Blumberg Capital

Blumberg Capital INTRODUCTIONMartin: Hi, today we are in San Francisco in the Blumberg Capital Office with David. David, who are you and what do you do?David: David Blumberg, I’m the founder and managing partner of Blumberg Capital. And we’re a very focused specialized fund. We focus very much on early stage information technology, that’s mostly software and it brings us across different geographies. We’ve started in the Bay Area, San Francisco and branched out quite early to Israel, New York as a triangle then along the way found out about the great brands in Germany and so I’ve been in Berlin mostly, with some in Munich and Hamburg, some investments there. And then along the way I also have found some great opportunities up in Vancouver, our neighbor to the north and then down to Los Angeles. So those are the four or five places. It’s interesting because I just read yesterday a study saying that in the opinion of US investor, the top four countries for early stage venture capital invest ments are US, Israel, Canada and Germany.Martin: Canada as well, okay.David: Yes, so somehow we’ve got it just exactly right per the view of other investors and that’s the places that we have main investments and where we have some successes to talk about.Martin: What did you do before you started this fund?David: I’ve been in venture capital for many years and I really started out directly in venture capital which is very rare. What happened is in college, I had thought I wanted to solve big problems in the world and at my age, when I was in that young high school, college time where I thought, oh the solution to big problems for the world is government. Government knows best. They know how to solve problems. So I started studying international relations in government at Harvard College and I went to work in Washington for three summers. And at the end of those three summers, I realized, ‘Ooh, I don’t think government is the solution, I think it’s more of the cause of t he problems’. The Politicians like to reelect themselves and so they’re willing to offer or promise anything to anybody to get elected and they don’t really think about the long-term solutions. Whereas, in the market economy, there’s so much competition, if you’re not serving your customers on a daily basis, you go out of business. So for that reason and other reasons that science needs business to make a takeout out of the lab, I think the niche of a combination of science and entrepreneurship is fantastic for unleashing great things into the world and helping lots of people move up into a happy middle class safe, healthy lifestyle. That’s what my personal mission is.Now the way that it worked is when I was in college, I started a company, because I was a poorer or middâ€"not poor, I was a middle class student that I needed to pay for Harvard which is very expensive. And I got this job and I had such a great success personally, fulfillment about being an entrepreneur. I t led me to say, I should really think about business rather than law school and foreign policy and the state department. And so, I went to business school instead of law school. I decided to work in the entrepreneurial and tech sector instead of government and foreign trade. And this has been a fantastic luck. I really chanced out. I have a choice of going towards biotech or software, I chose towards software, because I thought it would be a lot easier. I didn’t have to go through organic chemistry and med school. And then, right out of undergrad, I had a choice at business school to go straight away or to work first. I thought I won’t appreciate business school fully until I have some experience in the real world. And I also needed to pay for it. So I had a job offer at T. Rowe Price, a fantastic firm, money manager firm in Baltimore, Maryland which manages tens of billions of dollars across many mutual funds. And the job that I was offered was to be an analyst for hi-tech sto cks that were going IPO. And T. Rowe Price among other groups is a large buyer. It’s like one or two in the US buyerâ€" of these big IPOs. And so, I was able to analyze these companies before they were public and that’s when I met a lot of venture capitalist and how I saw what is the output goal for a great successful startup. Essentially, in my mind I’m thinking I need to please T. Rowe Price or Fidelity or Wellington or any of these great firms with the startup that comes into my office now looking for a million or two dollars. Eventually, I want to be able to bring it ultimately into a great IPO.Now, as we all know, many, many more companies get acquired along the way to an IPO, but IPO is still sort of the gold standard for great exits. And so, that training, the other way of saying it is, it’s a biological metaphor, I was looking at the estuary where the salmon come out from the rivers to the ocean and then swim back upstream. And I also knew in my career I wanted to go upstream to where they breathe and find the little salmon and help them grow the big strong fish, getting a little too deep in the metaphor.But the idea is that, I knew I didn’t want to stay in Wall Street and look at it as an analyst, more secured portfolio manager of public companies because I like to be more involved with the companies. I want to be working with the entrepreneurial teams and in my little way helping them maybe pivot a bit toward a faster more strategic fit into the market. But you have so much more influence at the early stage that’s what I find fun and if I’m not going to be commercial, I also think it’s the area where there’s much more much more arbitrage opportunity. The information is much less widespread, it’s much less as an economics we say, it’s not perfect information. So there’s a great gap and if we can have better information, the insiders albeit legal, we have a better chance of making a great buy whereas at the public markets, there are so many smart people analyzing the same data. It’s hard to have an edge consistently.Martin: And did you then start out of business school in a VC fund or did you just start your own VC fund directly out of business school?David: Yes, I’ve had wonderful mentors. So I’ve had three mentors chiefly Frederick Adler from Adler Company. He was one of the great VCs of his generation. There were probably about 5 to 10 major venture capital firms in those days, in the 1970s, ’80s, ’90s, he was one of them. He’s still alive, he’s still doing well. And then, the next one was Alan Patricof of Patricof Company which now became Apax and then Charles Bronfman and his family office up in Montreal. So each of those three, they had amazing networks, they had a lot of capital, they had lots of success by the time I got there, so the deal flow was already coming in and I was really privileged to get to see excellent entrepreneurs, make some serious investments and learn a lot along the way. The joke about venture capital is how do you train a venture capitalist, let them lose or her lose $20 million and then they’re trained. And so along the way, I’ve lost and so on. And now, it seems to be working and we’re making but it does take a lot of training and mentorship so for that, I’m ever grateful.Martin: But at some point, you decided, ‘I’ll stop working as an employee and start my own fund’. What was the reason behind that?David: Yes, well when I came from the Bronfman family office, I started consulting and what happened is I started consulting to a Japanese technology distribution company from Tokyo and two family offices. And I would find the deals for them and they would pay me a bit of a retainer and I would have some carried interests from the companies, share options or shares from them and something on the deal closing, transaction fee. And I was working along that and four of them went IPO out of nine. It was very successful. And then wh at would happen is we were these three groups, you have family offices who can’t add a lot of value typically to a company when it’s in startup phase and this Japanese company who could add a lot of value in Japan but nothing in the States. But the entrepreneurs would come back to me after we had funded them and say, ‘Now would you help us in America?’ and so that I fell into an operating role with one call Check Point Software which became one of the most successful in my career. And that was a firewall company software, so listed, publically traded, very successful. And I was very fortunate again to become an operating officer, I came for all time purposes the vice president of business development in their first 18 months in market.And that was at the dawn of the internet, so everyone needed internet connections and then the first thing they said, we need security. And a firewall was the front door lock, so to speak and so I had a fantastic time doing deals with Sun Micro systems, Hewlett-Packard, Tandem, bringing them to Japan, Australia, other places and the rest is history. It went very, very well and so I had that entrepreneurial experience in biz dev where market meets product especially in a company coming from overseas with a lot of engineering strength but not much in the resource packet of sales and business development. Developing all that, their marketing, their tradeshows, PR, all that experience of what a startup has to go through if they’re successful was super great training and I’ve had that now multiple times. But that was the impetus from those four IPOs in that little portfolio, we were able to then raise a fund one which is about $36 million then we’ve had fund two, $91 million then recently closed in October of last year fund three at $150 million and now things are going so well and we’re going to be investing at a rapid pace, so we’re going to be raise our next fund, early next year.UNDERSTANDING BLUMBERG CAPITALMarti n: David, let’s understand Blumberg Capital.David: Sure.Martin: So you said that you have active investing in so many countries, do you have office in all these kind of countries in all of these kind of areas or are you sourcing them directly here from the US and just travelling abroad?David: That’s a very fair question and a lot of people don’t understand how we do what we do. So let me first explain that as a VC we don’t think we’re smarter than the entrepreneurs and that we have a better crystal ball it’s the other way around, we think the entrepreneurs know more, especially about their specific domain than we do. So we like to listen a lot and be sponge and try and gather information from our network which is quite extensive, we have an outstanding network of friends and associates over the years that have become loyal, trust worthy sources of information and deal flow. So we get deal flow from a lot of places and we cultivate that, we go and speak at conferences and we go to start up competitions and we are judges and we try and give back to the community in that way, that’s it.Why the specific areas? Israel was a personal passion of mine early on and I had that zionist dream to try and help build the country from nothing; deserts and swamps to something that could be respectful and help the rest of the world with maybe technological output in an export way. So, I took maybe extra risks there that wouldn’t have been seen as natural or logical for a business person. It’s paid off handsomely, I mean they have done all that they have said they would do and more. I mean the output of Israel per capita is higher I think than anywhere in the world, maybeâ€"even including or close to Silicon Valley. So in terms of that it’s astonishing. Canada and Germany are places I feel comfortable in, we have good relationship with some of our investors, I lived in Canada, if you know that I lived for several years in Canada, because of Bronfman. So there ’s that tied. The technical talent in both countries is really high, the ethics are very high, the level of business knowledge is very strong and they are both strong economies. Canada obviously tied very much to North America, Germany is the center of Europe, so all of those things work well. Now that’s it.We see the world as, and this may be offensive to some people, a bit of a hub and spokes. The US is the big.., and North America is the big early adopter market, especially the unified currency, unified language, relatively unified market and has the biggest group of early adopter, and it has the biggest group of major strategic partners for distribution, and it has largest group of later stage venture capitalists for onward funding. So for those three reasons, if it’s a company starting in Canada or a company starting in Germany or a company starting in Israel, if they have any degree of goal to get into the North American market and launch as a global company, we feel lik e we can really add a lot of value.For example, we would not think we can add a huge amount of value, in Germany for a German company that would be arrogant on our part. The same Canada, in Canada. No, that’s not where we would have the most value and in Israel, there is no market in Israel, it’s way too small. So we are inbound to the US in that respect. Now that said, the world has changed dramatically in the last 10 years with the advent of mobile as a platform and the advent of social media networks and just the cloud infrastructure. So all that makes it much easier to reach far flung markets. And if I can give an example of a German company, where we’re very happy to be investors, Credit Tech is doing phenomenally well doing consumer lending from a base in Hamburg, but not in Germany. They are lending in Poland and Russia, in Spain, Czech Republic, Mexico, Dominican Republic, Peru, etc., far flung places from Germany. And this is because everything is done on mobile phone s; they have no offices anywhere in any of these countries. All of it is done through machine learning with giant algorithms that can grab data through APIs that were never available even 5 years ago. So all this is to say that the world is becoming easier to become Global as an investor and as an entrepreneur and we are taking advantage of that because we’ve seen that we can work with global teams on distributed basis. And that the rising middle class in the middle tier of counties is quite a surge, it’s going to continue for the next 10, 20, 30 years and another 500 million people will move up into middle class and they have every right and need to have services that meet their needs and we can hope to bring them some of those services. So that’s a slightly different model from the US centric model of the classic enterprise businesses where we’d bring stuff in from let’s say Israel or Canada and sell it in North America. Now this is the additional model which we find fru itful where we can start anywhere and address mobile markets of a vast numbers of consumers as well.Martin: Okay, great. David, what types of companies are you looking for when you want to invest your money?David: Great. We like to be an investor very early so we are almost always investing either pre- product or pre-revenue, or at the down or revenue and so it’s what we consider typically the seed stage and A, series A are the main entry points. We typically are the first institutional investor we are very glad to invest with other angels, other VCs, other strategic partners, but we are typically the first venture capital fund in. And we like to lead those rounds, we’re not dogmatic, we don’t have to we can collate etc., but we tend to that a lot. I think that’s probably because a lot of the larger firms that we have known historically that were our peers have gotten so big that they really prefer to come at the A,B, and C rounds, whereas we prefer to come in the seed and t he A, so there is a nice division of labor. We do the, what I call the hard work early on and they can come in with the big dollars later and help with assets and distribution and so on. And then there is the Angel community, that’s a very community for us to work with. We like to work with angels because the find the deals first, entrepreneurs usually go to their friends first and then they would perhaps come to an institution after they have tried it out a little bit with another angel or taken a little bit of money and that’s fine with us.Now within the realms, let’s go domains, we like things that are capital efficient traditionally. So that has led us towards software, it has led us away from energy production or clean tech, other than software kind of things or the biotech side, the wet lab related or things with a lot of FDA approval. Those are difficult for us invest in or material science, it’s traditionally been difficult because they’re capital intensive and the y’re in the realms of either long regularity approval or large rollouts for scale up and that has not been where we canplan. So traditionally it has been software where we find our niche. And I think that is also changing, we are on the cusp of the new world in synthetic biology and the internet of things and new types of hardware that are astonishingly light and small and flexible that we are starting to see, that are been created on kickstarter and indiegogo, and so on. So we are looking at some of those with interest, haven’t done them yet, but we are open to it.Martin: Okay. What are the properties of a great team, if you could imagine the properties of a team, what would it be?David: First you it said the right word, team. It’s rare, it’s possible but it’s rare that we find a single entrepreneur. Usually one person needs a complement, either in live as a spouse or as an entrepreneurial group but there are 4 or 5 roles that are key, and so we look generally for somebod y who really understands how product market fit and that can be a CEO with a sales background or it can be a CEO with a product background, or it can be a technology person with an understanding of where the world needs to go, or what a new platform will mean in terms of opportunity or in the security space, what a new platform means in terms of treat and hence opportunity. So those are the areas and by the way I should make more precise; we’ve tended to focus about 70% on B2B, the business to business, the enterprise focus. And partly the reason we do that is because most of us come from those background, the other is that we have a great network, we have a specific CIO council, chief information officer council, a chief marketing officer council and a group of CISO, chief security officers from fortune 500 and similar companies and those folks answer the question that follows, if we build this, will you buy it? And they are very good at helping us separate the wheat from the cha ff and focusing us on areas of their concern, so that has been very helpful, it’s been helpful to the companies we’ve invested in because if they answer ‘yes we will buy this’ they often become the source and the locus and the focus of the first paid customers, the first proof of concepts that the company has.Martin: Are you asking the CIOs, in their due diligence process, pre-investment?David: Yes, often, not always. Often, but certainly, once we’ve made the investment we go to them a lot for help but we often make this question during due diligence. Again part of it is because we don’t think we always know the answer to everything, we wanna look around and get advice. And I think that’sâ€" you know you didn’t ask this question yet but I want to make another distinction, our model at Venture Capital is not that we know better and we’re going to tell you as an employee, CEO, how to work for us and do things better. Ours is a little bit more, ‘You’re the race ca r driver and we’re the pit crew or maybe the manager’. So we’re going to give you some coaching of course and try to stop you from crashing around the track, but we’re going to change your oil, fill your gas, maybe bring the crowd into the bleachers and maybe give you some guidance from watching you go around the track many times and say, we’ve seen this kind of patterns before, here’s what we learnt from it, maybe that can help you.So I think that model is appropriate especially at the early stage. I mean these people are working incredible hours, they are highly motivated, they are very smart and I just want to be very careful that we’re not trying to squash that creativity or say that we know better. And if I may, I think that’s why start-ups break off from bigger companies; the innovation just can’t happen in the structure of a big entity for a variety of reasons. One is the equity motivation but the other is that more informal sense of ‘We, a small team, tha t are empowered, can do something great and novel’. Whereas in a big structural organization you’re offending a rival, there is politics, there are procedures that just get in the way of that gorilla flexibility and speed and nimbleness that one needs as an entrepreneur.STARTUP ECOSYSTEMMartin: David, let’s talk about how you perceive the eco system, the startup eco system. Can you tell us in what type of areas, countries, industries, ticket sizes do you perceive there are some kind of under or over allocation of capital and what is driving that?David: Okay, here we are in 2014 and these questions have to be answered very specifically to a time we’re sitting and where we invest. We invest at the early stage and I think it’s never been a better time to be an early stage, it’s never been a better time to be an early stage entrepreneur. And you might say well, right before the bubble of 2000â€"during the early part of the bubble of 99’,2000, that was a great time, you mig ht say, ‘Not really, that was fake, this is much more real.’ We stand on the shoulders of giants, the people who built the cloud, the internet, mobile networks, social networks, machine learning and things like that, are really making our lives a lot easier, whether an entrepreneur or whether funding entrepreneurs as a venture firm. So it’s a great time to be investing in that regards. The world is blossoming in terms of GDP per capita even though in the developed countries like Germany, US, Japan, etc., it’s been a really bad recession and recovery has been weak almost everywhere. The rest of the world has been doing a lot better. And I think probably because the really bad economic systems of communism and socialism in China and India are kind of getting taken away. They are just getting rid of the bad stuff and once you, like a brick on aâ€"as a weight, if you take the brick off and you let the natural resources of entrepreneurship thrive, you get GDP growth and you get p eople who move from poverty to middle class, which I think what we should all wish for.So that is making is have big new markets to reach and it’s making the entrepreneurial journey realistic for people in many, many new countries. So the fact that we operate outside of Silicon Valley has also been great for us. We have, I think a much outsized presence in Israel and then in Germany if I may say so, then our size would be compared to here, in the States. We are a small firm in the states and I think we are prominent, well known in our niche, but in Israel we are very prominent and in Germany probably more than we deserve because we are so unusual in doing this.So now let’s go back to the ecosystem. The US venture capital industry has become what I would call bimodal, like a donut. The middle has eroded away, the early stage is doing very well, the late stage is doing very well. But in a recession, or in an interest rate spike, or in some macro collision, I’d be more worried ab out being in the later stage. People buying late stage pieces of very expensive, high flying companies, because the evaluations can pop very down here, if we are down at the very bottom level of these early stage companies and if we allocate enough money for follow on for say 2,3,4,5 year period, over life of our funds, we can survive through a down turn. And our returns might be lower, but everyone’s returns would be lower. But the volatility is much less at the early stage when their companies are well supported compared to the volatility of exits and the time frame that’s required of late stage investors so, I’d rather be frankly jumping out of a first floor than jumping out of a 47th floor, God forbidMartin: And if you look at specific industries like if you were looking at hardware, social networks, advertising, etc., what industries do you think are more overvalued?David: Okay, we’ve taken a slightly different approach. Our approach has basically been that if you take 3 centuries of economic history, what were the big game changers? The 19th century was really about automation or infusion technology, that was really automation and agriculture, transportation and mining. 20th century manufacturing became highly automated and very efficient. Now what is the 21st century about? we would argue it’s the service economy and probably with now the internet of things and synthetic biology is also going to have a renaissance in the later part of the 21st century in actually manufacturing in a new way. But for now, the service economy dominates Europe, the Europe mainly and the US. 60%, 70%, 80% of our GDP and our employment more enforces in the service economy so strictly an example would be financial services. What are financial services? It’s services to people run on computers and communication networks using some kind of processing to crunch numbers and a way of communicating information out. Now, the communications and computational infrastructure plus storage in the past 10 years has rocketed to more efficiency and past 20, and past 30 years. Most banks, most insurance companies are running on systems that are 10, 20, 30 years old. So the new entrance can come in with almost a green field advantage in terms of much more efficiency and now the world is again opened to new platforms of mobile, we can reach consumers for the first time that could really never be reached except through traditional expensive branches. So we are deconstructing, disrupting and innovating the whole area of financial services across probably 18 or 20 companies in our little portfolio. And it’s amazing to see our little Davids go up against the Goliaths, but they are doing very well, I am seeing incredible growth. And sometimes it not that just that we are going to disrupt and destroy the big but we’re going to offer something new that they could never do at scale, it just wouldn’t work and that is very exciting. And so if I would say it again I would simplify and say the services economy is both capital efficient for us to go after, it’s expanding, it’s very inefficient still and it has a lot of room for innovation. So, those are the keys so far we are interested in. I would say further on in the horizon, very interested by new hardware modality, internet things again and thenâ€"the intersection we call synthetic biology but that’s where essentially computation meets the human and the biological for the new developments, not done in a lab but really done on a computer almost as in CAD CAM does for engineering, makes sense?Martin: What other service industries can you identify that are right for disruption and big enough?David: Sure, sure. Travel is a huge industry, very inefficient and ready for disruption, insurance, banking, lending, real estate, education. Health care is complicated but we think there are a lot of opportunities of disruption there making it much more efficient and better, we have a couple of opp ortunities on our table right now in that round. And the thing about the medical science itself, it’s more about delivery and access and payment, that’s where I find the infrastructure to be lacking dramatically. Security is not exactly a vertical domain it’s more horizontal but with every new platform, the bad guys find opportunities to poke holes and so the good guys have to come and build solutions and so we see security as the new platforms arise becoming great area for us we’ve had a number of great exit’s there and new investments that are very promising, so those are a few areas that look good for us.Martin: Great.ADVICE TO ENTREPRENEURS In San Francisco, we talked with venture capitalist and the founder of Blumberg Capital, David Blumberg. David talks about the investment due diligence process and startup ecosystem. Furthermore, he shares his learnings and advice for young entrepreneurs.The transcription of the interview is provided below.INTRODUCTIONMartin: Hi, today we are in San Francisco in the Blumberg Capital Office with David. David, who are you and what do you do?David: David Blumberg, I’m the founder and managing partner of Blumberg Capital. And we’re a very focused specialized fund. We focus very much on early stage information technology, that’s mostly software and it brings us across different geographies. We’ve started in the Bay Area, San Francisco and branched out quite early to Israel, New York as a triangle then along the way found out about the great brands in Germany and so I’ve been in Berlin mostly, with some in Munich and Hamburg, some investments there. And then along the way I also have found some great opportunities up in Vancouver, our neighbor to the north and then down to Los Angeles. So those are the four or five places. It’s interesting because I just read yesterday a study saying that in the opinion of US investor, the top four countries for early stage venture capital investments are US, Israel, Canada and Germany.Martin: Canada as well, okay.David: Yes, so somehow we’ve got it just exactly right per the view of other investors and that’s the places that we have main investments and where we have some successes to talk about.Martin: What did you do before you started this fund?David: I’ve been in venture capital for many years and I really started out directly in venture capital which is very rare. What happened is in college, I had thought I wanted to solve big problems in the world and at my age, when I was in that young high school, college time where I thought, oh the solution to big problems for the world is government. Government knows be st. They know how to solve problems. So I started studying international relations in government at Harvard College and I went to work in Washington for three summers. And at the end of those three summers, I realized, ‘Ooh, I don’t think government is the solution, I think it’s more of the cause of the problems’. The Politicians like to reelect themselves and so they’re willing to offer or promise anything to anybody to get elected and they don’t really think about the long-term solutions. Whereas, in the market economy, there’s so much competition, if you’re not serving your customers on a daily basis, you go out of business. So for that reason and other reasons that science needs business to make a takeout out of the lab, I think the niche of a combination of science and entrepreneurship is fantastic for unleashing great things into the world and helping lots of people move up into a happy middle class safe, healthy lifestyle. That’s what my personal mission is. Now the way that it worked is when I was in college, I started a company, because I was a poorer or middâ€"not poor, I was a middle class student that I needed to pay for Harvard which is very expensive. And I got this job and I had such a great success personally, fulfillment about being an entrepreneur. It led me to say, I should really think about business rather than law school and foreign policy and the state department. And so, I went to business school instead of law school. I decided to work in the entrepreneurial and tech sector instead of government and foreign trade. And this has been a fantastic luck. I really chanced out. I have a choice of going towards biotech or software, I chose towards software, because I thought it would be a lot easier. I didn’t have to go through organic chemistry and med school. And then, right out of undergrad, I had a choice at business school to go straight away or to work first. I thought I won’t appreciate business school fully until I have some experience in the real world. And I also needed to pay for it. So I had a job offer at T. Rowe Price, a fantastic firm, money manager firm in Baltimore, Maryland which manages tens of billions of dollars across many mutual funds. And the job that I was offered was to be an analyst for hi-tech stocks that were going IPO. And T. Rowe Price among other groups is a large buyer. It’s like one or two in the US buyerâ€" of these big IPOs. And so, I was able to analyze these companies before they were public and that’s when I met a lot of venture capitalist and how I saw what is the output goal for a great successful startup. Essentially, in my mind I’m thinking I need to please T. Rowe Price or Fidelity or Wellington or any of these great firms with the startup that comes into my office now looking for a million or two dollars. Eventually, I want to be able to bring it ultimately into a great IPO.Now, as we all know, many, many more companies get acquired along the way to an IPO, but IPO is still sort of the gold standard for great exits. And so, that training, the other way of saying it is, it’s a biological metaphor, I was looking at the estuary where the salmon come out from the rivers to the ocean and then swim back upstream. And I also knew in my career I wanted to go upstream to where they breathe and find the little salmon and help them grow the big strong fish, getting a little too deep in the metaphor.But the idea is that, I knew I didn’t want to stay in Wall Street and look at it as an analyst, more secured portfolio manager of public companies because I like to be more involved with the companies. I want to be working with the entrepreneurial teams and in my little way helping them maybe pivot a bit toward a faster more strategic fit into the market. But you have so much more influence at the early stage that’s what I find fun and if I’m not going to be commercial, I also think it’s the area where there’s much more much more ar bitrage opportunity. The information is much less widespread, it’s much less as an economics we say, it’s not perfect information. So there’s a great gap and if we can have better information, the insiders albeit legal, we have a better chance of making a great buy whereas at the public markets, there are so many smart people analyzing the same data. It’s hard to have an edge consistently.Martin: And did you then start out of business school in a VC fund or did you just start your own VC fund directly out of business school?David: Yes, I’ve had wonderful mentors. So I’ve had three mentors chiefly Frederick Adler from Adler Company. He was one of the great VCs of his generation. There were probably about 5 to 10 major venture capital firms in those days, in the 1970s, ’80s, ’90s, he was one of them. He’s still alive, he’s still doing well. And then, the next one was Alan Patricof of Patricof Company which now became Apax and then Charles Bronfman and his family office up in Montreal. So each of those three, they had amazing networks, they had a lot of capital, they had lots of success by the time I got there, so the deal flow was already coming in and I was really privileged to get to see excellent entrepreneurs, make some serious investments and learn a lot along the way. The joke about venture capital is how do you train a venture capitalist, let them lose or her lose $20 million and then they’re trained. And so along the way, I’ve lost and so on. And now, it seems to be working and we’re making but it does take a lot of training and mentorship so for that, I’m ever grateful.Martin: But at some point, you decided, ‘I’ll stop working as an employee and start my own fund’. What was the reason behind that?David: Yes, well when I came from the Bronfman family office, I started consulting and what happened is I started consulting to a Japanese technology distribution company from Tokyo and two family offices. And I would find th e deals for them and they would pay me a bit of a retainer and I would have some carried interests from the companies, share options or shares from them and something on the deal closing, transaction fee. And I was working along that and four of them went IPO out of nine. It was very successful. And then what would happen is we were these three groups, you have family offices who can’t add a lot of value typically to a company when it’s in startup phase and this Japanese company who could add a lot of value in Japan but nothing in the States. But the entrepreneurs would come back to me after we had funded them and say, ‘Now would you help us in America?’ and so that I fell into an operating role with one call Check Point Software which became one of the most successful in my career. And that was a firewall company software, so listed, publically traded, very successful. And I was very fortunate again to become an operating officer, I came for all time purposes the vice presi dent of business development in their first 18 months in market.And that was at the dawn of the internet, so everyone needed internet connections and then the first thing they said, we need security. And a firewall was the front door lock, so to speak and so I had a fantastic time doing deals with Sun Microsystems, Hewlett-Packard, Tandem, bringing them to Japan, Australia, other places and the rest is history. It went very, very well and so I had that entrepreneurial experience in biz dev where market meets product especially in a company coming from overseas with a lot of engineering strength but not much in the resource packet of sales and business development. Developing all that, their marketing, their tradeshows, PR, all that experience of what a startup has to go through if they’re successful was super great training and I’ve had that now multiple times. But that was the impetus from those four IPOs in that little portfolio, we were able to then raise a fund one which is about $36 million then we’ve had fund two, $91 million then recently closed in October of last year fund three at $150 million and now things are going so well and we’re going to be investing at a rapid pace, so we’re going to be raise our next fund, early next year.UNDERSTANDING BLUMBERG CAPITALMartin: David, let’s understand Blumberg Capital.David: Sure.Martin: So you said that you have active investing in so many countries, do you have office in all these kind of countries in all of these kind of areas or are you sourcing them directly here from the US and just travelling abroad?David: That’s a very fair question and a lot of people don’t understand how we do what we do. So let me first explain that as a VC we don’t think we’re smarter than the entrepreneurs and that we have a better crystal ball it’s the other way around, we think the entrepreneurs know more, especially about their specific domain than we do. So we like to listen a lot and be sponge and try and gather information from our network which is quite extensive, we have an outstanding network of friends and associates over the years that have become loyal, trust worthy sources of information and deal flow. So we get deal flow from a lot of places and we cultivate that, we go and speak at conferences and we go to start up competitions and we are judges and we try and give back to the community in that way, that’s it.Why the specific areas? Israel was a personal passion of mine early on and I had that zionist dream to try and help build the country from nothing; deserts and swamps to something that could be respectful and help the rest of the world with maybe technological output in an export way. So, I took maybe extra risks there that wouldn’t have been seen as natural or logical for a business person. It’s paid off handsomely, I mean they have done all that they have said they would do and more. I mean the output of Israel per capita is higher I think than anywhere in the world, maybeâ€"even including or close to Silicon Valley. So in terms of that it’s astonishing. Canada and Germany are places I feel comfortable in, we have good relationship with some of our investors, I lived in Canada, if you know that I lived for several years in Canada, because of Bronfman. So there’s that tied. The technical talent in both countries is really high, the ethics are very high, the level of business knowledge is very strong and they are both strong economies. Canada obviously tied very much to North America, Germany is the center of Europe, so all of those things work well. Now that’s it.We see the world as, and this may be offensive to some people, a bit of a hub and spokes. The US is the big.., and North America is the big early adopter market, especially the unified currency, unified language, relatively unified market and has the biggest group of early adopter, and it has the biggest group of major strategic partners for distribution, and it has largest group of later stage venture capitalists for onward funding. So for those three reasons, if it’s a company starting in Canada or a company starting in Germany or a company starting in Israel, if they have any degree of goal to get into the North American market and launch as a global company, we feel like we can really add a lot of value.For example, we would not think we can add a huge amount of value, in Germany for a German company that would be arrogant on our part. The same Canada, in Canada. No, that’s not where we would have the most value and in Israel, there is no market in Israel, it’s way too small. So we are inbound to the US in that respect. Now that said, the world has changed dramatically in the last 10 years with the advent of mobile as a platform and the advent of social media networks and just the cloud infrastructure. So all that makes it much easier to reach far flung markets. And if I can give an example of a German company, where we’re very happy to be investors, Credit Tech is doing phenomenally well doing consumer lending from a base in Hamburg, but not in Germany. They are lending in Poland and Russia, in Spain, Czech Republic, Mexico, Dominican Republic, Peru, etc., far flung places from Germany. And this is because everything is done on mobile phones; they have no offices anywhere in any of these countries. All of it is done through machine learning with giant algorithms that can grab data through APIs that were never available even 5 years ago. So all this is to say that the world is becoming easier to become Global as an investor and as an entrepreneur and we are taking advantage of that because we’ve seen that we can work with global teams on distributed basis. And that the rising middle class in the middle tier of counties is quite a surge, it’s going to continue for the next 10, 20, 30 years and another 500 million people will move up into middle class and they have every right and need to have services that meet th eir needs and we can hope to bring them some of those services. So that’s a slightly different model from the US centric model of the classic enterprise businesses where we’d bring stuff in from let’s say Israel or Canada and sell it in North America. Now this is the additional model which we find fruitful where we can start anywhere and address mobile markets of a vast numbers of consumers as well.Martin: Okay, great. David, what types of companies are you looking for when you want to invest your money?David: Great. We like to be an investor very early so we are almost always investing either pre- product or pre-revenue, or at the down or revenue and so it’s what we consider typically the seed stage and A, series A are the main entry points. We typically are the first institutional investor we are very glad to invest with other angels, other VCs, other strategic partners, but we are typically the first venture capital fund in. And we like to lead those rounds, we’re not d ogmatic, we don’t have to we can collate etc., but we tend to that a lot. I think that’s probably because a lot of the larger firms that we have known historically that were our peers have gotten so big that they really prefer to come at the A,B, and C rounds, whereas we prefer to come in the seed and the A, so there is a nice division of labor. We do the, what I call the hard work early on and they can come in with the big dollars later and help with assets and distribution and so on. And then there is the Angel community, that’s a very community for us to work with. We like to work with angels because the find the deals first, entrepreneurs usually go to their friends first and then they would perhaps come to an institution after they have tried it out a little bit with another angel or taken a little bit of money and that’s fine with us.Now within the realms, let’s go domains, we like things that are capital efficient traditionally. So that has led us towards software, it has led us away from energy production or clean tech, other than software kind of things or the biotech side, the wet lab related or things with a lot of FDA approval. Those are difficult for us invest in or material science, it’s traditionally been difficult because they’re capital intensive and they’re in the realms of either long regularity approval or large rollouts for scale up and that has not been where we canplan. So traditionally it has been software where we find our niche. And I think that is also changing, we are on the cusp of the new world in synthetic biology and the internet of things and new types of hardware that are astonishingly light and small and flexible that we are starting to see, that are been created on kickstarter and indiegogo, and so on. So we are looking at some of those with interest, haven’t done them yet, but we are open to it.Martin: Okay. What are the properties of a great team, if you could imagine the properties of a team, what would it be?David: First you it said the right word, team. It’s rare, it’s possible but it’s rare that we find a single entrepreneur. Usually one person needs a complement, either in live as a spouse or as an entrepreneurial group but there are 4 or 5 roles that are key, and so we look generally for somebody who really understands how product market fit and that can be a CEO with a sales background or it can be a CEO with a product background, or it can be a technology person with an understanding of where the world needs to go, or what a new platform will mean in terms of opportunity or in the security space, what a new platform means in terms of treat and hence opportunity. So those are the areas and by the way I should make more precise; we’ve tended to focus about 70% on B2B, the business to business, the enterprise focus. And partly the reason we do that is because most of us come from those background, the other is that we have a great network, we have a specific CIO council , chief information officer council, a chief marketing officer council and a group of CISO, chief security officers from fortune 500 and similar companies and those folks answer the question that follows, if we build this, will you buy it? And they are very good at helping us separate the wheat from the chaff and focusing us on areas of their concern, so that has been very helpful, it’s been helpful to the companies we’ve invested in because if they answer ‘yes we will buy this’ they often become the source and the locus and the focus of the first paid customers, the first proof of concepts that the company has.Martin: Are you asking the CIOs, in their due diligence process, pre-investment?David: Yes, often, not always. Often, but certainly, once we’ve made the investment we go to them a lot for help but we often make this question during due diligence. Again part of it is because we don’t think we always know the answer to everything, we wanna look around and get advice . And I think that’sâ€" you know you didn’t ask this question yet but I want to make another distinction, our model at Venture Capital is not that we know better and we’re going to tell you as an employee, CEO, how to work for us and do things better. Ours is a little bit more, ‘You’re the race car driver and we’re the pit crew or maybe the manager’. So we’re going to give you some coaching of course and try to stop you from crashing around the track, but we’re going to change your oil, fill your gas, maybe bring the crowd into the bleachers and maybe give you some guidance from watching you go around the track many times and say, we’ve seen this kind of patterns before, here’s what we learnt from it, maybe that can help you.So I think that model is appropriate especially at the early stage. I mean these people are working incredible hours, they are highly motivated, they are very smart and I just want to be very careful that we’re not trying to squash that c reativity or say that we know better. And if I may, I think that’s why start-ups break off from bigger companies; the innovation just can’t happen in the structure of a big entity for a variety of reasons. One is the equity motivation but the other is that more informal sense of ‘We, a small team, that are empowered, can do something great and novel’. Whereas in a big structural organization you’re offending a rival, there is politics, there are procedures that just get in the way of that gorilla flexibility and speed and nimbleness that one needs as an entrepreneur.STARTUP ECOSYSTEMMartin: David, let’s talk about how you perceive the eco system, the startup eco system. Can you tell us in what type of areas, countries, industries, ticket sizes do you perceive there are some kind of under or over allocation of capital and what is driving that?David: Okay, here we are in 2014 and these questions have to be answered very specifically to a time we’re sitting and where we i nvest. We invest at the early stage and I think it’s never been a better time to be an early stage, it’s never been a better time to be an early stage entrepreneur. And you might say well, right before the bubble of 2000â€"during the early part of the bubble of 99’,2000, that was a great time, you might say, ‘Not really, that was fake, this is much more real.’ We stand on the shoulders of giants, the people who built the cloud, the internet, mobile networks, social networks, machine learning and things like that, are really making our lives a lot easier, whether an entrepreneur or whether funding entrepreneurs as a venture firm. So it’s a great time to be investing in that regards. The world is blossoming in terms of GDP per capita even though in the developed countries like Germany, US, Japan, etc., it’s been a really bad recession and recovery has been weak almost everywhere. The rest of the world has been doing a lot better. And I think probably because the really b ad economic systems of communism and socialism in China and India are kind of getting taken away. They are just getting rid of the bad stuff and once you, like a brick on aâ€"as a weight, if you take the brick off and you let the natural resources of entrepreneurship thrive, you get GDP growth and you get people who move from poverty to middle class, which I think what we should all wish for.So that is making is have big new markets to reach and it’s making the entrepreneurial journey realistic for people in many, many new countries. So the fact that we operate outside of Silicon Valley has also been great for us. We have, I think a much outsized presence in Israel and then in Germany if I may say so, then our size would be compared to here, in the States. We are a small firm in the states and I think we are prominent, well known in our niche, but in Israel we are very prominent and in Germany probably more than we deserve because we are so unusual in doing this.So now let’s go back to the ecosystem. The US venture capital industry has become what I would call bimodal, like a donut. The middle has eroded away, the early stage is doing very well, the late stage is doing very well. But in a recession, or in an interest rate spike, or in some macro collision, I’d be more worried about being in the later stage. People buying late stage pieces of very expensive, high flying companies, because the evaluations can pop very down here, if we are down at the very bottom level of these early stage companies and if we allocate enough money for follow on for say 2,3,4,5 year period, over life of our funds, we can survive through a down turn. And our returns might be lower, but everyone’s returns would be lower. But the volatility is much less at the early stage when their companies are well supported compared to the volatility of exits and the time frame that’s required of late stage investors so, I’d rather be frankly jumping out of a first floor than jumping out of a 47th floor, God forbidMartin: And if you look at specific industries like if you were looking at hardware, social networks, advertising, etc., what industries do you think are more overvalued?David: Okay, we’ve taken a slightly different approach. Our approach has basically been that if you take 3 centuries of economic history, what were the big game changers? The 19th century was really about automation or infusion technology, that was really automation and agriculture, transportation and mining. 20th century manufacturing became highly automated and very efficient. Now what is the 21st century about? we would argue it’s the service economy and probably with now the internet of things and synthetic biology is also going to have a renaissance in the later part of the 21st century in actually manufacturing in a new way. But for now, the service economy dominates Europe, the Europe mainly and the US. 60%, 70%, 80% of our GDP and our employment more enforces in the service economy so strictly an example would be financial services. What are financial services? It’s services to people run on computers and communication networks using some kind of processing to crunch numbers and a way of communicating information out. Now, the communications and computational infrastructure plus storage in the past 10 years has rocketed to more efficiency and past 20, and past 30 years. Most banks, most insurance companies are running on systems that are 10, 20, 30 years old. So the new entrance can come in with almost a green field advantage in terms of much more efficiency and now the world is again opened to new platforms of mobile, we can reach consumers for the first time that could really never be reached except through traditional expensive branches. So we are deconstructing, disrupting and innovating the whole area of financial services across probably 18 or 20 companies in our little portfolio. And it’s amazing to see our little Davids go up against the G oliaths, but they are doing very well, I am seeing incredible growth. And sometimes it not that just that we are going to disrupt and destroy the big but we’re going to offer something new that they could never do at scale, it just wouldn’t work and that is very exciting. And so if I would say it again I would simplify and say the services economy is both capital efficient for us to go after, it’s expanding, it’s very inefficient still and it has a lot of room for innovation. So, those are the keys so far we are interested in. I would say further on in the horizon, very interested by new hardware modality, internet things again and thenâ€"the intersection we call synthetic biology but that’s where essentially computation meets the human and the biological for the new developments, not done in a lab but really done on a computer almost as in CAD CAM does for engineering, makes sense?Martin: What other service industries can you identify that are right for disruption and big enough?David: Sure, sure. Travel is a huge industry, very inefficient and ready for disruption, insurance, banking, lending, real estate, education. Health care is complicated but we think there are a lot of opportunities of disruption there making it much more efficient and better, we have a couple of opportunities on our table right now in that round. And the thing about the medical science itself, it’s more about delivery and access and payment, that’s where I find the infrastructure to be lacking dramatically. Security is not exactly a vertical domain it’s more horizontal but with every new platform, the bad guys find opportunities to poke holes and so the good guys have to come and build solutions and so we see security as the new platforms arise becoming great area for us we’ve had a number of great exit’s there and new investments that are very promising, so those are a few areas that look good for us.Martin: Great.ADVICE TO ENTREPRENEURSMartin: David, you’ve see n so many entrepreneurs over the last more than 10 years, what advice would you give one of your friends who’s asking you for advice when he wants to start a company?David: Sure. I’m going first to go back to the last question and say I left out things like E-commerce and marketing, advertising, all those again all those very strong. E-commerce is the fastest growing part of retail and within e-commerce, international e-commerce is the fastest growing part of e-commerce. So those areas with payments or marketing automation or supporting the customers or finding customers, all those are super areas that we can grow into the future.Now if an entrepreneur comes to me or my colleagues at Blumberg Capital and ask for advice on what to do.First I want to ask if they have the mentality to be an entrepreneur, it’s not for everybody, it’s a very lonely thing to do, it’s very tough, the odds are against you. And yet, in your heart you knowâ€"or in your brain, combination of brain an d heart, you should know that ‘I have what it takes, I’m going to give it my best.’ And if you have that persistence and that strength of character to try and forge ahead after being told no, no, no dozens of times and then you finally hear a yes, then I say okay, first thing is know yourself.The second thing is how do you solve the world’s problems? Who are your fellow man and woman who you can you deliver something better? One of my favorite economist is Thomas Sole at Stanford and he said, ‘What is the definition of Profit? Profit is simply a recognition by others of the value you deliver to other people’. That’s a beautiful concept and unfortunately, capitalism has quite of a negative perception, many quarters of the establishment and Hollywood and literary world, the art world and so on and I think it’s very underserved. I think capitalization is the greatest force for liberation of poor people into let’s say a more reasonable middle class lifestyle. It’s ev er been in the history of the world. Remember until 1800 it didn’t really exist everyone is either a king or a surf, but another way owner or a slave, that’s what the world was until 1800 there was almost nothing else. And it’s only because of capitalism, it’s only because of moving capital around to entrepreneurs frankly from investors that you got innovation and that spiral going.So, you know, that’s a little side argument for capitalism. For entrepreneurs I think again, it’s never been a better time. So know yourself, find what you can do to help somebody else in the world with a better product, a better service. Find a team that can support you, leverage you, add to what you have as an individual and then think it through, poke it and test it, test your assumptions and don’t come to us right away until you’ve done some testing with real customers or with people who know the industry. And you’re going to get a lot of no’s and you’ll get some false signals an d there will be a lot of noise but in that noise look for the real signal and then we want to hear from you first.Martin: So when is the best time to make contact you? Is it really like when somebody is looking for funding or is it like 6 or 12 months before?David: I like to hear from people before they’re looking for funding because that gives us an advantage of being the first on the block to see it but also because we can learn the basic ideas in one meeting or encounter. We might ask them some tough questions and they’ll go back and think about it and comeback the second time better prepared and have more complete presentations.Here are the odds, we see about 5000 business plans a year and we go and invest in maybe 10 or 15, our current fund size, so it’s a very tough needle to the thread. We’re not the only game in town, there are other sources of capital, and we make mistakes as well, we don’t have perfect vision. But I would say, do your homework, it’s always easi er to raise money if you have real customers or real traction of some kind, they don’t even have to be paying customers. We’ve invested in many companies that we’re basing on the freemium model where they start with the free group that proves the value of proposition, improve the product, then we find what people are willing to pay for it. Ultimately, someone has to be willing to pay for something to make it work, makes sense?Martin: Totally. David thank you very much for your time.David: My pleasure.Martin: Next time you are thinking about starting a company and looking for funding maybe you should talk to David or his assistance and get some advice. Thanks.David: Thank you very much.Martin: Great, thank you very much David.

1905 Revolution Essay - 1621 Words

1905 Revolution These days we call anything a revolutionà ¢Ã¢â€š ¬Ã‚ ¦[1] To decide whether or not any event is a revolution I must first set some parameters to define my personal idea of what a revolution is. I believe a revolution to be a radical change of anything, not just political. I believe this as from history labelling the Renaissance as a revolution, yet it lacked political change. In my opinion hindsight is very important to whether or not something is a revolution. I think you can only decide if something was revolutionary if you can see its consequences. I do not think revolutionary thought is essential to whether or not an event is a revolution. To discover whether or not 1905 was a†¦show more content†¦This resulted in a generalised feeling of resentment towards the Tsar even amongst his supporters. The political unrest was present through the survival of a poor Minister of the Interior, Viacheslav von Plehve, until 1904 when he was assassinated. This was the Tsars chance to quell the political unrest. He chose a new minister in Prince Sviatopolk-Mirskii. However, he had political innocence[3] and promised vague reform. Basically he was weak and this weakness annoyed both wings of the political spectrum sustaining the political unrest throughout 1905. Economical unrest is best shown through the peasants. They were heavy under the weight of redemption payments and oppressive taxes and their economic unrest was definitely evident preceding 1905, and throughout 1905 they vented their anger. The ferment in the countryside grew in a menacing way[4], is a good quote describing their movements as the word menacing seems to suggest they were very dangerous and seems to have connotations supporting the large numbers that there were. The word ferment supports the fact it peasant unrest had been building up. One major achievement I can see from the peasant uprisings was that they were organised by themselves, demonstrating their own political thought and this was cemented in July of the year when theShow MoreRelatedThe Revolution Of The 1905 Revolution Essay1494 Words   |  6 Pageshim the nickname â€Å"Nicholas the Bloody† (Khrustalev and M. Steinberg 25). The Russian people no longer felt safe under the tsar’s rule. Wit h more instances of brutality accumulating on top of one another, the 1905 Revolution was inevitable. Albeit the violent suppression of the 1905 Revolution, in the end it was regarded by revolutionaries as semi-successful. 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These series of revolutionaryRead Mo reThe Regime Of The 1905 Revolution1911 Words   |  8 PagesII was mainly to blame for the 1905, due to his lack of response to the growing discontent amongst the Russian people. Although it could be argued that the actions of previous Tsars were the cause of this discontent, and this was certainly influential, Nicholas failure to act upon his people s requests was ultimately the cause of the revolution. The repressive Tsarist system in place in 1905 was arguably one of the most significant factors in the 1905 revolution, as much of the discontent inRead MoreEssay On The 1905 Russian Revolution1042 Words   |  5 PagesZachary Shooshani Profesor Kakounis Ph.D Global History I 31 October 2017 1905 Russian Revolution The Russians had protested against a corrupt government and their unfair laws. There were many different causes, events, effects, and compromises that happened. 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One of the main reasons that the 1905 revolution failed was because the October Manifesto merely only satisfied the middle classes’ appetite for reform. However this was only a short term change in government therefore it was not really a revolution because the changes were not permanent. To add, the readiness of the liberals to accept the government’s political and economical bribes indicted that they were not genuinely ready for a revolution at this time. FurthermoreRead MoreWhy Was There a Revolution in Russia in 1905936 Words   |  4 PagesWhy was there a revolution in Russia in 1905? The 1905 revolution happened for many reasons and so a combination of factors will best explain this question. However the most important reason was the tsar and his ignorant beliefs and attitudes towards Russia. 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Building a Market Economy in India - 1521 Words

ASSIGNMENT ON BUILDING A MARKET ECONOMY IN INDIA THE RISE OF ISLAMIC BANKING IN PAKISTAN Prepared for: Prof. Dr. Masud Rahman Prepared by: Gazi Md. Ali Zafar Roll-1003013 BANGLADESH UNIVERSITY OF PROFESSIONALS Mirpur Cantonment, Dhaka-1216 BUILDING A MARKET ECONOMY IN INDIA 1. What were the features of pre reform India and what were the justifications of that? Answer: The features of pre reform India were as following: a) The economic system that developed in India after 1947 was mixed economy system characterized by a large number of state-owned enterprises, centralized planning, and subsidies. b) This system constrained the growth of private sector and that time in India private companies could expand†¦show more content†¦India’s privatization program has had a bumpy record and was often slowed by political opposition; in 1999 some 240 state-owned enterprise were still scattered across many sectors of the economy and accounted for 15 percent of India’s GDP. But the program was progressing at a fairly rapid price in the early 2000s with 30 state-owned enterprises privatized in 2002. f) The response to these economic reforms has been impressive. After taking economic reform program in India; foreign direct investments, economic growth, export increases. 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Work place communication Free Essays

Communication is essential for effective functioning in every part of an organisation. From marketing, production, finance, personnel, and maintenance, all departments may receive direction from corporate goals and objectives, but communication links them together and facilitates organisational success. The importance of effective communication from team leaders cannot be overemphasised for one specific reason: everything a team leader does, involves communicating. We will write a custom essay sample on Work place communication or any similar topic only for you Order Now Communication is needed to increase efficiency, satisfy customers, and improve quality. Effective communication is so important for organisational success that not only team leaders, but also the employees must be effective communicators. One role of a team leader is to help employees improve their communication skills. When all members of a team, department, or organisation are able to communicate effectively with each other and with people outside their group, they are much more likely to perform well. The successful team leader, therefore, needs effective communication skills. Communication is the activity of conveying information. Communication requires a sender, a message, and an intended recipient. However, the receiver needs not to be present or be aware of the sender’s intent to communicate at the time of communication; thus, communication can occur across vast distances in time and space. Communication requires that the communicating parties share an area of communicative commonality. The communication process is complete once the receiver has understood the message of the sender. Feedback is critical for effective communication between parties. Communication can be defined as the exchange of opinion, ideas, information, facts, feelings, and values between two or more persons sender and receiver’s) with the help of some channels to accomplish the desired purpose. The sender creates a message either in the written or in verbal or nonverbal form. The message is dispatched to the receiver with the help of channels of communication. The receiver takes the delivery of the message and provides feedback to the sender. The sender gets the feedback and determines whether the receiver has received the same message and meaning that the sender had intended to communicate with him; if the sender feels that the receiver has not received the same message and meaning, he/she again initiates the cycle of communication. THE CYCLE OF COMMUNICATION Elements ot Communication 1 . Sender 2. Message 3. Channel of communication 4. Receiver 5. Feedback 1 . Sender: The sender is the person who initiates the process of communication. Whenever the sender feels that there is a need to communicate some information to the other person (receiver), he/she starts the process of communication. The sender must be aware of the purpose of the communication and the receiver’s abilities to understand the message in terms of language, interest, etc. 2. Message: The message is created by the sender to convey the information, facts or opinion to the receiver. The message should be clear and simple so that the receiver can understand it in the same way as the sender desires. While creating a message, the sender should take care of words, language, and meaning of the message if the message is to be communicated in verbal or written form or he/she should take care of body language and facial expression if the message is to be communicated in nonverbal form, along with the abilities and professional competencies of the receiver. 3. Channels of communication: Communication channels are the medium through which the message is communicated to the receiver. Channels of communication play an important role in the process of communication. If the sender selects an appropriate medium or channel of communication, there are more chances that the receiver will receive the same message; or else, there are chances that the message may get distorted. In this hi-tech era, there are a number of channels that can be used to communicate message, e. g. , mobile, e-mail, voice mail, person, radio, TV, Internet, blogs, etc. 4. Receiver: The receiver is the person who receives the message. The receiver may be a single person or a group of persons. The receiver understands the eaning of the message and provides feedback to the sender. The receiver should have the same language ability, comprehension, and cultural background as the sender. If not, it may lead to distorted understanding of the meaning of the message by the receiver. 5. Feedback: It is the most crucial element of communication. It is provided by the receiver to the sender. Receiving feedback is important for the sender to know that the receiver has received the message and interpreted the meaning of the message in the desired way. Without feedback, the process of communication cannot be complete. For example, when you send a mobile SMS to our friend, you get feedback in the form of delivery report that informs you whether your message has been delivered or not to the intended receiver; it also happens in the same way the case of e-mail. BARRIERS OF COMMUNICATION Communication plays a major role in developing a relationship. It can also a relationship among family members or management in any institute. More specifically, communication influences the effectiveness of instruction, performance evaluation, and the handling of discipline problems. Communication should be straightforward. What can make it complex, difficult, and frustrating are the barriers. Some barriers of communication are the following. Physiological barriers to communication are related with the limitations of the human body and the human mind (memory, attention, and perception). Physiological barriers may result from individuals’ personal discomfort, caused by ill-health, poor eye sight, or hearing difficulties. Poor listening skills, listening to others is considered a difficult task. The solution is to be an active rather than passive listener. A listener’s premature frown, shaking of the head, or bored look can easily convince the other person/speaker that here is no reason to elaborate or try again to communicate. Information overload, it is essential to control the flow of the information, else the information is likely to be misinterpreted or forgotten or overlooked. As a result, communication may get distorted. Inattention, at times we Just do not listen but only hear. For example, your manager is immersed in his/her very important paper work and you are explaining to him/her about an urgent problem. In this situation, due to the inattention, the manager will not listen to you (he/she will only hear you); hence, he/she may not get hat you are saying and it may lead to disappointment. Emotions, the emotional state of a person at a particular point of time affects his/her communication with others as it has an impact on the body language (nonverbal communication). If the receiver feels that the sender is angry (emotional state), he/she can easily infer that the information being obtained will be very poor. Poor retention, the human memory cannot function beyond a limit. People cannot always retain all the facts/information about what is being told to them especially if he/she is not interested or not attentive. This leads to communication breakdown. Physical and environmental distractions, physical distractions are the physical things that get in the way of communication. Examples of such things include the telephone, an uncomfortable meeting place, and noise. These physical distractions are common in the warehouse setting. If the telephone rings, the usual human tendency will be to answer it even if the caller is interrupting a very important or even delicate conversation. Distractions such as background noise, poor lighting, uncomfortable sitting, unhygienic room, or an environment that is too hot or cold can affect people’s morale and concentration, hich in turn interfere with effective communication. Psychological barriers, psychological factors such as misperception, filtering, distrust, unhappy emotions and people’s state of mind can Jeopardize the process of communication. We all tend to feel happier and more receptive to information when the sun shines. Similarly, if someone has personal problems such as worries and stress about a chronic illness, it may impinge his/her communication with others. Social barriers, social barriers to communication include conformity, a process in which the norms, values, and behaviours of an individual begin to follow those of the wider group. Social factors such as age, gender, and marital status may act as a barrier to communication in certain situations. Cultural barriers, cultural barriers to communication often arise when individuals in one social group have developed different norms, values, or behaviours to individuals associated witn another group. Cultural ditterence leads to difference in interest, knowledge, value, and tradition. Therefore, people of different cultures will experience these culture factors as a barrier to communicate with each other. Semantic barriers, language, Jargon, slang, etc. , are some of the semantic arriers. Different languages across different regions represent a national barrier to communication. The Use of Jargon and slang also act as barrier to communication. Past Experience, if someone has awful experiences in the past related to some particular situation, then he/she will try to avoid communication in that situation. Organisational Barriers, unclear planning, structure, information overload, and timing, technology, and status difference are the organisational factors that may act as barriers to communication. Technological failure, message not delivered due to technical failure (e. g. receiver was not in mobile network area and the sender has not activated delivery report in message setting). Time pressures, often, in an organisation the targets have to be achieved within a specified time period, the failure of which may have adverse consequences for the employee. In a haste to meet deadlines, usually an employee tries to shorten the formal channels of communication that can lead to confusion and misunderstanding among the various levels of supervisors, hence leading distorted communication. Therefore, sufficient time should be given for effective communication. Complexity in the organisational tructure, the greater the hierarchy in an organisation (i. . , the more the number of managerial levels), the more chances of communication getting destroyed. Only the people at the top level can see the overall picture while the people at low level Just have knowledge about their own area and a little knowledge about other areas of the organisation. Unclear messages, effective communication starts with a clear message. Unclear messages in terms of meaning, grammar, and words may a ct as a barrier to communication because the receiver may not be able to understand the actual meaning of the message. Lack of feedback, feedback is the mirror of communication. Feedback mirrors what the sender has sent. Without feedback, communication cannot be considered complete. Both the sender and the receiver can play an active role in using feedback to make communication truly two-way. Methods of overcoming barriers of communication, overcoming the communication barriers will be different in different situations depending upon the type of barriers present. The following are some of the important general strategies that will be commonly useful in all the situations to overcome the barriers of communication. Taking the receiver more seriously Crystal clear message Delivering messages skilfully Focusing on the receiver Using multiple channels to communicate instead of relying on one channel Ensuring appropriate feedback Be aware of your own state of mind/emotions/attitude Effective communication techniques are useful to make the communication efficient and meaningful. There are several techniques of effective communication, which can be used. For example, maintaining eye-to-eye contact with the team is essential for ettective communication. Listening actively means to be attentive to what the other erson is saying verbally and nonverbally. Active listening is an effective communication skill. 1 . Stand squarely facing the other team; establish eye-to-eye contact. 2. Keep the posture open. 3. Be relaxed. Using silence during communication process can carry a variety of meanings. The impact from every conversation you have comes from your nonverbal cues. These include eye contact, your posture, and the gestures you make. The nonverbal cues indicate what you think, even if your words say something else entirely. Some people don’t like to be touched, and invasion to their personal space is one nonverbal cue ou can easily avoid. Nonverbal cues are Just as important as any other communication technique you’re trying to master. The tone of your voice, for example, if you say that mfou’ll be happy to sacrifice this opportunity for someone,† but you’re yelling when you say it, the team will clearly notice that you’re actually not happy to do it. Be consistent verbally and nonverbally inconsistency in verbal and nonverbal communication by the sender may lead to confusion and misunderstanding of the message. Ask open-ended questions open-ended questions encourage the team to communicate more, whereas, close-ended questions iscourage the team from communicating. Use Language Understood by the team. Accurate, accessible and detailed recording is not only essential it is a vital tool for ensuring accuracy of information, clarity of goals and accountability. Of course, it can achieve none of these aims if it is never read, and so in the first place it must be legible. It is a team leader’s responsibility to ensure that, they record conversations, accurately, and that they retain the information available. Electronic copies of any form of communication i. e. emails can be copied saved and stored either into a eparate folder on your computer, or onto a USB storage device, or external hard drive alternately you should ensure that all emails are archived for future reference. Methods of Verbal Communication Face to face informal communication Underused in these days of email, but invaluable for getting the message behind the words. Body language can tell you a lot about what a person really thinks regardless of whether they are agreeing with you verbally or not. Quite often we will email someone who only sits in the next room – or even at the other side of the same room, ‘because an email is recorded’. There is nothing to stop a record of a face to face meeting being created. Meetings Many meetings are badly planned and managed, this is one of the main disadvantages of meetings as no formal records or minutes are kept or recorded. Formal Briefings Useful to reach a mass audience. Beware though if what you have to say is controversial or bad news for some of the audience then you will face a lot of resentment and create resistance, where staff feel unable to challenge you or to ask questions because there are so many people present. Verbal Communication has the following advantages: Saving of Time The greatest advantages of verbal communication is saving of time. Under this system of communication the messages are communicated immediately without consuming any time. Verbal communication is the only way out when a message is important and when immediate action is necessary. Saving of Money As there is no tormal met nod ot communicating the message, no help ot any particular media this type of communication saves a lot of money. More Effective As the message is direct between the Senders of message and the receiver of message the messages prove to be more effective. The sender of the message can also exercise his personal influence over the receiver of message. Clear Doubts Verbal communication is also better as it removes any doubts regarding the message, between the sender and the receiver of message. Any doubts can immediately be cleared and the receiver of the message can immediately get the explanations regarding the message. Increase in Productivity and Efficiency Verbal communication is more effective. It increases the productivity and efficiency of workers because they clearly understand it and follow it. Verbal communication has the following disadvantages: Lack of Proof of Message The greatest disadvantage of verbal communication is that there is no proof of the message being communicated. Not Suitable for Future Reference As there is nothing in writing supporting the message communicated under this method, it is not suitable for future reference. If there is any dispute at any point with the message. Not Suitable in Case of Distance if the receiver and the sender of the message are living at a distance from each other, this method of communication is not suitable because it will increase the cost of communication, it ill not be effective because of lack of personal touch and it may not be clear and explanatory. Many times, when people think of the word communication, they think of an exchange of information and ideas through words. However, verbal communication is just one small part of communication. There are many different methods of communication. Written You can’t avoid written communication in the workplace; it’s everywhere. Emails, memos, reports, and other written documents are all part of everyday business life. Written communication is the most appropriate when detailed instructions are equired, when something needs to be documented, or when the person is too far away to easily speak with over the phone or in person. Email is a lifesaver for many people, especially in the business world. If you rely on emails and memos to conduct your business, it’s very important to portray a professional image. Don’t use abbreviations unless they pertain to your field, and always use spell check and read over your email before you send it to make sure it’s clear and concise. Emails should be brief and to the point. Non-verbal communication plays a large role in the way you communicate with thers. Unless you’re using sign language, however, you probably dont want to rely on it as your sole means of communication. You do, however, need to be aware of it. Your gestures, eye contact and movement, and the way you stand and sit all convey a message to the person you are communicating with. Use gestures appropriately, or leave your hands at your sides. Don’t fidget, which is distracting, and avoid crossing your arms, which sends off the appearance of being angry or closed off. Always look the person you are speaking to in the eye, and don’t roll your eyes or stare while they talk. Email Effective where supported by the organisation, and where sent by the right person. Emails that look as though they are selling something or that come from people the recipient has never heard of, are at high risk of being deleted without being read as they will be seen as potential spam. Newsletters Newsletter can be good for general awareness, but will normally only be well read if the newsletter is usually interesting and colourful. Notices/signs/posters Effective for messages or promotion of single issues although notice boards are not always the best place to put a notice that you want read. Signs need to be displayed where they can be easily seen but there is still no guarantee that they will be read. Blogs Blogs are a good way of keeping people up-to-date, again, providing that there is a good reason for people to visit and read you blog these can also be limited to people with only a passing interest. The importance of keeping oral records Any oral communication where a decision or commitment is made, and that is not otherwise documented, needs to be captured and placed in your recordkeeping system. For example: A meeting or conference call where a decision is made, if formal eeting minutes or notes are not taken. A voice mail message committing to take action. A telephone call responding to a member of staff. The issuing of verbal warnings. What types of communications are included? Face-to-face meetings Telephone calls Voice mail messages (including telephone or computer) What is the best way to capture conversations that are records? Write a memo in your diary. Be sure to include: Date and time of the communication Type of communication (e. g. , voice mail, telephone call) Participants Subject Details on any decisions or commitments What kind of electronic communications might be a record? Any electronic communication where a decision or commitment is made, and that is not otherwise documented, needs to be captured and placed in your recordkeeping system. For example: E mails. A voice mail message committing to take action. All other forms of on line communication. E mails Any on line correspondence What is the best way to capture conversations that are records? Save to a file on your computer, or onto a USB drive, or external hard drive be sure to include: Date and time of the communication Type of communication How to cite Work place communication, Papers

Pregnancy Essay Example Sexuality and Teen Pregnancy

Sexuality and Teen Pregnancy The risks of sexual involvement for Sally Research shows that without contraception, teenage girls have 90% chances of being pregnant within a year. Adolescents like Sally are more susceptible to sexually transmitted infections like Chlamydia, syphilis, herpes, gonorrhea, and even the fatal HIV. This can be attributed to monogamy, sex without contraceptives, and selection of partners at elevated risk. In addition, younger females are biologically more prone to infections in comparison with older females. Moreover, sexual activity before the physical development of body can immensely hurt. Teenage girls like Sally who engage in sexual activity before turning 18 are more susceptible to health hazards such as cervical cancer. Most importantly, the emotional trauma suffered by teens when left by their partner drives them towards monogamy. This can prove even more physically and emotionally distressing  (Belsky, 2010). She should be encouraged to use contraceptives; however, sometimes contraceptives like spermicides can escalat e the risk of catching sexually transmitted diseases. Lastly, early on sexual activity has greatly accelerated issues of mental health, regret, low self-worth, guilt, depression. This in turn encourages adolescent intimate relationships; thus, the sadistic cycle thrives. Authoritative parenting behaviors and consequences if the limits are not followed I would explicitly delineate cultural and societal norms that we respect and expect Sally to abide by. More importantly, a direct one on one talk with children can clear out any misconceptions from misinformation from peers. Regular talks focused on sharing and emphasizing values will also serve as a communication channel and help the child to confide in parents. Since, Sally is sexually active and has had opportunities to have sex, so it is crucial to know about her whereabouts, and even that of her friends. It is vital to establish a positive relationship with children and to keep an eye on what they do in their spare time. On a more strict side, high and achievable academic expectations should be established. Studies have proven that children who are committed to studies are less susceptible to anti-social behavior such as teenage sex, drugs, alcohol, and the like. Therefore, a high academic expectation should be established and ambitions should be constantly emphasized. She needs to be clearly reminded of the non-negotiable rules, curfew timings, and expectations as she has been staying out late. In case, she does not adhere to these, she should be punished. She needs to be encouraged to join group activities and stay away from one-on-one dating in her early teens. Unconstructive media images that promote early sexuality should be stringently denounced. Physical and emotional issue likely to be important to Sallys physical and mental health Sexually active teens are confronted with social and emotional plights due to puberty. Although, pubertal changes occur earlier in females like Sally; however, teen girls have not developed the emotional maturity to be given sole responsibility for their sexual behavior. Teenagers like Sally often confuse sexual pleasure for love. Later down the road, the sexual intimacy ensues in powerful emotional trauma. Girls are even more vulnerable to experiencing emotional collapse. Moreover, studies have revealed that sexually active teens are more prone to drug and alcohol usage than virgin teens. Drugs blind them temporarily; hence making it easier to indulge in sexual activity. Therefore, besides sexual health risks, drugs can also adversely affect Sally’s physical health. Sallys need for autonomy in her development of personal responsibility Sally should be encouraged to identify problems, root causes, and contemplate over probable consequences. This autonomy will encourage her to verbalize sentiments, and use alternate healthier ways to deal with teenage problems. Placing trust and responsibility in her will escalate her self-esteem and encourage her to take a more mature perspective. Nevertheless, Sally is still a minor so parents still have a moral and legal obligation to guide her; thereby, they should assume the role of consultants. Its Time We Did Your Assignment Can’t wait to hear from you. We are waiting for your call with you saying, â€Å"do assignment for me.† Talk to us.

Essay on Tax lecture2

Essay on Tax lecture2 Essay on Tax lecture2 1 Lecture 2: Residency and Employment income Selected parts of Chapters 1, 3 and 21 Web links are included to provide more information to those who are interested to learn more about particular topics Recommended exercises and self-study problems in chapter 3: Exercises 1-3, 8-9, 11-12, 14-16, Self-Study Problem 3-10: As you are not responsible for the standby charge (and the operating cost benefit, if any), you can assume that the standby charge is $4,871 (before taking into account any payments made by Ms. Firth to her employer) 2 Residency [ch. 1] 2.1 ITA 2 is the charging provision [1-77 to 1-90] It defines who the taxpayer is and what the base is = who is liable for tax on what taxable income For residents of Canada for tax purposes The base is worldwide taxable income in Division C of the Act For non-residents of Canada for tax purposes (you can't tax non-residents on worldwide income obviously because they are not Canadian.) The base is certain Canadian source taxable income in Division D of the Act if they were : employed in Canada, carried on a business in Canada, or disposed of a taxable Canadian property (e.g., Canadian real estate) at any time in the year or a previous year Read ITA 2(1), 2(2), 2(3) 2.2 Definitions [1-78] Person = individuals, corporations, and trusts Resident – unless an individual severs all significant residential ties with Canada upon leaving Canada You will be a resident of a country where you have the most residential ties (like 5 year contract as a teacher in Canada, so it is where your normal norm is, and where your family lives). Canadian residents are liable for Canadian income tax, without regard to their citizenship. In some cases you have multiple homes in different countries, and then you will have to go to court and decide which one is your norm home. Significant residential ties include: having a spouse or minor child in Canada; and having a home in Canada See also cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html 2.3 Computation of Income [1-100 to 1-105] You don't have to memorize the subdivisions. 2.3.1 Division B of Part I of the Act- Computation of Net Income for Tax Purposes Taxable income = Net income for tax purposes minus Division C deductions Division B has subdivisions for each source of income: a = employment b = business or property c = taxable capital gains/allowable capital losses - In Canada only one half of capital gains are taxed, and only one half of capital losses are deductible. d = other income (e.g. spousal support received, pension income) e = other deductions (e.g. RRSP contributions, moving expenses, spousal support paid, child care expenses) If an amount received does not fall into one of these categories it is not part of net income for tax purposes. So it wouldn't be subject to federal income tax. 2.3.2 Computation of Income ITA 3 [1-106 to 1-126] See Fig 1-3 page 24 ITA 3 brings together all the different sources of income to form Net Income for Tax Purposes Taxable capital gain (TCG) = 1/2 of a capital gain Allowable capital loss (ACL) = 1/2 of a capital loss One key point in ITA 3 is that if allowable capital losses are greater than taxable capital gains, the allowable capital losses deducted in computing net income is limited to the taxable capital gains for the year Excess ACLs are available for deduction in other years (â€Å"carried over"). They can be carried back to the preceding three years and deducted against TCGs in those years (if any) and/or carried forward indefinitely and deducted against future TCGs. If not deducted before death, they can be deducted in the year of death (and the immediately preceding year) against any type of income See Example at 1-125 page 26 3 Income or Loss from Employment [ch. 3] 3.1 General Rules [3-1 to 3-6] ITA calculates income by source , so each source separately. For example, employment income is computed separately from business and property income and

Complete SAT Instructions, With Tips and Strategies

Complete SAT Instructions, With Tips and Strategies SAT / ACT Prep Online Guides and Tips What are the instructions that you’ll see on the SAT? And are they important? In this article I’ll take a closer look at the directions you’re given on the test and tell you what parts of them are most critical for earning high scores! Instructions? What Instructions? On the SAT, you’ll see instructions on every section about how to answer questions as well as instructions on your answer sheet about how to select and fill in answers. What followsare the instructions that you should expect to see for different parts of the test laid out section by section.I’ll also go into more detail and show you the instructions for different types of questions within the three sections so you’ll be prepared for everything! Answer Sheet Instructions You will get a set of overall multiple choice instructions on the answer sheet that look like this: This is demonstrating how you should fill in answers to get credit for your responses.Make sure you bring a couple of #2 pencils to the test so that you have a backup in case one breaks!Don't use mechanical pencils.You should also follow the instructions for filling in circles darkly and completely. If you erase any answers, do it thoroughly, and bring an extra eraser just in case. Instructions for All Multiple Choice Sections The one direction you’ll see at the end of every section of the SAT is this: On the SAT, you can’t turn back to a previous section and answer questions you skipped or flip to the next section and start looking at questions early.If you do, it’s considered cheating!Everyone must have the same amount of time for each section. If you turn back, you’re giving yourself extra time, which is unfair to other students. SAT Reading Instructions On the new SAT Reading section, all questions are passage-based (no more sentence completion questions with crazy vocabulary!). Here are the overall instructions for the Reading section: You’ll see both single passages and paired passages, and some may be accompanied by relevant graphics. There are 52 questions in total that are asked over the course of five different passages or pairs of passages. These questions are based on information in individual passages, relationships between paired passages, or relationships between passages and graphics. When it says to choose the best answer to each question based on what’s â€Å"stated or implied†, this is an opportunity for slight confusion.Something being implied on the SAT is not exactly the same as something being implied in real life or in reading for an English class.The implication has to be very direct in order for you to take it as evidence for the answer to a question on the SAT.Since the SAT is standardized, there can be no room for subjectivity in answers.If you think something has been implied, make sure your thoughts are based on concrete evidence provided by the passage and not pure assumptions. SAT Writing Instructions The SAT Writing section has been simplified in a way on the new SAT. All questions are now passage-based (just like the Reading section). Here are the directions you'll see at the beginning of the section: Basically, the directions explain that questions will ask you to improve the quality of writing in each passage by correcting grammar errors, fixing sentence and paragraph structure, and revising word usage. Much like the Reading section, passages in the Writing section are sometimes accompanied by tables or graphs that you'll need to consider as you answer questions. In most cases, question numbers are inserted into the passages indicating which sentence or word you will potentially need to revise. SAT Math Instructions There are two math sections on the new SAT: the first section does not allow the use of a calculator, and the second section does. Both sections includemultiple choice and grid-in questions. The first section has 20 questions, 15 of which are multiple choice and five of which are grid-ins.The instructions that you’ll see at the beginning of the section look like this: Key points to keep in mind based on the instructions are: Use the space you’re given! Don’t hesitate to write things out if you’re unsure about them in your head. The diagrams are there to help you. They're drawn to scale, so use them for reference. The domain of a function on the SAT is always all real numbers unless otherwise indicated. I also included all the formulas that are provided for this section.Even though they’ll be there on the test, you might still decide to memorize these formulas.You'll waste valuable time if you keep needing to flip back to the first page of the section. For the last five grid-in math problems in this section, you’ll see the following instructions: Key points to remember from these instructions: Fill in the circles completely and correctly. DON’T just write the numbers in the boxes because that’s not the part that’s going to be scored by the machine. There are no negative answers for grid in questions. If you get a mixed number fraction for an answer, turn it into an improper fraction or a decimal before gridding it in. Leave any columns you don’t need blank. If you get a long decimal answer that won’t fit in the grid, round it, but make sure it fills the entire grid so it’s the most accurate possible response. The second math section has 38 questions that you will answer over the course of 55 minutes. It includes 30 multiple-choice questions and eight grid-in questions. The only difference in the instructions for the second section is that the use of a calculator is allowed. Remember that you can use your calculator as much or as little as you want. There will be cases in this section where it's actually faster NOT to use your calculator, so be mindful of which method makes the most sense for each question. Woo...oh man...excuse me while I wipe away tears of mirth. SAT Essay Instructions The instructions for the now optional SAT essaylook like this: To make sense of these instructions, it's important to understand the format of SAT essay prompts.The prompt will consist of a piece of persuasive writing. You're expected to analyze the techniques that the author uses to build his or her argument. You will need to â€Å"demonstrate that you have read the passage carefully, present a clear and logical analysis, and use language precisely."What do they really mean? "Demonstrate that you have read the passage carefully" This means you should frequently use direct quotes from the passage to back up your response. Make sure you fully understand the author's point and are able to explain it clearly with solid evidence. It's best to read the passage very thoroughly before you start writing and underline the most important points. This will help you to write an essay that is more mindful of the exact methods by which the author's argument is constructed. "Present a clear and logical analysis" Write a good introduction with a thesis that clearly states the aspects of the author's argument you plan to analyze.Use specific examples from the text to support your point in logical order.You should also write a well thought out conclusion that summarizes the main points you made in your essay about the techniques the author uses to build an argument. "Use language precisely" Try to use advanced vocabulary words, but only if you’re very confident with them. Using a word incorrectly could hurt you.Make an effort to avoid repetition and createsmooth transitions between your thoughts. The rest of the instructions tell you to be careful with your handwriting and to write only in the lines on your answer sheet.If you think you’re going to have a problem with writing legibly, you might want to look into testing with accommodations.You may be able to type your essay in extreme cases. The instructions also reiterate that you need to use a #2 pencil, write on the answer sheet and NOT in the test booklet, and stay on topic! Conclusion To save yourself time on test day, you should understand the instructions for each section before you sit down to take the SAT. The new SAT has four sections, each of which is accompanied by one or more unique sets of instructions. All questions on both the Reading and Writing sections are multiple-choice and passage-based, and the two Math sections contain both multiple-choice questions and grid-in questions. The essay now involves analyzing how a persuasive argument is constructed by the author of a given passage. Now that you're armed with this background information, the foundation is laid for you to takesome realpractice tests! What's Next? For more quick facts about the SAT, check out these 21 SAT tips and tricks you can use to raise your scores! Still not sure what score you should be aiming for on the SAT? Read this guide to learn how to calculate your target score. If you're looking to register for the test, learn whether the next date is best or if you should hold off until later. Want to improve your SAT score by 160points?We have the industry's leading SAT prep program. Built by Harvard grads and SAT full scorers, the program learns your strengths and weaknesses through advanced statistics, then customizes your prep program to you so you get the most effective prep possible. Check out our 5-day free trial today: