Archive for the ‘Company Running’ Category

Venture Summit | West: Wrongly Charging Entrepreneurs to Pitch VCs

What is old is new.  Entrepreneurs  are stil being asked to pay to pitch.  It’s WRONG.

Two and a half years ago, I wrote a post about a Boston group trying to charge entrepreneurs $4500 to pitch venture capitalists at an event.  Many in the startup community were appalled by this especially folks like Jason Calacanis who created the Open Angel Forum specifically to create an event where entrepreneurs could gain free access to investors.

To quote my partner Seth:

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THERE IS NO CIRCUMSTANCE IN WHICH ENTREPRENEURS SHOULD PAY TO PITCH THEIR BUSINESS TO PROSPECTIVE INVESTORS.

PERIOD. END OF STORY.

 

Microsoft, who had been a sponsor of the Boston event, terminated their relationship after the pay-to-pitch arrangement was publicized.  I thought all of this activity would die, but it’s 24+ months later and it looks like the idea has been resurrected.  And it makes me just as sick today as it did then.

Venture Summit | West, being held February 13th is an event looking to make money off of entrepreneurs who need to raise money.  The price?  $1585.00.  I suppose the good news is that if you apply and don’t make the cut, they don’t charge you.  But $1600 bucks to pitch VCs?  This is completely backwards and distasteful. They also offer startups a ticket for $400 if they just want to come and network with the VCs at the event.

They are charging the VCs to attend ($500) and they have a bracket for “others” at ($700).  So at least the investors are not getting a free ride on the backs of the entrepreneurs, but can we finally be done with trying to make money off of startups that don’t have any cash?  Come on folks, create a business model where you can make some money but NOT charge the entrepreneurs.  My bet is that many of the VC attendees have no idea this is even going on.

Lastly, if you are trying to raise money, do you homework.  You have many other outlets to meet VCs, including OAF, and simply going to VC websites and finding email addresses.  There are events all over the place where you can network and / or pitch.  Even online.

I hope that companies aren’t taken in by their slick marketing materials.

 

December 12th, 2012     Categories: Company Running, Entrepreneurship, Financings, Frustrations, Venture Capital    

Sympoz Launches Programs on Starting Companies

One of our portfolio companies, Sympoz has announced the launch of their programs targeting startup entrepreneurs.  Even better, the series stars some of my favorite people in startup land:  my partner Brad Feld, along with Brad Bernthal of the University of Colorado Law School and Mike Platt , partner at Cooley LLP.  We teach you everything that we know in this comprehensive video series.

Thinking about doing your first startup? Perhaps you’re a startup veteran, who has the bumps and bruises to prove it, looking to jump back in?

Let us help you maximize the opportunity and do it right.

Brad’s class, How To Light a Spark & Set Your Startup on Fire, is FREE for a limited time.  Brad has lived the startup story over and over. He offers straight-shooting advice: Does your idea have market potential? Is it the right idea for you? Brad’s raw and pragmatic advice will lead you to consider the competition, examine your motivation and be honest about your level of passion and commitment.

Brad Bernthal and I, who have for several years taught an oversubscribed course at the CU Boulder Law School, are joined by Mike in teaching, The Nuts and Bolts of Starting a Company. In this class, which includes over 4 hours of instruction for just $29.99, we join forces to teach you things your lawyer and venture capitalist may not want you to know. How to turn an idea into a company. Who to partner with. How to seek out money and what to do with it when you get it. You’ll learn what to put in your pitch deck, what not to say to a VC, and 15 common mistakes that will kill your startup before it gets off the ground.  And a lot, lot more…

For those of you who have read Venture Deals, consider this a great summary of some topics in the book, but more heavy on the business side of equation, with the benefits of interactivity between you and the instructors.

Sympoz classes are perfect for busy people; you can watch the professionally produced, HD videos anytime, anywhere on the planet, from any Internet-connected device, as often as you want. The Sympoz learning platform seamlessly blends discussions into the class experience, enabling you to ask questions of, and participate in conversations with your class community, including your instructors.

So, what are you waiting for? Join us in class!

New Colorado Meetup for “Infopreneurs”

As the knowledge economy grows, there is a new breed of information entrepreneurs or “infopreneurs” that is emerging.   The Internet is really just one big platform for creating these new information-based businesses.  And there is very little upfront investment or infrastructure needed.  Unlike any time prior in history, entrepreneurs can create multi-million dollar businesses just by packaging and selling their information online.

Although the barriers to entry are low, there are so many skills you need to learn and so much technology that it can be overwhelming.  It is hard to do alone.  My friend, Roger Glovsky, fellow lawyer and entrepreneur, just started a new meetup called “InfoCrowd” to support entrepreneurs who want to start, grow, and manage an information product business.  “Infopreneurs” include authors, speakers, publishers, coaches, consultants, and content marketers.

The InfoCrowd group will host monthly meetings, masterminds, and of course, online information. For information or to attend the inaugural meeting, go to http://www.meetup.com/InfoCrowd/.

September 20th, 2012     Categories: Company Running, Technology    

Outside Counsel Attendance At Board Meetings

I’ve been thinking a lot recently about lawyer attendance at board meetings.  Normally, most venture-focused law firms attend board meetings free of charge.  And like most things in life, people value things by how much they pay for them.  (If you don’t believe me, check out the healthcare and education industries, to name a few).

This isn’t to mean that I don’t value counsel’s opinions on the company, rather, many times I feel badly for the attorney who is sitting in an hours long board meeting while I know (from my past life) that they have many other clients needing their help, all along the while they are bored and sneaking in peeks of their Blackberry*

It’s time to be more considerate to our lawyers who are already volunteering their time.  Effective immediately, I’m going to recommend to all the companies that I’m involved with to take the following approach to board meeting agendas.

1. Start with a 5-15 minute overview of the company.  This is a quick status update, quick financial update, the “good, bad and ugly” and what agenda topics the CEO wants to talk about with the board.  This will give the lawyer (and the board) a backdrop to which have all other conversations;

2. Then immediately jump into the administrative stuff like option grants, approvals, etc.  If there are any legal issues out there, discuss them upfront;

3. Then let the lawyer go if he / she wants.  If they want to stick around, by all means they are invited to, but if they have better things to do, then so be it.  We get it.  It’s not a secret that we aren’t their  only client.  If we were, we wouldn’t want them as our lawyer; and

4. Business / strategy part of the board section.  If any legal issues come up, we can loop back in the lawyer later.

Note that with the quick hit summary upfront, a properly skilled and attentive lawyer may determine that they should stick around for other parts of the discussion.  That is absolutely cool.  Also, on some of my boards, the lawyers have become valuable business advisors, so this idea might not actually change the way they do business, but for the majority of folks I think this will have a positive impact.

I’ve done this recently at a couple of board meetings and each time, the lawyer has sent me a thank you note.  And my belief is that most of the good lawyer folks out there will remember who treats their time with respect and when push comes to shove will try extra hard for the clients they like the most.  In short, everyone wins.

(*  Yes, Blackberry.  Still not sure how y’all deal with that crummy piece of hardware, but good luck with that).

June 18th, 2012     Categories: Company Running, Law, Venture Capital    

Zayo Group is Hiring

My friend, Dan Caruso, CEO of Zayo is hiring.  And unlike many companies, he is looking for recent college grads.  Dan is a great guy and the folks that I’ve meet at his company are as well.  In his words:

“Amazingly, in this economy it is hard to fill key positions.  Zayo occasionally looks to fill senior positions.  Usually though, we are looking to complement our veteran team with recent grads who have engineering, IT, construction project management, and finance backgrounds.  We are looking for ambitious, hard working and entrepreneurial people, especially women and minorities as well as Iraq/Afghanistan veterans.  We are an ideal home for those who want to accelerate their career development and hone their entrepreneurial skills.

We are looking for the following positions:

  1. Senior Product Management
  2. CFO for internal business units
  3. Recent grads in engineering (learn how the Internet really works)
  4. Recent grads in IT (learn Salesforce.com and GIS)
  5. Recent grads with an interest in operational finance
  6. Construction/project management who understand telecom projects (or recent grads)
  7. Recent grads with an interest in technical sales”

If you are interested, send your resume to Kellie Lemmel at Kellie.Lemmel at Zayo dot com.

January 29th, 2012     Categories: Company Running, Education, Technology    

A Sure-Fire Revenue Raiser (Tax Increase) That Everyone Will Love

In this day and age where Democrats and Republicans both do their best to distort any real facts in the tax and deficit debate, I think that I’ve come up with a way to increase revenues (yes, increase taxes) that everyone should love.

Kill IRS Section 409(A) and allow companies to issue stock to employees at any price that they wish until such company is public.  If you need a refresher on what 409(A) is, check out this post which will get you there.

When 409(A) forces companies to raise their option strike price, who wins?  Certainly not the employees who have higher strike prices.  Certainly not the company who will have  trouble incentivizing employees as the option price increases and not even the IRS! Because of the heightened price, there is less gain at a liquidity event.  So even the IRS loses money every time the price is raised.

Let’s be controversial for a moment and suggest that if all strike prices were set to 1 penny, then the employees make a lot more money, the IRS receives more tax revenue on a bigger gain and the company doesn’t have to worry about 409(A) valuations and timing of material events and fundraising affecting their option grants.

I realize that this will not work in the public company setting given the market’s need to see option expensing in the financials, but for private companies, who really cares?  It’s just a made up number at the end of the day, anyways.

I probably need to think a little more deeply on what happens if a public company acquires a private company, but I’ll get there.  The main point is that doing away with 409(A) leads to both more money being put in consumers’ hand and more money in the IRS coffers and it’s essentially “free.”

September 20th, 2011     Categories: Company Running, Frustrations    

Really Cool Data About Merger Economics

For anyone not familiar with mergers, if you sell a company, you rarely get the full purchase price at the closing. Some of it is usually held in an escrow account for a year or so to allow the buyer to see if there are any issues related to the acquired company that would entitle it to some of its money back. The deal might also be structured so that the purchase price is effectively paid in installments called earnouts based on how the company performs after closing. There are a million varieties of these formulas, and they can get very complicated very quickly.

In the past, there was little information about what the parties to a merger should expect related to these post-closing terms. Much of it is deal specific, but we still wanted to have some analytics around what happens in the marketplace on average. It just never existed.

Last week, Shareholder Representative Services released a study that is the first to do a deep dive on analyzing these questions and to give some insight on what actually happens. It goes into detail in investigating the issues around indemnification claims and eventual payouts. This is critical to understanding both the anticipated economics of a deal and how much total work you might expect before the transaction is fully behind you. This information is tremendously valuable to entrepreneurs, investors and buyers of companies and I believe it’s the first time it has ever existed. SRS is in a unique position to do this sort of analysis because of the high volume of escrows and claims that it manages.

The full study is only being made available to customers and business partners of SRS, but for a copy of the summary of the study, click here

April 18th, 2011     Categories: Company Running, Venture Capital    

Techployment – A New Boulder Resource for Tech Hiring

Two local entrepreneurs I know just started Techployment, which is a simple idea, but goes after a growing problem in the local tech arena: tech companies finding great tech professionals, and vice versa. Techployment helps solve this problem by vetting the best local tech opportunities and and sending a daily email highlighting them in a succinct way. And while most employment sites/blogs/posts tend to get visited by only those actively looking for a job, Techployment is primarily focusing on those that already have a job, but want to stay up to speed on local opportunities. The grass could be greener at a company across town, and this is an easy way to find out about it.

So if you are looking for a job or just want to know what is out there, go to Techployment and sign up. No username. No password. Just your email and you’re good to go.

And if you are a tech start-up looking for some key hires, using Techployment will get you to some eyeballs that traditionally don’t see/look for exciting new opportunities/greener pastures.

February 14th, 2011     Categories: Company Running, Entrepreneurship    

Call For All US-based Open Coffee Clubs

About 4 years ago, I founded the Boulder Open Coffee Club.  It’s been a massive success with about 50-70 people attending each event.  The popularity of it, in fact, has led to the creation of a Denver Open Coffee Club by local entrepreneur Michael Sitarzewski.

The Coffee Club has become a real local hub where we’ve gotten to know each other and help each other learn from each other’s experiences.  It’s been a ton of fun, too, and we’ve even got some airplay on TV recently.

From time to time, I get an email from another open coffee club telling me about what they are doing.  I’ve done a poor job keeping track of all the OCCs in the US and I am wondering whether or not it would be worthwhile to create a network between them.

If you participate in an OCC, drop me a line or leave a comment.  I’d like to see who else is out there.

February 2nd, 2011     Categories: Company Running, Technology, Venture Capital    

Marketing 2.0 Bootcamp. In Boulder. And It’s FREE

For all of you out there interested in metrics-based marketing (and if marketing is your thing, you should be interested), here is a must attend event.

Sponsored by Trada, Silicon Flatirons, CU Marketing Department and SendGrid, this event promises to share their collective knowledge along with a host of great speakers.

Tickets are limited to 75 people.  This is going to be an intimate event.

The website for the event is here.

 

January 19th, 2011     Categories: Company Running, Entrepreneurship, Technology