When considering entering into a partnership or making a private
investment in an early stage company, beware of the “idea
guy”. This is a title sometimes used by entrepreneurial
minded individuals who don’t contribute to the growth of the
company through development, sales or management but develop
concepts (ideas) for products or services for some market
opportunity.
From my experience, idea guys often have little ability to manage
cash flow or people. Without the proper partners in...
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The following is a guest post by a fellow
Gravity Ventures member and
friend, Dr. Tony Ratliff:
Learning to Pitch Before You Start Raising Capital
By Dr. Tony Ratliff
It only took about six months of deal flow and a handful of
“pitches” before I realized that most entrepreneurs are really,
really bad at “selling themselves” and “pitching” their ideas and
companies to investors.
I cringe every time I listen to a great start-up idea or read a
well-written business plan, and then watch in horror as...
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A tech entrepreneur friend recently told me that the concept of an
“evangelist” in tech companies is all but dead. Honestly I
don’t know if it was ever as alive as people thought, but I liked
where he was going with this. I’ve talked to a number of
aspiring entrepreneurs who view their role in their development
stage company as that of an evangelist. Practically what this
often means is that the person has a entrepreneurial idea but no
ability to either develop it, sell it or run the...
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All securities offerings fall into one of three classes:
1. Registered,
2. Exempt, or
3. Illegal.Private offerings of securities are just that – “private”.
The key for any private offering is that the offerer may only
solicit investors through private methods. There are all
sorts of rules around what constitutes private solicitations and to
whom the solicitations can be made, but in general "private" means
that which is not public. If a business attempting a private
offering makes a...
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Very
interesting article from CNet regarding the proposal to be made by
Senator Dick Durbin (D-Ill). The article can be found
here. Basic point of the article is
that Senator Durbin wants to add sales taxes to on-line sellers
like Amazon and iTunes (although I would note that I think
iTunes already has a tax component) for all purchases. The
idea being that brick and mortar stores in a given state shouldn't
have to foot the bill for these new-fangled on-line
superstores. They should have to...
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In the words of Schoolhouse Rock, “three” is the magic
number. That is not what I am talking about. Every
business model has some number milestone that must be met to ensure
a basic level of success for the business. This can be number
of customers, revenue, user seats, market share, marketers’
requirements, sales reps, break even...
Good market research can predict this number. Unfortunately,
most business plans either ignore the number or use wild a**
guesses (WAGs) to predict the number....
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I was reminded today of something told to me by a friend last
year:
Good people who are smart
ask good questions
Bad people who are smart ask bad questions
Good people who are not smart ask bad questions
In business we are always looking for answers – but what we
really want are good answers. Today the issue is never
whether we have enough data (we arguably have too much), it is
whether we can properly utilize that data to make better
decisions. I see this especially in my Internet Law /...
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There is a great article in the July-August edition of the Harvard
Business Review entitled
The Early Bird Really Does Get the
Worm. The article summarizes a study which found a
correlation between "morning people" and career
success. This is based on a number of traits which are
commonly found in morning people.
Traits
Agreeable
Optimistic
Stable
Proactive
Conscientious
Satisfied with Life
Being a morning person, of course I loved this! Most days I
am the first in the office. I love getting...
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If you are a founder of an emerging company looking to do your
first capital raise, consider talking to angel investors BEFORE
having your private equity attorney draft the organizational and
exempt securities documents for your private placement
offering. I meet a lot of business owners at this stage who
make guesses as to what investors are looking for and what the
market will bear. What pre-money valuation should we use?
What preferences (if any) should we include in the private
placement...
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I recently read a summary of a lecture on applying the seven deadly
sins to software development. The sins are:
|
Lust
|
Obsessive or excessive thoughts
|
|
Gluttony
|
Over-indulgence, over-consumption
|
|
Greed
|
A sin of excess like lust and gluttony, but in reference to
wealth
|
|
Sloth
|
Laziness, indifference, apathy
|
|
Wrath
|
Uncontrolled feelings of hatred and anger
|
|
Envy
|
Resenting another because they possess something you do
not
|
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Pride
|
Excessive love of self
|
The idea is not to sell products leading to the sins themselves...
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I was told this past year that I am a "numbers guy".
Honestly, I think it was intended offensively, but I didn't
take offense to it. I was reminded of this recently when I
read, and laughed at, this quote on Twitter:
“Math may be the language of the Devil, but statistics prove that
reality really is what you make it.”
- Stephen Colbert
~~~~~~~
Other posts that may be of interest:
A World of Private EquityTwo Types of Violations in Private Equity
OfferingsRules of FundingEntrepreneurial...
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Working
in the area of
Indiana entrepreneurial law,
I see dozens of business plans that are incorporated into the
equity raise documents of budding new companies.
With those business plans are financial projections that are based
on newly formed companies with limited operating histories,
unproven track records, and often times plans for entry into a
mature and highly competitive marketplace.
Needless to say, it can be daunting as an entrepreneur to come
up with a compelling reason why investors...
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I just
returned from the Masters. What a thrill. Augusta
National is quite possibly the most beautiful place on earth, and
the golf was stellar. My dad and I spent much of the two days
stationed around Par 3s. We spent Saturday on the 16th green
where we were 20 feet from the golfers as they putted. You
could see the green of hole 15 and the tee of for hole 17 from our
spot. On Sunday we spent the morning at hole 6 and the
afternoon on amen corner – just beside the tee on hole 12 where...
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I had the privilege of speaking
at the
Rainmakers Incubator event this morning. I
thought the Rainmakers team did a nice job organizing the event -
even with a last minute change in location due to factors outside
of their control. Thank you guys for the opportunity to join
you this morning!
The topic given to me was "Three Things Every Entrepreneur Should
Know." My legal practice focuses on entrepreneurial law,
funding law, SaaS business law and securities law. In these
fields I see a lot of...
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Does your business take advantage of
opportunities when they arise? Or, like most businesses, do
you watch competition seize opportunities before you consider or
execute on them?
There is a good article in this months Harvard Business Review by
Donald Sull on a business’s ability to execute on
opportunties. It is a worth while read, but I will summarize
the key points in the next three posts.
What your company needs for execution:
1.
The ability to spot new
opportunities. This requires...
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There are several business blogs that I follow. Most of these
are written by SaaS law / Internet law clients of mine or other
Indiana businesses in technology industries. Lately I have
been falling behind on them. This morning I am trying to
catch up.
I came across a very good, brief video on
Kristian Andersen + Associates'
blog.
The video is from the Bigger Ideas/Smaller Indiana conference this
past summer. In the video Kristian Andersen shares his
feelings on central Indiana's business...
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I saw
a great article awhile back in Entrepreneur and thought
I should post the article for those in the formation stages of
their next business venture.
I can't stress enough how much time and energy it takes to launch a
start-up, and just how
much the success or failure of a budding new company rests on the
people involved. I see it everyday as an Indiana
technology lawyer involved in Indiana entrepreneurial law.
You can count on spending hours upon hours of the day with your
business...
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The Federal Trade Commission has published its Final
Guide Concerning the Use of Endorsement and Testimonial in
Advertising (16 C.F.R. Part 255) (link to notice-
www.ftc.gov/opa/2009/10/endortest.shtm).
This Guide addresses in detail the use of blogging endorsements for
products. Under the new Guide, bloggers will be required to
disclose the material connection they share with the seller of a
product or services. These guides are not law, but are rather
administrative interpretations of law to...
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Golf is a game of mental
dichotomy. On one side you have
details. Keep head down, swing through
ball, pay attention to stance, keep knees bent, elbows create a
“V”, swing through waist, maintain balance…
On the other side, you hear people say,
“You’re thinking too much.”
“Relax.” “Just hit the ball.”
I play golf a few times a year with my
dad. He talks about the two persons in
his head with two distinct personalities. If
you claim multiple voices in your head anywhere else than a
golf...
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