Yearly Archives: 2012

Founders Flash

This week’s articles discuss how to operate your company as it outgrows start-up status, methods of recruiting and hiring top talent, tips on avoiding common mistakes made by small businesses, and topics that are likely to arise in the entrepreneurial community in 2013.

Staying Small While Getting Big – Aaron Levie, Linkedin

The best run companies are able to maintain a start-up feel while operating at scale.

5 Smart Sources for Finding the Best Start-up Talent – Shawn Graham, Fast Company

While recruiting can be a challenge in the start-up community, there are a number of ways to hire effectively.

Entrepreneur’s Dish: 3 Start-up Mistakes and How to Avoid Them – Katie Morrell, Open Forum

Entrepreneurs address some of the biggest and most common small business mistakes and how they can be averted.

13 Start-up Headlines You Will Undoubtedly Read in 2013 – Zach Davis, Tech Cocktail

As we gear up for the new year, here are 13 headlines experts think you’re likely to read in 2013.

This post was authored by Founders Workbench.

The Eight Great Mistakes Founders Make (Part 1)

Goodwin Procter tech partner Dave Cappillo recently led a discussion at Harvard Innovation Lab focused on how to avoid eight missteps that entrepreneurs commonly make in the early stages of a company’s life cycle. Here are Dave’s first four “great mistakes.”

To follow along with the video of Dave’s presentation, scroll to the minute markers noted next to each mistake.

  1. Failure to pay attention to corporate formalities (03:27 – 07:31)
    • Form the company correctly (make the appropriate filings with the state in which you incorporate). Use the documents found on Founder’s Workbench!            
    • Issue stock to the founders
    • Enter into a Founder’s Agreement
    • Incorporate early enough
  1. Complicating the formation process (07:32 – 25:31)
    • Keep it simple
    • Weigh the benefits of a LLC vs. a Corporation
    • Weigh benefits of an S Corp vs. C Corp
    • Decide where to incorporate: most companies incorporate in Delaware because legal precedents and laws there are well understood
  1. Failure to appropriately address founder equity issues (25:35 – 39:09)
    • Founders need to have specific, transparent discussions about expected contributions early on
    • Bad decisions about allocating founder equity can kill companies
    • Founders stock should be subject to vesting
    • Each founder should earn their way into stock issued to them over time.  If they leave, the unvested portion should revert back to the company
    • 83(b) elections are critical
    • Transfer restrictions should be put into place (Right of first refusal and IPO lock-ups)
  1. Dwelling on valuation (39:12 – 41:18)
    • Goal for a founder should be to reach a reasonable deal/outcome both on valuation and other terms as quickly as possible, because the fundraising process can be all consuming

Stay tuned for a look at the next four “great mistakes!”

This post on Start-up Issues was authored by Founders Workbench.

Congrats to Forbes 30 Under 30 Tech and Games & Apps Honorees

This week Forbes released its annual 30 Under 30 list, highlighting the biggest stars of tomorrow. The publication chose 30 standout people in 15 categories, totaling 450 individuals under 30. These honorees represent the entrepreneurial, creative and intellectual best of their generation. Forbes named several friends of Goodwin Procter to the Tech and Games & Apps lists including:

Congratulations to these honorees and to all of the outstanding individuals named to the 30 Under 30 lists!

This post was authored by Founders Workbench.

Founders Flash

This week’s articles highlight the experiences of a military veteran and entrepreneur, include a list of essential skills that entrepreneurs possess, question the impact that funding can have on a company, and discuss how to raise entrepreneurial kids.

Veteran Entrepreneur Spotlight: Brian Iglesias – Film Producer – Shaun So, Forbes

Film producer Brian Iglesias talks about what it means for him to be a military veteran and entrepreneur.

5 Essential Skills of an Entrepreneur – Jessica Stillman, Inc.

An analysis reveals the list of five essential skills that entrepreneurs possess.

What VC Money Buys – David Rosenbaum, CFO

A CFO discusses how much change happened to his company after receiving funding.

How to Raise Entrepreneurial Kids – Nadia Goodman, Entrepreneur

An entrepreneur and parent shares how you can raise your kids to have an entrepreneurial spirit.

This post was authored by Founders Workbench.

12/12/12 Holiday Tech Co-Party

Goodwin Procter was thrilled to sponsor the 2012 Holiday Tech Co-Party last night. We had a great time supporting the dozens of tech start-ups that make up Boston’s stellar start-up community.

Thanks to Dave Bisceglia, Ben Carcio, Raj Aggarwal, Ben Maitland-Lewis, Jesse Bardo, Sravish Sridhar and all of the other hosts for organizing a fantastic evening.

Special thanks to @santaclaus for showing up and putting everyone in the holiday spirit!

This post was authored by Founders Workbench.

What Lies Ahead: Trends in the Tech IPO Pipeline

The recently released Tech IPO Pipeline Report from CB Insights makes interesting reading for founders and entrepreneurs who are looking ahead. The report identifies 472 private venture-backed companies with valuations over $100 million, the “shadow IPO pipeline.” These companies have collectively raised $40 billion, and a quick look at the list reveals some commonalities and trends among both the companies and their investors. 

Key takeaways from the report:

  1. The majority of these companies are selling to enterprises and the SMB market; only a minority are consumer-focused.
  2. NYC overtook Boston as the 2nd largest home for these companies (41 to 40), putting the two east coast states in a virtual dead heat.
  3. The average funding amount per company on the list is $84.7 million.
  4. PE investors are increasingly active in this space and are investors in 90 of the 472 companies.
  5. Almost 50% of the tech IPO pipeline is comprised of  internet companies followed by mobile & telecom companies, focused on services and infrastructure rather than applications.

For a  full summary of the report, click here.

This post on IPO was authored by John Egan.

Founders Flash

This week’s articles highlight how businesses can retain talented employees, share the story of an entrepreneurial doctor, provide a guide on how to find the right venture capitalist, and discuss signs that entrepreneurship may not be right for you.

Entrepreneurs: Here’s the Secret to Retaining Your Most Talented Employees – J.D. Harrison, The Washington Post

A panel of young entrepreneurs offer their insight on how businesses can retain talent.

An Entrepreneurial Doctor Isn’t Afraid to Shake Things Up – Cliff Oxford, The New York Times

An entrepreneurial doctor believes that in order to grow your business fast, you shouldn’t have partners.

A 4-step Guide to Finding the Right VC – Bob Ackerman, VentureBeat

A guide on how to find the right venture capitalist for your company.

5 Signs You’re Sucking as an Entrepreneur – Jason Freedman, Inc.

Five signs that that entrepreneurship isn’t the right fit or right time for you.

This post was authored by Founders Workbench.

Privacy Compliance Challenges for Mobile App Developers

Mobile application development continues to be an interesting growth area for entrepreneurs. With the industry a mere four years old, consumers and business users alike continue to seek out and use new apps at a rapid pace. In fact, recent research shows that the use of mobile apps in the U.S. rose nearly 35% this year.

While there are tremendous opportunities in mobile app development and marketing, start-ups entering this field must pay heed to their compliance obligations, particularly in the area of consumer privacy. Mobile app developers have been getting particular attention in California where the state’s attorney general, Kamala Harris, has been warning developers that if they fail to communicate their privacy policies to their end users in a clear and conspicuous manner, they face the possibility of significant fines.

At issue in California is the state’s Online Privacy Protection Act (the “CalOPPA”), which requires all online services that collect personally identifiable information about consumers residing in California to post privacy policies that explain their information collection and use practices. CalOPPA was passed in 2003 and online services have had to comply with its terms for several years now. However, in recent months, California regulators have been focusing increased attention on companies’ compliance with the measure. At the end of October, Attorney General Harris began notifying mobile app developers that they had 30 days to post a privacy policy or could face a fine of up to $2,500 each time their app is downloaded.

In the first action against mobile apps providers for claimed violations of CalOPPA, on December 6th, Attorney General Harris filed a civil suit against Delta Airlines for its failure to include a privacy policy notice in its Fly Delta app.

With the expiration of the 30-day warning period and the filing of the first suit, it is critical for all developers of mobile applications to ensure that they are displaying privacy policies if their applications collect personally identifiable information.  Significantly, because CalOPPA applies to online services that collect data from consumers residing in California, the impact of this development reaches far beyond California.

Of course, when developing a privacy policy for a mobile app, as is the case with any other online service, it is essential to ensure that the privacy policy ultimately displayed is a complete and accurate description of the company’s actual policies and practices. Also, if an app is used for collecting regulated information, such as health-related apps used to collect protected health data, attention will also need to be paid to ensuring that the privacy-related disclosure addresses the applicable legal and regulatory requirements.

This post on Start-up Legal Issues was authored by Jacqueline Klosek.

 

VIDEO: hack/reduce Incubator Grand Opening Event

Boston’s Big Data incubator hack/reduce hosted a grand opening event for its new space in Kendall Square on November 8.   

Hack/reduce, a nonprofit established in partnership with the State of Massachusetts and innovative local and global firms, works with MIT, Harvard and other local universities and provides developers, data scientists and domain experts with a large-scale compute cluster, hands-on workshops, and physical workspace in the heart of Cambridge, Mass. Hack/reduce is sponsored by Google, Microsoft, Bessemer Venture Partners, IBM, Goodwin Procter, Dell, and Charles River Ventures, among others.

The event brought together CEOs, founders, engineers, academics, big data enthusiasts, Goodwin Procter partner John Egan, and Massachusetts Governor Deval Patrick to check out the new space and discuss how hack/reduce will help create the next generation of Big Data technologies and applications.

To view highlights from the event, watch the highlight video.

 Follow hack/reduce and Founders Workbench  on Twitter!

This post on Start-up Issues was authored by Founders Workbench.