Ethical Investing, pt2

In my previous blog post, I covered the first half of Rick Zitelman's presentation to the Technion Entrepreneurship Club on ethics and investing. After concluding his discussion of Jewish business ethics, Rick transitioned to a more general presentation on investing in Israel and investing overall. 

"Anne, Kelley, and Don chatting with Rick Zitelman"
Photo by Kristin Thompson

For many years, Rick has been an investor in companies - as a venture capitalist - as well as a principal advisor to other investors and investment firms. Further, he has been (and currently is) an investor in Israeli companies. As such, he has a wide range of hard won advice to offer to investors - especially those looking to invest in Israel.

In regards to investing in general, Rick offered nine "rules" to live by ...

• There is money and then there is SMART money.
• Smart investors invest in people - passion and potential are critical.
• Remember, it ALWAYS takes longer and costs more.
• It's better to have more capital than less.
• It's better to have a small piece of a big pie, than a big piece of a small pie.
• Protect your IP, but remember, it takes a lot of money and time.
• Play to your strengths and learn to work with your weaknesses.
• There are three types of investors: Lead, Co-, and Passive.
• Valuations are never easy. Take your time and do your homework.

As you can imagine, hearing Rick's thoughts about investing in Israel (specifically his views on the American perspective) was also of keen interest to the Israeli Technion students in the audience - especially those involved in high-tech start-ups - or those considering starting their own ventures. For them, Rick had a few key pieces of wisdom.

• Investors look for reasons not to invest. Don't let poor communication be why.
• Time differences can play havoc. Be prepared to work odd hours.
• When dealing with America, Shabbat removes a significant portion of the week.
• As a deal develops, it becomes good to have partners in both the US and Israel. 

Rick concluded his talk by discussing a final criteria for new ventures in Israel. According to Rick, the Israeli government's Office of Chief Scientist (as well as many other local incubators) offer lucrative sources of early stage financing. However, he indicated that investors and firms should really do their homework before signing onto one of these partnerships, as there are significant pros and cons to following this path. The avenues available for exit can narrow if a firm accepts investment from these entities.

Rick's talk was really well received. He offered both the Smith School and Technion students a great overview of Jewish business ethics, investing, and investing in Israel.

Ethical Investing, pt1

This past Wednesday, the Smith team had the opportunity to listen as one of our program's benefactors, Rick Zitelman, presented to the Technion Entrepreneurship Club. Rick - who maintains an apartment in Jerusalem - is in Israel for the next few weeks and took time out of his schedule to give a talk on three topics close to his heart, 1) business ethics from a Jewish perspective, 2) investing in Israel, and 3) investing in general. In fairness to the amount of information Rick covered, I'm splitting my coverage into two posts.

Owner and president of the The Zitelman Group (TZG), a Maryland merchant and investment bank, Rick has over 30+ years experience in the financial services sector. TZG provides asset management, investment and merchant banking, investment advisory and active investor services. Additionally, Rick is a principal at Valuation Services, a Washington, D.C. financial valuation firm. He speaks frequently on the topic of business ethics and corporate social responsibility. Further, Rick is a strong advocate for the University of Maryland, the Robert H. Smith School of Business, the Dingman Center for Entrepreneurship, Judaism and Israel.

The presentation kicked off with Rick leading a discussion on business ethics from a Jewish perspective. This topic was definitely of interest to our team - especially in light of the fact that we had all just completed Professor Lele's business ethics and social responsibility course this past term. As we came to find out, business ethics has long been considered an integral component of Jewish written law. From the Mishnah and Gemara to the Talmud and Mishneh Torah, all contain concrete advice on behavior in certain business situations.

"Individuals have a responsibility to conduct themselves in an honest and forthright way. Organizations, even while increasing profits, need to recognize some form of corporate social responsibility." - Business Ethics: A Jewish Perspective

Rick's presentation also incorporated a business case study as well. The meeting's participants (us included) broke out into separate groups and analyzed the case, as well as attempted to answer a few questions that had been provided.

"Rick Zitelman talks with an ethics breakout session"

Photo by Kristin Thompson

After a few minutes to confer with our group - and discuss the case in breakout sessions with Rick himself - he led us through a discussion of the case and possible options. Rick then supplemented this with the proscribed actions from a Jewish perspective. Altogether, it was definitely enlightening to explore and discuss this topic - and it helped us gain insight into an integral aspect of the Jewish and Israeli business mindset.