One of the questions that I’m asked the most is “how do I find a business partner in Boulder?”  I always liken it to dating – it’s really not that much different.  Thanks to the hard work of Tracy DeCicco, we now have a founder matching event in Boulder. Here are the details:

Come Meet Your Match at the first-ever FounderMatch event!

The event will be held on Wed., Nov. 3, from 6-9pm, at the TechStars Bunker in Boulder.

· Do you have an idea but need a partner(s) to help get it off the ground?

· Do you have a strong desire to form a startup but don’t necessarily have an idea?

· Do you want to hear awesome startup ideas and brainstorm with like-minded people?

If you answered yes to any of the above, check out the first FounderMatch event.  Signup is through our partner site, startupSQUARE.com.

To signup, go to STARTUPSQUARE.COM/foundermatch

BE SURE TO COMPLETELY FILL OUT THE PROFILE INFORMATION ON THE SITE!

We’ll need to understand your skills and interest areas to help you meet your match!

Space is limited so SIGNUP NOW to get in on the action!  Attendees will be selected to ensure balanced mix of people.

Boulder has definitely received its fair share of good press relating to its startup ecosystem.  Whether the topic was the 50 Best Places to Start a Business, to Bloomberg / Businessweek declaring Boulder the BEST town for startups, or even the New York Times declaring us a magnet for high-tech, it has been nice to see the efforts of the Boulder community paying off.

Today, Fox Business is spending the day in Boulder interviewing people about what they think is special about this unique 100,000 person town that we live in. 

Here were my thoughts:

Have a great company in Michigan that needs funding?  In what is the largest award that I know of, Accelerate Michigan is offering $500,000 to the winning team.  And if you company isn’t in Michigan, but you want to move there, you are eligible. 

Ann Arbor is still one of my favorite cities.

Here is the official blurb:

Accelerate Michigan Innovation Competition is an international business plan competition which highlights Michigan as a robust and vibrant venue for innovation and business opportunity. The competition fuels innovation-based business growth by uncovering the best and brightest new business concepts from local and global entrepreneurs, exposing those opportunities to potential investment capital and fostering their growth within Michigan.

The Accelerate Michigan Innovation Competition targets mid-to-late-stage business start-ups with potential to generate an immediate impact on Michigan’s economy, as well as student concepts with longer-term business viability.

With more than $1 million in cash winnings, plus in-kind awards of services, staffing and software, the Accelerate Michigan Innovation Competition is the world’s largest business plan competition.

I’m looking for a local entrepreneur to pitch their business in front of my VC 360 class that I teach.  The class is held at the University of Colorado Law School and is comprised of both law and business school graduate students.

The class is October 25th from 8am to 9:15am.  The format would be sitting with me and pitching me as you would if you came to my office, but the students get to watch.  We also let the last 20 minutes go to student questions.

It’s a great opportunity to pitch Foundry Group and do something good for the community.  If you are interested, let me know.  I’ll pick the company that closest fits one of the Foundry Group investment themes. 

I’m asked all the time to play matchmaker between folks and companies that we’ve invested in.  Sometimes it’s someone looking for a job, sometimes it’s one company looking to partner with one of our investments and other times it’s something completely different.  I’m always happy to do so long as I think it could be a mutually beneficial relationship.

Lately, however, I’ve seen an increase in behaviors that do nothing but turn me off.   I feel almost silly writing this post.  These should be obvious.  Perhaps this will help someone?  Or at least, I’d love to hear some other stories which will make me laugh.

Poor behavior #1:  Expect me to do all the work.  This is the person who wants an intro to a company, but it is like pulling teeth trying to get them to write something that I can send along to the company.  First, the askee should have a better idea than I do why there is a good reason to connect.  Second, if I’m going to take time to make an intro, then why would you want to wait for me to get around to writing an email?  I could end up getting so busy that I never get around to it.  And it’s just nice etiquette, too, I think. 

Poor behavior #2:  Be overly aggressive to get directly connected to the company.  This is the person who wants me to introduce them to an executive at a company, before I check in the with the company to see if they are interested.  Our companies are really busy building businesses and if they don’t have an interest, I’m not going to force them (or guilt them, as an investor) to meet with someone.  When I say that I’ll make the intro if the company is interested and the askee becomes aggressive wanting a direct intro, it really turns me off.  Remember, it takes me more time to check in with the company and then get back to the person than an instant intro, so it isn’t like I’m not trying.  I’m just attempting to be respectful of our portfolio companies’ executives time. 

Poor behavior #3:  Insult my company in an attempt to show your worth.  This is my favorite.  This is the person who tells me that the reason our portfolio company needs to meet with them is because our company sucks in some capacity.  Insults will get you nowhere.  This isn’t the case where a person says “Hey, I can help your company do X better.”  This is the person who says “I can fix your company’s debacle” or “Your company has no idea how to monetize.  They suck at revenue.”  (I am very lightly changing actual quotes sent to me).  Every startup company has issues.  Actually, every company has issues and can be better at some things, but acting as a know-it-all and being arrogant and thinking that an outsider is smarter than anyone inside one of our companies is probably a bad strategy.

Okay, rant over.  Am I missing any good ones?

My partner Seth has a great interview on Stocktwits TV, hosted by one of the smartest and funniest entrepreneurs that I know, Howard Lindzon.  The topic is whether or not the Web is Dead.  (It’s not).  Also, he will give you his stock picks, as well.  This I can’t wait to see if he is correct.   

Today, my partner Seth wrote a great piece on the merits of early-stage startups raising convertible debt rounds versus traditional preferred stock equity structures.  The piece was inspired by Paul Graham’s recent tweet that said:  “Convertible notes have won. Every investment so far in this YC batch (and there have been a lot) has been done on a convertible note.”

Seth’s piece is a must read in this debate that is only gaining more participants, including a nice follow up from Mark Suster about his thoughts.  I can’t do justice to either Mark’s or Seth’s pieces trying to summarize them, so I strongly encourage you to read them.

I’m going to go out on a limb and break out my old law bar card and bring up one issue that I don’t think is getting enough focus in the debate:  the use of debt fundamentally changes the fiduciary duties of managers and board member of the company.

If a company raises cash via equity, it has a positive balance sheet.  It is solvent (assets are greater than obligations) and the board and executives have fiduciary duties to the shareholders in the efforts to maximize company value.  The shareholders are all the usual suspects – the employees and venture capitalists.  Life is good and normal. 

However, if a company is insolvent, the board and company now owe fiduciary duties to the creditors of the company.  By definition, if you raise a convertible debt round, your company is insolvent.  You have cash, but your debt obligations are greater than your assets.  Your creditors include your landlord, anyone you owe money to and folks that you might owe money to you, like former disgruntled employees and founders who have lawyers. 

How does this change the paradigm?  To be fair, I have had no personal war stories here, but it’s not hard to construct some weird and scary situations.

Let’s look at the hypothetical:

Assume the company is not a success and fails.  In the case of raising equity, the officers and directors only own a duty to the creditors (landlord, etc.) at such time that cash isn’t large enough to pay their liabilities.  If the company manages it correctly, even on the downside scenario creditors are paid off cleanly.  But sometimes it doesn’t happen this way and there are lawsuits.  When the lawyers get involved, they’ll look to try to establish the time in which the company went insolvent and then try to show that the actions of the board were “bad” during that time.  If the time range is short, it’s hard to make a case against the company.

However, if you raise debt, the insolvency time is forever!  Not just when cash got below the ability to pay liabilities like the equity situation, because the company has never been solvent. 

What does this mean?  It means that if your company ends up failing and you can’t pay your creditors, landlords, etc. that their ability for a plaintiff lawyer to judge your actions has increased dramatically.  And don’t forget, if you have any outstanding employment litigation, etc., all of these folks count as creditors as well.   

The best part of all of this is that many states impose personal liability on directors for screwing up things while a company was insolvent.  Read this to be:  “some states will allow creditors to sue directors personally for not getting all of their money they are owed.” 

Now I don’t want to get too crazy here.  We are talking about early-stage / seed companies and hopefully the situation is clean enough that my doomsday predictions won’t happen, but my bet is that few folks participating in convertible debt rounds are actually thinking about these issues.  And no, I don’t know of any actual cases out there, now.  But I’ve been around this business long enough to know that there is constant “innovation” in the plaintiff’s bar as well. 

Today, I was called for jury duty.  Upon arrival, we sat for 30 minutes, then we watched a 12 minute video for juror orientation. The voiceover kept cracking me up, however, as they were unable to pronounce “voir dire” correctly.  (Think “vor dire” as in Dire Straits).  If you don’t believe me, watch the video.

Anyways,we kept moving rooms, filling out forms, being segregated into different piles of humanity and I thought “couldn’t this be simpler?” and made some snide comment under my breath about the efficiency of government.

While I was sitting there being frustrated, I realized that over complicated things, maybe more than anything, really ruin my day.  Then I realized that I was an arrogant ass, because I’m not sure my ecosystem is all that more simple or efficient most of the time, either. 

I could write tomes on all of the efficiencies that I see every day – the same ones that I’m sure you don’t like either.  I think all this artificial complexity probably plays back into our lives in that we start to overcomplicate things that don’t need the added brain damage.  This includes both professional and personal contexts and the sad thing is that we have so little control on most of these situations.

But we should rethink about how we do things when we do have control. 

Thinking back over my career – and specifically even if I just think deeply about the last few  weeks of meetings that I’ve had -I think the number one piece of advice that I’ve given is “keep it simple.” Whether it’s a business model, financing plan, product user interface, or a plan to deal with human conflict, simple is best the vast majority of the time. 

And likewise, when I think back to those seminal moments of mentorship that I’ve been fortunate to receive, there has usually been a component to simply what I was trying to accomplish.

So, there’s my fortune cookie advice for the day: “keep it simple.”  Likely you and those around you will be happier for it. 

Last week, Silicon Valley Bank hosted a roundtable discussion featuring members of the New Democrat Coalition and SVB clients from the venture capital community.  The event allowed Silicon Valley entrepreneurs and innovators to discuss first-hand with legislators focused on championing innovation a variety of ideas for promoting U.S. economic growth.  SVB summed up the event well in a press release. 

As part of the discussion, there was a focus on the Startup Visa effort that has been introduced in both the Senate and House of Representatives (including by Jared Polis in the House).

I think Jared says it best:

"As a former entrepreneur, I know first-hand what it takes to build a company — and I know what opportunities a successful company can create for its workers, its suppliers, and its community.  If an entrepreneur has an idea for a company that will attract investors and hire workers, we should be welcoming and encouraging that entrepreneur to start their company in the U.S.,"

Furthered Mary Dent General Counsel of SVB when speaking about the impetus of the event:

"There is a great deal of evidence showing the profoundly positive effect that venture-backed companies have on our economy — creating jobs, creating entire new industries, and promoting U.S. competitiveness around the world," said Mary Dent, SVB’s general counsel. "Congress hears a lot from companies that have already made it.  We want to make sure they also hear from the growing companies that will shape our economy in the future.

Kudos to SVB for organizing such a worthwhile event and the New Dems for supporting their efforts.  Among all the issues that are important to our continued leadership role in technology and entrepreneurship, the value of initiatives like Startup Visa can not be overstated. 

Today, the NVCA hosted Jared Polis for lunch.  Jared is the Congressman for the 2nd District of Colorado. 

Why is Jared important to you, if you aren’t from his district?

Simple.  He’s absolutely one of the most intelligent and thoughtful elected officials in our country when it comes to issues regarding startups, innovation, education, immigration and jobs.  (And probably a lot of other subjects, too, but these are just the ones that I engage him on). 

Jared was previously a serial entrepreneur (Proflowers.com, Blue Mountain Arts) and has been a thought leader on many issues that affect our industry.  He has stood strong in the face of political pressure to change his views.  In fact, I’m am most impressed with Jared’s resolve to do the right thing for our country as a whole, although he represents one district in one state.

Jared has been a steadfast partner with the NVCA on issues such as job creation, innovation, immigration, education reform and tax policy.

Today, Jared and the invited guests talked about everything from future policy decisions to mechanics of how things really get done in Washington.  It was a great learning experience.

I’m also happy to report that the NVCA PAC contributed to Jared, as well as several of the attendees personally, including yours truly.  I’d highly recommend folks contributing to Jared, no matter how small of a donation as every bit counts.  We need more people in Congress who really understand what drives this country’s success. 

Contribute here.  (Picture, L to R.  Me, Jared, Paul Schanitter and Mark Heesen, President of the NVCA)