Last night I lectured on this topic to my entrepreneurial capstone
class at Purdue. It is possibly the most basic question for
any startup looking to raise capital, but it is often not
approached correctly. In my experience most entrepreneurs
take a wild guess at their number.
The correct approach is to look at your cash flow projections and
determine it from there. For a new startup the goal is to get
to breakeven and beyond. For later stage companies the
projections may address strategic...
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Agreement titles are funny things. In their best use they
quickly describe the general subject matter of the contract.
For most situations a simple title is helpful. E.g.,
"Services Agreement" helps differentiate between a contract for
services and one for goods. That is helpful. Many
contract titles are more descriptive (e.g., "License Agreement",
"SaaS Agreement" or "Software Service Level Agreement" to describe
the technology nature of the agreement).
Where a client is using form...
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I've had several conversations with concerned
entrepreneurs over the last year about changes in the accredited
investor standards under the Dodd-Frank Act. In January the SEC
proposed amendments based on Dodd-Frank to the accredited
investor standard which subtracts the net equity value of an
investor’s primary residence from that investor’s net worth
determination.
Example: Currently if an investor has $800k net equity before
equity in primary residence and $300k in net equity in the...
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I know there will be an "official" congratulatory press release in
the near future, but I thought I'd take a moment to congratulate
the Alerding Castor Hewitt partners on being included in the 2011
Indiana Super Lawyers.
Brian Hewitt received the nod as one of the Top 50 Super
Lawyers in the state. This is, of course, a recurring honor
for Brian, who has been a Super Lawyer for the past several
years. Brian's practice focus is on business and probate
litigation and mediation.
The voters...
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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 have said it a million times since learning the lesson myself in
a failed entrepreneurial effort a couple of years ago, the CEO of
any entrepreneurial venture must understand the importance of
managing cash flows and how to use cash flow analysis for the
strategic growth of the company.
Trust me, I am all into the Six Sigma approach of throwing a couple
of innovators together, rolling out a v1 product as quickly as
possible, and slowly scaling the company from hobby phase to a
successful...
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The first caveat is that I'm sorry I haven't posted anything
recently. Work here at Alerding Castor Hewitt has been going
like gangbusters and yours truly has been up to his distinguished
eyeballs in work. Trust me, however, I'm now dutifully
committing myself to continue providing insight and humor as your
Indiana Internet Litigation guru.
Second caveat is that this post actually has nothing to do with
privacy litigation, software litigation or really any other
technology law issues. ...
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Indianapolis, IN – Mike Alerding, founding partner of Alerding
Castor Hewitt LLP, is slated to teach Business Law at Harrison
College this spring. The course combines the understanding of
legal theory with the acquaintance of the various forms of
contracts. Students will be taught the essentials of the
legal environment of business, tort law, contracts, commercial
transactions, government relations and property.
“I am teaching because I enjoy the process of observing the
improvement and...
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Your friendly neighborhood litigation attorney at Alerding Castor
Hewitt, LLP with a final post for the year to all of our business,
Indiana internet litigation, and technology law
clients. Saturday, December
25th will no doubt be a date of celebration in many
homes. As you spend time with your
family, remember how special the day is and all of the changes that
have taken place in the last 20 years.
Some of you might wonder what I mean exactly. I’m not referring to Christmas. And for those...
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I hope that you all had a thankful and fulfilling turkey day.
Your friendly neighborhood technology legal counsel stuffed
himself horrendously. But, I digress. I know that I owe
you all part 2 of my discussion of the legal landscape of corporate
blogging, and I promise that I will get that posted in the near
future, but two recent opinions in some non-Indiana Internet
litigation piqued my interest and I had to talk about them.
Both rulings involve application of the liability...
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It has been said a million times already on this blog – a CEO,
especially one which is seeking funds from private equity
investors, needs to understand finance. Often a basic
knowledge of sources and uses and cash flow analysis is enough, but
in many early stage investment rounds, savvy investors expect the
CEO to know the company's internal rate of return (IRR) - and
why it matters.
I meet many entrepreneurs who have served as VPs or middle managers
before embarking on their entrepreneurial...
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“What are you doing with my money?” No, it’s not your mom or
dad asking or your friend you lost a bet to on a college football
game – it’s your potential investor and they’re asking one of the
most fundamental questions in a capital raise. Why?
Because you forgot to answer it ahead of time! You’re not
alone, though, too often a sources and uses statement is
overlooked. Many entrepreneurs simply rely on the financials,
general statements in the text of the business plan or...
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Here at Alerding Castor Hewitt, LLP, one thing that we are called
upon to do as business law, SaaS law, and technology counsel for
our clients is collect on a judgment. I
have previously posted on other topics in the collections world,
which you can find here and here. Today’s topic
is in answer to the question we sometimes get: how long is my judgment good for?
A decision today by the Indiana Court of Appeals in the estate case
of In the Matter of the Unsupervised Estate of
Dwight M. Wilson...
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I can read your mind. You are thinking, "oh, great and
insightful technology legal counsel, what do you mean by a 'legal
landscape' and what does that have to do with blogging?" My
initial response is that, (a) you've asked two questions and (b) if
you plan to use blogging as a component of your business model, you
need to know what potential pitfalls exist. That is the legal
landscape of blogging. It is made up of the hills and valleys
that must be overcome or avoided to reach blogging...
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Thanks to the wonderful folks over at Compendium Blogware, I
presented a fun webinar last week on the Legal Landscape of
Corporate Blogging. Don't fret, dear reader; I intend
to put together several posts over the weekend that hit the
highlights of my presentation. Overall, I discussed topics
like privacy litigation, copyright, defamation, Section 230
protections, etc. The fun stuff of blogging.
One area that I discussed and have had several questions about is
Creative Commons. For those of...
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Last Wednesday, I had the great opportunity to attend the 2010
Techpoint Summit. For those of you that don't know, Techpoint
is organization with the mission of "accelerating Indiana's
emerging and vibrant tech sector" (source:
www.techpoint.org). This great organization fosters and
nurtures the technology sector that is developing in Indiana.
It brings the innovators together and gives them a voice.
And, their yearly summit is an excellent example of the work they
are doing. In the same...
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Alerding Castor
Hewitt, LLP is a business law firm that works with many
technology start-ups in their formation stages and in assisting
with the legal aspects of dealing with private equity
investors.
The entrepreneurial spirit of our clients is inspiring, and I am
looking forward to attending
Techpoint's 2010 Innovation
Summit that will be held in downtown Indianapolis today.
An annual event that Alerding Castor Hewitt is proud to sponsor, it
will feature keynote speaker Nicholas Carr who is a...
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I know that you are expecting witty and poignant analysis
of some new and exciting aspect of technology and / or privacy
litigation, but that's not really the point of this
post. Rather, the impetus of this concoction of literary
excellence is a realization that I had regarding social
media. In the last two weeks I have experienced the following
(all on a large social media site that shall remain nameless but
that has a movie): (1) received birthday announcements and
pictures of my niece in...
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Your friendly Indianapolis attorney at Alerding
Castor Hewitt, LLP here with an overdue update with some possible
interest for our business law clients.
Back at the end of September, the Indiana Supreme Court decided
Bingley v. Bingley, a marriage dissolution case, and
concluded that the employer-provided health insurance benefits of a
retiree constituted an asset once they had vested and should be
included in the marital estate for the distribution of
property. You can read the full opinion
he...
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The last couple of years have been strange. With the change
in the economy, many early stage companies are looking for anybody,
and I mean anybody, to invest in their capital round. As the
economy rebounds (which we are seeing in technology markets)
business owners are again able to be picky when considering angel
investors.
An angel investor (or an angel investor group or private equity
firm) should be more than just a liquid wallet. He/she
should be a strategic member of your team. They...
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