- If you don’t take risks, you never get to drink champagne! Nothing ventured, nothing gained as the saying goes. Is that true of venture capitalists?

- I may have champagne sometimes, but it is not on my list of favorite drinks. Out of all light alcoholic beverages, I prefer Riesling. During my college years, though, I thought it was the most disgusting wine of all, it tasted terribly sour. With time, I realized that Riesling wines can be very different. France, Germany and Austria make very decent brands.

I like red wines, too. Provided there is a fitting occasion to propose a toast.

- Surely you celebrate successful deals, don’t you?

- Our fund’s team is scattered throughout the world. Our people are at very different locations. We get together twice a year. And then we celebrate everything that’s been achieved during the period under review.

- Where do you usually meet?

- Different places. For instance, on Lake Baikal’s Olkhon Island, in Las Vegas, in San Francisco, in London, in Italy and Portugal… We select sites where we can have a good time together socializing, doing business and spending our spare time on recreation. Although the past tense of the verb “select” would be more appropriate here.

Regrettably, for the time being, the pandemic has made some modifications to our lifestyle.

- How many people are employed at Almaz Capital?

- There are 14 of us at the moment. Not that many. California is our main base. That’s where the so-called “exit” from our portfolio companies usually happens. The main reason is different, though. Silicon Valley is the place where our services are in extremely great demand. It so happened that innovations, at least, those in the field of IT technology, are most wanted there. America’s share in this process is very significant. Particularly, during the first three years after some new technology appears.

In the US, everything is based on competition even among traditional businesses, which either introduce innovative approaches themselves or purchase companies that have them.

The Europeans are too slow in making decisions, they are afraid of taking risks and may hesitate for too long out of fear that a new project may not survive. The American mentality is different, they tend to ask: what if the new idea hits the bull’s eye and yields a colossal competitive edge over the competitor?

This explains why our main office responsible for supply and demand analysis is there in California. We also have our people in London, Berlin, Warsaw and Kiev, and here in Moscow.

Before the coronavirus pandemic, I used to spend a third of my time in the US. I think that I stayed a quarter of my time in Russia, and the rest, in Europe and Asia. It wouldn’t be an overstatement to say that just a year ago the skies were my home. Three or four flights a week were normal.

- Do you have your own personal plane?

-  No. A private jet is not very important to me from the standpoint of convenience. I can easily do without it. I just don’t feel it is very necessary. To call a spade a spade, I hate show-offs, period.

I developed a certain set of habits a long time ago. For instance, it is a matter of principle for me to avoid using a chauffeur-driven limousine. Usually, I get around in a BMW X5 SUV with tinted windows. From time to time, some intriguing incidents occur thanks to this vehicle. Occasionally, when I drive up to some friend’s countryside home, their security guards or the domestic help usually swing the back door open to let the passenger step out only to see nobody inside. Then they gape at me and ask: “Where is the guest?” Sometimes I reply: “Gee… I must’ve lost him somewhere along the way?”

I only settle on using a car with a chauffeur, if I go to some official event in order to avoid confusion.

Believe me, I find it far more convenient to drive myself, that’s the typical European and American attitude. In Russia, people have a different take on things. Here’s another funny story you may enjoy. One time, I arrived at an office for a business meeting. From there I was taken to the next round of negotiations in a different car. Then I returned to the place where I had left my vehicle to find it was gone. I was stunned. I left it in the right place and didn’t violate any parking rules. Yet the car must have been towed away… In the end, a friend of mine confessed that he had pulled a fast one on me and said: “stop being stingy and hire someone to drive you around.”

You see, personal drivers became part and parcel of my daily routine at the dawn of my career. I was still a very young man when by virtue of my status I was entitled to a personal corporate vehicle. I was unable to shun the privilege, and had to put up with the thought that my personal driver was idling his working hours away waiting for the moment the “boss” might need his services to go someplace.

I worked endless hours, sometimes 12-14 hours nonstop. My personal driver was obliged to wait for me. While I kept toiling away from morning till evening attending meetings, holding talks and so on, my driver would move the back of his seat down and take a nap. His sole function was to take the boss from point A to point B from time to time. Did that make sense? As far as I can remember, all of my drivers were older than me and often complained they had to stay at work more hours than they should. Naturally, they felt that those extra hours were stolen away from their home and the family. I found this situation very awkward and irritating. When I moved to work abroad, I realized that even captains of big business - some of them multibillionaires - saw nothing wrong in driving to work and then back home. It’s normal.

- And how did your transformation from an expert theoretical physicist into a global investor take place?

- Life is life. It reshapes us and forces us to make choices. My life first transformed me into an international businessman in the hi-tech segment, and then into an investor.

I believe that at the very start, a great deal was decided when I graduated from high school in Zhitomir with honors and decided to go to Moscow to apply to the Institute of Physics and Technology. On the face of it, in my younger days my life was easy and simple. Although if we dig into my past a little bit deeper, some very interesting and humorous stories will surface.

- Such as?

- In the eighth grade, a bunch of us guys started making electric guitars. They were a great luxury and in very short supply in those days. There was no chance of buying them at all! First, we made some for ourselves to establish what was then called a “vocal instrumental ensemble” commonly known under its Russian acronym VIA, or more precisely, a school band. Then we launched a batch production process with the aim of making no less than 20 instruments only to be stopped on the way.

- By whom?

-Those vested with the proper authority.

- Were you trying to sell the guitars?

- Why, of course. At a certain point, we even ditched our school band project. We kept trying and experimenting…

We had some parts and components made for us at a local musical instrument factory. The radio-electronics components we made ourselves. My sister’s husband worked at the Yuzhmash plant in Dneptorpetrovsk. I asked him to have the missing metal components for a set of ten instruments made for us according to the blueprints that I had given him. They made it from titanium. Yuzhmash, as you may remember, was a defense industry giant that built missiles and space rockets…

Also, one day I was foolish enough to air a love song for my girlfriend Svetlana using an amateur radio transmitter. We had no license for independent radio broadcasting, of course.

In a word, we got in trouble. Police operatives paid a visit to our house and confiscated all the radio equipment, and even the guitars.

- Your father supervised a large farm cooperative and was a very respectable person.

- My dad stood up for me and put a good word in for me here, of course. That affair was swept under the rug. But at the same time, I suspect, it cost him the title of the Hero of Socialist Labor… By that time, my dad had been awarded many government and state decorations. But he was not destined to get the Gold Star medal of the Hero of Socialist Labor. He was nominated twice only to be crossed off the list both times. The reasons for this might have been many. I reckon my dear father must have felt deeply hurt, but he never said a word about it.

He was a very successful farm manager of great initiative. For instance, he was the one who put forward the idea of making a new variety of apple wine, called Golden Autumn, and it was very high quality. It was a nice complement to such customary products such as canned fruit and jam our farm cooperative manufactured. To clarify, I should say that the farm cooperative’s products could be seen on the tables of the Ukrainian Communist Party’s top officials, including Central Committee members.

Output kept growing and my father built a glass factory to make bottles. He never stopped working all his life. He would launch project after project – greenhouses for vegetables, flowers and mushrooms, a meat factory and so on and so forth. He could not stay idle for just a second…

When he was already 80, my dad embarked on building a Catholic church, because he was a Catholic himself. He spent much effort and time on this idea of his and strongly desired that it would become a community-funded project. At first, he strongly objected, when I tried to donate more than the others. Originally, I participated in it on equal terms with the others. Also, I extended a helping hand at the final stage in 2014, when the community ran out of money…

I’m glad that we put the finishing touches to it on time. My dad saw his last project materialize. He even when to church services for about six months.

My dad passed away at the beginning of 2017, and by that time, he was 89…

- Did you inherit this knack for business from him?

- Perhaps, I did in some respects…

And my mother was a school teacher of Ukrainian and Russian literature. But I never went to the school where she taught so as to avoid suspicion of bias and nepotism. It was our family’s rule.

- Why did you decide to go to study at a college in Moscow, and not in Kiev, which was way closer to home?

- To tell you the truth, first I thought of becoming a journalist. My dream was to see the world and to travel outside the Soviet Union. I think that I was able to author some good stuff and I also won many school literature contests. For instance, I wrote a very romantic story in Ukrainian, in which I described the morning dew as the Sun’s tears. That story of mine, entitled The Sun’s Tears, was published in a regional daily newspaper.

In a word, I was pretty serious about a career in the media. One day I came home to see some newspaper clips on the table. All of them were editorials from the nation’s leading dailies, such as Pravda and Izvestia and from our regional newspaper. My dad told me: “Here is some stuff for you to read.” I was surprised. “What for?” I asked. In those days, everybody started reading the newspapers from the last page – sports news, foreign news, the TV program list and the weather report. My dad said: “Son, you will spend the next 10 to 15 years writing about all these things – Brezhnev’s speeches, harvest statistics and the latest resolutions by the Communist Party’s Central Committee. After that you will be allowed to write about sports and world news. Maybe…”

My father’s words had a sobering effect. Step by step, my dad instilled in me the notion that I was born in the same city as Sergey Korolyov. His message was: your hobby is engineering, you have a gift for science and some day you will surely assemble something more decent and noteworthy than electric guitars.

After graduation I went to Moscow to apply to the Institute of Physics and Technology. On my application, I wrote that I was from a family of white- collar workers, although I could have said that I was from a family of farm cooperative members as well. In the end, I fell a little bit short of the admission threshold. My social origin was not taken into account. I remember I was terribly upset. Then I decided that I’d go and serve in the army and then have another try at getting into that same college.

Furthermore, I should say that when I was still making plans to go to Moscow, I overlooked one more important point: all the exams were in Russian, yet I had been studying at a Ukrainian school and at home we spoke Ukrainian. It might seem that the two languages are very close, but there are slight nuances. Some terms in mathematics and physics sound quite different, and it was a problem for me to retune my ear to grasp the meaning.

Also, on my application I never mentioned that I had been an athlete, a swimmer and even had a master of sports degree in the 200-meter freestyle. I was too shy to boast about this achievement of mine, although it would’ve surely boosted the odds in my favor…

In a word, the door of the Institute of Physics and Technology remained shut to me. I was about take a train back to Zhitomir, but before leaving I decided to visit a girl from the same class who had applied to the Moscow Institute of Electronic Technology in Zelenograd. I went there just out of curiosity and I extremely liked what I saw there! A futuristic city! That girl’s mother was a mathematics instructor at Zhitomir Polytechnic State University. She was well aware of my level and persuaded me not to waste time on military service, but rather show my exam results to MIET, because the points scored at the Moscow Institute of Physics and Technology were good enough to get admitted elsewhere. I followed her kind advice and I’ve never regretted that I did so.

At first, I kept thinking in Ukrainian and even took notes in this language. Eventually, I adjusted myself to the new environment, but I felt homesick for a long time.

- Are you still homesick now?

- It couldn’t have been any other way. Home, sweet home!

- How long has it been since the last time you went there?

- I visited Zhitomir more than a year ago. I have a sister and some other relatives there. I go to Kiev far more often on business.

- Are you allowed to enter the country without any problems? Aren’t you stopped at the border and asked who Crimea belongs to?

- Nobody has ever asked me things like that.

-  And what if somebody does?

- I’ll say I have nothing to hide. During the tsarist era, Crimea belonged to the Russian state. But before that it had been part of the Ottoman Empire for much longer. What sense does it make to dwell on the past? We should be guided by the formally authorized international obligations that are in effect these days. They have to be honored.

We provided guarantees of Ukraine’s integrity and signed the Budapest memorandum. In exchange, Kiev agreed to the removal of all nuclear weapons to Russia. Just imagine today’s Ukraine having missiles with nuclear warheads. I believe that the tone of our discussions would have been quite different and history would have taken a different turn. True, that’s all theory. What was done cannot be undone.

But as I see it, from a de-jure standpoint, Crimea remains Ukrainian.

- So, we got your opinion on that topic. Now let’s get back to the story of how a Soviet citizen turned into a businessman.

- After graduation, I took a job at the Micro-Instruments Engineering Research Institute, an affiliate of the ELAS research and production association. Concealed behind this uninformative name that revealed nothing to outsiders was a first-class defense industry establishment. As a matter of fact, I found myself working for an arms race frontrunner. We were commissioned to create space systems relying on the latest achievements in microelectronics.

The man who led the ELAS research and industrial association was the legendary designer Gennady Guskov. Back in 1953, he received the Stalin Award for creating the nation’s first-ever ground-based radar. After Gagarin’s space flight, his space communication system earned him the title of the Hero of Socialist Labor. All telemetry was his realm of responsibility. It was Guskov who made the first computer for a space satellite that was orbited in 1972. In this respect, he outpaced the Americans.

In addition, he devised a mobile communication solution – an electronic gadget the size of a backpack capable of putting through a phone call from any point on the globe to any telephone number via active phased array antenna relay satellites, which his research center had created earlier. When President Richard Nixon paid a visit to Moscow in 1972, he proudly showed Leonid Brezhnev such an option he had at his disposal. A couple of years later it was Brezhnev’s turn to demonstrate to Nixon a similar Soviet-manufactured communication device.

And then Guskov created the first-ever optoelectronic surveillance satellite.

That’s when my own career at ELAS began. The man who hired me was Vladimir Bryunin.  He had taken note of my potential when I was still a fourth-year college student. That’s how I started working on software for a remote sensing satellite.

Guskov trusted me and in 1987 he put me in charge of ELAS’s computer systems and satellite software division. I reckon no other person younger than me had the status of a chief designer in the Soviet Union’s entire defense industry at that time. I was just 32!

- Were those satellites military ones?

- Naturally. It was a satellite system for monitoring a strategic adversary. I used it to thoroughly explore the map of San Diego back in the early 1980s.

- Why San Diego?

- It’s the base of the US Pacific Fleet. Submarines are docked there. We often took pictures of them, down to every tiny detail.

When 12-13 years later I found myself in that city for the first time, I easily walked around without using a navigator. Never lost my way!

- Was that your first visit to the United States?

- No. I’d flown there several years before that. In March 1991, Roald Sagdeev, a member of the Russian Academy of Sciences, who, as many remember, was married to President Dwight Eisenhower’s granddaughter, arranged for a Soviet-US space exhibition of achievements in science and engineering. The USSR agreed to dispatch its top-notch products there without a second thought. We took our backpack transmitter there. Some of our colleagues displayed a nuclear engine model and the Moon Rover…

Bringing the exhibits to the United States was far easier than taking them back. According to US laws, anything can be taken out of the country only on the condition that it is officially permitted by the authorities.

- Everybody and everything in, nobody and nothing out?

- Roughly speaking, yes. A stark contrast to Russia, whose policy is based on an export-import prohibition. In that sense, the US system is far more reasonable.

We were allowed to have our exhibits back only after lengthy talks. They would remain in store at the Soviet Embassy in Washington for quite some time. The affair ended well, but we gained some experience and realized that we should be more prudent the next time around…

Shortly after that, in April 1991, Guskov saw to it that I was included in another group going to the United States. ELAS at that moment was working on a “response” to the United States’ Star Wars initiative. The Americans approached us with an idea of holding a seminar in Washington on ways of eliminating space debris and delivering a series of lectures at their universities. My boss was invited, but he refused to fly and said: “Let Alex go instead. He’s a young man. It’s of greater interest to him.” Besides, the management of Sun Microsystems back in March invited me to visit the company’s Silicon Valley office.

I had the strongest desire to go there. It was an engineer’s dream!

In those days, there were no direct flights from Washington to San Francisco. The official program of my visit to the US capital came to an end, so I proceeded further on by myself. I got a connecting flight through Denver. As soon as we landed, I heard the announcer’s voice call out my name: “Mr. Galitsky, someone’s waiting for you on the aircraft ladder!” My first thought was: “Damn, those CIA guys in Washington must’ve decided to stop me. Forget about seeing the Valley.”

The usual reaction of a Soviet citizen expecting a pitfall at every corner. However, to my surprise it was a fax message from the seminar’s organizers wishing me a safe and joyful journey.

In San Francisco, I was welcomed by astronaut Russel Schweickart, a participant in the Apollo 9 mission to the Moon and a spacewalker. He then shared with me his idea of pooling efforts in creating a low-orbit communication system. That was surely my cup of tea. We’ve been on friendly terms with Russel ever since.

That visit to the Valley and Sun Microsystems (the number one company in 1990!) had an extremely powerful impact on me. I was taken around the laboratories. They showed me everything without making any secrets, although they could’ve surely kept some things away from foreign eyes. There were many meetings. Some of my discussion partners had been well familiar with me extramurally, so to say. I’d read their works. Some became my friends: Scott McNealy, Eric Schmidt, John Gage, and Jeff Bayer, of course – eventually my partner in Almaz Capital Partners.

All looked absolutely fantastic in those days!

- Were you paid for the lectures in Washington?

- It was not part of the deal. The organizers shouldered the financing for all the costs and that was enough. Sun Microsystems surpassed all expectations. In the hotel, I had a luxury suite I’d never seen in my life. Even a jacuzzi bathtub was there! The hotel’s employee, a Mexican, made an attempt to explain to me how the equipment worked, but I arrogantly dismissed his offer of help. I’ll manage myself, I said. Then I started pushing all the buttons and at a certain point I turned on a mode that caused water to flow and spew from every nook and cranny, as I stood helplessly by, not knowing how to stop this fountain display…

It was funny and sad at the same time.

Of course, it was not the main thing that I saw in Silicon Valley. At that time, I could’ve had no reason to suspect to that my life would take such a dramatic turn. Later, I started flying to the United States, 5-6 times a year on average. But in 1991 everything looked new and surprising. It was then and in the following years that I got the chance to meet and talk with many remarkable people like Bill Gates, John Chambers, James Gosling, Bruce Schneier, Whitfield Diffie… My new acquaintances were too numerous to count.

I recall my 1994 meeting with General Abrahamson, who once led the Star Wars program at the Pentagon. I was on the list of authors for our counter-response, so the Americans invited me for a talk. Possibly, Abrahamson wished to have a word with somebody from the other side of the barricades. He demonstrated some of his achievements…

I should say that on some tracks we were far ahead of the [United] States.

- How come you were allowed to travel outside the Soviet Union? You were quite familiar with many state secrets and surely had to adhere to certain restrictions in your contacts with foreigners.

- That’s right. I had the highest security clearance degree – Special Importance it was called. Or Number One, according to a different classification. The Top Secret clearance was rated lower.

But don’t forget, that those were the years when the Soviet Union was on the decline. The system’s grip had eased somewhat. Joint ventures began to mushroom in the late 1980s. I put signatures on some documents required for the registration of several such ventures myself.

And my first trip abroad – to Finland - followed in 1990. I was given a service passport (blue cover) via the Soviet Union’s Electronic Industry Ministry. When I went there to collect it, at first, I got a refusal. Literally! The deputy minister responsible for overseeing external affairs frowned at me and said that he had been to Finland eight times himself only to find nothing of interest there.

In my younger days, I was never at a loss for words and snapped back: “You know what? For me one trip will be enough to decide if the trip is worthwhile.” Naturally, the big boss felt insulted and told me to get out. From his lobby, I phoned Guskov and explained what the situation was. He replied: “Stay right there and wait.” After sometime the deputy minister told some of his subordinates to come to his office and then stepped out, dropped the passport on the desk in front of me and hissed through the teeth: “Don’t you think that with a boss like yours you’ll have all your problems settled. From now on you are on my list!” I preferred to stay quiet. Just picked up the passport and left.

- Were you invited to the KGB office on Lubyanka Street for a briefing?

- That was not connected to this incident. We had our own security department – The First Section – staffed by security service people. Let me say again, the empire was crumbling and the old rules were becoming obsolete.

I had to recall that affair in 1998, when my passport was about to expire and to be exchanged for a new one. I’d just returned from a business trip to the United States and was scheduled to travel to Europe, where my new company had already gone into business. I flew into Moscow for my passport. I thought the whole procedure would not take long and very soon I would be on my way, but it was more easily said than done. They refused to give me a new one.

- On what grounds?

- Due to my previous access to state secrets. As if they woke up after nearly ten years.

As a result, while my application was being considered, I had to run my business online. In fact, it was my first experience of distance work. There was no chance for me to leave the country, so investors and staffers had to fly in to meet me at Sheremetievo Airport.