As you are venturing into uncharted territory building a startup, having the proper legal protection and organization is not at the forefront of every entrepreneur’s mind. But after all of the building and planning and coding, making sure that your IP, partners and company are protected is absolutely paramount to ensure smooth sailing when you hit it big.
As you are seeking out a firm / lawyer to work with to form your corporation and initial IP protection documents, consider the following:
Does the lawyer specialize in startups?
Does the lawyer have a strong track record in representing successful entrepreneurs?
How involved are they in the entrepreneurial community?
Have they ever started a company themselves or been deeply involved in a startup?
Are they willing to defer fees until you raise capital?
Additionally, you need to consider how a lawyer is going to treat you. Do they have tons of clients that will get more attention than you?
For my last startup, I worked with Glen Caplan and John Fogg of Robinson Bradshaw in Chapel Hill, NC. They hit the nail on the head with every point I described above. I knew I was in good hands based on the following:
Prompt responses: when I emailed Glen or John, I get a response back generally within an hour.
Insightful responses: when I asked a question, I didn’t get back a bunch of legal jargon. Instead I received detailed, insightful responses in language that I could understand.
Culture fit: these were guys I would invite over to a BBQ… genuinely nice people that are a pleasure to work with.
Ultimately, you need to find a lawyer that is competent, values you as a client, and is someone that you can trust. And remember, it’s much cheaper to get it right the first time as opposed to cleaning up a legal mess later!
Flash back to 9th grade history class. The teacher passed out an assignment, some sort of research and essay stuff. But there was a catch – students in the class had a choice to do a second assignment instead. The second one involved completing a longer reading, and writing a lengthier, more complex essay. This alternate assignment was mandatory for any student who wanted to apply for AP World History the following year.
So 14 year old me looked at the teacher and said (in my head of course), “so let me get this straight. You’re giving me homework, and then you’re saying I have the opportunity to volunteer to do even more homework. Are you freakin’ crazy?”
I didn’t like homework very much, so I opted for the first assignment and never looked back. I certainly worked in high school, but I wasn’t up until 2am every night writing papers nor was I struggling through advanced calculus. I took the normal classes (plus 2 AP’s and college level Spanish) and excelled.
Everything in high school and beyond is about trade-offs and opportunity costs. I chose to not pursue an excessively rigorous courseload in part so I could have more free time outside of school. And when I was 14, I used that free time to start my first business,Armonk Computer Solutions.
Over the next 4 years, while many of my peers were sweating through AP Euro, I was learning the fundamentals of customer service, marketing, accounting and technology. I learned how to talk to people and how to sell. This wasn’t coming from a book – it was real world, first hand experience.
The bottom line here is about passions. I wasn’t passionate about any of the subjects offered in AP. To this day, I still believe that I got more value out of starting a company than I would have gotten spending my afternoons outlining an AP biology textbook.
In the fall of 2010, I accepted a spring semester internship in Durham, NC. At that time I didn’t know anything about North Carolina, nor did I know a single person there. I wanted to change that.
I decided that it would be great to have some friends when I got to Durham. I would be located just a mile away from Duke University, full of interesting people – a great place to start. So, I sent emails to strangers. I searched the internet for the student leaders of the entrepreneurship community at Duke and introduced myself: “Hey, I think what you’re doing is cool and although I don’t have any affiliation with your school, I’d love to get involved.” And to my surprise, my inbox filled with enthusiastic replies, welcoming me to the community.
Fast forward a month and I arrive in Durham. I begin following up on those emails and arranging meetings. Within the first week I had met with several student leaders and Presidents of clubs. I began attending executive board meetings and providing input from what I had learned running the Entrepreneurs Club at Northeastern. All of the groups had websites, although some of them were outdated. So I offered to re-design them, for free. Of course I was met with an enthusiastic yes and over winter vacation I began to code several new websites for the Duke Entrepreneurship organizations.
A week later, I was introduced to a professor in the Markets & Management program and after telling him my story, he invited me to participate in his class. Within 3 weeks of being at Duke (minus vacation), I was:
Participating in the executive board operations of clubs
Taking a senior capstone class… and doing homework!
Rushing two selective living groups (living communities on campus)
Went to my first Duke basketball game, and then another.
Now fast forward another few weeks and I was:
Planning & executing events for the InCube selective living group rush
Starting a company with a freshman computer science major
Meeting more key people at Duke then many seniors knew
I had quickly accomplished my goal of making friends – but the experience ended up becoming so much more. I gained an entirely new perspective by immersing myself in a university that was so different than the one I had been at before. I went from not knowing anybody to walking through Duke campus saying hi to people around every turn.
What did I learn?
People will give you amazing opportunities if you have the guts to ask
If you create advantage instead of taking advantage, everyone wins
Duke & Northeastern are completely different – more info coming later
With the popularity of programs like Startup Weekend and 24 hour hackathons, it is becoming common for entrepreneurs to start building something with a bunch of random people and then afterwards decide they are all going to start a company together.
Starting a company is a big deal, it’s dangerously close to a marriage. One of the most important decisions you make is who will be on the team, so when you’re thinking about partnering up, consider the following:
How much do I know about this person? Do I know who they truly are?
What are their past experiences? Do others speak highly of their work?
What are their values?
Ultimately, it is tricky to get the answers to all of those questions. I say, give it a try for a little while with no-strings-attached… see how everything works before you sign the papers.
Ideally, you want a mix of different strengths and weaknesses with less overlap. I.e. my partner is a rockstar hacker and I can sell water to a well. Creating balance and leveraging people’s core competences are keys to building a great team.
It’s a popular strategy these days – putting up a mysterious landing page claiming you are creating the next “big thing” and asking people to sign-up for the beta, not even knowing what it is. And guess what? It works! Curiosity gets the better of us and we opt in, handing out email address over to some strange start-up, anxiously awaiting to test out their new product.
Stealth mode can definitely be an effective way of raising early curiosity and getting people to sign up for something before you are ready to launch it. It raises hype and creates a stir.
Here is the problem though: when you don’t tell us anything about what this new product/service is, we are free to let our imagination go wild. The issue there is that chances are, we are going to imagine your thing to be crazy awesome. So cool, so bold – so game changing, that it is too good to be true. And that is precisely what it is. Because when you finally do unveil it, that anxious early adopter will more than likely be disappointed. The real thing didn’t live up to the wild fantasy – it rarely ever does.
Bottom line: think carefully about the go-to-market strategy. Sometimes, a mix of stealth & some handy clues is the most effective way to get the right people excited about a new venture.
Over the past 2 years, I have been a part of a Fellowship program at .406 Ventures, a $170M early stage technology venture capital firm based in Boston, MA. The program is designed to introduce highly entrepreneurial college students to the venture capital process and ultimately grow their entrepreneurial skills so they can start awesome technology companies.
The 13 Student Fellows represent campuses all along the east, from Harvard to Carnegie Mellon. Each Fellow is responsible for identifying exciting high growth technology start-ups founded by students in their school, collaborating with the other Fellows and .406 investment professionals to evaluate the opportunities and then connect their classmates to the vast resources of one of the highest regarded venture firms in the Boston tech scene. This past year, the group introduced over 250 start-ups to .406.
There were a ton of learning opportunities throughout the program:
Networking – I got to meet so many cool people through deal sourcing for .406. In fact, one of them is now my business partner.
Learning – I got to observe pitches and participate in the deliberation process after. Now when it’s my turn to pitch, I know exactly what to do.
Internships – the partnership knows everybody, and connects the fellows with great internships. I just finished one at a .406 portfolio company.
The Fellows – the group consists of incredible students doing amazing things at their schools. As the program grows, so does the network.
For any current students considering the Fellowship, it has been a cornerstone of my college experience, and I passionately recommend it.
I recently finished a semester-long co-op and have decided to spend the summer starting a new tech company with another student from Duke. After careful consideration, we decided to both live at home with my parents for the summer so we can focus 100% on what we are building (more details on that later).
With the Northeastern co-op schedule, I haven’t lived at home since I graduated high school. What I am quickly discovering though is that for a bunch of 20 year olds writing cool software, living at home can be fantastic.
It’s free! My parents know that if we end up with $millions from the company we’ll send some their way.
Food. I’ve been cooking (attempting to cook) while living on my own for co-op, but oh man is it great to have home cooked meals every night.
We can focus literally 100% on our company – no need to worry about bills, driving, getting furniture etc. We wake up and code.
I always hear that a potential drawback of following the entrepreneurial path is having to worry about forgone paychecks to cover cost of living. I can’t think of a more effective way to combat this at the college age then moving back home.
Bottom line for college entrepreneurs and recent graduates:
Give up your freedom and go live with your parents if it is a viable option in your family. Focus your time and energy on building something great.
One afternoon last year when I was on co-op at Cisco Systems, I went out to lunch with a few other co-ops to a Vietnamese restaurant. I had never tried Vietnamese food before, and the restaurant was a favorite of one of the interns going with us, who happened to be originally from Vietnam.
The lunch was excellent and we all had a great time. At the end of the meal, I was surprised that the intern who suggested the restaurant graciously insisted on paying for everyone’s lunch. While it might be pretty standard for your boss to pick up the tab after lunch, it was different with a peer since the check is generally split.
So what happened? Well, to this day, I have not forgotten this gesture. It was so simple, and the total capital investment required was about $8. Yet it made such a deep impression. While he may not have thought of this at the time, he could end up getting a substantial ROI on that investment. Because of the impression he made on me, I would go out of my way to help this person – get him an interview, make a recommendation, etc.
Bottom line:it is surprising how powerful simple gestures of generosity can be. So next time the lunch bill comes, consider being generous and making that investment.
Today is my last day of co-op at Digitalsmiths, a video discovery & metadata software company in Durham, NC. Over the past 5 months, I engaged on several exciting initiatives with the Digitalsmiths team, all focused on technology, project management and business. Just a few including building a cloud-based KPI dashboard, running logistics at a trade show in Las Vegas and spearheading social media marketing strategies.
So, what did I learn about?
All about the digital video industry and a unique application of data
How a VC backed tech start-up operates from the inside
Structure of an executive team & reporting structure
Talking to clients at major fortune 500 organizations
I realized how important company culture is & how I want to structure it
I have the entrepreneurial bug. Next step is to start my own company
I crave risk, responsibility & big rewards & relentlessly pursue them
This semester was all about discovery for me: video discovery & self discovery. I confirmed important parts of what motivates me & makes me happy. All in all, a great success!
The ability to focus in on your core competencies is a major asset. We all have multiple talents, commitments and activities. Some create a lot of value, while others do not. The goal (particularly on the business side of things) is to determine which activities create the most value and focus resources on those. Value could be happiness, money, whatever it means to you.
So Drew, to answer your question, YES, drop things that you have gotten out of practice with and aren’t truly passionate about anymore, even if they are making money. I recently left my web design business of 7 years that generated great revenue for a college kid to instead focus on a new tech start-up that statistics and probability say will fail.
Never sit still. Take the risk, go for the gold. Don’t get caught up in the little wins, it’s the big ones that actually make an impact. Always consider, what is the worst case scenario? Maybe some lost time, lost money, so what? Think about the opportunities that have a time window – if the clock is ticking, grab them while you have the chance.