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My first business partner, Dave Jilk, emailed me our original partnership agreement for Feld Technologies. It’s one page.
We incorporated a month later as an S-Corp. It cost us $99 to do this – I remember using an organization called The Company Corporation - we called an 800 number, gave them some information, and the documents were automatically generated and filed. A short letter agreement specifying the equity splits and the boilerplate legal docs were the only legal docs we had until we sold the company in 1993.
As my partner Jason Mendelson told me after I sent him this the other day, “If things go well, it’s fine. If they don’t, it’s a fucking disaster.” And he’s completely correct – in this case things went well so there were no issues.
I continue to try to do deals this way. I lay out the terms, will negotiate a little, but am clear about what I want. If it works, great. If it doesn’t, I move on. Once the simple terms are agreed to, I let the lawyers generate hundreds of pages of documentation to support the deal. I used to read every word on every page myself (I learned that from Len Fassler, who bought Feld Technologies). I still look through the documents, but I only work with lawyers who I deeply trust to do it right (like Mike Platt at Cooley) so I focus on the stuff that matters for the specific deal.
Trust matters more than anything else to me in a deal. Sure, I occasionally get screwed in a deal, but never more than once by the same person. And, for people like Dave Jilk and my dad, I’ll work with them over and over and over again because I trust them with my life.
Keep it simple. It’s much better.
My partner Greg Galanos forwarded me a great article from the Philadelphia Inquirer titled “The Economy Revealed: Why understanding economics is hard” that builds on the more difficult to digest but equally interesting essay / research by Alan Page Fiske titled “The Inherent Sociability of Homo sapiens.” Fiske’s theory is based on the conclusion that all human relationships are built from four types of interactions: communal sharing, equality matching, authority ranking, and market pricing. In Fiske’s theory, these four building blocks (which he calls “relationship models”) result in the entire range of the very complex and diverse social life of humans.
While I’m not going to dig another layer into the theory and the research to decide if I believe that it’s true / valid / complete, it’s very provocative and stimulating, especially when you start applying it to a wide range of situations – especially ones that are filled with conflict or behavior between two people that are operating at cross purposes.
Start with the summary article in the Philadelphia Inquirer. If you are interested, read Fiske’s essay. If you are really ambitious, take it a step further and then use some “communal sharing” and post your discoveries here for all to see.
Oh – and why is economics difficult? Actually, I never had too much trouble with the IS-LM curves. It was all that supply side stuff that confused me.
Jeff Jarvis has a superb post up called New News: Deconstructing the newspaper.
A week ago I spoke at a the Metzger Associates First Annual New Media Summit – a great example of a “local” event (local = Boulder). It was moderated by Matt Branaugh – the Business Editor of the Daily Camera (our local paper.) Fortunately, Matt is a good humored soul so when I asked the audience the question “how many of you read the stock tables in the newspaper” and not a single hand went up, Matt didn’t throw me out of the room when I looked at him and asked “why the fuck do you guys still print those things?”
Jeff – who knows newspapers and the newspaper business infinitely better than I do, goes through the question of “why stock tables” and much, much more in his post.
Here’s some candid straight talk about access to VC capital in Colorado. Brad Feld, Managing Director of Mobius Venture Capital didn’t have much good news to talk about when w3w3.com interviewed him two and three years ago. Brad gives some specific examples and offers some interesting advice for the coming year. For some, it is going to be a very good year and others will struggle. Brad points out that mid-stage and later-stage activity is very healthy.
Have you ever made an error as a result of a formula problem in a spreadsheet. Nope – I haven’t either <g>. A long time friend and uber-accounting-dude Frank Lincks sent me this somewhat painful story of Eastman Kodak’s recent SEC non-reliance 8–K filing due to a spreadsheet error. Quoting from the 8–K:
“…the Company has concluded that the severance error that occurred in the second quarter, as described above, was primarily the result of a failure in the operation of … the existing preventive and detective controls surrounding the preparation and review of spreadsheets that include new or changed formulas. The Company has concluded that this situation constitutes a “material weakness,” as defined by the Public Company Accounting Oversight Board’s Auditing Standard No. 2. The Company believes that this material weakness will be remediated by December 31, 2005.”