RW Emerson: Heart vs. Mind in Religious Exploration

RW Emerson is justifiably famous for his pithy one liners, although they appear strewn like nuggets of gold in a field of dense pyrite, at least to modern readers.  Here are a few you may recognize but not have realized he was the author:

Hitch your wagon to a star.  To be great is to be misunderstood.   Nothing can bring you peace but yourself. All mankind love a lover.

And this last one, which I love from an author: Next to the originator of a good sentence is the first quoter of it.

He was a lecturer and writer of history, biography, and science, as well as a poet, but I want to focus on his religious and philosophical views today because the conflict he felt in religion is one that you may feel, too, pulled between heart and mind, intellect and emotion. By looking at some of his decisions, and considering the context of those actions, we can reflect on our individual and congregational values about the heart and mind of our faith. 

Unitarians sometimes forget that, although he was a Unitarian minister, in what amounted to a nine generation family business, Emerson quit the job after only 3 years.  Ostensibly it was over his discomfort in celebrating the Eucharist, but really, according to his journals and other writings, it reflected broader reasons that many of us have experienced, too, as we have church shopped through our lives, trying out different denominations, and various congregations within them.  After he left, he neither referred to himself as Reverend nor expected others to do so.   I think he’d be rather embarrassed to have a Unitarian church named after him, because he purposefully left the denomination, explaining that one’s relationship with the divine was better found outside any church than within.

Roman and Jewish Context of Early Christianity

When I taught 7^th grade years ago, I heard the tail end of an argument between two girls.  The penultimate line was, “Then what religion was Jesus?” To which the other girl hurled with confidence, “Jesus was Baptist.”  We laugh, knowing that Jesus was Jewish, but I think many of us are rather vague on the historical context that gave rise to the Jesus movement, especially if we read the Bible in a vacuum, or rely on those religious movies that appear, without fail, every Easter.  So this morning, I thought it would be useful to summarize the position of Judaism in the Roman Empire between 100 BCE and 135 CE, then focus on the religious conflicts within Judaism itself, and the implications for the early years of Christianity, when it segregated from its root religion of Judaism.

Our images of first century CE Jews as a small band of poor people limited to Palestine, dressed in striped blankets and wearing burnooses is misleading.  First of all, they didn’t wear that Arab headdress.  Second of all, during the first century BCE, Jewish populations thrived throughout the Roman Empire.  They were not some marginalized population crowded only into the eastern Mediterranean hinterlands.  For example, although Rome was obviously the political capital, Alexandria, Egypt was the cosmopolitan and intellectual city (maybe like the different perceptions of New York City and Washington DC for America, today).  In Alexandria, Jews accounted for about 40% of the city’s population (and it was supposedly one of the Ptolemy pharaohs who commissioned the Septuagint Greek translation of the Old Testament, a few centuries earlier).  Throughout the empire, Roman records calculated a Jewish contingent upwards of 10%, often in cities and in positions of business, educational, and political leadership. By contrast, do you know the percentage of Jews in the US today?  Less than 2%.  Furthermore, the Romans granted Jews favored status during that century.  They had full freedom to practice their religion, including not working on their Sabbath, not worshipping at Roman religious sites, and practicing circumcision.  Had the influential Greek population of the eastern empire been in power, they would likely have outlawed what they regarded as that barbaric act of self-mutilation.

Native Plants and Gardening

We live in South Central Alaska.
Among the edible wild plants on the property are plenty of edible berries:  blueberries, raspberries, strawberries, elderberries, cranberries.  Vitamin C is not a problem in the summers or for people who can the berries in the fall. Edible wild leaves for salads or cooked preparations (or medicine) include fiddlehead ferns (which must be cooked), fireweed, dandelion, and chickweed  (Do you remember Euell Gibbons?  He called the last a miracle plant because it is so good for so many things).  I've used spring time spruce tips in shortcake, viniagrette, and tea, based on information that Captain Cook had his men drink spruce tip tea to ward of scurvy during winter explorations.

Below is a list of native and purchased plants that this neophyte gardener and forager has nurtured and how they performed over the past few years.

Tiny House Furnishings



You can enlarge this photo by clicking on it 

Furnishing the cabin long distance, before it was built, and as design elements shifted, was intimidating to me, but the endeavor committed me to the site in a way that my husband's enthusiasm and my maniacal weed whacking of 8 foot grasses and devil's club never did.  The process enabled me to start seeing myself living there.  In terms of décor, I had three priorities:  a) shop once and that’s it, b) don’t crowd the little space, and c) make it inviting and functional. These priorities determined what we bought and how we used them.

How Entrepreneurs Can Avoid a Financing Scam

(I originally wrote this article for Entrepreneur Magazine, several years ago)

“If it seems too good to be true…,”

“If it walks like a duck and quacks like a duck…,”

“Beware of Greeks bearing gifts” … 
Not every business scam is so obvious.  Even seasoned business people can be taken by smooth talkers, not realizing the manipulation until tens of thousands of dollars have changed hands.  Optimistic start-up entrepreneurs in need of financing are particularly vulnerable to “financial advisors” who position themselves as representing ready investors.  Without knowing the questions to ask about securities laws that protect business owners and investors, they can be suckered into typical scams.  The common theme running through all of them is “Say what the person wants to hear” and “if they don’t ask, don’t tell.” Confident entrepreneurs who dismiss nay-sayers as “not getting it” may be susceptible to smooth operators who praise their idea as the greatest thing since Microsoft, promise funding, and then slip in a creative contract. 

 Consider the following frequent scams that might be titled, rope them in; string them out”, “bait and switch,” and “now or never.” 

 SCAM:  “Rope them in; string them out”

A serial entrepreneur, Joe Knoff, 47, bootstrapped one business, Illuminating Consulting Service and Supply (ICSS), which he sold in 2002, after being diagnosed with cervical degenerative disk disease.  His entrepreneurial experience and his frustrating medical journey prompted him to found MyNaturals.com, an e-commerce solution to the $230 billion dollar healthcare-environmental consumer marketplace, known as LOHAS (lifestyles of health and sustainability).  This time, he wanted to attract investment in order to grow faster, so he posted his business summary on a website designed to bring entrepreneurs, service providers and investors together. 

Within three days of posting, MyNaturals received a letter from a firm that included the following phrases, “We love your concept and niche market,”  “capitalization is highly feasible,” “for this investor,” “we have strong interest,” and “we, in conjunction with investor, have easily pre-qualified the financing requested…” Joe was delighted but skeptical.  How could anyone pre-qualify him based on a two page business summary?  First, he called a representative of the posting website, who carefully told him that the company makes no warrants or representations about any of the entrepreneurs, investors, or service providers who register with the site.  So he checked out the investment firm.  He visited the website and was pleased to see a Better Business Bureau logo there.  Then, he interviewed one of the principals and had his accountant call, too.  In addition, he contacted a few client referrals and even checked with the state to confirm that the company was a registered corporation. 

Satisfied, he made a few adjustments to the contract and then engaged the firm.  He understood the deal as this: the firm had investor(s) ready to make either a loan or an equity investment of $650,000 if MyNaturals met certain milestones.  Both investors and MyNaturals could pull out of the deal at any time. The firm earned a non-refundable, up-front fee of $3450, as well as a percentage of funds raised, payable at closing.  This fee structure encouraged Joe to believe that the firm was financially committed to concluding the deal.  The firm also charged for various services, listed in a supporting document, but Joe was verbally assured that he probably would not need them. 

 Seven months later, he had paid $15,000 for various business preparation services and met no investors.  When the firm required yet another fee for a feasibility study, Joe balked.  On advice of his attorney, he contacted the principals and “clearly and politely” laid out his litigation strategy, their initial written assurances, and his detailed records of verbal and written communication with members of the firm.  He said that he was willing to settle out of court now or go to court later.  Eleven months later, he received a refund of 50% of the fees he had doled out, with the stipulation that he would not sue the financial firm. 

20/20 hindsight: Joe warns, “Entrepreneurs – beware.  THE FIRM IS STILL IN BUSINESS.  IT IS A MEMBER OF THE BBB.  Firms that are scamming you will never admit any guilt, even when they are made to pay up.”  Joe muses that “challenging economic times can be a breeding ground for unscrupulous groups claiming to represent capital funding sources.  I treated my search for start-up capital as meticulously as I wrote my business plan, but I did not know what I did not know - all the rules of the funding game.  There don’t seem to be well published industry guidelines, probably due to the fact that much of this industry is not well regulated.”   

 Elements of the scam:  This clever ruse encouraged the client to think the financing firm made its money on funds raised from investors (as legitimate, FINRA licensed broker-dealers do) when in fact, their revenue results from the service fees that were represented as “refundable at closing” and as “probably unnecessary.”  Charged one at a time, those costs seemed modest in comparison to the potential funding.  After all, what is a $5000 feasibility study if it yields a $650,000 investment?  A disgruntled client without the detailed notes and quotes of Joe Knoff would likely confront an uncomfortable truth – being told up front that “the investor can back out at any time” and that “the fees are refundable at closing.”  In other words, if no investor, no closing, and no refund. 

Commentary:

Steve Brewer, Managing Director of Brewer Capital in Houston, TX has heard his share of scams from vulnerable entrepreneurs.  His advice is to “Only deal with registered broker-dealers, where you have recourse to FINRA and SEC to validate people in advance and for mediation of any disputes afterward.”  In this case, one red flag was the early identification of an investor who never appeared.  “Broker-dealers can earn a commission on money raised from investors,” says Brewer.  “Therefore, we have an incentive to bring our investors and entrepreneurs together as soon as we have identified a fit. Someone who doesn’t do that may be milking a retainer.”    

SCAM:  “Bait and switch”

Kyle Holland, Managing Director of Investment Banking for Gray Capital Partners in Austin, TX, tells of a scam that happened to a client of his, who is a trial attorney.  “In early 2004, he was putting together a deal to develop a resort in Mexico.  Not every investment source is right for an international project like this, but about six months beforehand, a colleague of mine had talked with an investment firm in New Jersey that sounded likely.  My client and I talked with the principals and they said that they had all the right connections and could fund it.  We signed a reasonable term sheet, detailing costs and services, and mailed a $10,000 check to initiate the work.  To our astonishment, we subsequently received a totally new term sheet, with exorbitant terms, like a second ‘deposit’ of $100,000. We walked away.” 

Commentary: Holland shakes his head; “Of course this is illegal.  We could have sued them, but the costs of recovery with an out-of-state dispute would probably have cost more than the money we lost.  My advice is to meet investors in person, walk around their office, talk to their clients.  A $1000 plane ticket is worth the cost.”         

 SCAM:  “Now or never”

Mike Segal, of MJ Segal, Assoc. in NY has organized private equity conferences in New York for several years.  Presenting companies often mention funding horror stories to him.  In one case, an entrepreneur in NC had met, through networking in the investment community, an unlicensed “capital advisor” who appeared to have a reputation as a well-connected, hard worker.  One day, he received a breathless call from the man, saying that he had lined up $450,000 in investment for the start-up, but in order to represent him the next day in Denver, he needed a contract and an advanced fee of $22,000.  The entrepreneur had his attorney quickly draft a contract which, among other terms, solicited all written and phone records of contact with potential investors within 30 days of concluding the contract.  The advisor agreed and the money was wired.  When no proof of a meeting appeared, the entrepreneur canceled the contract, requested the records, and sent an attorney to collect a refund.  The principals of the firm refused the calls, closed the business, and are now working for other companies. 

Commentary:  A red flag here was the lack of due diligence, or company research, by the alleged investor.  As a result of corporate scandals in the public sector, the government passed the Sarbanes Oxley Act, which requires much more attention by corporate boards and the independent accounting and law firms they hire.  This requirement is impacting private companies, too. According to David Barbash, Corporate Group Partner with Nixon Peabody LLP in Boston, MA, just as entrepreneurs should take the time to investigate the professionals they intend to hire, they should expect the same evaluation themselves. "Entrepreneurs should be wary of prospective investors who do not do due diligence (on the entrepreneur and his/her company).”  “In the wake of Sarbanes-Oxley, investors are spending considerably more time in due diligence before consummating an investment.”   No reputable person would claim imminent financing by an investor who had never contacted the start-up management.   

 Overall:

Melinda LeGaye, President of MGL Consulting Corporation in The Woodlands, TX, provides FINRA required compliance auditing services for broker-dealers, and other regulated professionals.  She recommends that "entrepreneurs seeking equity capital in the form of a private placement (stock in a private company, sold to individual investors) make sure of two things.  “One, have legal counsel that is experienced with private placements, issuers, and underwriters.”  This is not the person who wrote the family will.  Securities law is an area of specialization.   “Two, utilize the services of a broker-dealer firm that is registered with the FINRA, the SEC, and with the states where the offers will be made.  Otherwise," she warns, "There are potential rescission issues (deals can be revoked) associated with sales by non-registered dealers.” 

What is the difference between a licensed/registered broker-dealer and a non-registered one?   The terms, investment banker and financial advisor, are generic.  They do not indicate academic degrees, state or federal licensing, or other special knowledge.  Therefore, you too, could set up shop with a company name like “ABC Capital Resources” or “XYZ Financial Advisors” or “Bonafide Equity Partners.”  On the other hand, FINRA and SEC DO register (license) people to perform limited functions that are subject to annual review.  Each license number, like 7 (national securities), 24 (supervision), or 63 (state only) defines the scope of their activities, and their responsibilities in raising money for entrepreneurs.

 The reason that this FINRA and SEC registration is important is that it PROTECTS ENTREPRENEURS AND INVESTORS in ways that unlicensed or unregistered “financial advisors” do not, unless you know what to demand.  Licensed broker-dealers must comply with a whole host of requirements (listed at www.finra.org) such as full disclosure in sales documents and in contracts, financial solvency, quarterly and annual audits by an outside organization, a log of client complaints that any potential client can request, and dispute mediation outside of court.  This means that entrepreneurs can validate a person’s professional good standing before hiring, ensure standards of salesmanship, fees, and contracts during engagement, and save money in case of any disputes later.  Broker Check (on the site), which the public can access for free, reveals work and disciplinary history of individuals.  Brokers who have been delisted are deleted.  Any entrepreneur considering raising money should spend several hours scanning the sections relating to private placements (sometimes referred to as reg. D).

By contrast, working with unlicensed fund raisers is a “buyer beware” proposition.  If securities law is not your area of expertise, why pay high fees to anyone who may subscribe to a “don’t ask, don’t tell” mantra of customer relations? 

 Dr. Sam Buser is a psychologist in Houston, TX who specializes in men’s issues and who works with many independent businessmen.  “There isn’t so much a psychological profile of businessmen vulnerable to scams.  It is a sociological issue.  Americans have a cultural belief that everyone can strike it rich.  We love ‘rags to riches stories.’” … “However, the person most likely to fall for a scam is one who won’t take advice from other people.”  He recommends that, “Every entrepreneur should have a mentor – someone who has succeeded at something along the line he or she is pursuing.”  Learn from what he or she did and didn’t know.

Lawyers, compliance officers, entrepreneurs and broker-dealers offer similar advice about the value of fore-knowledge.  Hire licensed broker-dealers and attorneys who specialize in private placements.  Expect detailed due diligence and do the same.  Note any differences in verbal promises and contractual language, and take great notes.  If you make a mistake, be prepared to walk away from a bad deal. Forewarned is forearmed.    

 Scam Signs:  Run, Don’t Walk  

 1)     Fund raisers who evade questions about their licenses, registration, AND amount raised for recent clients in your industry. 

----Legitimate broker-dealers comply with full disclosure requirements by FINRA in sales and contracts.  Require evidence of registration.

2)     Really wordy contracts filled with legalese that say, in essence, “we have no obligation to do anything we say,” or no contract at all.  

----Have a securities attorney write or review any contract involving investors or fund raisers.  This is an area of legal specialization.  

3)     Contracts that are clear on fees and duration but vague on deliverables.

-----It is your responsibility to define milestones and deliverables before you sign the contract.

4)     Fund raisers who won’t reveal the name of the investor/terms of investment as soon as they say they have some.  

5)     Offices with P.O. Box addresses only

6)     “Investors” calling from “boiler room” type call centers.

Sidebar 2:  How to Protect Yourself   

1)     Ask your banker, lawyer, and accountant to recommend broker-dealers. Their business with you is vulnerable if they steer you wrong.

2)     "Smart money" is worth more than "dumb money."  Hire people who specialize in (a) your industry, (b) investment in that industry, and (c) the funding range you seek.

3)     On www.finra.org, read all the requirements of FINRA registered broker-dealers that protect clients. Look up the status of the broker-dealers you are considering.

4)     Check websites for "tombstones" of funded deals and evidence of FINRA licenses.  If there are no tombstones, what services do they render?  (business consulting, business plan writing?)

5)     In interviews, ask for current registration with the FINRA, the SEC, and in each of the states in which any private placement will be offered.  If any answer is none, it is "buyer beware." 

6)     Complete background checks before you pay any money.  Visit companies like  www.ussearch.com to pay for background checks on individuals and companies.  Visit www.nasaa.org and www.finra.org for information (in English and Spanish) on broker-dealers, investment fraud alerts and other useful information.      

7)     Fees: Don’t sign an open-ended retainer. Few entrepreneurs have deals strong enough to justify a commission-only fee.  If your deal is not a slam dunk, negotiate a short term contract with monthly fees for pre-determined deliverables, like a deal critique and a pre-determined number of investment contacts.  Require updates of all communications with investors.   

8)     Set written caps and an approval process for expenses.

9)     Get everything in writing.  Don’t believe anything that is not written.