— Mark White of White & Lee LLP.
Mr. White presented a hypothetical Company and situations that illustrate certain principles of law and business as it is normally conducted in the Valley. Situations presented will include (a) starting a Company while employed, (b) selecting the corporate entity, (c) creation and protection of intellectual property, (d) capital structure and incentive compensation issues, (e) early stage financings and valuation issues, and (f) the structuring of strategic relationships and joint ventures.
— Tom Miller of Sapiental Partners
Mr. Miller addressed how young companies should prepare a Business Plan that will be presentable to early-stage investors. The topics he addressed include (a) use of executive summaries vs. full-blown business plans, (b) ideal length and critical topics to be covered, (c) how to make a convincing business case, (d) confidentiality concerns, and whether to tell the whole story, (e) use of illustrations, charts, client testimonials, (f) level of outside research on market and competitors, (g) how to overcome concerns about a weak management team, (h) use of projections, assumptions, and level of detail, (i) what to avoid in the plan (ie. returns on investment, hyperbole, etc.) and (j) how to distribute the plan, to whom, and attract attention.
Speaker #1: "Human Resources 101 and the Employee Leasing Option" - Susan Jochhiem of Execustaff (sorry, no paper available)
Ms. Joachhiem generally addressed how startups can identify, attract and pay for technical, marketing and administrative staff, with a focus on the employee leasing option offered by Execustaff and other similar firms. The topics she addressed include (a) how to identify and hire quality staff without going through headhunters, (b) normal pay scales for staff pre and post funding, and by category of employee, (c) the benefits, pitfalls and expenses of employee leasing, (d) when and how to build a human resource function and staff in a Company, (e) critical employee policies, practices and programs needed to attract and retain staff in young companies, and (f) generally, how to avoid building a bureaucracy - and remain "lean, mean and flexible" as an organization.
Speaker #2: "How to Allocate Stock and Keep Everyone Happy" - Dee DiPietro of Advanced HR
This topic is critical in that every technology startup struggles with it. Ms. DiPietro's presentation covered (a) the mix between cash and stock used by most companies, and how this changes pre and post financing, (b) general trends in the Silicon Valley among employees in reducing salary for stock - and by what amounts, (c) how to categorize employees, do a spread sheet of staffing needs, and allocate stock out of a stock option plan, (d) what are the general guidelines on stock or option issuances to officers, directors, senior and junior staff - and the difference in allocations based on function (i.e. technical, marketing/sales or administrative), (e) how to negotiate with employees on allocations, and when and whether to grant extraordinary awards, and (f) how to continue to incentivize employees after the initial sign-on stock or option grants.
Mark Rubash of PriceWaterhouseCoopers
Mr. Rubash primarily focused on accounting issues for early stage companies. Topics he addressed include: (a) when and how to select an accountant, (b) comparison of big "4" firms to smaller firms - and typical fee structure, (c) tax issues on "C", "S" and "LLC" corporations, (d) parameters on acceptable debt-equity ratios, (e) issues on selecting a fiscal year, (f) proper record keeping and tax preparation, (g) what type of financial management control system, if any, should a Company put in place - and when, (h) when a Company should hire a book-keeper, controller and then CFO, and how to find these people, (i) the financial accounting software packages that are available, and which are best for what kind of Company, (j) a comparison of cash vs. accrual basis accounting, and which is best and when in the life of the Company, (k) the difference between an "audit" and a "review", and when a Company should begin to audit its financials, and (l) to assure that it remains eligible for "pooling of interests" treatment for potential acquisitions, the things a Company should do early on with respect to its accounting practices.
— Jay Whitehead, IPEO
Jay spoke about how technology companies can create a brand presence and market interest necessary for successful product launch without funds. Specifically he addressed (a) identifying and executing on the right promotion strategy, (b) selecting a PR firm, and typical terms of engagement, (c) how to identify and work with trade publications and industry analysts that will review and write articles about new products and services, (d) building a brand presence in dynamic and highly competitive markets, and (e) case examples of product launch strategies that work and don't work - and why. On this last point, Jay gave case examples of his promotion efforts for UPSIDE Magazine, PC Magazine, CRN and his latest startup, IPEO.
Speaker #1: "Retailing and Brand Presence on the Net" - Phil Levinson of PersonalKids, Inc. (sorry, no paper available)
Phil presented a case study of PersonalKids, and its plans for creating an e-commerce internet retail service for personalized gifts and products. His presentation covered (a) a brief history of CatchTV (Phil's first venture), lessons he learned, and how he extricated himself from CatchTV and maintained relationships with prospective investors, (b) why he believes the sale of personalized gifts on the internet is a viable business, and what it will take for such a business to succeed, (c) how he is building his team, identifying his business model, and attracting seed investment, (d) how the early members of the founding team were identified and recruited, and what compensation arrangements were considered, (e) writing and receiving input on the Business Plan, how it has been used, what seems to be critical in the presentation on the Company - and how the Business Plan works with oral presentations to potential investors and customers, (f) making the decision to initially self-fund the business vs. immediately seeking venture capital - the tradeoffs and timing, (g) how the Company intends to close its first round of financing, valuation issues and working capital requirements ö how to set the amount of funding sought and how to stage out financings to maximize Company valuation, (h) how he intends to launch the service and create distribution and traffic, (i) how PersonalKids will distinguish its service and compete with similar services, (j) how his plans for PersonalKids has changed over time, why, and what he has learned from his study of other net retail businesses, (k) unanticipated problems and how they have been addressed, and (l) his thoughts on what are the internet business revenue models and distribution strategies that seem to work for e-commerce companies.
Speaker #2: "Building a PCS Telephone Operating Company Without Really Trying" - David Nelson of Via Wireless (sorry, no paper available)
In less than one year, Mr. Nelson has successfully launched one of the Central Valley's largest PCS phone operating companies. As a contrast to Mr. Levinson's presentation on starting a Company from scratch without funding, Mr. Nelson discussed (a) his experiences as an entrepreneur bidding on PCS licenses at the birth of the PCS industry, (b) how he found and reached agreement with the rural phone companies that are partners in Central Wireless Partnership LLC, the owner of the Via Wireless service, (c) the essential idea behind Via Wireless, how it attracts and retains subscribers, and how it competes against other PCS services, (d) the biggest problems he encountered in building and launching the Via Wireless service - and what he would do differently if he had the chance, (e) how he simultaneously handled the Rural Telephone Finance Corporation financing, equipment purchases, system buildout, the design and construction of the Via Wireless main office, initial staffing and launch of the service, (f) keeping his partners happy - and assuring that they don't interfere with the business, (f) the similarities between Via Wireless and other service companies he has founded and managed, including CSI, CBILL, PageCell etc., and what all these companies required in order to succeed, and (g) a bit about selling companies, and pitfalls to avoid.
