Beware of the “Connected”

Another of our clients has been stung by someone they hired because of a promise to “open doors” and introduce them to connections in high places.

Here’s the thing. If someone approaches you claiming to be highly connected and promises to introduce your business to those connections, they aren’t and they won’t. They aren’t highly connected (no matter how many LinkedIn connections they have) because anyone that is well-networked would never make that claim. Who wants to be connected to someone who insists on repeatedly introducing them to any old tat just because there’s a fee in it? And that’s why they won’t successfully introduce you to anyone. They might try, but it’s very unlikely that you will build any meaningful relationships.

Let’s just call these people what they are: sales agents. There’s nothing wrong in that. For the right business model, a good sales person is worth her weight in gold. But giving a slice of equity away because somebody claims to be well-networked is a nonsense. Put them on a commission, train them up and let them get on with it.

Anybody that is well-networked would NEVER claim to be. Because that defeats the point of being well-networked. Any successful networker knows that the value in her network is the value derived by both parties that are the subject of an introduction.

Think deeper, people. Not wider…

Julie Meyer On the Mistakes That Entrepreneurs Make

Adopted Brit VC and ex-California girl Julie Meyer is a big favourite of ours at *particular (although I didn’t rate her book “Welcome to Entrepreneur Country” especially). Yesterday’s Good Morning Silicon Valley led with an interview with her in which she describes the biggest mistakes that entrepreneurs make. There are a number of gems there, but the one that really strikes a chord is something that drives my business partner, corporate finance specialist Deb McGargle crazy. So-called “loyalty” or “reward” equity:

Julie Meyer, CEO of Ariadne Capital

Julie Meyer, CEO of Ariadne Capital

“There are many [mistakes] I’ve seen in the 15 years I’ve been doing this. These are some that can be deadly:

“Making all your friends co-founders with founding equity, when only two of you are doing the work. Once you’ve given the founding equity away, you can’t get it back.”

She also mentions another that is of relevance to us:

“Not reading the investment documents thoroughly. I once had to break the bad news to a (not stupid) guy who hadn’t realized when he signed with his Series A investors that if he missed some milestones, a massive amount of his firm was going to be transferred to the venture capitalists.”

Last year, we were asked to put together a series of videos to take the teams participating in Searchcamp through their invest. Unfortunately they were never used, but we had made similar suggestions to both Rivers Capital Partners and North Star (both of whom have invested in many of our clients) and were rebuffed.

The other mistake that she mentions that jumps out at me is this:

“Outsourcing the development of the product to an agency of some sort. If the product is not built in-house, don’t invest.”

Advice to investors as much as entrepreneurs perhaps, but proof (were it needed) that the old ONE North East funded investment model has no place in the real world.  It’s not the role of an equity investor to fund a third party’s profit margin on the creation of the key asset.  If you can’t develop the product in-house, you either have to bootstrap or raise debt finance.  Or find a fund that is based on public money and that doesn’t really care so much about where the money goes…

Read the whole piece here:
http://www.siliconbeat.com/2014/03/17/elevator-pitch-julie-meyer-of-ariadne-capital-on-how-to-crush-it-in-europe/

The Gettysburg Address (and what you might learn from it)

150 years ago today, Abraham Lincoln delivered the Gettysburg Address.  Just ten sentences and 273 words, it stands as perhaps the greatest example of the power of simplicity, of quality over quantity and of how brevity will always triumph over verbosity.

The Battle of Gettysburg

The Battle of Gettysburg – over 51,000 Union and Confederate troops died at Gettysburg.

“Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.

“Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battlefield of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

“But, in a larger sense, we can not dedicate, we can not consecrate, we can not hallow this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.”

Lincoln took just 2 minutes to deliver his address.  He spoke after Edward Everett, one of the great speakers of the day, had finished his two-hour “oration”.  Everett’s words are little-remembered.  Lincoln’s will never be forgotten.

It seems more than a little crass to associate such an important event as The Gettysburg Address with business, but if Nancy Duarte can do it with Martin Luther King’s “I have a dream” speech, I don’t see why I can’t stress the point again. The best way to get people to remember your words is to use as few of them as you can and to maximise the impact of each and every one.

(There was an excellent piece by Jim Naughtie on the Today Programme this morning about Gettysburg.  You can catch it here.)

 

The Price of One Man’s Freedom

IMG_0332

Whatever happened to ‘innocent until proven guilty’?

This morning, one man in the north of England will wake up to find himself free.  Two years ago, he was accused by two women of various sexual offences against them.  He was charged and, although it was their word against his, the wheels of justice ground remorselessly forward towards a trial that started on Monday of this week.

Once charged, his name was published.  He faced verbal and physical abuse.  He was hounded out of his home and from his home town.  The women, on the other hand, as victims, properly benefited from anonymity.  It is hard enough to persuade victims of this type of crime to come forward.  If their names were to be made public, that in itself would be too high a hurdle for many of them.

In our legal system, the Prosecution puts its case first.  It is possible, though rare, in the English courts for a Judge to decide at the end of the Prosecution’s case that there is no case for the Defendant to answer.  In that situation, rather than asking the jury to consider its verdict, the Judge will not trouble the Defence but instead the Defendant will be acquitted immediately.  Usually, this happens when the Prosecution’s case is technically flawed in some way.  When it’s a she-said/he-said case like this one, a Judge will let the jury weigh up who’s telling the truth – that’, after all, is what they are there for.  They are the arbiters of truth.

Almost always.

Yesterday, the Judge accepted the argument made by Counsel for the Defence that there was no case to answer.  Why?  Because under cross-examination, the two women were revealed to be conniving liars.  Indeed, so bad was their evidence that they ended up fighting with each other via the witness box.

So the accused was freed.  He was reported as being “distraught” – a strange adjective to use for a man who has, for the last two years, been falsely labelled as a sexual predator facing a long prison term and a lifetime on the sexual offenders register.  But of course, you can’t throw this much excrement at somebody and expect him to walk away without some kind of lingering stench.  He may never be able to return to his home town.  Were you to google his name, you would doubtless come across reports of the charges made against him and perhaps you may never see reports of his acquittal.

For the rest of his life, this sorry case will hang over this man, affecting his reputation, his confidence and his psychological health.

The Defendant’s barrister (for our American friends, his trial attorney), when asked whether the alleged victims would face perjury charges, replied simply “that almost never happens”.  And yet their anonymity is judicially preserved.  To report their names would be a contempt of court and could see the reporter and his or her publishers imprisoned.

Who knows why they did this?  Perhaps it was out of spite, revenge for some perceived wrong they had suffered.  Perhaps he was the village weirdo, an outsider who was asking for trouble.  Perhaps they were just bored and looking for something to spice up their dull and fruitless lives.  Perhaps, just perhaps, there was some tiny kernel of truth to it all, some way in which the lives of the three did intertwine, but which did not result in the commission of a criminal offence.

I am not saying that it is wrong to preserve the anonymity of complainants in cases like this, both before and after the case.  I am not even saying that in this case, withholding the identity of the Defendant would have prevented the unnecessary level of distress and lingering damage that has been caused to him.  What I am saying is that it is time that something was done.  Some combination of measures perhaps involving anonymity for the Defendant may help.  But maybe there should also be a readiness to re-examine, in the context of the acquittal, the basis for the evidence given by the complainants upon which the case was based.

The acquittal of a Defendant does not necessarily mean that he has been found to be innocent.  To be convicted, a jury must conclude that it is beyond reasonable doubt that the Defendant is guilty.  These days, English Judges tell their juries that they must be sufficiently certain so that they are sure.  So, the fact that a Defendant is acquitted does not mean that those tabling the accusations are necessarily lying.  But there comes a point.  There must be consequences for those willing to destroy the lives of innocent people by misusing the criminal justice system for their own ends.

The victims of this type of crime are the powerless and the meek.  It is incumbent upon all of us to give them as much support as we can to bring their abusers, the perpetrators of these horrible crimes, to justice.  But very, very occasionally, the true victim is not the person you might have expected it to have been at the outset.

I am not an expert in this.  I am a lawyer but I have no knowledge of or experience in criminal law.  But I can see when the system has become unfairly balanced against individuals supposedly innocent until proven guilty.

This post was first published on Medium.

LinkedIn: Wider or Deeper?

This is a question I have posed to our LinkedIn group.

As previously recorded in this blog, I have always connected only with people I’ve actually met. If I received a connection request from somebody I hadn’t met, I would invite them to meet up. This tactic always worked extremely well and resulted in a number of new instructions. However, perhaps it’s time to revaluate because more recently, I’ve noticed a significant drop-off in its effectiveness.

A cup of tea.

Fancy a cuppa?

Some of those sending a connection request don’t bother to respond at all. Of those that do, about half say that they were only looking to expand their networks (and so, the implication is, they can’t be bothered to meet face to face – what’s that about? And of the last 5 that have arranged to meet, 3 have not shown up. One I never heard from again, one said there was some diary confusion at their end and this morning I wasted 75 minutes on somebody who told me that I hadn’t confirmed the meeting. This despite a chain of emails in which we’d narrowed the options to one date, time and location.

What is this, a transatlantic flight? Do I have to re-confirm meetings?

So I’m wondering how you use LinkedIn. Do you use it to strengthen ties with people you know? Do you use it to connect with people you don’t? And if the latter, does it bother you whether you have actually met and had a meaningful conversation with that person or not?

Am I the last person to treat LinkedIn as online support for real networking as opposed to a business Facebook? Because it’s really starting to feel that way.

Well, I’m not going to change the way I use LinkedIn. Save for the fact that when I receive connection requests in future, instead of inviting the person out to coffee, I’m simply going to ask them to confirm whether we’ve met and if not, why we should. Maybe it’s a consequence of approaching middle age but really, I just don’t have the time or the patience for this charade anymore.

Knuckle Down, Fit In.

About 13 years ago, I had my first appraisal at what was then my new firm: Prettys in Ipswich.  Colourful shirts, floppy hair and a passion for doing things differently, I think it’s fair to say that I was already rubbing my supervising partner up the wrong way.

“You need to knuckle down”, he said.  “You have to fit in.”  I still have the notes I made at the appraisal, which was something of a character assassination.  Those notes contain just four words:

KNUCKLE DOWN

FIT IN

And for a long time I had them pinned to the wall above my desk, as a badge of pride.

I have never “fitted in” to any law firm that I have worked at.  Which is probably why within a year of meeting the right person to partner up with, I had set up my own practice.  We work hard, we love what we do.  But we will never knuckle down.  We will never fit in.

As a result, we will never again get that magical unexpected call from the huge client of which every lawyer dreams.  (It did happen to me once, when I was at Watson Burton, and I ended up handling all the grey trading litigation for Canon UK.)  But that’s OK.  Because what I’ve realised is that even as a lawyer, it’s OK not to fit in, not to knuckle down.  There are enough people out there who like the way we do things that differentiating ourselves on this basis is a good thing.  A great thing.

Two things happened today that made me decide it was time to write this post.  One, we had some wonderful recommendations (one from a client, one about our iTunes podcast, and finally one being a podcast listener coming to our defence when somebody suggested that my post about it wasn’t suitable for a Facebook group about start-ups in London).  All this in the space of an hour and a half.

And two, I read this post by Seth Godin.  Of course, Seth is all about differentiation.  And you’d know that already if you had read Purple Cow.  But what I love about this very short post is that it summarises in just a few words not only why it’s important to be different, but why the reason for that difference is important.  You’ll see when you read it.  And don’t say you haven’t got time.  It’s less than half the length of this one…

Memory Tapes

This was not quite my first mix tape, but I think it might have been the second.  I came across it the other day.  I think the first one was better and was from about 1983 and had stuff like OMD, Depeche Mode, Duran Duran and all sorts of other good stuff.  I think this was 1984 and is my earliest survivor.  It’s recorded on a TDK D90…

Bird of Paradise – Snowy White

Love of the Common People – Paul Young

Hold Me Now – Thompson Twins

Club Tropicana – Wham

Waves – Blancmange (still think this is awesome)

Electric Dreams – Phil Oakey & Giorgio Moroder

Missing You – John Waite

Hello – Lionel Ritchie (a lot of soppy stuff on this tape…)

Too Late for Goodbyes – Julian Lennon (whatever happened to him)

Against All Odds – Phil Collins (really..?)

White Lines (Don’t Do It) – Grandmaster & Melle Mel (now that’s what I’m talking about)

You’re the Best Thing – Style Council

Small Town Boy – Bronski Beat

Lessons in Love – Level 42

Absolute Beginners – David Bowie

Invisible Touch – Genesis

Happy Hour – The Housemartins

Look Away – Big Country (such a loss)

Is This Love? – Whitesnake

Lies – Jonathan Butler (don’t remember that one at all)

Pretty in Pink – Psychedelic Furs (big sign-off!)

And if that’s not enough, the name of this tape is “Essential Edits”.  This is sooooo embarrassing but somehow I feel much better for it.

In my defence, may I add that the first 12” and 7” vinyl that I bought was Blondie – Parallel Lines and Cool for Cats by Squeeze back in 1978 at the age of 9, so I was a lot cooler in the 70s obviously…

A Stolen Bike and Why You Might Need a Lawyer Some Day

Daniel and Keith Lovejoy, picture courtesy and copyright of The Northern Echo

Courtesy of and (c) The Northern Echo

Seventeen year-old Daniel Lovejoy worked through his summer holidays and at the end, he spent £110.00 on an offroad bike.  Sadly for Daniel (but perhaps happily for those living near where he used to ride it) his bike was stolen when thieves broke into his father’s garage.  The next day, the bike was discovered nearby, having been dumped by the thieves.  Hurrah!

If only it was that simple.

The Police wouldn’t allow Daniel and his father Keith to retrieve the bike.  Instead, they recovered the bike and sent it for forensic examination.  Five weeks later, the justice system having apparently exhausted itself in this particular instance, Daniel was informed by letter that he could retrieve the bike if he paid £150.  And that if he failed to do so, the charge would rise by £10 a day for every additional day that it was stored beyond the two weeks he was given to retrieve it.

It’s funny how long it takes ordinary people to realise that so-called civil servants such as the police, health workers and educationalists etc aren’t actually there to look after us.  They aren’t, of course.  They are there to serve the objectives of the Government.  In my case it happened when, on reporting a break-in, I was told by a police officer that they wouldn’t be sending anybody round to have a look at the scene of the crime because there really wasn’t any chance of catching the culprits.  I was disillusioned.  Unsurprisingly in this case, Keith Lovejoy was furious.  He has written to his local councillor and to his MP but fears by now the bike may have been disposed of.

I’m not sure I ought to tell him this for fear that he might explode, but Daniel’s troubles may not be over.  Daniel may be charged an additional £50 for the disposal of the bike that was stolen from him.  And if that weren’t bad enough, since it’s unlikely that the police would recover at the auction of the bike anything like the storage charges that have been levied, the balance could be recovered from Daniel as a debt.

The case hit the local press this week and in a statement responding to Keith’s complaints, a spokesman for the local police force said that the collective hands of Durham Constabulary were tied.  It is a national scheme and the fees are set by the Government under the Removal and Disposal of Vehicles Regulations.

Actually, it’s The Removal, Storage and Disposal of Vehicles (Prescribed Sums and Charges etc.) Regulations 1989.  These regulations apply the fees applicable where the police or a local authority recover a vehicle under The Removal and Disposal of Vehicles Regulations 1986, which is itself brought about by section 99 onwards of The Road Traffic Act 1984.

But, you guessed it, it’s not that simple.

You see under regulation 4 of The Removal and Disposal of Vehicles Regs 1984, vehicles can be removed by the Police:

“where a vehicle… has been permitted to remain at rest on a road or on any land in the open air in such a position or in such condition or in such circumstances as to appear to a constable to have been abandoned without lawful authority.”

Which is interesting, because the concept of “abandonment” is a legal thing and it relates to the rightful owner of something effectively surrendering his title to that thing.  But wait… Daniel hadn’t abandoned his bike.  It had been stolen from him.  Therefore, he hadn’t abandoned it.  Which means the charges imposed by the Contract Vehicle Recovery Scheme don’t apply.

Now consider this.  The failure of which ever grey sector quango or contractor holding Dan’s bike to return it to him when demanded amounts to wrongful interference with goods – what we used to call “conversion”.  This is a “tort” – a civil wrong that could be the subject of action in the County Court.  Dan would be entitled to damages for the failure of the Police or whoever else may have control of his bike to return it to him upon demand.  He would doubtless also obtain a court order requiring the bike’s immediate release and, if the bike has been “disposed of”, he would get damages to the value of the bike.

This is the sort of thing that legal aid lawyers deal with all the time.  And it’s why you should think twice about supporting the Government’s proposals to scrap criminal legal aid and introduce price competitive tendering just because you think you would never be in a position where you’d need a lawyer to protect you and yours.

Join the campaign against PCT and the abolition of legal aid.  And give Dan his bike back.

 

Read more about this story in the pages of the very excellent Northern Echo

How to Make Yourself Unelectable (in one easy step)

The current fuss over a bill to require a referendum in 2017 misses the very first point that all law students learn in their first Constitutional Law session: no Parliament can be bound by the actions or predilections of any predecessor. So the proposed bill, whether it’s a private members bill or is government-sponsored, is entirely pointless.

When we use the word “Parliament”, we mean in essence the House of Commons as it is composed between general elections.  It’s a rule that came about during ‘the English wars’ after Charles I was deposed and the Roundheads were keen not to be bound by the parliaments that he had thrown together to do his bidding before his demise.  And it’s been like that ever since.

Anyway, back to the point.  Why would Tory backbenchers want to introduce a bill that serves no purpose?

What’s really happening here is that the Tories are convinced that if they simply say that they will introduce a referendum bill after the next general election, voters on the doorstep won’t believe them.  So they think that if they create a law that requires them to introduce such a bill after the election and they get back in, we’ll be convinced that they have no option but to introduce the referendum bill.  Even though the bill now contemplated would, at that point, be unconstitutional and meaningless.  And would be ignored were, lawks-a-mercy, Labour to get back in or the Lib Dems be involved in the next Government.

The usual Tory suspects really think you’ll fall for this.  Because they really think you are that stupid.

Are you?  Well, I guess we’ll see when this issue is debated in the run-up to the next election…

“I’m From The Government and I’m Here to Help… Finance Your Business”

A piece in this morning’s Guardian gives voice to the criticisms of businesses and commentators over the use of funds by the Technology Strategy Board.  It’s slow, it’s bureaucratic, it’s unaccountable. Yada-yada-yada.  Oh, where to start…

The Guardian reports “entrepreneurs are complaining that the significant amount of time it takes to apply for [a TSB grant] is an investment they can’t afford”.

There are 3 ways to raise money to finance your business, people.  Three ways.  Debt finance (people lend you money), equity finance (you sell some of your business in return for money) or grants.  They each have benefits.  They each have drawbacks.  If you want to raise money through grants, yippee, it’s free money.

Well, no, it’s not free money.  It’s not free at all.  You have to jump through hoops to get it and when you’ve got it, you have to account for how it’s spent.  Sometimes you spend days preparing the paperwork and you get knocked back by some bureaucrat who hasn’t bothered to get to grips with your business and your needs and there’s no right of appeal.  What do you want? A medal? Stop your whinging and get on with finding an alternative to fulfil your plans.  Jeesh…

The Guardian reports the words of Andrew Carroll (founder of Paperless Receipts, who, and we’ll take this one step at a time, it quotes as saying:

“We went to the Government for our first round of funding…”.

Er, hello?  Grants should never be seen as a first round of funding.  NEVER.  You simply cannot build a business plan for a growth-oriented enterprise that is based on the availability of a grant.  If the only way you can get your business moving is with a grant, it’s not a business.  I don’t mean that it’s not worth doing.  It’s just not a business.  Not yet, anyway.

Grants are subject to the whims of politicians and the career ambitions of civil servants.  They are used as a power play by the grey sector – that sphere of business that exists somewhere between the public and private sectors, notionally private or at least independent of government but entirely dependent on the flow of public sector capital.  NONE OF THIS SHOULD BE NEWS TO YOU.  If it is, go back to your lab or your studio and leave the business to the grown-ups.

Andrew Carroll continues:

“… and found the process of doing it laborious and lengthy, to the point that it’s just impossible to actually get [eek split infinitive] anywhere in any reasonable timescale.”

First, see above re. the cost of using grants to finance your business.  Second, just what is a reasonable timescale?  If the development of your project depends upon the availability of grant funding, you had better build the requisite timescales into your planning.  Those timescales are the timescales that an organisation like the TSB works to.  That could easily mean a year passing before you get the green light to proceed with a really adventurous project.  You, supposedly being in business, might consider that “unreasonable”.  In reality, it is neither reasonable nor is it unreasonable.  It is what it is.  Stop whinging and get on with it.

“I have a number of friends who have had to turn to venture capitalists because they’ve found the TSB process impossible.”

Really, venture capitalists?  Surely it’s not that bad?

Are you serious?  This guy needs a reality check.  If a VC (or a private investor) is prepared to invest in a project, it’s because s/he sees a return.  Here’s the rub.  You may not yet see the project as a business, but the VC/investor does.  Ergo, it is a business.  And if somebody is prepared to give you money because they see a return, then that’s the appropriate source of money for you, not the Government.  Grants from the likes of the TSB should only ever be for instances where no private sector finance (by which I mean equity finance, since debt finance will not be appropriate at this stage).

Why wouldn’t a VC invest in this situation?  Usually because the prospect of a return is too distant or the technical risk is too great.  Or maybe because the market is too small and does not justify the investment, in which case there could easily be merit in public sector finance provision.  But if this doesn’t apply and you still can’t raise the money, guess what.  You’re on your own.  Or you would be, were it not for the curious notion that the welfare state should extend to business-building.

Now, you might think that these things are pulled out of the Guardian in isolation, given it’s particular reputation for views on these things.  But the Huff Post carried a story this afternoon headlined “British Science Faces ‘Valley of Death’ say MPs”.  The piece reviews the publication of a report by the House of Commons Science and Technoloy Committee.  The Huff Post summarises the report as saying:

“it was “troubling” that so many British technology start-ups have to be acquired by foreign companies before they can grown into thriving businesses”.

Committee chairman Andrew Miller is reported as saying:

“British entrepreneurs are being badly let down by a lack of access to financial support and a system that often forces them to sell out to private equity investors or larger foreign companies to get ideas off the ground.”

Curse those private equity investors and larger foreign companies with their pots of money and willingness to finance our ideas.

And the TSB is criticised for having a lousy record in backing winners.  Good, I say.  I WANT the TSB to give money to things that only have a remote chance of success.  Because that’s the best way of making sure that the person whose ideas are being financed really doesn’t have a more appropriate option for raising money.  So, it’s the best way to guarantee that when there’s a success, it is something that would never have seen the light of the day were it not for the funding.

I have spent a lot of time listening to the Entrepreneurial Thought Leaders podcast series, which is part of the Stanford Technology Ventures Program. (I think that should be “Programme”. Tsk, colonials…).  It is very interesting to compare the approaches taken by businesses growing out of Stanford’s enterprise programme and the contrast with our own approach.  There are grants available in the USA in order to encourage beneficial research for which no equity finance is yet ready to support.  But you would NEVER hear a Stanford graduate describe grant funding as their “first round of funding”.  If equity finance is not available, a Stanford entrepreneur might be encouraged to seek finance from a ‘foundation’, that being an organisation set up by philanthropists to support certain ideals.  But grant funding would never be the first option.  Apart from anything else, life is too short.  Especially life in Silicon Valley.

I am no apologist for the Technology Strategy Board.  But if you think they are there to be a conventional source of finance because you don’t want to give away any ownership or you’re not prepared to bootstrap or not willing to keep schlepping the finance trail, it’s you that’s wrong, not them.