19 posts categorized "December 2013"

Greetings from Peninsula Park, Newport Beach

Am down in Southern California this week visiting my youngest brother.

People down here dress differently and have different mannerisms.

Greetings from Peninsula Park, Newport Beach

They also hang out at the beach in shorts the day after Christmas, building fires at sunset.

Christmas at the airport

That Nick Lowe has some PR person.

Someone locked in to all the NPR shows.

Christmas at the airport

I heard him play and sing his new song, Christmas at the Airport, on two different NPR shows the week before last, and have heard the album recording three times on NPR since.

It's a fun song!

The story of the lyric is that of a person stuck traveling Christmas Day, who makes the best of it, finds joy and succor alone among the baggage carousels and dustbins.

Reminds me of the Alaine de Botton book, A Week at the Airport.

Well, on a plane now. Merry Christmas. More soon from sunny CA.

Hero for the holidays

My hero for the holidays is Judge Richard Shelby, of the US District Court, District of Utah.

Now3t2A few days ago, Judge Shelby struck down, as unconstitutional (with reference to the United States Constitution), a Utah constitutional amendment the prohibited same-sex marriage.

Here's a paragraph from Judge Shelby's memorandum decision and order in  Kitchen et al v. Herbert et al (a full copy of which you can find here):

"Rather than protecting or supporting the families of opposite-sex couples, Amendment 3 [the Utah law struck down] perpetuates inequality by holding that the families and relationships of same-sex couples are not now, nor ever will be, worthy of recognition. Amendment 3 does not thereby elevate the status of opposite-sex marriage; it merely demeans the dignity of same-sex couples. And while the State cites an interest in protecting traditional marriage, it protects that interest by denying one of the most traditional aspects of marriage to thousands of its citizens: the right to form a family that is strengthened by a partnership based on love, intimacy, and shared responsibilities. The Plaintiffs’ desire to publicly declare their vows of commitment and support to each other is a testament to the strength of marriage in society, not a sign that, by opening its doors to all individuals, it is in danger of collapse."

And here's a link to Judge Shelby's order from yesterday, denying the State of Utah's request for a stay of his order. (Who would have thought the State of Utah and Vladimir Putin would see eye to eye?)

Bleeding prose

I've been reading the new Thomas Pynchon book, Bleeding Edge, and I'm puzzled about why I keep with it.

If the Thomas Pynchon name were not on it as author, I'd be quick to say, this is a book by someone with a snarky attitude about being a New York City insider. Somebody who over the years has collected inside tidbits about living in New York, and has little other purpose in his narrative than to showcase that he's hip and in the know.

But I do keep reading it.

Here's a quote from late in the book, from a character who's critiquing the Internet. Ostensibly, within the frame of the story, he's speaking and 2001; but it's obvious this perspective can only be from 2012 or 2013:

"Yep, and your Internet was their [Cold War-era intelligence types] invention, this magical convenience that creeps now like a smell through the smallest details of our lives, the shopping, the housework, the homework, the taxes, absorbing our energy, eating up our precious time. And there's no innocence. Anywhere. Never was. It was conceived in sin, the worst possible. As it kept growing, it never stopped carrying in its heart a bitter-cold death wish for the planet, and I don't think anything has changed, kid."

That's about as good as the book gets, but, you can't give it credit for prophesying the near future. This is 20-20 hindsight into the near past.

It makes me think again about the new Dave Eggers novel, set in the near future, which is just as outlandish, but at least can be read as satire and, if moral instruction might be the point, can be said to illustrate a future we might yet avoid.

Bleeding prose

Squeegeeing snow

It's snowing this morning in Seattle.

This was forecast, but it will still be interesting to see how the morning commute goes. Hopefully not perilously.

In the building I work in, and the one across the street, staff are doing something smart: brushing the half-inch or so of snowfall so far from walkways, before people tromp on it and make slush.

But they're not using brooms. They're using giant squeegees!

Squeegeeing snow

Investment crowdfunding and legal costs

Check out this really nicely done analysis of how legal and other costs kill the federal crowdfunding exemption before it is even legal: “Death by Expense” of Crowdfunding?, by Nancy Fallon-Houle, It is posted on the Corporate Counsel site and I got the link from watching Joe Wallin and Antone Johnson tweet about it.

4344953451_d9fe8369ec_zFallon-Houle's main point is that public offerings, and particulary those targeted at unsophisticated investors, must have disclosure documents. And disclosure documents are expensive. They are expensive becuase disclosure documents are expensive to prepare. And they are expensive because the actual organization, business and affairs of the company being described actually have to conform to what the disclosure document says. That is to say, there is invariably clean-up to do, things to fix that weren't done right in the first place.

"Crowdfunding offerings are small capital raises by definition; however, the legal fee costs are not scalable to 'small', simply because of the small amount of capital raised! In fact, the legal fee cost tends to be higher for smaller raises. Smaller raises are typically effected by unseasoned Issuers, who sometimes do their own intellectual property work without counsel, who form their own entities without counsel, and using parochial ideas about percentages of ownership; therefore often shooting legal holes in the investment. Small unseasoned issuers sometimes can even be loose cannons (from a legal standpoint), including on social media, and including comments about the offering that may possibly be illegal."

One facet of Fallon-Houle's analysis is a variation of the Fred-Wilson-$5,000-in-legal-fees-seed-financing-challenge: that's not an unreasonable budget for a small note or Series Seed financing to a small group of all accredited investors; but it's the clean-up and organizational stuff previously not done, that breaks the budget.

It's hard to take issue with Fallon-Houle's thesis: of course disclosure has to be made.

But do lawyers have to be the ones organizing the company and fixing things?

A couple years ago, I raised the question, don't lawyers have to be pushed out of investment crowdfunding, in order for it to work? My thought then - and from the perspective of today, after we've seen the proposed Regulation Crowdfunding, I think I was right - was that companies wishing to access a crowdfunding exemption should be templatized. That is to say, they should have a form of organization, stock, agreements with founders (including IP assignments and vesting), and other arrangements that are standardized and do not vary from company to company. Ergo, no clean up necessary; instead, opt in to the same structure and set of agreements every single other company accessing the exemption chooses.

Of course, you can't templatize all of the contracts that the given startup will end up negotiating and signing with outside parties. :/

Photo: Harsha K R / Flickr.

Friday housekeeping

Been posting a lot from my phone lately, which means the scale and formatting of the pictures hasn't been so pretty.

So I just went back into the posts for this week and cleaned up the layouts.

6612975937_a9343a09d3_zI found a better picture on Flickr to go with the post about preferred vs. common stock. You'll want to check that out, or revisit that post if only to catch the picture.

Trending on the blog right now: Good faith and fair flying, a post about how shutting down state regulation of a national industry can have something to do with implied covenants in contracts (sounds nerdy, but it's actually a case where laypeople can get some insight into how complicated conflicts of law can be); Cracking open the SAFE, about a novel new seed financing instrument designed to be very friendly to first time entrepreneurs; and How to tell the difference between Stefan Frei and Stephen Fry, which is an indispensible aid for Sounders fans at least.

Heads up on a couple friends writing today or this week about the bad actor rule and how it's impacting even Rule 506(b) deals: see Doug Cornelius' post, Participating Bad Actors and Private Funds, and John Myer's Get Ready to Fill Out Bad Actor Questionnaires.

Photo source: Loopdeeloop / Flickr.

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