His fellow inmates congratulate Jorge Heredia after his presentation on Demo Day in the Last Mile programme at San Quentin State Prison. Gerry Shih / Reuters
His fellow inmates congratulate Jorge Heredia after his presentation on Demo Day in the Last Mile programme at San Quentin State Prison. Gerry Shih / Reuters

Signs start-up mania has taken hold even behind the walls of California's most notorious prison



One by one, the entrepreneurs, clad in crisp blue jeans and armed with PowerPoint presentations, stood before investors and tech bloggers to explain their dreams of changing the world.

For these exuberant times in Silicon Valley, the scene was familiar; the setting, less so.

With the young and ambitious flocking again to northern California to launch internet companies, there were signs one recent morning that start-up mania has taken hold even behind the faded granite walls of California's most notorious prison.

"Live stream has gone mainstream. Mobile video usage went up and is expected to increase by 28 per cent over the next five years," said Eddie Griffin, who was pitching a music streaming idea called At the Club. He happens to be finishing a third stint for drug possession at San Quentin State Prison, near San Francisco, after spending the past 15 years behind bars.

Mr Griffin was one of seven San Quentin inmates who presented start-up proposals on "Demo Day" as part of the Last Mile programme, an entrepreneurship course modelled on start-up incubators that take in batches of young companies and provide them courses, informal advice and the seed investments to grow.

According to the business news website Xconomy, incubator programmes have tripled in number for each of the past three years, a pace that has fuelled talk in tech circles of an "incubator bubble".

Chris Redlitz, the local venture capitalist who founded Last Mile, says that his goal was never to seek out a genuine investment opportunity inside a prison, but to educate inmates about technology entrepreneurship.

Inmates, after all, are not allowed to run businesses. They do not have access to mobile phones and they use computers only under close supervision.

After his presentation in San Quentin's chapel, which received a rousing reception, Mr Griffin told a reporter that it was unlikely he would launch his start-up idea immediately after being released this summer.

"I still have a lot to learn," he said. "I've never used a cellphone. Technology is kind of foreign in this environment."

But to hear San Quentin's inmates use jargon such as "lean start-up" and "minimum viable product" shows how start-ups have come to embody mobility, ambition and hustle.

"If they were doing this in the '80s there may have been a different theme or model," said Wade Roush, Xconomy's chief correspondent. "But in this day and age, becoming an entrepreneur or starting a business is a form of self-actuation."

Situated on prime waterfront land, San Quentin prison is home to California's only death row. But it has also kept a long-standing progressive reputation, boasting a college degree-granting programme and arts courses.

The Last Mile accepted 10 inmates out of 50 applicants for its latest batch. The programme, which graduated its first class of inmates last year, meets twice a week to discuss start-ups and lasts six months, although the most recent class took seven months because of a prison lockdown last year.

Some Last Mile participants, under official supervision, have also joined the online question-and-answer site Quora to respond to questions about prison life or describe what it felt like to commit murder.

The latest batch of start-up ideas included a fitness app that would motivate drug addicts to exercise, a cardiovascular health organisation, a social network for sufferers of post-traumatic stress disorder, a food waste recycling programme, and an e-commerce site for artists in prison.

The specs

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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UAE currency: the story behind the money in your pockets
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Men’s: 
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Women's: 
Nour El Sherbini (EGY)
Raneem El Welily (EGY)
Nour El Tayeb (EGY)
Laura Massaro (ENG)
Joelle King (NZE)
Camille Serme (FRA)
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
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Toyota land Cruiser 2020 5.7L VXR

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