When I read James Frey’s first book A Million Little Pieces, I thought it was the most intense book I had read in a long time. Frey’s second book – My Friend Leonard, which continues where the first book leaves off, is even more intense.
This book starts at the bottom (like the first one does), starts to climb a little, and then turns you upside down and smashes your head into a concrete floor over and over again. I started it in the Seattle airport last night on my way to Boston on the red eye – I figured I’d just get started and then put it down when I settled in on the plane to fall asleep. Bad plan. An hour into the flight, I finally gave it up and went to sleep. I finished the book off after I woke up in Boston this morning. The roller coaster ended – finally – on page 357.
Frey is incredible on numerous dimensions. For starters, this dude is unbelievably stubborn. It works against him for a while, but it ultimately works for him in major ways. Next, he transitions from a devastating first 24 years of his life into a supremely articulate, yet rawly emotional, human. While he struggles, is afraid of himself, hates his fear, and suffers, he never gives up, especially since he knows that giving up will mean death for him.
His friend Leonard is a major part of this. Leonard has his own issues, but is an awesome friend when Frey keenly needed one. Leonard is unapologetic, unyielding, and knows life is meant to be lived. The interplay between Frey and Leonard is awesome, especially when you toss in Leonard’s bodyguard Snapper.
This book is brilliant. Do NOT read it without reading A Million Little Pieces first.
I’ve just agreed to be a judge for the finals of the Microsoft produced Imagine Cup Programming Competition. This is a college programming competition that now has over 15,000 students enter. I’m heading over to Yokohama, Japan at the end of July with Scott Maxell of Insight Venture Partners and Chris Pacitti of Austin Ventures who are my co-judges for the finals. We’re apparently going to do an American Idol like thing – nerd style. Scott insisted on being Simon and I offered up – much to the chagrin of Amy – that I’d be Paula. I think it’s awesome that Microsoft produces a worldwide college programming competition – it was easy to agree to judge when asked.
I’m at Gnomedex. Rick Klau said it earlier today when he said that the Gnomedex theme song is “It’s Raining Men.” I’m in a room with 500 people and there are less than 10 women in the room. I’d better tell my friends a the National Center for Women & Information Technology that the RSS tech universe needs to be studied a little more. Remarkably, within the first hour of the conference, we destroyed the “newly amped up WiFi at the Bell Harbor Conference Center.” So – there you go – RSS Disconnected. We just sang the official Gnomedex theme song (led by Dave Winer) – “Yellow Submarine.”
Gnomedex starts tomorrow (ok – I guess it officially started tonight, but I chose to spending the evening gorging on sushi with Amy and then watching the Spurs crunch the Pistons.) I’m not a conference guy (I get restless) but I happened to be in Seattle and it has turned into the center of the RSS universe for a few days. So – off I go to Gnomedex tomorrow.
In preparation, NewsGator released two new things this week.
Sync is up next. I’ll be on the look out for short nerds tomorrow.
Seth Levine has a guest blogger on his site today contributing to his M&A series – his friend Daniel Benel, a corp dev exec at Verint Systems (NASDAQ: VRNT). Daniel’s post is well worth reading – he covers three topics that fall in the category of “things sellers try to tell buyers that a sophisticated buyer will see through, so don’t be a wanker” (my words, not his).
Once Jason and I finish our term sheet series (soon), we’re going to start dissecting a standard M&A letter of intent. This will be a nice technical / legal compliment to Seth’s practical viewpoints.
Star Wars 3 was technically beautiful, but thematically disappointing to me. However, Seth emailed me a link to Store Wars (via his dad Randy). You’ll have to decide whether or not you are on the dark side of the farm. Worth a five minute break from your day. Hang in there until the end – yogurt is delightful.
Today is one of my favorite days of the year. I like almost every day, but today is special. Happy Anniversary Amy. Happy Birthday Drew. Happy sunshine everyone else.
I had a nice response to my I Don’t Get Podcasting – Yet post where a number of folks responded privately – both trying to give me a clue as well as sending deals my way. On my run today, while listening to Postively 10th Street (happy 18th anniversary Fred and Joanne – Chai) and Mass Hysteria, I was thinking about the new investments I’ve been looking at. I’m working on one that I think will surprise people after I do it, and figure I’ve got one new deal left in me this year after that one.
I’m looking for anything email or RSS related (which – of course – in my lexicon includes podcasting and vlogging). I’m completely stage agnostic (early, middle, late – it doesn’t matter to me.) Feel free to give me a clue and send interesting stuff my way.
Today’s “term that doesn’t matter much” from our term sheet series is the Right of First Refusal. When we say “it doesn’t matter much”, we really mean “don’t bother trying to negotiate it away – the VCs will insist on it.” Following is the standard language:
“Right of First Refusal: Investors who purchase at least (____) shares of Series A Preferred (a “Major Investor”) shall have the right in the event the Company proposes to offer equity securities to any person (other than the shares (i) reserved as employee shares described under “Employee Pool” below, (ii) shares issued for consideration other than cash pursuant to a merger, consolidation, acquisition, or similar business combination approved by the Board; (iii) shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Board; and (iv) shares with respect to which the holders of a majority of the outstanding Series A Preferred waive their right of first refusal) to purchase [X times] their pro rata portion of such shares. Any securities not subscribed for by an eligible Investor may be reallocated among the other eligible Investors. Such right of first refusal will terminate upon a Qualified IPO. For purposes of this right of first refusal, an Investor’s pro rata right shall be equal to the ratio of (a) the number of shares of common stock (including all shares of common stock issuable or issued upon the conversion of convertible securities and assuming the exercise of all outstanding warrants and options) held by such Investor immediately prior to the issuance of such equity securities to (b) the total number of share of common stock outstanding (including all shares of common stock issuable or issued upon the conversion of convertible securities and assuming the exercise of all outstanding warrants and options) immediately prior to the issuance of such equity securities.”
There are two things to pay attention to in this term that can be negotiated. First, the share threshold that defines a “Major Investor” can be defined. It’s often convenient – especially if you have a large number of small investors – not to have to give this right to them. However, since in future rounds, you are typically interested in getting as much participation as you can, it’s not worth struggling with this too much.
A more important thing to look for is to see if there is a a multiple on the purchase rights (e.g. the “X times” listed above). This is an excessive ask – especially early in the financing life cycle of a company – and can almost always be negotiated to 1x.
As with “other terms that don’t matter much”, you shouldn’t let your lawyer over engineer these. If you feel the need to negotiate, focus on the share threshold and the multiple on the purchase rights.