David is a founding partner of Alerding Castor, LLP, an Indianapolis-based law firm designed to serve and partner with privately owned businesses and their owners through their business growth. Alerding Castor, LLP strives to be a "Partner in Success" with its clients. David's practice focuses on representing Internet and software based technology companies in licensing transactions, but he also has experience in areas of contract drafting and negotiation, private offerings and capital structuring, mergers & acquisitions, business formation and entity selection, trademarks, and stockholder and LLC membership issues.

Corporate Headhunters consistently look at General Electric as a major hunting ground to find business leaders.  CEO Jeff Immelt listed what GE looks for when hiring talent.  They look for someone who:

• Is externally focused
• Is a clear thinker
• Has imagination
• Is an inclusive leader
• Is a confident expert

It is interesting that these are all behaviors, not traits.

Source: Talent is Overrated by Geoff Colvin



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Alerding Castor Hewitt is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

My law firm is going through many changes.  Yesterday we officially welcomed Brian Hewitt as a named partner of our firm (note the name change to Alerding Castor Hewitt, LLP).  This is a great move for our firm and makes us all the more a full service business law / entrepreneurial law firm (also litigation and estate planning).

In times of major changes like this I spend a lot of time contemplating the direction of our firm.  What do we want our business to be?  Where do we want to go?  Who do we need to be part of our team to get there?

The answer to the first two questions are easy for me.  We want to be a full service business and litigation law firm with specific focus on legal technology consulting and SaaS law.  I want us to be knows as THE SaaS law firm.  We want to be an entrepreneur’s law firm.  And, we are well into the process of getting there.

The last question, who do we need to part of our team to get there, is the harder question.  There are a lot of good attorneys out there – but being good is not enough.  In any profession, being good is merely the barrier of entry.  We want attorneys who are exceptional. 

What makes someone exceptional?  As I stated in a prior post, there is an element of seeking personal fulfillment in your profession – seeking excellence – seeking the true benefit of others – that makes someone go from being good to exceptional.  This takes hard work, deliberate practice, smart work, high character and a sense of personal understanding. 

My wife and I know a lot of good parents – we know a few that we think are exceptional.  I asked her last week what makes a parent exceptional.  She said and I quote, “Understanding the impact of today on tomorrow.”  This applies in the business world as well.  What does it look like if you are doing your work today thinking about the impact you are meaning to have tomorrow?

Section 230 of the Communications Decency Act (47 USC 230), entitled “Protection for private blocking and screening of offensive material”, is an important federal statute for any interactive computer service provider.  As a technology lawyer, my law practice largely focuses on SaaS law, software licensing law and Internet based businesses, this statute impacts several of my clients.

The statute essentially provides protection for providers of interactive computer services against information published by third parties on their site, provided that “a  provider of interactive computer service shall, at the time of entering an agreement with a customer for the provision of interactive computer service and in a manner deemed appropriate by the provider, notify such customer that parental control protections… are commercially available that may assist the customer in limiting access to material that is harmful to minors. Such notice shall identify, or provide the customer with access to information identifying, current providers of such protections.”

Where the notification requirement is met, Section 230 provides certain protections from liability when users encounter objectionable material through the Internet service.  230 essentially divides online content into first party content and third party content and says that online parties cannot be liable for third party content unless (1) it is covered by the Electronic Communications and Privacy Act (protection of individual’s communications via technology by government officers without court order), (2) federal criminal enforcement, or (3) intellectual property claims.

I often read the Technology & Marketing Law Blog by Eric Goldman.  In a recent post, Professor Goldman summarizes liabilities under Section 230.  Here is an excerpt:

As a final point, with the global nature of many ISPs, it is worth noting that many other countries do not afford the protections that the US provides under Section 230 (e.g., certain first world countries have found ISPs liable for negligence where they have failed to investigate material or user published content).  For Internet based companies doing business globally, it is worth considering the application of Internet laws of those countries.


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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

In the movie The Natural (based off the Novel by Bernard Malamud), Robert Redford plays the role of Roy Hobbs, a fictitious baseball player considered to be the most naturally gifted person to ever play the game. 

In the movie, Hobbs’ career nearly ended when he was only 19 years old.  He was on his way to his big leagues tryout when he was shot in the abdomen by a lunatic woman who was on a mission to kill the most talented baseball player.

A number of years later Hobbs returns to baseball – going through the minors and ultimately making the big leagues at age 36.  There he excelled and was called the greatest player to every play the game. 

Every baseball fan, including myself (go Cubbies), loves this movie.  People want to believe that some folks are so naturally gifted that they rise above everyone else at their craft.  These people are bigger than life itself.  They deserve what they have received because they were born with lucky genes.  In this case, Hobbs hadn’t played for over 15 years but returned and was hitting tons of home runs and led his team to the post season.  He had pure God-given talent.

In the business world, people believe this as well.  They believe that some folks just have what it takes to be successful.  They are born that way.  It is natural.  You hear people say things like “He is natural born salesmen”; “She was born to lead a company.” 

The problem is that this does not reflect reality.  If you look at the history and practices of people who really excel at business you will see a lot of hard work, dedication towards excellence, and practice, practice, practice, and then, more practice. 

In my profession, great lawyers learn to study the law.  They also practice - they write, read, read again, write again, then study more… when all is done, they read once again.

Late in his career, Larry Bird would still routinely show up to practices an hour or two before his teammates to practice free throws and three pointers.  This is what Geoff Colvin refers to as Deliberate Practice in his book Talent is Overrated.  It is the process of deliberately working on aspects of your profession in order to better yourself.  The goal is excellence.  The process is hard. 

Natural talent may exist in an extremely small percentage of the population, but most of us do not even know these people - and it is surely not the norm.  Most of us have to practice and practice and practice, and then do, in order to achieve excellence in our craft. 



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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

This ticks me off.  I understand that in a struggling economy the State needs to make budget cuts, but instead of cutting spending in areas that ultimately do not lead to economic improvement, our State representatives are considering cutting spending in an area that have been the lifeblood of the State for the last quarter century – technology.

This may have a huge impact on my clients as my law practice centers on Indiana technology businesses – helping technology businesses get innovations to market and meet strategic business growth needs.  In particular, I work with a number of SaaS and software licensing businesses (as well as many biomedical and biotech firms).  My entreprenurial law / funding law firm provides counsel on private equity and venture capital, intellectual property and licensing, and general legal technology consulting. 

I believe at least a part of the problem that led to the proposed cut is that past technology funding has not proved itself to the State as creating jobs and causing a respectable ROI / economic increase for the State.  The State has sunk an overwhelming proportion of funded dollars into biomedical businesses (e.g., the 21st Century Fund has sponsored some 10 companies in the last 4 years that have products in development for cancer treatment). 

Don't get me wrong, those businesses are great and need to be supported, but the process of getting innovative concept to market for biotech and biomed companies is long and expensive.  Further, until the product is successful at market, significant numbers of jobs are not created.  So, funding ROI decreases (at least for the short term).  The overall funded portfolio should be diversified with other technology investments that will result in more jobs and more tax dollars back to the State quicker.

Investments in Internet and SaaS companies could be that answer.  For $500k to $1M, most SaaS companies can get product to market and begin generating revenue.  Job creation and the ROI on invest dollars is proven quickly.  Innovation is encouraged, businesses are built, jobs are created.  This all leads to fast economic impact.

I believe Indiana’s past approach on technology funding was flawed, and I think that is shown in the distrust of the State legislature to invest further dollars in technology.

That said, some recent conversations I have had with State leaders involved with technology funding gives me some hope.  These particular unnamed individuals appear to be looking for more solid investments that will quickly lead to jobs.  They are also not only looking at investments in companies that have connections to political dollars (another problem with certiain past State investments).  They also seem to be thinking a bit more broadly about what defines “innovation”.

For those readers of this blog in Indiana, contact your State representative and ask them to continue to fund technology. 

A friend of mine and I were recently discussing the growth and strategic direction of my law firm.  He asked me, “What do you want to be famous for?”  Wow – great question.  It implies something more than just building a business to collect a pay check.  It pushes an answer that describes the pursuit of excellence – something bigger than yourself – something that makes a true impact on community and culture.

Most people I encounter are perfectly fine with being fine at their job (this includes most attorneys I know).  I wonder if these folks understand the compromise of being fine with being fine.  Our culture teaches people that if you work work hard enough but not too hard , you can do well in life. 

I believe that hard work and being good at your job is a minimum standard.  Being good at one’s craft is merely a barrier of entry into your profession.  If you want to play, you have to at least be good.  If you don't meet this standard you will eventually be forced out.  If you do meet that standard - so what - there are a million others who have also met this standard.  You are now a commodity.  You are on the ball field, but you are an average player.  Nobody knows you or cares (except maybe your mom).  How do you move to the next level?  How do you become famous?

To be famous for something requires people to go beyond being good (or fine).  You must be exceptional.  So what makes someone exceptional at their profession (or at anything)?

There are many ways to answer this, and I have read countless books from countless authors on the topic, but I believe it comes down to infusing diligence, hard work and a pursuit of personal fulfillment.  When these things merge, a person's job ceases to be a job - it becomes part of that person's lifestyle.  At this point a person moves beyond merely trying to complete a project or finish a workday in order to collect a paycheck.  They pursue excellence.  They see their profession as part of their larger lifestyle which ultimately wants to benefit others.


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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

This is an exciting week at Alerding Castor, LLP.

The biggest news is the addition of Brian Hewitt as a named partner of our firm - to take effect on June 28.  Brian is coming from Williams Hewitt Barrett & Wilkowski, and practices in business law, commercial law, estate planning, banking law, probate and business litigation and mediation.  Brian is a rock star attorney and a big land for our firm!  We are very excited to have him as a partner.

I am leaving today on a three day trip to New York City and Chicago with the itinerary of meeting with three private equity firms, two angel investors, and two business clients.  The goal of my entrepreneurial law / SaaS law / business law practice is to help technology and SaaS businesses get their innovations to market and, thereafter, sustain business growth.  These particular private equity investors are great matches for some of our business clients that are looking to raise capital.

Other than that, we have just a ton of projects for great clients which are moving at high speed.  This is fun!

I am a HUGE fan of Compendium Blogware.  If you have not considered the value of business blogging as a tool for search engine optimization (SEO), you need to.  Here is the value received by my SaaS law / Entrepreneurial law firm over the last year.

I started the Business & Culture blog (powered by Compendium) about 12 months ago.  Key search terms for my blog are listed on the right side of this page (e.g., Angel Investor Group, Private Equity Attorney, Funding Law).  I landed my first client as a result of search last November; Second in December; Third in January.  I struck up a good relationship with a capital group in Southern CA through search in January.  This group has funded one of my Indiana technology clients already and is considering investments in a few other clients. 

Since March, I am getting nearly one call every other week as a result of search. 

Not to sound to infomercial on behalf of Compendium, but the ROI in this tool (in terms of dollar and time investment) has proven big. 

I can only give so many details on the clients and contacts made, but here are some recent examples:

1.  This week, a SaaS company from southern city found my blog through a google search for "SaaS Law".  We came up #2 on the google results page - and top law firm.  That got us in the door for initial conversations where we secured the engagement.  We are moving forward with an initial contract review project and counsel on future equity rounds.
 
2.  Last month an established capital group in New York found the blog through google search for "Entrepreneurial Law Firm".  We came up as #1 on the google results page.  Again, this got us the initial contact.  Through four weeks of discussions we have secured a good working relationship with this group.  I am flying out to NY next week to work on four early stage SaaS client equity raise deals with them.

3.  An established mountain-state real estate group found the blog through a google blog search for "Private Equity Attorney".  We came up as #1.  We helped this group structure their equity raise last month.

In summary, I have seen first hand the value of solid SEO.  If you have not considered business blogging for search, you should.

I read a great article in this month's The Practical Lawyer entitled Rainmaking: Talent is Overrated by Cordell Parvin.  Although the article is describing attorneys as business developers, I think the lessons apply well to all business owners. 

Rather than summarizing the article, I have posted it below.  Really a great read.  Enjoy...

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I meet many young lawyers who instinctively know they should get better at client development, but either never take the first step, or take the first step and give up.  These lawyers have bought into the idea that only few lawyers have what it takes to become rainmakers.

A couple of years ago I met with the managing partner of a 500-lawyer firm for which I was about to begin coaching for 15 junior partners.  He was my age, and in addition to being the managing partner, he was a leading rainmaker.

During our conversation, he expressed skepticism about the value of coaching: He said: “Rainmaking, you either have it or you don’t. Some lawyers are meant to be finders, others minders, and others grinders.”

While I agreed that for some people client development comes more naturally than for others, I respectfully disagreed with his premise that lawyers either have it or they don’t.  Several months into our coaching program, he acknowledged that based on what lawyers in the firm were doing differently, lawyers can learn to develop business.

Lately, I have been writing about how rainmakers are developed rather than being born with the gift to attract clients.  I have shared with you some of Geoff Colvin’s thoughts from his book and article, Talent is Overrated.

What Beats Talent?

When I mentioned the book to Kevin O’Neill, a D.C. lawyer I coach with Patton Boggs, he responded that talent will never beat:

• Showing up early and staying late;
• Exerting enough effort to allow luck to play to your benefit; and
• Convincing the clients that they matter to you and you are focused on serving them.

Kevin hadn’t read the book, but he certainly understood its principles.  Simply engaging in a flurry of activities like meeting contacts for lunch, writing articles, and speaking is not enough—that’s the rainmaking equivalent of the golfer who stands on the practice range hitting bucket after bucket of balls, but who never actually gets out onto the golf course.

Deliberate Practice

Colvin, and researchers before him, talk about “deliberate practice.”  He describes the typical golfer on the driving range hitting large buckets of balls without any improvement.  On those rare occasions when I practice golf on the range, I am one of those golfers who does not get better.  My wife, Nancy, is a different story.  She took up golf when she was 40 and now plays in tournaments all over the country.  She is driven to get better, and unlike me, she focuses on specific shots in specific situations and has a teacher giving her feedback.  I have seen her work on sand shots, flop shots over traps, and knock down shots into the wind.  When we play “date golf” she works on those shots on the course.  Nancy understands deliberate practice. 

Colvin refers to a landmark research paper done by K. Anders Ericsson, Ralph Th. Krampe, and Clemens Tesch Römer: The Role of Deliberate Practice in the Acquisition of Expert Performance, available at http://projects.ict.usc.edu/itw/gel/EricssonDeliberatePracticePR93.pdf.  With the research, Colvin suggests that “deliberate practice” has these characteristics:

• It is designed specifically to improve performance, often with a teacher’s help;
• It can be repeated often;
• Feedback on results is continuously available;
• It is highly demanding mentally, meaning it requires us to focus on the task at hand; and
• It isn’t much fun, because we do not do well rather than doing things we already do well.

I already owe a great deal to deliberate practice. I did it for legal skill development as well as client development. Here are my ideas for how lawyers can deliberately practice client development skills:

• Figure out what is going on and the implications for your clients.  I read Engineering News Record (ENR) weekly looking for news that would create legal issues for contractors.  If I were still practicing law, I would have iGoogle pages and Google alerts and read the ENR alerts to find issues;
• Write articles. I wrote a monthly column in Road & Bridges, a top industry publication for 25 years. Over time, I got better at selecting the topic, creating the title, getting readers engaged in the first paragraph, and offering a conclusion readers found helpful;
• Do some public speaking. I was so nervous the night before my first presentation to a construction industry group that I could not sleep a wink. I overcame being nervous by speaking in public as often as possible, including teaching senior high Sunday school at my church.  I also shot videos of myself speaking over and over again until I get more comfortable;
• Network.  I always hated networking and striking up conversations with people I did not know.  I decided I needed to network frequently to become better at it.  I went to functions just to practice my networking skills;
• Think up elevator speeches and elevator questions.  I practiced these on airplanes and other places where I met strangers;
• Work on asking questions and listening.  In law school we are not taught how to ask questions, and over time I believe we have lost listening skills.  Every meeting I had with a client I worked on asking better questions and being focused on the answers.  I also read books on asking questions and improving listening skills. 

In Talent is Overrated, Colvin talks about the important role teachers, coaches, and mentors play in developing skills. First, your teacher, coach, or mentor will help design the activities best suited for you to deliberately practice client development skills.  Second, your teacher, coach, or mentor can give you unbiased feedback on how you are doing. 

 

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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

There was a great post on the bMighty blog last week regarding the debate between who Infrastructure as a Service (IaaS) is better targeted for – large enterprises (+1,000 employees) or small to midsize businesses (SMBs). 

According to a recent Forrester research report on cloud computing models entitled Conventional Wisdom is Wrong About IaaS, a higher percentage of enterprise-level businesses are interested in Infrastructure as a Service than SMBs.  Fredric Paul, the blog author, argues that despite this report cloud computing is more appropriate at the SMB level.  The reasons include: less legacy infrastructure, fewer security and compliance issues, greater capital expenditure constraints, smaller internal IT staffs, and a bigger appetite for innovation.

He concludes by stating: “Given the exponentially larger number of small and midsize businesses, even if they're a few percentage points less likely than enterprises to head to the cloud, there will still be waaayyyy more SMBs in the cloud than there will be enterprises.”

Over the last year I have seen the debate between the value of cloud computing, and SaaS, for enterprise vs. SMBs grow.  This is quite important to any cloud computing or SaaS business which is trying to refine its target market.  Many IaaS and SaaS businesses focus solely on SMBs, as described in Chris Anderson’s book The Long Tail.  Part of the reason is that this previously under-addressed market segment is huge – and there is much opportunity for quick sign on and customer benefit.  But, larger contract scale and margins from enterprise customers make that segment too enticing to ignore – especially in light of the growing trend of buy-in from these types of businesses.




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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

Let's face it - most contract terms are boring.  SaaS licensors and their customers want to close deals.  They want to hammer out the business terms and key legal terms and get the contract done.  I don't blame them.  Nobody in their right mind wakes up in the morning and says "I want to negotiate a contract today."

After weeks (or even months) of negotiations over key business and legal terms, the parties often are left with a few miscellaneous "legal" terms that seem more of a burden than important to the ultimate goals of the transaction.  One common term that reaches these final stages is the forum selection clause (i.e., if a lawsuit arises based on the contract, where will it be brought?). 

An Indiana technology company obviously wants all actions to take place in Indiana courts.  The out of state (or out of country) customer wants their home forum. 

So the key question is: Is this clause really important enough to delay closing the transaction? 

My favorite attorney answer: It depends.

As a business law attorney, answers are not always so clear.  For instance, a SaaS client of mine once asked me regarding a large scale SaaS licensing agreement valued at hundreds of thousands of dollars in which we were negotiating a choice of law clause, "What is the difference between choosing Indiana law or Illinois law to govern this contract?"  There are two potential answers.  The first answer engages the standard large business law firm approach - have an associate draft a massive memorandum comparing statutory and case  laws of each state on each and every clause of the contract and then outlining each and every difference to the client.  Spend: 40 legal hours @ $250/hr = $10,000.  

The second answer is approached from a business risk standpoint.  This is usually more what the client is looking for.  The attorney answers that there will be some differences but anticipates the differences will be fairly minor as both are seventh circuit states and have approached business law in very similar manners.  That said, this does not mean there are not differences in law, and we can look into specific issues further if there are key issues you want addressed.  Spend: 0.3 Hour @ $250/hr = $75.

The second answer provides a platform of risk assessment for the client to make an informed decision.  Do they want more information or are they willing to take on the risk of not knowing all of the answers in order to get the transaction done.

That example is for choice of law.  With forum selection clauses you are taking on the risk of a lawsuit arising from this contract and the need to bring an action on this contract.  The attorney can either do a detailed analysis of the differences in procedure and history of case law in SaaS transactions in the other state or provide the client with the opportunity to weigh the risk.

An out of state (or country) forum selection clause will greatly increase the costs of an action on the SaaS licensor.  So, there are several factors to consider when weighing the risk.  

• Is the SaaS licensor collecting a subscription fee over time or payment upfront?  A foreign forum selection will make small collection actions more difficult to obtain.
• Does the contract provide for attorney's fees and collection costs to be recovered by the SaaS business?
• Does the foreign selection clause put the SaaS business' customer on their home turf (there is a such thing as home court advantage in law) or is it a neutral site?
• What is the estimated cost for securing counsel in the forum (e.g., If you have London or New York forum, the SaaS business will pay double or triple on legal rates than Midwest rates).

Moral of the story - consult with an attorney who truly wants to get business deals done and weighs risks with you based on particular transactions.  Be aware of attorneys that want to provide over analysis on all provisions or ignore the particulars of a transaction.  Finally, don't overlook what sometimes are considered miscellaneous, general or "boilerplate" terms.  There are often "hidden" costs down the road in these clauses.


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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

This has been a hard week for me to get blogging.  The problem is a great one to have - I have a lot of client projects going right now and am finding the time to sit down and write difficult.  So, rather than a typical blog post, let me provide some updates on what has been keeping me busy lately.

As the economy is showing signs of life once again, many of my entrepreneurial clients are finding opportunities for strategic partnerships, private equity funding, bank financing and customer engagements.  There is probably nothing more fun in my entrepreneurial law / funding law practice than to see business clients get funded and reach business goals. 

Over the last few weeks I have secured relationships with two new private equity firms - one in Indianapolis and one in Chicago.  I will be visiting the firm in Chicago next week.  I am optimistic that both will help fund innovative technology businesses in central Indiana.

I have also furthered my relationship with a global private equity firm in Los Angeles.  The group has three business clients of mine in due diligence stages currently.  Exciting stuff.

LightsOut Intelligence is making huge headway in the web analytics world.  We have already secured some private equity funding and expect to begin pilots with clients later in the summer.

We have also been working on several technology and software licensing transactions.  In the last week, my firm has handled nearly twenty deals in these fields.

These are exciting times at Alerding Castor.

Much of my SaaS law (Software as a Service) practice consists of negotiating SaaS agreements.  Whether you count SaaS as a license, service or a hybrid of both, expect one thing in your negotiations, corporate counsel usually just don't get it. 

Most in-house counsel for large corporations spend their time on securities, employment or common vendor or customer issues.  SaaS licensing is still a relatively new area of technology / information technology law and most in-house counsel want to throw it into a bucket of a purchase of goods or an installed software transaction.  Common provisions that point to this lack of understanding are terms like acceptance testing, termination on convenience, reoccurring purchase order requirements, IP ownership, on-site insurance provisions and so on.

I once had a corporate counsel hold up a SaaS agreement over a maritime insurance clause.  Not only was this a SaaS agreement where the client is merely turning on the switch to provide the customer Internet access to the SaaS solution, but my client was located in Indianapolis – the largest city in the US without a navigable water way. 

The biggest problem caused by inexperienced counsel in these negotiations is that it causes delay in finalizing the transaction, which equates to increased expenses and risk of not landing the deal.

So what can you do? 

During the proposal phase “ask, ask, ask”.  Find out if the customer is experienced in SaaS transactions.  Get the customer business representative to partner with you and to side with you when they present this to their counsel.  Ask if their counsel can talk to your experienced SaaS counsel before negotiations begin.  Inquire about the bureaucracy of the customer’s contract negotiation procedures.

Answers to these questions may not prevent all of the delays, but they should streamline resolutions to some of the issues that may otherwise come up during negotiations.


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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

There is a good article in this month's Harvard Business Review on fatal flaws in leadership.  The authors reviewed results from two studies of 450 Fortune 500 executives and found comparisons between the most ineffective leaders and fired leaders to come up with the 10 most common leadership shortcomings.  

1.  Lack energy and enthusiasm.  They see new initiatives as a burden, rarely volunteer, and fear being overwhelmed.  One such leader was described as having the ability to "suck all the energy out of any room."

2.  Accept their own mediocre performance.  They overstate the difficulty of reaching targets so that they look good when they achieve them.  They live by the mantra "Under-promise and overdeliver."

3.  Lack clear vision and direction.  They believe their only job is to execute.  Like a hiker who sticks close to the trail, they're fine until they come to a fork.

4.  Have poor judgment.  They make decisions that colleagues and subordinates consider to be not in the organization's best interests.

5.  Don't collaborate.  They avoid peers, act independently, and view other leaders as competitors.  As a result, they are set adrift by the very people whose insights and support they need.

6.  Don't walk the talk.  They set standards of behavior or expectations of performance and then violate them.  They're perceived as lacking integrity.

7.  Resist new ideas.  They reject suggestions from subordinates and peers.  Good ideas aren't implemented and the organization gets stuck.

8.  Don't learn from mistakes.  They may make no more mistakes than their peers, but they fail to use setbacks as opportunities for improvement, hiding their errors and brooding about them instead.

9.  Lack interpersonal skills.  They make sins of both commission (they're abrasive and bullying) and omission (they're aloof, unavailable, and reluctant to praise).

10.  Fail to develop others.  They focus on themselves to the exclusions of developing subordinates, causing individuals and teams to disengage.



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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, probate and business litigation.

I just returned back from another trip to Southern California.  This time I met with two investment teams – one angel investor group and a venture capital group.  My firm has built a good relationship with each team.  The investment world is getting smaller and smaller.

I took a portfolio of sixteen Alerding Castor clients’ equity deals to share with these teams.  As every investment group has their leanings of types of deals they like to see (e.g., real estate, emerging tech, SaaS and Internet, biotech, software licensing) and the investment risks and returns they like to see, it is nice to be able to present this type of portfolio and have them determine which ones they want to review.  I am excited that based on these fairly recent relationships we have several clients in the review process with these groups. 

I am leaving today for Orange County, CA once again.  I have meetings scheduled this week with two clients, one venture capital firm and one angel investor group in Southern California.  Regarding the later two, we are working on securing capital funding for several business clients of our firm.

When heading out to the East or West coast, I find it interesting how different the investment community cultures are from the culture of the Midwest.  When presenting to most Midwest angel investor groups, the presentation goes something like this:

1.  Raise excitement about the business concept
2.  Get buy-in from investors on the market opportunity and your business team's ability to meet that opportunity with the capital to be raised
3.  Present the investment opportunity

I find that Midwest investors in general want to be excited about the business strategy and opportunity before hearing anything about the investment opportunity.

Presentations to angel investor groups on the coasts are often inverted from this.

1.  Show that this is a respectable investment opportunity (ROI, Type of Equity, Exit Strategy...)
2.  If investment opportunity is worth considering, then raise excitement about strategy and market opportunity
3.  Prove that the business team can meet market needs

Know who you are talking to.  Before making the presentation, ask a director of the group how they typically like to see deals.  Find out who the potential investors are.  This is a sale, just like any other type of sale - so, know your customer.


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See also:

A Private Equity Attorney
Angel Investors - Supply vs. Demand
US Private Equity - Requires Self Awareness

Funding Law - Buyer's Market
Funding Law - Investing in Midwest Technology Companies
Angels are Still Investing
Private Equity VIII – Environment for Buyers and Sellers

Private Equity in 2009 – Don’t Give Up
Private Equity VII – More on Angel Investors

Private Equity VI - Raising Angel Capital
Private Equity V - Raising Capital and Not Telling Lies
Private Equity IV - Angel Investors Get Picky
Private Equity III
Private Equity II
Private Equity I

Most entrepreneurs I meet are not short of business ideas.  Some are good (e.g., web intelligence); some are bad (e.g., restaurant bathroom touch-screen marketing); Some will find markets; Others will not. 

One of my roles as an entrepreneurial law attorney is to help these individuals recognize and focus of their core competitive products.  How do we get the key products to market?  And, how fast can we do so? 

Technology entrepreneurs in particular have a hard time with this.  They have a tendency to focus on tangents to their core innovations – on adding bells and whistles to their technology.  There is often where the difference between what the technology expert and the consumer sees as being important.  Often a focused technology without bells and whistles, a technology that is simple to use and understand, and meets a core need in the market creates a better business strategy.

Take the original iPhone for example (before the gazillion apps became available).  I bought one right away and loved it instantly.  But with certain functionality, such as e-mail, my old Palm actually had more features, was more reliable, and was easier to use.  So why was the iPhone so great? 

Apple saw the opportunity to focus on simple design rather than allowing for every technical function which could potentially be added.  They found that consumers wanted media, phone, e-mail and “real” Internet all in one product.  They also found that a majority of the consumers did not care about full functionality – they wanted something that was quick, easy to use and cool.  So the iPhone was designed simple. 

At the same time, this “focus” should not kill creativity.  Just because something is not part of this "core" product, don’t kill it.  Put it aside.  Schedule time to work through these ideas.  This is where innovation develops.  Certain “tangents” may eventually become core products.



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Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business litigation.

Being a private equity attorney is fun.  Despite the current economic climate, Madoff, AIG bonuses and States' misuse of economic stimulus funds, businesses continue to raise capital and grow.  They continue to innovate, add employees, and develop businesses.  They continue to add to and help fix the economy. 

This is part of the fun of being an entrepreneurial law / business law attorney who helps business owners realize their capital growth goals.  You are part of the strategic growth of business and culture.

Today alone I worked with six companies that are pursuing private equity raises.  All of the companies are Indiana technology businesses.  Three are SaaS (software as a service), one is IT infrastructure, one is business intelligence, and one is procurement software.

One of these came from an angel investment group I work with from Chicago.  This group is looking for deals in Midwest technology companies.  Another two are being presented to a group of private equity investors in Orange County, CA this summer.  A final is being considered by a local angel investor group.

It is encouraging to see businesses still innovate and grow.  It is also encouraging to see these businesses get funded! 

Congratulations to Indiana technology / SaaS company Compendium Blogware who was named as one of America's Most Promising Startups by Business Week this last week.

Compendium Blogware is a Web-based blogging platform built for businesses and organizations. With its administrative layers and proprietary compending feature that maximizes search engine optimization, the company offers businesses an innovative solution for lead generation, customer acquisition and humanizing their marketing.

My business law / SaaS law firm, Alerding Castor, has partnered with Compendium as both a customer (the Business & Culture blog is powered by Compendium) and it's legal counsel.  

Here is an excerpt from the article:
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Compendium Blogware is a member of Alerding Castor's Partners in Success program.  Partners in Success is a group of professional services companies, consultants, clients, and friends (e.g., marketing companies, accountants, wealth management firms, logistics or sourcing providers, business consultants) which have proven themselves to bring further value to us and our clients.