TEACHING & LEARNING
Good
as Goldman
OUTREACH
Return
on Restlessness
PLUS: Video of alumnus Peter Nicholas
PLUS: Two Professors + Two Graduate Students = Fortuitous Start
Faces of Wharton Entrepreneurship
RESEARCH
Bridge
Over the River Why
Is There a Robot in Your Future? Helen Greiner Thinks So
Good as Goldman
Wharton
Alum Amir Goldman Brings VC Experience to
Business Plan Class.
When Amir Goldman
left Wharton with his bachelor's degree in 1994, he took a traditional
path and landed a job on Wall Street as an investment banker.
Then a year later, he turned around and did something unexpected: He quit New York and moved to Israel, unsure of what his plans were beyond finding some sort of job in the investment business. "I got tired of wearing a suit and a tie and taking the subway into Manhattan," he says. Plus, he figured that Israel's fledgling high-tech scene offered more opportunities for a young guy.
In New York, he was just another of a league of recent college graduates from top schools. But in Tel Aviv, his American bachelor's and fluent English might make him a hot job candidate.
His hunch paid off. Within a week of arriving, he had half a dozen job offers from Israeli investment firms. He picked one doing mergers and acquisitions for an Israeli conglomerate with a merchant-banking and venture-capital arm.
"I had a cultural fluency that was uncommon in Israel then," he recalls. "There weren't a lot of Americans from business schools there because there weren't that many great jobs. In 1995, Lehman Brothers had two investment bankers on the ground. Another firm had one, and there weren't any U.S. venture capital firms there."
Today, Goldman is back at Wharton and, as a Wharton Entrepreneurial Programs instructor, is sharing the expertise acquired during a decade as an investment banker and venture capitalist, mostly either in Israel or working with Israeli firms. The class he taught, "Formation and Implementation of Entrepreneurial Ventures," combines his experience with theories and tools developed by Ian MacMillan, director of the Sol C. Snider Center for Entrepreneurial Research and a Wharton management and entrepreneurship professor.
The match works, say two students who are taking the class this spring. Howard Katzenberg and Rahul Kothari, both 2006 MBA candidates, also are members of a team, called MuscleMorph, which won the grand prize at the Venture Finals of this year's Wharton Business Plan Competition. MuscleMorph aims to make motion devices for prosthetics applications.
"The difference between Amir's class and others that I've taken at Wharton is his approach," Kothari says. "It draws more on his real-life experience as a venture capitalist. And he brings speakers, people he knows from his business career, into every class."
The academic underpinnings are just as beneficial as you try to hammer out a business plan, Katzenberg says. "Prof. MacMillan's theories have helped us solidify our strategy and think about our business in ways we wouldn't have otherwise," he says. "He has something called discovery-driven planning. You say, ‘If I'm going to have X amount of revenues in five years, then what are the assumptions that I have to have to get to that?' It really makes you think about the nuts and bolts of the business."
The class necessarily draws extensively on Goldman's stint in Israel. When he started there, the country's high-tech sector was just emerging from its adolescence. "When I was doing M&A in the U.S., middle-market deals were between $20 million and $100 million. In Israel back then, a $100 million deal was huge."
While there, he helped
to sell an Israeli bank, owned by the Rothschild family, to a South
African multinational. He sparked
the deal by
approaching the
South Africans, whom he had met a few months before. "I
was just a kid, but the partner who'd originally brought
them in had left the firm, so I just picked up the phone and
called them."
He returned to the United States in the late '90s to earn his MBA
at Harvard University and then joined the New York office of an Israeli
venture-capital
firm. He spent three years there and eventually jumped to TL
Ventures in Wayne, Pa.
At TL, he has focused
on investing in companies in Israel and
the Mid-Atlantic region of the U.S., especially those in
the information-technology
sector. But one interesting deal of his involves high-tech
textiles. Noble Biomaterials
in
Scranton, Pa., has devised a way to coat nylon with silver.
When woven
into garments, the resulting fabric kills odors and conducts
heat, allowing for
better cooling.
He also has invested in Kashya, an Israeli software firm
that specializes in disaster recovery and data replication. "It was founded by three entrepreneurs
who came directly out of one of the elite Israeli military intelligence units."
"I don't know exactly what they did there," he quips. "If they told me, they'd have to kill me."
After returning to Philadelphia, he met Prof. Raffi Amit, co-director of Wharton Entrepreneurial Programs. Amit, a native of Israel, served on the board of one of the companies that Goldman had worked with in Israel. "I was introduced to Raffi because he's an active participant in the early-stage business community both here and in Israel." Amit invited him first to guest lecture at Wharton and then to teach a class.
The aim of Goldman's class is to introduce students to the process of researching and writing a business plan and finding funding sources appropriate to their goals. He calls the first part of the process the validation phase. In it, he teaches students to use tools like discovery-driven planning and consumption chains to assess the validity of their business ideas. Then comes the translation phase in which they take their research on a potential market and turn it into a plan. "That's where you have to ask yourself, ‘How successful does this venture have to be that it's worth passing up an opportunity to work at Goldman Sachs?' Goldman says.
Part three is implementation, which entails finding and tapping into resources, including what Goldman calls "your social assets" (also known as friends and family), to a turn a plan into a real company. And part four is exit strategies. "One thing that I like to focus on is that VC is a sexy business where we talk about selling a business in five to seven years. But you can also build an entrepreneurial venture that generates real cash income for the founders and their families for decades. The idea is to open their mind that you're not just building a company to sell it. If you choose the VC route, you have to look at exits. But you don't have to do it that way. You can bootstrap a company and keep it."
One of Goldman's guest speakers was Jay Starr who introduced students to alternatives to venture capital. Starr owns a factoring company — a firm that makes loans secured by its clients' receivables. "He explains asset-based lending and borrowing money from hedge funds," Goldman says. "And it's a double story because his children are in his business, so he talks about family businesses, too."
Likewise, Goldman
introduced the class to Philadelphia serial-entrepreneur Gary Erlbaum,
whose family
owned the David's Bridal chain. Erlbaum explained
that entrepreneurship isn't always something
that follows a predictable formula. "Gary
talks about how he makes his decisions by gut and
then just works hard," Goldman says.
"I want my students to understand that, despite all of the science we try
to put around this stuff, instincts, hard work and luck matter, too."
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wharton Entrepreneurial Programs