Recently, when you search on David Shen Ventures on Google or Yahoo!, I come up on some other blogs now.
If you know how blogs seem to work these days, there is a lot of rehashing of content to create content. Bloggers follow other sources and then paraphrase, rewrite, or add onto the content by commenting on it. It’s an easy way to generate material for articles, versus coming up with something yourself.
But sometimes, they get it totally wrong. It’s a problem with citizen journalism. Professional journalists have methods of working and standards to uphold (at least most of them anyways). One big characteristic is truth in journalism, and the verification of facts before publishing something so as to maintain/increase reader trust, which is a good way to get readers to come back and read your stuff.
Today’s new citizen journalists often don’t have these standards. Nobody taught them how to be like professional journalists. They just started writing and sometimes are unaware of things like holding high ethics and standards. They have different motivations like creating content which generates traffic which generates revenue through ads and affiliate programs.
So now I’ve been mentioned by some citizen bloggers, who I am sure are just trying to create content by following activity on my companies page. Unfortunately, the information is wrong. They say I have invested in a bunch of companies but it is not true. Even though a company is mentioned on my companies page, it does not mean I have invested in it. My model is to be advisor to every company listed, but I could be advising without investing.
None of them have taken the time to verify the information. They just made some assumptions and posted them.
Think what would happen if reporters on CNN reported this way. How would you feel about their news? Still trust it?
In a previous post, I raved about being able to bring my video iPod with me, and the TV shows that I always watch so that I can watch these shows whenever I wanted and not when they were on TV.
It was fantastic all the way up to the point at which the external hard drive which held all my iTunes library crashed in a big way.
Well, how nice of Apple to not let us re-download the stuff we bought. Where is the promise of digital media and the ability to not have physical media but being able to access it anywhere? Guess it doesn’t work with the economics. After all, Apple could make money on all the people who blow up their hard drives and can’t re-download their stuff.
I for one am glad that I buy CDs and rip them into iTunes. My music I can recover with difficulty; it was fortunate that I have a backup of my iTunes directory but unfortunately it is many months old. I can re-rip the CDs but I can’t re-download the 2-3 albums I did buy through iTunes.
But all the recent TV shows I subscribed to – all gone. PFFT. Kaput. Nada.
Now maybe it’s OK. I probably wouldn’t have watched them again anyways. Still, it sucks. Those little bytes of data which made up those videos are gone forever because Seagate didn’t make a drive that lasted long enough.
So where are the indestructible drives? As the world goes more digital, we have need for storage that should outlast ourselves. But yet nobody is making anything like that. They just say you should backup. Wonderful. I believe the technology is out there to create the indestructible hard drive but they just won’t because otherwise they’d be out of business because they can’t sell more hard drives for all the people who crash them.
What can I do? I’m going to try to extract all the music from my iPod via some bootleg programs and at least see if I can recover a lot of my music. The videos are pretty much gone though.
I went and bought two 750 GB hard drives and now am going to have to be religious about backing up TWICE. So now for security, this wonderful digital media is costing me many hundreds of dollars more just so I can make sure they won’t disappear on me again.
What’s the probability of both hard drives self-destructing at the same time?
I don’t want to know.
This is an impression of a “tough dog”, as performed by entrepreneur whose determination is shown through gritted teeth and never failing optimism in the face of rejection, sleepless nights, and stress at starting a new company.
It’s easy to give up. Retaining confidence, determination, and forward moving energy is super tough in the face of constant adversity. Rejection, business deals moving too slow, running out of cash, wondering when revenue is coming in, investors and partners beating on you, your staff is not working out and you need to fire them – the list goes on and on of things faced by new entrepreneurs.
But you can’t give up. If you do, then you may never realize your dream of watching your company and idea flourish and grow. You need to learn that the world is going to constantly try to beat you down and you have to live with that, roll with the punches, and keep moving forward. There will be times where it will seem you’ve hit rock bottom, but only to fall even lower. You, the budding entrepreneur, need to expect this, prepare yourself, and keep saying to yourself that it will get better, and to drive towards making it better.
Because if you can’t adapt, then maybe you shouldn’t be an entrepreneur. You’ll die of despair and never get anywhere. Know yourself before you embark in entrepreneurism.
Or…learn how to say:
GRRRR ROWRRR ROWRRR
It really works.
On Friday, we waited at JFK to no avail as a winter storm grew worse and caused all flights to be cancelled late afternoon. We tried everything and ultimately we managed to get transferred to a Sunday flight out of La Guardia, which would get us to Chicago O’Hare and then onwards to Los Angeles. The way home was interesting as we got to ride the most amazing off-rode vehicle ever and both of us spent two more nights back in Manhattan, braving first a night of pelting sharp snow and then the screaming drunk people celebrating St. Patrick’s Day all day and night.
I got up early just to see if I could make to the airport early and get a seat on my flight out to Chicago, as the internet was not allowing me to grab seat. When I got there, the woman said I still could not get a seat, so I sat down and waited for my buddy to show up. Of course, my buddy, through picking the right person and with a bit of smile and flirting manages to find someone who CAN assign seats even as they are locked up on the normal screens. Go figure. We get seats and then move downstairs to grab lunch before we board.
It’s still many minutes before the flight takes off, so we grab some food and sit down at the gate itself. We see lots of people milling around but nobody getting on the plane and it’s 1215p with the flight supposedly taking off at 1229p. So we just wait thinking that they’ll make an announcement when it takes off. Time passes, and passes. Then we see the board go blank and our flight is not talked about anymore. We get up to check the departure board and the FLIGHT IS NOT THERE. We then see the guy who was working the gate’s desk, stop him and ask him about our flight. He tells us it just loaded everyone and took off.
We were sitting there at the gate and yet there was no final boarding call, no call for us even after we had boarding passes and were checked in! Unbelievaable. There wasn’t even a movement of people onto the plane that we could see! We run upstairs to the Admiral’s Club to see if we could fix this. They were as perplexed as we were and put us on the next flight to Chicago taking off at 115p, which was boarding right now. The guy grabs our boarding passes and runs ahead of us to see if he can get us seats, and we shuffle quickly after with our carry-ons. We see him at our gate and he confers with the gate agent, who, while boarding the last few folks, manages to get us FIRST CLASS SEATS. I thought we were really screwed and would have taken any seat just to get out of La Guardia! But somehow, we score the last two first class seats in time, nabbing them before all the upgrade requests ahead of us.
We get this confirmed, hop into line, get our seats, and look at each over the rows, thinking how unbelievable this whole trip back has been. Still, it’s not over yet. I have now only 10 minutes to get to my connecting flight when I hit Chicago. I hope that they hold this flight for me.
My buddy and I are never ever flying to or out of La Guardia again. That place is very bad for the traveler being very small and crowded with not enough places to sit and we’ve experienced firsthand poor operations. During the cold weather months, we’re going to ask our main ringleader if we can have meetings somewhere warm and not subject to snowstorms, like the Bahamas. Think he’ll go for that?
Sometimes I hate meeting somebody I have never met or haven’t seen in a while. It’s bad enough trying to remember someone by picturing them in your mind, let alone trying to figure out who someone is without even meeting them in person before.
But make that worse by asking for those people by name and then being shown to their table and then you realize that the person sitting there is not the right person…AND…they have the same name!
The first time this happened with someone named Lynn whom I had not seen in a long time. I go to Pershing Square and ask for reservations in Lynn’s name, and they say she has already arrived and is waiting for you. I say, great, and follow the server to the table. I see someone sitting there with blond hair, so I approach from her back and then say hi to her face and realize it doesn’t look like the Lynn I knew. I say excuse me, and ask her for her full name, and it’s not my Lynn! She laughs and was also wondering who the hell I was, since she was expecting two other people. She jokes about joining her but I needed to meet the real Lynn so I move off and my Lynn shows up a few minutes later.
The second time was just this last week when I asked for someone named Adam at Olives in the W Hotel at Union Square, whom I had never seen before. I was shown to a table where there was a guy sitting there named Adam, and he and I greet and I get a call from another person meeting us for breakfast but is now telling me he can’t make it. I sit down and then start talking about my flight out and a few other things, and then we realize that I’m not the person he is supposed to meet, and he is not the Adam I am supposed to meet! How funny! I grab my stuff and go back to the front desk and there is the real Adam there waiting for me.
Usually I don’t have a problem finding and meeting someone I have never met or someone I have not seen in a long time. But it’s doubly weird when there are others with exactly the same name having reservations on the exact same day, time, and place to trip me up!
OK so I’ve been complaining about Yahoo! Mail Spam filtering for a while now because it’s catching so many important emails from people I want to get email from. I try to add people to my address book as fast as possible, but often I don’t get them there fast enough. I just grin and bear it; it’s better than receiving 1000+ spam emails but missing that one super important one isn’t a good thing.
But today, my Outlook’s Junk Filter started JUNKING EMAIL FROM MYSELF. Is that ridiculous or what?
This is why Microsoft will never produce products as cool as Apple’s, or win in the long run.
These Moo cards are really starting to take my brain and feelings for a loop.
The impulse to make more is staggering. It takes a huge force of will to not go and upload more pics and order more.
When I order them, my intent is to use them as a personal ID card or as a unique business card design. But I find that when I get them, it is super hard to part with them. I like them so much that it’s hard for me to give them away! I think it’s the fact that I took those pics on the backs. I have a deep attachment to them simply for that fact alone.
It’s also their novelty and size. The slender aspect ratio of these cards makes them almost cute and you want to own them. I can’t part with them because they are so keep-a-ble!
Then when I show them to others, they like them too. But they won’t take just any card; they want to pick. They look carefully through them and only pick the one they like. Or take more than one. How strange. They want that special one that appeals to them alone, even though I took those pics and like them all.
It is even more pronounced when I show my biz cards. In case you didn’t know, the backs of my business Moo cards have images of my startups that I take on occasion to document their “Making Of”. So when they take my Moo cards, they don’t want some strange image or dudes on the card backs; they want something that is familiar to them, like either their own company or if they know the people.
Moo cards are strangely addictive and produce such interesting reactions in myself and in others. I think I am going to need some MOOOO therapy soon to figure this all out…
The other day, I met a guy who told me about a situation he was in where he was a consultant for a company who got in a legal dispute with another firm. Then he got tangled up in the lawsuit and got sued by the other firm and was forced to defend himself with his own funds because there was no clear indemnification in any contracting agreement.
At the moment, this guy is shelling out between $25K to $50K per month out of his own pocket to pay for legal fees. There is a soon to come happy ending though. It turns out that this guy was employed through another temp firm while working for the company. While indemnification was not explicit, it just so happens that employees are automatically indemnified via the California Labor Code (see section 2802) and is the same for pretty much every other state’s Labor Code.
However, had this guy worked directly for the company without an official statement of indemnification as a consultant, he would have been really screwed. There would be no clear path for indemnification and thus reimbursement for legal fees.
Very scary. How would you like to pay out of pocket legal fees of $25K to $50K per month, and for months on end?
As soon as I heard this story, I called my lawyer and thanked him for being so adamant about indemnification.
In my journey to implement indemnification, here are my thoughts and discoveries:
1. Ignorance of the state’s Corporation Code, especially with respect to indemnification, is common among the lawyers I’ve worked with. So they err on the side of company favorable tactics, which is to never give anything away, including indemnifying advisors.
2. Not knowing or understanding indemnification is also shared by investors and other entrepreneurs.
3. It’s very much a worst-case scenario discussion. It’s difficult to discuss sometimes.
4. Experienced entrepreneurs have no issue with it. They just assume they’ll protect anybody that does work for them. It’s natural for them to thank people who help them in that way.
5. By the way, all the Corporation Codes stipulate that in the case of an external person causing harm willfully to a company, the Code states that indemnification is invalid, even if a contracting/consulting/advisory agreement calls for indemnification. By the way, there is the case of unknowingly causing harm which is a huge grey area and would probably have to be explored on a case by case basis.
If you’re interested, you can read about indemnification in the California Corporation Code or in the Delaware Corporation Code.
6. No matter what, I do not want to put my personal assets at risk for another company. It doesn’t make sense at all.
7. I will definitely walk away from any deal that will not indemnify me as an advisor. It is a deal breaker.
This isn’t a usual Business post. But I just had to post about it.
Today, my buddy Pooj and I were on our way home when one of the biggest nor’easters hits the east coast. It, well…kind of ruined our day. We both got to JFK only to wait many hours in the Admiral’s Club to find out that they cancelled all flights out of JFK to everywhere. We tried everything; getting on flights to LA, connect through everywhere, get on an international flight connecting through SF or LA – all cancelled. Dejectedly, we removed ourselves from the comfy Admiral’s Club where we were just sitting there surfing the Web and ragging on people. After looking at the taxi line (WAY TOO LONG), we jumped into the LIRR back which was quite an experience in hiking. Up stairs, down stairs, up stairs, walk more, down stairs, up stiars, walk more. ARG!!!
Eventually, we got back to Penn Station and after one more train ride to Grand Central, we said enough was enough. We’ve been dragging our luggage from JFK to Manhattan and pretty tired of that, especially given the constantly increasing snowfall.
So upon exitting Grand Central we said “f**k it” and jumped into the taxi line. As we were pelted by these little bits of ice which tried to fake itself into being snow, a guy pulls up in one of these:
Both of us looked at each other and had enough of the snow pelting so we jumped into this contraption.
Boy. I wish I had a video camera. It was the most amazing ride I ever had.
Imagine the snow piling up on the roads in this really slippery slush and taxis whipping in and around you as this guy is pedalling to your destination, which for us was only 5 blocks away. We weave our way around cars and people as he pedals in the middle of the road and we’re wondering how this bike-thing isn’t skidding out or doing some kind of donuts in the snow. We marvel at this bike’s manuverability as he is on the road at one minute, and then he jumps onto the sidewalk and now he is weaving in and around people as they walk on the sidewalk! Wow! And he even swears at another pedestrian in true New Yorker style! What a treat! In another minute, he is back on the road and riding along with cars and then lastly, we tell him that our stop is over there on the right, so immediately he turns right and leaps onto the sidewalk and delivers us to the doorstep.
It was then we were able to look at this thing. What kind of tires this contraption must have to transport us through ice and snow without skidding or causing an accident, and only through human power alone?
An amazing invention, this tricycle-come-rickshaw with unbelievable off-road capabilities. If it ever snows in NYC, I would highly recommend jumping off the taxi line and taking one of these.
Raising money is never fun. When the time draws near to a date at which you want to officially stop fund raising and collect the money, things tend to get pretty hectic.
So what happens exactly? And who is involved? What are things you should watch out for?
Let’s say you created a term sheet X weeks or months ago. You’ve met with a whole bunch of investors and some of them say they will invest (usually we say “we’ve soft circled them”). The term sheet has been negotiated and potentially changed, and you circulate that back to each investor and finally everyone says they’re on board and they’re ok with the final term sheet.
And then, time draws near and you realize it’s time to get serious and actually get the money. What happens?
1. In the financings I’ve done, the law firm project manages this process. They help circulate the documents, gather signatures, send reminders, etc.
2. The law firm has an escrow account where investors wire their money. As one entrepreneur I met put it, “The reason why you wire to an escrow account is to prevent us from absconding with your money (if wired into our own bank account directly) to the Cayman Islands before all the official paperwork was finished .”
3. The law firm takes the term sheet and expands that into official paperwork that spells out the terms in detail. The investors sign these documents and they make everything official. This paperwork is passed back to investors for review and signature.
4. Due diligence materials from the company are sent to each investor upon request (and I HIGHLY recommend that) to make sure everything is in order. Every company document is sent, every record, every contract – just about everything. Thankfully for early stage startups, there isn’t that much paperwork to review. But imagine if you were to do due diligence on buying a company like Yahoo! or IBM. The due diligence alone would be staggering as you reviewed every contract, every patent, every legal dealing, every lawsuit – everything that could introduce risk into the investment. You don’t want to miss something that could turn what appears to be a great investment into zilch.
5. The CEO devotes his/her entire life to the closing during the last 2-3 weeks before close of the financing. He calls every investor and double checks to make sure they are still on board. He fields any last minute questions. He assures investors that the close will happen and makes sure everyone knows to sign papers, wire money on time, etc.
6. Investors need to prepare the cash for wiring. This could take some time to prepare if the investor needs to sell stocks, or get out of other investments. They may need to give their money manager lead time to make sure cash is available. Even the wiring process takes time. I fax in requests the day before with wiring instructions just to make sure that they get in on time. If the money is being wired internationally, you have to be wary of the fact that it could take additional time, or the wiring may not even be accessible to that account from theirs. More warning is always better than less.
7. Signatures also take time to collect. The law firm project manages the collection of the signatures and makes sure that everybody has signed the right papers on the right lines.
8. After the money is collected and the paperwork signed, then the law firm gets copies of signed paperwork back to the investors and, if it is an equity deal, prepares stock certificates and sends those back to investors as well. Other paperwork that goes back to investors can include receipts for the money wired; one law firm prepared a huge notebook for me which had all the involved paperwork in it. Very nice!
9. Be prepared for high stress situations as the time draws near, the lack of sleep, distractions up the wazoo. You must remain focused and determined through the whole process.
So there are never problems, right? HA. What COULD happen:
1. At the last moment, one or more investors back out and you’re left with less cash than you expected, perhaps substantially less.
2. Other investors backing out could cause even more investors to back out. It might be interpreted as a vote of no-confidence for the investors.
3. Some strange investors could keep saying they’ll send you money, but it never shows up.
4. Unfortunately, I have also seen the law firm flake out which is REALLY BAD. All the more reason for the CEO to keep tabs on EVERYTHING and make sure it’s all moving along.
All sorts of things can happen which can spoil your day. As CEO of a startup and going through this process, you should make sure your full attention is on this and be ready to adapt to changing, chaotic conditions – but rejoice when you get every investor that you say you got and see that money arrive in your bank account.