Tuesday, March 24, 2015


Last week, I was privileged to hear Glenn Greenwald give a passionate speech about his experiences revealing the astonishing evidence of government surveillance and collection of personal information as disclosed to him by Edward Snowden, the 29-year-old NSA contractor and traitor/hero.  Greenwald was the keynote speaker at the Global Privacy Summit, which was attended by over 3,000 privacy professionals in Washington, D.C. Citizenfour, a compelling film documentary, tells the Greenwald/ Snowden story in real time.

Upon returning to Minnesota, I learned that Target is offering to settle a class action lawsuit related to their 2013 data beach with a $10 million pot of money set aside for Target customers harmed by the breach. 

So what do Edward Snowden and the Target breach have in common?  They both cause me to think about how much we as individuals value our privacy and what value society places on our right to be left alone.

If your telephone and email records were accessed and collected by the government without your knowledge, what harm or damage was caused? Creepy, yes.  But did you suffer any monetary loss or other injury? Can you demonstrate any damage to your name or reputation? What loss have you suffered as a result of such an alleged invasion of privacy?

If you were one of over 110 million customers who shopped at Target between Nov. 27 and Dec. 15, 2013, you may now be able to submit a claim with a potential $10,000 payout, but it may be difficult for anyone to get much money from this settlement offer.  As with other privacy litigation and related settlements, it is difficult to prove actual damages.

In Boring v Google, a Pennsylvania couple sued Google for posting pictures of their home on Google’s street view claiming an invasion of privacy. The court dismissed the case, finding no facts to support the torts of intrusion upon seclusion and publicity given to private life. The court found nothing to support any shame, humiliation, or offense to a reasonable person.  This case is just one example of how difficult it is to prove actual damages in a privacy claim. 

In the case of Target, an individual seeking payment under this settlement program may have to demonstrate actual harm in the form of unauthorized and unreimbursed charges or other actual loss or damages. In most cases, fraudulent charges are caught before they are charged to the consumer and, if the credit card company is notified in time, the charges are reversed. Emotional duress or angst suffered as a result of a data breach and potential identity theft is not generally considered sufficient harm and is very difficult to quantify in monetary terms. No money has been set aside in the Target settlement pot to cover such anguish suffered by a consumer as a result of the data breach. 

So what is the real value of individual privacy, and at what cost should we allow our privacy to be compromised? Can we assign a monetary value to such rights? 

I do not know the answer to this philosophical question and am not sure the courts are equipped to resolve this issue.  This is not a new issue; it was first articulated by Louis Brandeis is 1890, over 125 years ago.  And now Snowden has elevated the individual’s right to privacy and the right to be let alone to a global discussion taking place  both within government agencies and corporate boardrooms.

Tuesday, March 17, 2015

The 500 Hats of Entrepreneurship

I’ll be honest. After working with entrepreneurs for the last 25 years, I didn’t need any scientific study to tell me that there is a difference (or really many differences) between entrepreneurs and employees. Nonetheless, these recent studies did reveal some interesting insights about some of the key personality traits of successful entrepreneurs.

The new study expanded on the conclusions of existing research (completed at Stanford University), which concluded that an individual with a broader portfolio of experiences (a “jack-of-all-trades”) has a stronger disposition toward entrepreneurship than one who is a specialist. The new study showed that those with a diverse network of relationships (both personal and professional), coupled with diverse experiences, were actually the ones likely to become entrepreneurs.

Apparently, it isn’t enough to have either a lot of different experiences or many different relationships. Essentially, the conclusion is that having both a diversity of experiences and a diversity of contacts (so called “double-diversity”) is likely to lead someone to entrepreneurship. 

Given my interaction with hundreds of entrepreneurs, I’m not surprised by this conclusion. My clients often wear so many hats that they rival Bartholomew Cubbins. It also seems that those who are able to effectively juggle all of the different roles (cheerleader, coach, connector, founder, 
fundraiser, manager, marketer, etc.) are more likely to be successful.

The studies also concluded that successful entrepreneurs are:

  • Conscientious—something that I’ve consistently seen in my practice
  • “Outrageously” self-confident—this isn’t surprising. Given the risks of entrepreneurship and the failure rate for small businesses, it would be hard to start a new enterprise if you didn’t think you were the one who had the traits needed to succeed.  Interestingly, other data shows that:
                  o Entrepreneurs think they can prevent things from going wrong with 
                        their businesses
                  o Over a third of entrepreneurs believe they have guaranteed success 
                  o They even think they will live longer than everyone else!  (I hope this is also 
                        true about the entrepreneurial lawyers who represent them…)

The one surprise to me was learning that research shows successful entrepreneurs are “disagreeable.” Honestly, I’ve seen more success among the entrepreneurs who are collaborative, affable, and have high EQ than those I’d label as disagreeable. Given all the other challenges to success, I think it helps to have others pulling for you, rather than secretly (or openly) hoping for your failure.

Friday, March 13, 2015

What: Stephen Ambrose, Nothing Like It in the World: The Men Who Built the Transcontinental Railroad 1863-1869 (Simon & Schuster, 2000)

Why: The story of the men whose entrepreneurial dreams and competitive spirit created the coast-to-coast economy.

As the 150th anniversary of the Civil War comes to a close (you were aware of this, right?), the observance of another 150th anniversary has just begun.

Maybe I’m more in tune to this anniversary than your average Joe. I come from a railroad family; my grandfather was gainfully employed by the Great Northern Railway for his entire life, a position that shielded his family from the ravages of the Great Depression. Then there’s my civil engineer father, whose greatest joy in life was simply to build things.

I’m speaking, of course, of the sesquicentennial of the building of the transcontinental railroad. Stephen Ambrose calls this “the greatest achievement of the American people in the nineteenth century,” and it’s hard to argue with this assessment. Before the Union Pacific drove west to meet the Central Pacific building toward the east at a lonely place in Utah called Promontory Summit, before the golden spike completed the first direct railroad line from New York to San Francisco, it took eight months and cost $1,000 or more to travel between those two cities. Afterward, anyone with a week at their disposal and $65 in their pocket could make the trip.

The effect on the economy—and, indeed, on the everyday lives of Americans—was nothing short of miraculous. “Things that could not be imagined before the Civil War now became common.” A national market for goods and financial instruments emerged, leading to the creation of a national culture.

And all of it came about because of a few entrepreneurs. Take, for example, the principals of the Central Pacific, the “Big Four:” Leland Stanford, Charles Crocker, Collis Huntington, and Mark Hopkins. Living in California in the early 1980s, I couldn’t escape the legacies of these men: I was a student at Stanford University, I kept what little money I had in the Crocker National Bank (soon thereafter acquired by Wells Fargo), and I had drinks with friends at the Top of the Mark (the rooftop bar at the Mark Hopkins Hotel on Nob Hill in San Francisco).

I only wish I’d known more about how their entrepreneurial dreams in a very real sense built this country.

Monday, March 9, 2015

Recap of the ACG BOLD Awards

Recently, I attended the third annual ACG BOLD Awards. Some background: ACG is the Association for Corporate Growth, and ACG Minnesota is the area’s premier mergers and acquisitions organization. Its membership includes corporate executives, private equity investors, investment bankers, and other mergers and acquisitions intermediaries.

The BOLD Awards recognize “Minnesota organizations and individuals who demonstrate innovative and imaginative efforts to positively impact the community and grow Minnesota.” There are four award categories—Small Corporate, Middle-Market Corporate, Large Corporate, and Non-Profit—and nominees must have demonstrated innovative approaches and BOLD ways to address challenges in their respective market.

Nominees are judged on criteria including Innovation, Talent Management, Growth, Collaboration, and “Daring BOLD.” More than 60 companies were nominated for the 2015 BOLD Awards, and the winners are….

  • Small Corporate: Surgical Science. Established in 1999, Surgical Science is a developer of virtual reality surgical simulation training systems for medical professionals. The company’s first product, LapSim, provides best-in-class procedural simulation for appendectomy, advanced suturing, gynecology, bariatrics, and more. Recently, the company unveiled its TeamSim creation, the industry’s first interprofessional simulation trainer. 
  • Middle-Market Corporate: Angie’s Boom Chicka Pop. Founded in southern Minnesota by Dan and Angie Bastian, Angie’s Boom Chicka Pop is one of the country’s fastest growing natural popcorn brands. Angie’s popcorn and puffs are certified gluten-free, made with non-genetically modified ingredients (with no effect on taste!), and come in some pretty fun packaging. The products can be found in natural food, grocery, club, and mass retail stores nationwide. Angie’s was also the winner of the overall grand prize, the “Boldest of the BOLD” Award.  
  • Large Corporate: ABRA Auto Body & Glass. Founded in Fridley in 1984 and currently headquartered in Brooklyn Park, ABRA is a nationally-recognized leader in collision repair, paintless dent removal, and auto glass repair and replacement. ABRA has exhibited impressive growth in recent years, fueled primarily by the acquisition of existing facilities and the continued construction of new locations. Currently, ABRA has over 270 company-owned or franchised centers in 20 states. 
  • Non-Profit: Pinky Swear Foundation. Formerly the Miracles of Mitch Foundation, the Pinky Swear Foundation recently rebranded itself to honor the pinky-swear promise made between a father and son. Founded by Steve and Becky Chepokas in 2003 in memory of their son Mitch, the Pinky Swear Foundation helps children with cancer and their families by providing support for basic needs. For the past 12 years, the Pinky Swear Foundation has hosted the largest children’s fundraising triathlon in the U.S., and has provided more than $4.5 million in financial assistance and quality of life support. The Pinky Swear Foundation is currently undergoing expansion into 11 new markets across the country. 

These four BOLD Award winners showcase entrepreneurship and inspiration at their best, and it was enjoyable to spend an evening hearing their stories. For more information on ACG Minnesota, see here, and mark your calendar for next year’s ACG BOLD Awards on February 23, 2016. 

Wednesday, March 4, 2015

MN Cup: Second Annual Women in Entrepreneurship Conference

Last week, I attended the second annual Women in Entrepreneurship Conference hosted by the MN Cup. I found the panel on financing to be the most inspiring. There were two panelists who shared their path to fundraising with the group. Maia Haag, the co-founder and president of I See Me!, self-funded her company through bank loans and a small inheritance that she had received. Katie Jasper, the co-founder and CEO of Prescribe Nutrition, used crowdfunding (indieagogo.com) to raise $40,000. The other panelist, Chris Mahai, a partner at Aveus, shared insights into her experience within the angel investment community.

As the three panelists discussed their experience in the capital raising world, a few themes became clear:
  • Be purposeful in your decision to raise funds. Make sure your company is ready for outside investors. Be certain that you have a proven concept before you take too much money from investors.
  • Be tenacious. Whether you are pursuing bank financing, crowdfunding, or seed/angel investments, dive into it. Once you decide that financing is necessary, be ready to work to get others to invest. 
  • Be honest with yourself and with others. Be realistic and don’t overpromise to investors, especially if they are family members. 
  • Seek good advice. Find mentors that will be brutally honest with you.

Ann Winblad, the keynote speaker and the co-founder and managing director of Hummer Winblad Venture Partners, reiterated the importance of finding mentors that will support and challenge you. She noted that if you find a mentor that is going to be brutally honest with you, it’s better for them to be brutally honest in the beginning of your capital raising process. 
As you consider fundraising options, know what terms are standard for raising funds in Minnesota. Avid readers of the entreVIEW blog may know that Gray Plant Mooty’s Entrepreneurial Services Group has published two reports that analyze seed and angel capital that has been raised by Minnesota start-up and early-stage companies. Information like this can be extremely helpful to determine what terms investors expect to receive in a financing deal. Click here to review the report that covers financings in the first half of 2014.

Of course, you’re always welcome to contact your friendly, neighborhood member of the Gray Plant Mooty Entrepreneurial Services Group. We’re always glad to share our knowledge and help out however we can.  

In the meantime, happy capital raising!

Thursday, February 26, 2015

Next Step: Transporter Beam?

According to recent blogs, articles, items, and tweets, I need to decide where I am going to put my home 3D printer. The technology is booming and costs are coming down.  It is only a matter of time before every household will have one.

While I think about where the machine would reside in my house, I realize that I don’t know much about the technology. I have never questioned the desirability of such a gadget. Because, of course, I am imagining a machine that works like the toy-making machine invented by Grumio, the Toymaker’s apprentice in Disney’s  1961 movie Babes in Toyland. Toss in a little bit of this and a little bit of that, and out pops a doll—in roughly a minute—with soft hair, a beautiful cloth dress and plastic shoes, captivating glass eyes, and a lovely painted smile. Throw in a few different things and you get a tin drum with a tightly stretched plastic drum head and wooden drumsticks.  

3D printing—AKA desktop fabrication or additive manufacturing—actually refers to any of a number of processes that are used to produce a three-dimensional object, such as selective laser sintering, fused deposition modeling, and stereolithography. Using materials generally in powder or sheet form, the object is built in layers of “printing.” The differences in these processes largely relate to the method in which the layers are deposited and in the materials used to produce the object. While early technology primarily used plastics or polymers, objects can be produced from such things as metals, plaster, filament that imitates wood in appearance and texture, paper, rubber, and edible materials. Significant interest continues in developing uses of human tissue.  

In order to create printable designs or models for a 3D printer, one will need modeling software, a 3D scanner and/or a digital camera with photogrammetry software (software that can make measurements from a photograph), and various types of software that will convert the model to a format that will allow the printer to read and print the model, correct errors in the design conversion (gaps, surfaces that do not connect, etc.), convert the model into layers, yada yada yada. Although there are free versions of modeling software (Google SketchUp, Blender, Tinkercad, etc.), and the conversion and processing software will likely be packaged, an investment in the simplest equipment, software, and materials is easily going to be a couple of thousand dollars, and much, much more if considering commercial production.

Admittedly, the complexity and cost has cooled me somewhat to the magic of 3D printing and instilled a more realistic view regarding the “imminent’ presence of a printer on every desk or counter. After all, I would probably use a printer to make new knobs for my kitchen cupboards.

I am nevertheless intrigued by some of the stuff that has already been developed. In addition to component use in the automotive and aerospace industries, it clearly has promise for dental and medical products. The ability to more easily and efficiently create both typical and more complex customized products such as prosthetics, hearing aids, and dentures is exciting enough, but imagine the thrill of being able to print a new foot for a crippled duck. While some contemplate a future of using human tissue to print new organs, others are testing the market for 3D reproduction of the “Left Shark” costume from the Katy Perry Super Bowl half time show.  

So while not yet at the level of the Grumio toy making machine—I haven’t seen any description of a process that works with more than one material at a time—the technology is advanced enough to be used for great complex things, lots of little and practical things, or just-for-fun things, to awake the entrepreneur, engineer, or kid in all of us.

So now I am back to the problem of place—will a printer fit on my desktop or should we plan to take out the refrigerator? Do I have to rewire my house, or just add a few more power strips? Can I put it in a corner or will it need to be in the middle of the room, or do I need to build an addition to the house? Most importantly, can it double as a clothes rack?

Wednesday, February 18, 2015

Seed Capital reVIEW—it’s Survey Time!

It’s Survey time again and we need your help!

Our Seed Capital reVIEW survey for the second half of 2014 is now open! 

Click here for the survey.

In case you haven’t already seen the announcement, Gray Plant Mooty’s Entrepreneurial Services Practice Group has launched its third semi-annual survey regarding seed and angel capital being raised by Minnesota’s start-up and early-stage companies (typically financings between $100,000 and $2 million). Investors and entrepreneurs are being asked to complete this survey regarding deal terms of seed/angel investments during the second half of 2014. Past surveys have revealed relevant and useful information regarding trends in the angel capital community. 

The most recent release of the Seed Capital reVIEW report analyzed seed and angel capital raised by 84 early-stage companies in Minnesota during the first six months of 2014. Please complete the survey by February 28, 2015 to help make sure the data is meaningful. The survey will only take a few minutes per deal to complete! Click here to respond to the survey. 

The next edition of Seed Capital reVIEW report is due sometime late in the second quarter of this year.