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Megan Muir.jpgCONTRIBUTED BY
Megan Muir

Yesterday (March 22), the Senate passed the Jumpstart Our Business Startups Act (JOBS Act), which could make it easier for startups and other small businesses to raise capital.  The bill now goes back to the House, which passed a similar bill two weeks ago, for the reconciliation process, which may occur as early as next week.  Some of the proposed changes to federal securities laws in the bill would:

  • Exempt, for up to five years, “emerging growth companies” (those with under $1 billion in annual gross

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Continue Reading Senate Passes JOBS Act

Megan Muir.jpgCONTRIBUTED BY
Megan Muir

Steve Blank’s post yesterday – with its eye-catching title of “Killing Your Startup By Listening to Customers” – makes some very good points about how to use information gathered from potential customers.  He summarizes it as “understanding who to listen to and why.” His main points:

  • Getting out of the building is a great first step
  • Listening to potential customers is even better
  • Getting users to visit your site and try your product feels great
  • Your job is not to make every possible

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Continue Reading Killing Your Startup By Listening to Customers: Steve Blank

Former entrepreneur and current venture capitalist Mark Suster has an interesting post on his blog “Both Sides of the Table” about his hiring suggestion to early stage companies.  His “ideal team” at the seed or Series A round (assuming 6 people) is made up of a CEO who doubles as head of product management and 5 engineers.  That’s it, no one else.  However, his recommendation to startups about who they should hire after they have a product built and shipped and have raised that first $2-3 million is…
Continue Reading Mark Suster: Who to Hire after Closing your Early Stage Financing

Here is the second half of The Venture SpotLight interview with Rebecca Lovell, the Chief Business Officer of GeekWire, the tech news site based in Seattle.  You can find the first installment of our talk with Rebecca here.

Biggest mistake you have made in your career/business?  Staying in a comfortable job for too long back in my corporate days.

What did you study as an undergraduate at Carleton College?  I designed my own American Studies Major: sort of history-based with a little English and religion and women’s studies all mashed up.  I was absolutely set to go into a non-profit.  That was my game plan.

What did you do instead?  Great big companies would come to Carleton, this little liberal arts college, because they wanted to hire smart people and train them to do whatever it was they needed.  I ended up filling a slot at an informational session to take notes for someone else.  The recruiter convinced me to come meet with him.  I borrowed a suit, interviewed and the next thing I know, I am in a management development program for an industrial supply distribution company in Chicago.  So that’s what I did with my liberal arts degree.  I went and learned everything there is to learn about logistics and socket head cap screws and marketing and finance and accounts receivable and inventory management along the way and six years later I woke up in Cleveland.Continue Reading The Venture Spotlight: Rebecca Lovell, GeekWire (Part II)

lovelletters.JPGThe Venture SpotLight turns to Rebecca Lovell today, with the first installment of our interview with her.  Among the many hats she wears, Rebecca is the Chief Business Officer of GeekWire, the tech news site based in Seattle.  In that role, she oversees advertising, sponsorship, planning GeekWire events and generally helping GeekWire connect with the Pacific Northwest technology community.  Some the other roles Rebecca fills: mentor for TechStars and The Founder Institute; community advisor to Startup Weekend; professor of a class on venture capital investing at the University of Washington Foster School of Business; board member of the Northwest Entrepreneur Network; classically trained flutist; self-described “karaoke junkie”; National Merit Scholar; valedictorian of Garfield High School; and former mathlete (ask her about having 75 students create a human mobius strip).

What are the best and worst aspects of your job at GeekWire?  

Best:  I get to work with smart, motivated, passionate geeks and meet with them every day.  I love evangelizing our mission – putting our region on the global map of innovation, where it belongs.  Shining a light on innovation wherever it happens.  Celebrating and supporting geekdom.

Worst:  I am not a patient woman.  I can see where our business can go 6, 12, 18 months from now and can’t wait for rolling out some amazing stuff that I could tell you about, but would have to kill you.  Ordering is important and I don’t want to screw it up.  Along those lines, there’s a lot of behind-the-scenes, keeping-the-lights on stuff that is the prelude to greatness.

What advice would you give to someone applying for a job at a startup?  Embrace uncertainty.  You may be applying for a specific job but you will need to be a generalist – a real team player.  That provides huge opportunity but is a big responsibility – you’ve got to call for the ball.  If you see a problem, present a solution, or just fix it.  You’ve got to be nimble and move at the speed of startups.Continue Reading The Venture Spotlight: Rebecca Lovell, GeekWire (Part I)

Megan Muir.jpgCONTRIBUTED BY
Megan Muir

At the recent GeekWire Meetup in Seattle, Rich Barton (co-founder of Zillow, founder of Expedia, and co-founder of various other startups) participated in a Q&A session with John Cook, co-founder of GeekWire.  (Video available here.)  Among other things, Barton encouraged entrepreneurs to aim big and “go for the home run.”  Continuing the baseball analogy, Barton said:

Look, you have an at bat, and it takes just as much energy to swing for the fences as it does to bunt.  OK.  So, why bunt?  Why bunt?  Why not swing for the fences?  I would argue that it is just as likely that you will succeed if you swing for the fences as if you bunt, and the outcome will be much more magical.  And, I have to say, being a part of something that you are swinging for the fences and you are trying to change the world, is an excitement that you just don’t get from bunting.

Continue Reading Swing for the Fences – Rich Barton of Zillow talks with John Cook of GeekWire

Megan Muir.jpgCONTRIBUTED BY
Megan Muir

Today Dow Jones VentureSource reported that venture capital firms invested $8.4 billion in Q3 2011, 29% more than in Q3 2010.  Additionally, the total of 765 deals is an 8% increase over the third quarter of 2010.

Jessica Canning, global research director for Dow Jones VentureSource, noted that:

Venture investment rose in the third quarter, putting the industry on pace to near pre-recession investment levels by the end of the year.  While it’s unclear how long venture capitalists can continue at this pace given the weak

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Continue Reading Venture Investing Up for Q3 2011 – Dow Jones VentureSource

Earlier this week, I attended the TechNW 2011 conference organized by the Washington Technology Industry Association (WTIA). The conference was very informative and full of interesting presenters and topics. The corporate development panel discussion moderated by Tom Huseby (General Partner and founder of SeaPoint Ventures) was particularly interesting for startups (and relevant to my practice). The panelists were Neeraj Arora (Principal, Corporate Development at Google), Ryan Aytay (VP of Corporate Development at Salesforce.com), Ryan Cooper (Corporate Development Director at Microsoft), and Amin Zoufonoun (Director of Corporate Development at Facebook), all companies that have grown a great deal through partnerships as well as acquisitions of other companies. The general discussion surrounded merger and acquisition activities and drivers from the perspectives of Facebook, Google, Microsoft and Salesforce.com.

Two specific questions relating to the value of investment bankers in the M&A context and timing of the M&A process stuck out because they are questions that frequently come up with early stage companies.Continue Reading Perspectives on M&A from Corp Dev Execs at Facebook, Google, Microsoft and Salesforce.com

One of the more confusing parts about forming a startup is sorting through the dozen or so documents that may come into play. Below are the basic organizational documents to consider when forming your startup. Which documents are applicable to your startup may differ, depend on your startup’s specific circumstances (e.g., number of founders, alignment of founder expectations, financing plans, whether or not there will be non-founder employees, tax elections, etc.), but these are the versions we typically see.
Continue Reading What documents do I need when forming my startup?

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Andrew Ledbetter
andrew.ledbetter@dlapiper.com

For a variety of reasons, many emerging companies are not in a position to easily identify venture capital funds, banks, or angel investors from whom to raise money or to identify a potential acquirer for their business.  Publicly soliciting investors in a registered offering might involve prohibitive costs and an uncertain outcome.  The entrepreneur may not have adequate personal wealth to fund the company, not be fortunate enough to have rich relatives or friends, or not be looped in to the right circles to meet financially sophisticated potential investors.  Such small businesses sometimes turn to “finders” to help them locate potential sources of financing or acquirers.

What is a “Finder”?

Defining a “finder” is difficult.  This report of an ABA Task Force on Private Placement Broker-Dealers describes a “finder” as a person who:

  • brings together buyers and sellers for a fee;
  • who has no active role in negotiations;
  • who may not bind either party to the transaction; and
  • who may not offer or sell or buy the security.

Legitimate finders should strictly be intermediaries who merely introduce parties and then step back.  However, giving the finder a fee, which is commonly tied to a successful closing, can often create an incentive for the finder to do more.  This can raise challenging legal issues under the securities laws.Continue Reading Will Using a “Finder” Ruin My Deal?