Blog Archives

Sarbanes Oxley’s collateral damage: US public markets ?

I mentioned two days ago the continued decrease of the volume IPOs of VC-backed companies. Discussing it with a VC friend, we sort of joked about the efficiency of the Sarbanes Oxley regulation that is essentially scaring away from the public markets a generation of companies – hence reducing in a round about way the potential for fraud and abuse from these new companies.

This morning, Benchmark Capital’s Bill Gurley is pointing to a Wall Street Journal piece (that I could not read b/c you need to be a subscriber) from the CEO of the Nasdaq market warning of the potential demise of US Markets due to Sarbanes Oxley:

He is properly concerned that the overly bureaucratic Sarbanes-Oxley (SOX) processes could lead to the end of global domination by the U.S. capital markets. Ironically, the two gentlemen that created SOX did it with the intention of “preserving” U.S. capital market leadership. Their fear was that people … Read more »

How about friends and family financing ?

Quite a bit of discussion took place in the comments and offline following my post on accredited investors, especially as it relates to friends and family financing. These investors will typically be “easier” to convince to support and finance your idea, but at the same time they might not qualify for the accreditation as defined by the law.

So what can you do as a young entrepreneur/team needing some cash? First order: can your savings and credit cards get you anywhere meaningful? Second: in order to avoid being stuck between a rock and a hard place, a loan that will be re-imbursed as opposed to converting into the next round of equity financing might be a temporary solution. Unfortunately for the unaccredited lender, he/she will not be able to benefit from that early support through the perks angels typically get: discount to Series A, warrant coverage, etc. because only accredited investors can acquire equity. And once … Read more »

Why startups must only take financing from accredited investors

Seed stage investing is getting very busy these days, and over the past few months I have started hearing about companies taking money in small amounts from a large number of friends and family investors. Easy money ? Maybe, but…

Whilst it is great to get that kind of support from your close circle, it often involves investors who are not accredited. The accreditation has nothing to do with the sophistication of the investor, nor having gone through a formal exam but a set of criteria clearly defined by the SEC (Rule 501(a) under the Securities Act of 1933) – which are related to a minimum level of yearly income or a minimum NAV (net asset value).

Not complying with this rule, which means – yes – turning money down, will come back and haunt you down the road when it is time to further finance or sell your company. Just as an example: unaccredited investors can rescind their investment at … Read more »

Delaware re-incorporation and entity conversion just got easier

Startup companies sometimes need to re-incorporate in Delaware if they did their incorporation in a state where corporate law is deemed less friendly to business operations or investments. Other times, it is the legal structure which has to be changed (say from an LLC to a C Corp).

Brad Feld has started a useful set of posts on the topic a while back, and just mentioned that both changes got easier in Delaware:

The first innovation (Section 265 of DCGL – Delaware Corporate General Law) creates a simpler process for the reincorporation of non-Delaware corporations in Delaware (through a one-step “conversion” rather than through the traditional but cumbersome reverse merger of the non-Delaware corporation into a wholly-owned Delaware sub.) In English – if you are incorporated in a state other than Delaware and want to reincorporate in Delaware – it’s now a lot easier.

The second innovation allows for the one-step conversion of non-Delaware limited liability companies into Delaware corporations.  These conversions/reincorporations have historically required 2 steps – for … Read more »

Podcasting news:’s funding and TalkCrunch’s first show

Busy evening on the podcasting front: first came the inaugural show of a new weekly podcast, TalkCrunch. Given the highly recognizable brand, you won’t be surprised to listen to the audio extension of TechCrunch. The first show is about events and calendars, and you can subscribe to the feed here.

The second piece of news that I am delighted to relay is the Series A funding of, the podcast production company of John Furrier: the company just raised $5.5M (!!!) from US Venture Partners and Venrock Associates. Over the past year, John has tirelessly recorded and produced hundreds of shows with entrepreneurs, VCs, lawyers and senior executives – creating a market and a business model for himself and his growing team on both the consumer and the corporate side. It is not common for VC investments to get into content creation – traditionally a space where revenue multiples don’t exceed 3 … Read more »

If you are still wondering whether to buy an EVDO card – read this

It has been a few days since I bought an EVDO card (using the excuse that my new office would not have Internet access for about a week), and I must say that I am totally bought in: this is the best productivity tool I have bought in a while, both in terms of convenience and time saved.

Time saved can be measured in the (sometime long) minutes one has to spend testing, configuring and sometimes paying for Wifi access. Convenience is due to the ability to access the Net during a “downtime” (like this morning when I waited for the airport shuttle) where this was no Wifi access point around.

Add to this the fact that the first couple of hours of a large conference is generally spent screwing around with a non-working Wifi (apparently Etech’s attendees faced that last week), and you will very quickly rationalize that $60 to $80 a month is *nothing*.

I for … Read more »

Josh Kopelman has avoided it for a long time – but he’s finally done it: he blogs

It is with delight that I have discovered that my friend Josh Kopelman, the Managing Director of First Round Capital, and one of the early stage investors I respect the most, has finally given up and has launched his blog a few days ago. “Redeye VC” relates to the fact that Josh seems to exclusively fly the redeye from SFO to Philadelphia, his home base. Here is his feed.

In his first post, Josh tries to explain why he has taken so much time to give in: #4 rings so true (it is 4:29am as I type this on Sunday morning).

4. I don’t have the time.There are currently 364 unanswered emails in my inbox.  I have 14 phone calls to return.  Six meetings a day.  I’m currently sitting on the redeye flying back from SFO to PHL. I have a wife.  Two kids.  If I had an extra hour a day, I’d rather spend it … Read more »

TechDirt’s Greenhouse: a very interesting experiment

I spent the day hanging out at the TechDirt Greenhouse, and I am glad I did – even if this meant spending a day away from the family. Mike Masnick and his team came up with an interesting concept: getting startups to present their product/services for 5 mins, and get the audience divided up in small discussion groups that would address a key business or strategy question related to one of the presenting companies. We’d spend about 40 mins talking around the subject allocated to us, and report back to the whole group. In order to make sure that attendees would hang out with different people (as opposed to their friends), the TechDirt team put together a set of markers that defined which session/meeting room one should attend.

Oh, and there were the leaders: Red, Blue, Orange, Pink, Green, Mauve. Guess which one I inherited ? Yep, the Pink one. Our role was to facilitate discussions, and make sure … Read more »

Pictures of our new offices

Much of the week-end has been spent on packing and moving to our new offices, in downtown Menlo Park. There have a number of notable news over the past few days, but I have been very busy with mundane things like getting new furniture, Internet connectivity, a parking permit, etc… and a Verizon EVDO card (the Kyocera KPC650 – the one working fine on both PCs and Macs). Since the new office won’t be connected to the net for  a week, it seemed to be the perfect occasion to try EDVO. The result so far is conclusive: with compression turned on, effective bandwidth got close to 700 Kb – not too bad (!!!).

What I am not sure of is the drain on the battery generated by the card, and whether I should set the card so that it turns itself off automatically when a Wifi connection takes place.

Here are some pictures of the office “in progress”:

Read more »

Cool hack of the day: WhatsUp

I am a sucker for data vizualization projects, especially when it comes to news and stock prices (my roots I guess, as this is what I was building as a young C developer). I particularly like this one: What’s Up, a news map display developed by Jeroen Wijering, a UI designer recently graduated from the Eidhoven Design Academy. It basically displays headlines from a bunch of news (geolocated) RSS feeds on a planisphere. Jeroen says that he plans to make this available as a screen saver at some point.

You can launch it full screen here. Very cool.

TechDirt announces its first un-workshop – March 11, 2006 – Sunnyvale, CA

After the “everything 2.0” meme, I see the “un-“ something meme developing. What does it mean ? An event based on a two-way, open, discussion.

One of my favorite tech blog, TechDirt, is putting together the first edition of its Idea Workshop. The concept is very appealing:

A group of pre-selected companies and individuals will present ideas in quick, five minute presentations. Unlike a standard product showcase, this is not the “final word.” After a group of presentations, the attendees are split up into breakout groups, and given a specific issue from one of the presentations to “workshop.” For a company with a new product, this could be anything from “what new features should be added” to “what target market should they focus on” to “is there a business model here?” Other presentations may not be about products, but ideas, and the workshops will be related to those ideas.

 After a short period of time, everyone … Read more »