com | Spring 2015
What is the subtle part of due diligence? Make sure you are dealing with honest people with full capacity for the process. We always try to get that right. We spend a lot of time making sure we are working with people of integrity. Clients need to understand that they must have resources to cover their running costs and, keep the process moving ahead while we are obtaining the long-term finance. I will typically ask: “Are you planning to pursue your business investments while we seek financing for you?” Will you be able to keep putting money into the business even if the funding is delayed?” It is also important that developers or sponsors fully understand the undertakings required to borrow from a government agency. There is a minimum amount of “skin in the game” that any lender or investor will want to see. Finally, we often help clients to break their large projects down into smaller, but still financeable tranches. This helps to manage the time and capital commitments of the developer and his promoters. If part of a project can become operational ahead of the whole, then Phase I can become a source of cash to fund the remaining portions of the large project. What kind of careers are there available for alumni in your field? There are a lot of opportunities in the development financing field. One can work for a law firm, developer, bank, NGO, for a private equity fund, or for a finance institution doing project finance. A good understanding of finance is important. Even the best lawyers in our field are the ones that understand finance and accounting. There are also interesting opportunities to work for a government agency. Because there are a lot of moving parts in these transactions, obtaining experience by looking at deals from a variety of perspectives will add to your effectiveness. A lot of parties need to come together on common ground for these transactions to be successful. It’s a dynamic field, and there is always something interesting out there. – KT
Three Wharton Attorneys Walk Into a Club Meeting...
The Founding of the WCNY Legal Affinity Group It turns out that a lot of Wharton alumni are attorneys. Once you get past the gratuitous lawyer jokes, it turns out that Wharton’s attorneys have a lot in common: a desire to help people, a love of the way the justice system can solve the problems that people and businesses encounter, and an appreciation of the hundreds of years of precedent that shaped the way Americans resolve conflict. When New York attorney, Lew Tesser, W’74, Fels MPA, called the first meeting of the Wharton Legal Network (WhLN) to order on November 18, 2014, all those in the crowded room immediately sensed that this was a group that could unite for a common purpose — to help one another and to help the greater Wharton community in the New York metropolitan area. The group members network, socialize, discuss practice problems, host newsworthy and topical speakers, foster one another’s professional development, and seek to participate with WCNY members and affinity groups. The WhLN’s mission is to: • Exchange information on contemporary legal issues • Provide programs allowing members to meet and learn from leaders in the legal and judicial fields • Provide an atmosphere of collegiality and cooperation • Acquaint members with one another’s areas of expertise • All to the end of promoting civility in legal practice and of providing
better knowledge of the law, better representation of clients, enhancement of the members’ practices and legal endeavors, and an opportunity to contribute to the public’s respect for the legal system Volunteering their leadership to WhLN are: Deborah Jagoda, W’81 coordinates Diane Krausz, W’77, a committee to develop a speaker program. These speakers will include lawyers and non-lawyers, largely from the Wharton community, who will present timely and topical presentations to lawyers and nonlawyers regarding legal-related subjects. Pamela Lehto, WG’90, and Marc Edelman, WG’99, will be spearheading a large committee to plan events for lawyers and nonlawyers that will focus on Wharton networking, rainmaking, practical startup and management techniques, and other topics of interest to a lot of WCNY members. Jim Shenwick, WG’79, leads a committee to help WhLN members communicate with one another and with members of the WCNY generally, to develop a website, and to otherwise help plan and administer WhLN. Chair Lew Tesser would love to hear from all WCNY members as to how this group can help serve WCNY members’ interests and programs, and from other affinity groups as to how WhLN can collaborate with them. Lew can be reached at Ltesser@tesserryan. com
Former U.S. Attorney General, Michael Mukasey, and Lew Tesser, W’74, FELS MPA
Lew is the President of the New York County Lawyers’ Association. Last year, he was Chair of the General Practice Section of the New York State Bar Association. He also served as President of the egalitarian Congregation Sons of Israel in Upper Nyack, New York.
When Lew is not helping people connect, he is busy as the Senior Partner of Tesser, Ryan, & Rochman, LLP, a business law firm in New York City. The firm represents entrepreneurial and established businesses in their formations, mergers, transactions, governmental affairs and disputes, and defends executives accused of white-collar offenses. Lew, in particular, is the dispute resolver and head of the firm’s litigation department. Lew is the Editor-in-Chief of The New York Rules of Professional Conduct (Oxford University Press, 2012). Lew is the proud husband of Marjorie Altman Tesser; father of Shauna, Ben and Randall; and grandfather of Will.
Read articles online at readwny.com
Club Benefactor Members:
The Wharton Club of New York appreciates the enthusiastic support of the following premium members:
Ramkrishan Hinduja, BSE, WG’91 Hinduja Group of Companies Regional Chairman, Americas (212) 355-0755 www.hindujagroup.com Daniel Lowy, WG’13 LFG America Investment Manager, Private Transactions (646) 681-2225 www.nyscq.com Christopher Stavrou, WG’67 Stavrou Partners, LP General Partner (212) 297-6110
Gold Members: Michael Graves, W’95 SAC Capital Advisors Portfolio Manager Daniel Katz, W’87 PSK Supermarkets Vice President (914) 667-6400 Allen Levinson, W’77, WG’78 Credit Risk Advisors, LP Principal (201) 934-7768 Alan Vanderborght, WEV’05 Torreya Emerging Markets CEO (609) 970-4398 www.torreya-em.com Janice Stanton, W’81 Contrarian Capital Management President and Portfolio Manager (203) 862-8204 www.contrariancapital.com Karl O’Farrell, WG’89 Centrifugal Associates Group, LLC Founding Member, Chief Operating Officer (212) 798-3152
Take the Call! The Wharton alumni community is one of the most exclusive and powerful networks in the world. A key element to our success is the willingness of alumni to help other alumni. Take the Call is a simple concept: Wharton alumni should buy from, hire and help Wharton alumni. And if a fellow Wharton alum calls us for any reason, we Take the Call.
The Take the Call Forum allows you to directly reach 30,000 Wharton alumni in the New York City metropolitan area. Promote yourself! Find opportunities offered by your fellow Wharton alumni! Help alumni get answers! Gain ideas and useful information! Just submit your message at www. whartonny.com/forum.html. Here are some excerpts from the latest Take the Call Forum. Basketball, Anyone?
Anthony Price, W’79, Captain of the Penn Final Four basketball team, and his son, AJ Price, a six-year NBA player, have formed a not-for-profit, Paying the Price Foundation, and is raising money through indiegogo.com. Search for “Paying the Price Foundation,” and give your support. Healthy Real Estate
Daniel Lowy, WG’13, is looking for anyone interested in healthcare real estate development opportunities in Queens, NY. Djlowy@me.com.
Large or Small Graphic Design
My firm, Tornek Design Associates (www. tornekdesign.com) provides graphic design services to companies of all sizes, in all industries. Thanks! Scott Harris Tornek, C87 WG95 Productivity Through Small Changes
I teach my workshop participants to improve their productivity through making small changes in how they operate. This results in a big impact on their work performance and quality of life. Please contact me at Sharon@ControlChaos.org. Thanks, Sharon Danzger, W’87 Become a WCNY Volunteer!
Over 220 Wharton alumni volunteers provide business, career and social opportunities to over 30,000 Wharton alumni in the New York metropolitan area. Exciting new initiatives are being developed! For more info, see www.whartonny.com/article. html?aid=348.
YES, I want to be a Contributing Member of the Wharton Club of New York, giving me benefits including: y More access to fellow alumni y Eligibility for leadership positions
y 1/2 price on most WCNY events y Special, members-only discounts on special services, and health insurance.
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Supporting Membership - $95/year Silver Membership - $500/year
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To complete your application online, please visit http://www.whartonny.com/memsub.html
Or please complete and mail to: Wharton Business School Club of New York, 1324 Lexington Avenue, Suite 409 New York, NY 10128 Questions? Contact Gabriela Sanchez at firstname.lastname@example.org
WCNY – CALENDAR The Future of Retail & The Role of Corporate VC
David Tisch, C’03
Wharton Alumni Angel Network (WAAN) Wednesday, June 17, 2015 at 6:00 PM Location: Midtown (the address will be emailed to all registered guests prior to the event) J. Skyler Fernandes, is founding Managing Director of Simon Venture Group (SVG), the venture capital arm of Simon Property Group, an S&P 100 company and the largest retail real estate company in the world. The discussion will include insights on the innovations happening within physical brick and mortar retail
Wharton Entrepreneurs Education and Resource Network (WE-EARN) Wednesday, June 24, 2015 at 6:15 Join the Wharton Entrepreneurs Group and angel investor and entrepreneur, David Tisch. David is the Managing Partner of BoxGroup, a New York City based angel capital firm. BoxGroup is an investor in over 160 seed-stage companies. David is also the co-founder and Chairman of Spring, a mobile marketplace where customers shop directly within the app from a curated community of brands. David is the co-founder of TechStars NYC.
Yankees Take on the Phillies
An Evening of Shopping + Networking at the Adornia Store Special & Social Events Committee Thursday July 16, 2015 at 6:00 P.M. Location: ADORNIA (Between 3rd Ave. and Lexington) Enjoy a private shopping event with champagne and 20% off the jewelry collection. Tickets: FREE for members; $10 for non-members.
Tuesday, June 23, 2015 at 7:00 PM Yankees Stadium: 1 E 161st Street Bronx, NY 10451 The Bronx Bombers take on the Fightin’ Phils in an interleague game between that re-visits the ’09 World Series.
Check website for full details on exceptional upcoming events!
The Wharton Club of New York Magazine, is mailed to 27,000 alumni in the New York Metro region. This issue focuses on Dean Geoffrey Garret'...
Published on Jun 16, 2015
The Wharton Club of New York Magazine, is mailed to 27,000 alumni in the New York Metro region. This issue focuses on Dean Geoffrey Garret'...