30 posts categorized "September 2011"

Arianna O’Dell's "Cool Sites" Page

The highlight of my week is discovering that this blog, my blog, is listed on Arianna O'Dell's "Cool Sites" page.

Screen shot 2011-09-26 at 7.25.47 PMArianna didn't tell me. I just noticed traffic coming here from her site and clicked back. Pleasant surprise!

I'm also checking out the other sites on Arianna's list, most of which I do not know. I'm struck with how each seems unabashedly proud of its own, unique design. Why do people turn to the reductive Facebook with so many original treasures on the wider web?

Image is a screenshot of a detail from Arianna's "Cool Sites" page.

Exemptions Ain't What They Used to Be

Asher Bearman has an impressive post up this week on The Venture Alley. The post is a primer on new reporting requirements for venture capitalists and other managers of private funds.

31060798_5898482606If you’re a VC or private fund manager, you’ll want to read the whole post to get a tour of what you’re in for, courtesy of Dodd-Frank.

If you’re not a VC or fund manager, you might still appreciate Asher’s introduction to the topic. It’s an illustration of the kind of sleight of hand that can happen when complex regulatory reform snakes its way through the "pay to play" system of government we've adopted in the US.

As Asher’s post makes painfully clear, the new reporting requirements for VCs and private fund managers are actual, affirmative, regulatory obligations, notwithstanding the "exemptions" from registration under the Investment Advisers Act that ostensibly apply to venture capital fund and private fund advisers.

I'll bet there's more than one fund manager who thinks "exemption" means an exemption from the Act. As in, "I am exempt from the regulations that would otherwise apply to me as an investment adviser."

Not so.

I had fun thinking up titles for this post. Here are some alternatives:

  • "An exemption by any other name...would still be a regulation."
  • "There are exemptions, and then there are exemptions."
  • "With exemptions like these, who needs regulations?"
  • "That exemption is only available to members who contribute at the platinum level."

Photo: "A rose by any other name . . " by h4rrydog.

The Founder Institute's Advisor Template

I don't want to throw rocks at anyone's effort to be helpful.

The "Founder Advisor Standard Template" put forward on TechCrunch last week by The Founder Institute is an okay form. Presumably it reflects programmatic recommendations the Institute gives participating entrepreneurs and advisors.

3124262567_2b92a506a5_zIt's not right for all startups. Even if you can peg your company to one of the stages of development referenced in the form, the right advisor agreement for you may need to be drawn from another model.

When documenting the advisor/startup relationship, the biggest issue - sometimes the only quandary - is how to deal with the intellectual property the advisor may contribute.

A startup won't err in getting an assignment of inventions of the same scope it requires of employees or the founders themselves.

On the other hand, many prospective advisors are active day to day in the very industry the startup means to disintermediate. These folks are valuable precisely because they are in no position to sign broadly worded assignments of invention.

The Founder template doesn't tell you what to do if the advisor declines to give you the requested IP assignment. I guess you ask your lawyer.

More worrisome is how the template implies it's okay to skip share numbers and talk about equity grants in terms of percentages.

Measuring shares in percentages is almost always a mistake. Doing so in a legal document is tanatmount to committing yourself to forever carrying a book of matches in one hand and a full can of gas in the other, promising you'll never put both down.

Am I exaggerating? Suppose you tell someone her equity grant will be 0.25% of the company. A month later, you close a financing in which you sell 20% of the company. You know with certainty that your advisor now has a claim on 0.20% of the company. With equal certainty, she knows you owe her 25% more shares than you actually issue, because her percentage (in her mind) was based on the company's capitalization post-financing.

This kind of misunderstanding happens all the time.

I do hand it to the Founder Institute for publishing the percentages it regards as appropriate for advisor equity grants at different stages in a startup's journey!

But when it comes to proscribing the legal document to put the benchmarks into practice, the Founder Institute's form - like many "standard" templates - adds to the noise and confusion.

Instead of new templates, we need to surface the templates promulgated by law firms and then we need to analyze and understand what language is common to all forms, what variants are standard, what provisions are outliers.

We need a way to mash up what is actually being used after being recommended by lawyers, and we need an intelligent, user-friendly way to visualize how to pick out the right clauses for a given, new set of circumstances.

Photo by isafmedia.

The Old, the New, the Perpetually Modern

What struck me most about the pages of incunabula David Wertheimer let people see and handle, following his lecture Sunday at the downtown Seattle Public Library, was how modern they are.

2011-09-25_15-34-57_566

Wertheimer himself speaks of books from the 15th Century as though they were pieces of technology. His talk considered how the very earliest printed books extended earlier traditions of written communication, disrupted prior modes of production, and posed challenges to political orthodoxies.

2011-09-25_15-48-49_301And it's not a simple story of liberation by printing press. Like Evgeny Morozov writing about how the internet can be both a tool for the free dissemination of information as well as a means for authoritarian surveillance and propaganda, Wertheimer points out that the first European printing presses were used for purposes from the subversive (e.g., publishing the Bible in vernacular languages) to the reactionary (e.g., the Manipulus Curatorum, the Church's detailed instructions in orthodoxy for priests to follow religiously).

The printed pages Wertheimer shared date, if I'm remembering correctly, from 1484. I got to touch them. The paper was thick. The pages snapped when turned. Each was warped in a slightly different way; like vinyl records, the pages suggested Platonic "flatness" while violating that ideal in Aristotelian realization.

The printing was as legible as text on a Kindle.

The work felt more contemporary than most of the books I've kept from college; the typical paperback from the 1990s shows more age. For that matter, the pages from 1484 seemed fresher than last year's iPad.

The experience is making me think of books printed on paper as e-readers that just happen to be dedicated to a single title.

To Follow What's Happening in New York, Cross the Atlantic

The best journalism I've seen around the ongoing #occupywallstreet protests in lower Manhattan has been in the Guardian.

The Guardian is a British news organization so their editors and writers perhaps have the critical distance to see the political issues raised in the protests and to take them seriously.

Screen shot 2011-09-25 at 7.13.50 PMI also like that the Guardian permits its writers to engage with reader comments and call out themes as part of the coverage above the comment stream. See for example the excerpt inset as an image just to the right.

Americans know, I think, how to follow political movements on Twitter without brand media filter. At least it felt that way to me with the events earlier this year in Cairo and in Libya. And so you can follow the #occupywallstreet hashtag on Twitter and get real time, first person reports from lower Manhattan, as well as links to live video feeds and videos.

It's a bit curious to not find American pundits well known for pronouncing on how "social media has the power to unleash democracy" commenting on the #occupywallstreet story as it emerges.

Those folks as a group have a narrative running that peoples abroad desire to import American ideals into their societies; that makes it inconvenient to question how we've lost our own grip on democracy at home.

I predict the technological utopianists will be outflanked on the story domestically by a conventional pundit or two, possibly someone who came of age before the Internet. Plenty of businesslike people, even people in the middle of the status quo, sense the danger that corporatism and the failure of American democracy poses for this country in the 21st Century.

Screen shot 2011-09-25 at 5.52.02 PM

Beyond Money

One recurring question I like to write about here is: when will social media embrace the destruction of the ad-based business model? We all know that's the natural use of social media on a commercial level. And yet no one has yet figured out how to do it. Facebook had the power to do it, but squandered the opportunity, lacking the imagination.

5857210610_830f43c0a4_zHere's an even bigger question, one probably outside the realm of any reality in the current century: can money be virtualized out of relevance? I'd like to tackle that question, using as a frame of reference Georg Simmel's "The Philosophy of Money" (which I find both fascinating and impossible to get through).

Meantime, you see web applications setting up barter schemes entirely outside systems of central banking and beyond the (present) ken of governments. These don't suffer from the bit coin problem, which is artificial scarcity. Unlike commodities, money derives value, not from being scarce, but from the confidence it engenders that energy expended will beget another's energy.

Photo by Images of Money.

California Law on Police Searches of Smartphones

Reacting to a decision of the state's Supreme Court, the California legislature recently passed a bill that will require law enforcement to get a warrant before searching "information in a portable electronic device" carried by a person who’s been arrested.

Old phone new phones

The legislation is careful to state that it does not curtail the ability of the police to rely upon "established exceptions to the warrant requirement."

Instead, the legislation is intended to trump the California Supreme Court's decision in People v. Diaz. I wrote about that case in a guest post on GeekWire that is also here in the archives of this blog. Purporting to interpret the US Constitution, the court had found a warrantless search of a suspect’s phone fell under an exception to the normal warrant requirement - the exception for searches “incident to a lawful custodial arrest.”

Amazingly, the legislation rebuffing the court is short and easy to understand. And it pinpoints exactly the issue California’s high court missed: cell phones are not “incidental” to a person, like a pack of cigarettes or items you might carry in your jeans or a shirt pocket. Rather, as the legislation states, phones can be a link to a potentially unlimited trove of personal information about a suspect:

"These devices are capable of and encourage the storing of an almost limitless amount of personal and private information. Commonly linked to the Internet, these devices are used to access personal and business information and databases that reside in computers and servers located anywhere in the world."

That’s exactly up to date. Maybe the justices on the California high court need to buy new phones!

Image sources: Oracio Alvarado and Osman Kalkavan.

A version of this post appeared September 25 on GeekWire.

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