Presentation is loading. Please wait.

Presentation is loading. Please wait.

Business 16 Stanford Department of Continuing Education Class # 3, 10/12/09 Who needs help?

Similar presentations


Presentation on theme: "Business 16 Stanford Department of Continuing Education Class # 3, 10/12/09 Who needs help?"— Presentation transcript:

1 Business 16 Stanford Department of Continuing Education Class # 3, 10/12/09 Who needs help?

2 o Everybody

3 Why do I need help? o You are most dangerous when you think you know it all o Mere mortals cannot keep track of all the external trends o You alone can’t know everybody o External validation of your credibility is important

4 Why do I need help? o Introductions o Notice of key events you wouldn’t otherwise hear about o Better intelligence about competition o Sagely advice o Avoidance of potholes

5 What kinds of help are there? oAttorneys oAccountants oScientific Advisors oBusiness Advisors oBoard of Directors

6 What good are attorneys? o None, if you pick a bad one o There are lots of bad attorneys

7 How do I pick a good attorney? o Find one who’s done a lot in the business you are interested in o Find one who’s worked with successful companies in your field o Call up a successful related company and ask them who they use o Ask a lot of people; the good names will keep coming up

8 How do I pick a good attorney? o Interview them; they will also be interviewing you o Find one with which you have a good rapport o Ask them about their fee structure

9 How do I pick a good attorney? o Ask what other people you will be working with o They will offer you to work with cheaper junior attorneys o Some are good, others are training on your nickel o Lawyers can be very expensive; use them wisely

10 What can an attorney do for me? o Help incorporate/set up a basic business structure o Partnerships vs. LLCs vs. corporations o Equity issues o Intros to potential investors/corporate partners o Give you a lay of the land

11 What can an attorney do for me? o Give you credibility; good firms don’t take all comers o Good attorneys have been to this movie before o Help you avoid basic mistakes and keep you out of trouble o Many other things, but you have to use them wisely

12 What can an attorney do for me? o You have to keep them in the loop, but you don’t want to be over-dependent o Solicit their advice, but tell them what you want o In general, they will not help you manage legal expenses

13 Warning Signs for the Wrong Lawyer o They piss off everybody they come in contact with o Documents measured in metric tons o Overly legalistic/complicated language o East-coastitis o Phone calls not returned promptly

14 Warning Signs for the Wrong Lawyer o Being charged excessively for standard documents (Non-disclosures, etc.) o Can’t ballpark figures for tasks o You just don’t like the guy o He’s related to you or a friend of Mom

15 Who are some of the good firms? o Cooley Godward o Gunderson Dettmer o Latham & Watkins o Morrison Foerster o Ropes & Gray o Wilson Sonsini o Many others; this town is lousy with lawyers

16 Choose the right lawyer… o Firms that are good at general corporate law are not necessarily good at patents, real estate, employment, M&A, IPOs or litigation o Litigators include just about every firm o IP firms include o Shay Glenn o Townsend & Townsend o Morrison Foerster

17 What about accountants; how boring… o Yes, but necessary o Investors will insist o A good one will save your life o They will help you figure out how viable your business really is o Like oncologists, they are good at bad news that you need to hear

18 What about accountants; how boring… o Good ones set up systems and routines o They will present the numbers in any way that you find useful (YTD, YTY, variances, stagger…) o Will keep you from mistakes that could cost you millions later down the road

19 How do I find one? o You probably need two o You need a day-to day (actually, week-to-week) rent-a- CFO o They come in once/week and do bookkeeping o Again, ask around o Second, you need a good accounting firm to do your books once/year

20 Which are the big accounting firms? o Deloitte & Touche o PriceWaterhouseCoopers o Ernst & Young o KPMG

21 Scientific/Business Advisory Boards o Absolutely necessary o They have experience you don’t have o They are in the trenches and the cutting edge o They know lots of people who can help you o They know lots of people to stay away from o They can often act as mentors

22 How do I set one up? o Find the thought leaders in your business, local and international o Meet with them, find out if you click o Plan to put together a group of 5-10 people o For an SAB, 50% academic, 50% industry o They are useless if you don’t use them o Offer to pay their expenses for a day-long meeting once or twice a year

23 How do I set one up? o Typically $1500 to $2000/day each o Offer to hire them for an additional 2-3 days of consulting/year at the same rate o A nominal amount of equity o Set up a schedule of speaking with them on a weekly basis o Pick people who like and respect each other. They don’t have to agree

24 How do I set one up? o Pick people who are not so old that they are irrelevant, and not so young that they know nothing o Avoid professional consultants, lawyers, accountants, relatives o Pick someone you would trust to shoot your dog; they may say your plan won’t work

25 Board of Directors: What does it do? o Represents the shareholders interests o Represents all the constituencies o Maximizes shareholders’ value o Sets company strategy/tactics o Checks on management o Hires/Interviews o Approves business/operating plans/budgets o Does all of it in a legally responsible way

26 What does one look like? o Minimum of 3, 5 to 7 optimal o Add people only after careful consideration o Only business people o A commitment somewhere between SAB and Management o Compensation usually stock, usually equivalent to a director-level employee (between.1% and.5% each) o Venture capitalists & investors are usually uncompensated for board service beyond reimbursement of expenses

27 What does one look like? o Usually your equity investors are represented o A good balance is half industry people, half investors, and the president

28 Remember: o It is hard to kick people off boards o You can make enemies out of previous allies o Nonetheless, sometimes it is required o Pick people wisely who will wear well o Make sure people understand what the commitment is o Don’t pick people who are too busy


Download ppt "Business 16 Stanford Department of Continuing Education Class # 3, 10/12/09 Who needs help?"

Similar presentations


Ads by Google