Thursday, December 29, 2011

The Definitive entreVIEW Top 10 List of “Must-Have” iPad Apps for Entrepreneurs (at least for this week)

Sometime after Thanksgiving of each year, the annual cascade of “Top 10” lists for the year begins, tempting the “list junkies” (author included if not foremost in that category). This year, I‘ve been trolling through various “lists,” but few have compelled me to go out and actually purchase something. Therefore, I am offering my Definitive entreVIEW “Top 10” List of Must-Have iPad Apps that an entrepreneur just can’t live without (at least until something better comes along).

Why an app top 10 list? Consider the following: since sometime in 2011, the percentage of people utilizing apps outnumbered web use on the basis of hours spent by users. Also, Apple’s app store now has more than a half-million apps, with the total number of downloads jumping from 10 billion to 15 billion between January and July of 2011. Also, from all those apps, six rose to the top—all of which are games. Earlier this month the Android Market announced that its estimated 350,000 apps had accumulated at total of 10 billion downloads  since it opened in 2008.

Like most lists and awards of renown, there needs to be some basic rules. Mine are as follows:   

Criterion 1: These apps are all available for the iPad (preferably iPad2). Some may be available for Droid users, but the focus is for tablet use.

Criterion 2: Except for certain honorable mentions at the end, non-productivity apps (including games) ARE NOT ALLOWED. Therefore, no Angry Birds references other than a link that suggests that Angry Birds may be the single largest contributor to loss of productivity in the workplace. Sorry, Pixelmator (named Apple’s MacApp of the year 2011) and other photo apps need not apply here (unless they instill innovation, organization, or productivity…).

Drum roll please…in no particular order:

Wunderlist: Possibly the best free organization and productivity app on the market. It pulls all Apple-based products into a cloud-based single app that can be synchronized across all of the “task-driven” software on your iPad. If it keeps you on time for just one pitch, it’s done its job. Plus, it’s FREE. Entrepreneurs (like everyone else) love free.

Skype: Whether you’re a traveler or sedentary, married or single, with or without kids, the solution to connectivity by voice and video option is solved forever. Updated only recently for the iPad, the improved camera in the iPad2 does a pretty good job of solving the videoconference juggernaut that travel and quality for business purposes may have posed. Also, it’s FREE.

Googlemaps: Have you ever run out the door only to be midway to a meeting and asked yourself (probably audibly—you know who you are), “Where the bleep am I going?” Googlemaps has—no kidding—very likely saved my life at least once. If you’re trying to find that meeting place for a potential investor and the directions on your calendar invite aren’t getting you there, the analogy just may apply. Streetview via Google may be the greatest invasion of privacy in the last decade, but it sure helps in a pinch. Even better, it’s a “Built-In App” with the iPad thanks to a sweet licensing deal between Google and Apple. Sorry, other tablets don’t have it “built in.” It’s FREE (as are the updates).

LinkedIn: If you like the rest of the world having unfettered access to your closest contacts, referral sources, and clients, this is the app for you. Why spend years building a great personal network when you can just give it away? However, if you ever have that nagging feeling that you “know something” about someone you had just met, but you didn’t know the “what/when/who/how/wheres” for that person (six degrees of separation to Kevin Bacon)—no more. You can simply hop on the LinkedIn App and find out who is a friend of your recent introduction. Buyer beware, people don’t “unfriend” on LinkedIn like Facebook users and there may be more of a matrix of connectivity to someone than you think. As of the date of this blog post, I haven’t seen or used an updated app for the iPad, so it’s functionally smaller (or granier at enlarged size) than it should be, but it’s fast and privacy knows no bounds. It’s FREE.

Dragon Dictation: I know what you’re thinking: “Who dictates anymore?” Surprisingly, many of you do and more will every day because it doesn’t require someone else to figure out what you said into a grainy microphone. If you have the new iPhone 4s, Siri proves the resurgence of voice-activated commands (even Santa Claus uses Siri). However, according to customer feedback, Siri does not recognize southern accents and certain “English” dialects. For those suffering the obvious bias against a southern accent by Apple or for those who haven’t made the upgrade, Dragon is a must-have. If you’re wanting to use it for regular dictation or drafting documents, emails, or texts, this application takes multi-tasking to a whole new level; even Siri doesn’t have the full range of capacity that Dragon does for creating documents. It’s FREE.

QuickOffice: Have you ever found a typo in your PowerPoint before a meeting and you don’t have time to flip open the laptop? QuickOffice Pro, one of iTunes’s top grossing apps ($4.99), is ideal for saving, editing, and editing presentations, Word documents, Excel Spreadsheets, and even open those elusive Adobe files (pdfs). (Do you want to know the real reason why Apple doesn't like pdf)? It’s like taking every file with you, with the ability to edit on the fly.

Notability: I am a proud convert from Notes Plus and Penultimate and I swear that the handwriting software actually improves my handwriting. Yes, many of us can text and type very fast, but an overwhelming majority of us are still dependent on the paper pad and pen. Add a Bamboo stylus by Wacom, and you have the best note-taking/illustration device on the market today. Introduced in November, it already is in the top 10 grossing apps in the App Store. Possibly the best $0.99 that you’ll spend before the New Year.

SAI-Business Insider: My favorite newsfeeds aren’t all reduced to apps yet, although I am patiently waiting. Of course, I like the Entrepreneur Magazine app because it’s a guilty pleasure like People magazine (we all wonder what it’s like to be one of the “beautiful people” in the entrepreneur world) and the WSJ app (because, after all, you do live on planet Earth, right?). Elegant, with the same look and feel as the newspaper without that grimy ink residue on your fingers afterwards, the WSJ app actually makes me want to read the real newspaper as well. However, for news by subject, one of the best, with a focus on entrepreneurs, is SAI. Get the free app, get the updates, read it daily. For those who need a distraction in their news, SAI has that, too. The powerful part of SAI is the tech news, podcasts, and input from all corners of the U.S. about relevant news for entrepreneurs and business. Also, it’s a bit unorthodox and politically incorrect, which keeps your senses tuned. It’s FREE.

Citrix Receiver: Can you say, “greatest thing since sliced bread?” If your company is big enough to have an IT department but is not yet “on the cloud,” this is it. Even so, if you’re on the cloud, getting access to the company server and your own desktop is an absolute must. Granted, rumors of bugs in the system swirl, but this robust offering of a full desktop makes other apps stand at attention—it could possibly be the greatest tool for workspace mobility. The small screen for the iPad may not be the best for that work during a layover at SFO airport, but if you’re a road warrior, pick up the $39 Apple Digital HDMI adaptor and use any HD screen you want when you get to your destination. Plus, if you need to show some spreadsheets on the fly, you can never use the excuse that “I forgot them at the office.” Also FREE.

WebEx: Another Cisco product, and this one tops this list for expense. Bite the bullet and write it off as an expense. For those investor pitches where you want to have a captive audience, while not having people “flip ahead” in your presentation materials, this enterprise solution with iPad app connectivity is a must-have for presentations, either in person or remotely. While not cheap, the utility is remarkable and provides for state-of-the-art presentations with spreadsheets and charts. It will make your head swirl when you can scroll through the participant’s simultaneous video and the software recognizes who is talking and brings his or her image to the front of the screen. Try the free demo and see how WebEx will hold the market until Microsoft can turn Skype into a more robust competitor for multiple users and presentations. The app (but not the host software) is FREE.

Honorable mentions

docScan HD: Be honest, how often do those important lunch and travel receipts, not to mention business cards, end up in the washer and dryer? You need to keep those receipts and copies of “stuff” somewhere and the IRS has some stringent rules on verifying expenses for deducting business expenses. Someone will develop a better app, but for the meantime, docScan HD has a mean scan app that utilizes the standard equipment on the iPad and allows for easy handling of those small pieces of paper. Save a tree, download the app. It’s FREE.

Cut the Rope (chillingo): Physics meets massive time vacuum. (Okay…it’s a game, I admit it, but it’s not technically on the list.) This game is addictive, but in a good way. If you like problem solving with a nod to Isaac Newton, this one is pretty cool. That being said, if Isaac Newton had had this game, we might have ended up with just two laws of gravity.  Its $0.99—practically free.

Doom Counter: You just can’t go wrong with a Mayan calendar apocalypse clock that not only provides a countdown of the amount of time remaining before the end of days, but also provides updates on solar flares and seismic activity. Put this app right between your Wunderlist organizer and your e-trade app and see how your daily habits change. This app actually has a useful calendar and provides feeds. Okay, maybe it’s not exactly productivity driven, but everyone needs a little motivation, right?

This list should remain current at least until the second week of January; by then Apple and Droid should have another 1,000 new apps vying for a spot on next year’s 2012 top 10 list. Have a favorite of your own that didn’t make my list? Feel free to suggest it.

Monday, December 19, 2011

The Twelve Days of Year-End Gifting

Christmas in the estate planning world always triggers thoughts of year-end gifting. I wish that I could say my family participated in this tradition, but nonetheless, many of my clients are considering the opportunities available for passing money or assets to other family members or charities this time of year. 
As some general background, this country has a gift tax system in place that will tax the donor of a gift over a certain amount. The current gift tax rate is 35%. Gifts are not taxed unless they exceed the “annual exclusion” amounta de minimis amount determined by the tax code each yearand then the donor has a lump sum lifetime total gift exemption to run through before the donor is taxed. Currently, the annual exclusion amount is $13,000 per year, per person, and the lifetime gift exemption is $5 million per person over that person’s lifetime.
These exemptions do not apply to charitable gifts or gifts to spouses (unless the spouse is not a citizen), but they do apply to gifts to children. This is a common misconception. If you are providing more than $13,000 per year to your children ($26,000 per year if you are married), you are supposed to report those gifts on a gift tax return and you chip away at the total $5 million you can give away during your life.
This year and next year are special in that the lifetime exemption of $5 million is unusually high. In prior years, the gift exemption hovered more around $1 million and it is set to go back to that level in 2013. As a result, there are some unique opportunities to gift assets during the next two years.
With all of that in mind, this is my version of the Twelve Days of Christmas, in the twelve simple ways to gift at year-end:
1.       Give $13,000 checks under the tree for each child ($26,000 if you are married, and $52,000 if they are also married).
2.       Gift $13,000 to a 529 plan for a new grandchild (or up to $65,000 if you want to “front-load” the 529 with 5 years of annual exclusion gifts).
3.       Transfer the family cabin to an LLC, and gift units of that LLC to your kids or other family members.
4.       Transfer non-voting interests in your business to children and grandchildren, which is a great way to start the business succession process now without transferring control.
5.       Buy that Lexis for someone with a big red bow (but then report it on a gift tax return).
6.       Pay off a child’s mortgage or student loans and provide the child with an intra-family loan or mortgage instead at a current 30-year minimum rate of 2.8% (or 0.20% for terms 3 years or less, or 1.27% if between 3 and 9 years).
7.       Forgive the interest on the loan you made to your child last year.
8.       Or, forgive the whole loan you made last year.
9.       Equalize gifts to your children by offsetting loans to other children with cash.
10.   Transfer an insurance policy to your children.
11.   Provide a child with a down payment on a house.
12.   Provide a child with the capital to start a business.
*Be sure to contact your attorney and/or your accountant to discuss the nuances of gifting specific assets, and be sure to file a gift tax return next April if necessary.

Tuesday, December 13, 2011

Venture Capital and Angel Investing

The Book: Venture Capital and Angel Investing, edited by Andrew M. Lane and Nicole P. Mifflin (Nova Science Publishers, Inc., 2011).
Why You Should Care: A relatively short and highly readable study of the structure of venture capital and the characteristics and behavior of angel investors.
My colleague Frank Vargas recently wrote about his experiences working with entrepreneurs in Silicon Valley during the early boom years. Some years before that, while Frank was a mere undergraduate at Harvard as yet untested by the rigors of Boalt Hall, I was already at Stanford Law School, smack dab in the middle of the Valley.
From time to time, my jogging route would take me down Page Mill Road in Palo Alto past Hewlett-Packard. All I knew about the company was that it made calculators, the kind that I had happily abandoned in my freshman year of college after fulfilling my calculus requirement (never to look back). I was blissfully unaware of any revolution taking place at the time. With interest rates in the high teens in the early 1980s, I have heard that some of my more entrepreneurial classmates would borrow for tuition at low subsidized rates, and invest in T-bills, earning themselves a nice spread from which to purchase the odd pitcher of beer at Zott’s (now known as the Alpine Inn in Portola Valley).
It only goes to show you that timing is key (something I’ve alluded to before). By the time things really were churning in Palo Alto, Sunnyvale, Mountain View, and San Jose (around the time that Frank was just starting to work in the Valley), I was sitting some 5,000 or so miles away in the decidedly not high tech United Kingdom. Sad to say, but things were not very rosy there in the early 1980s, what with the Iron Lady presiding over privatization of industry during the depths of recession. But, hey, my dollars sure went a long way, with the dollar and pound approaching parity shortly before I arrived on the shores of that scepter'd isle.
I returned to a United States in the early stages of a high tech revolution. Apple was just beginning to market the McIntosh, and Silicon Valley was now the place to be, not just for innovators, but for venture capitalists. It was around that time that I first became familiar with the concept of “angel investors”—those who provided the money to keep a dream alive until it made the radar monitored by venture capitalists.
Venture capitalists are fairly easy to identify, but hooking up with an angel investor has always seemed to be a fortuitous—if not providential—experience. The question for entrepreneurs was, and remains, who are these people, and how do we get in front of them?
Venture Capital and Angel Investing is a slim volume that provides some help on the first question, and perhaps indirectly on the second as well. The section dealing with angel investors provides all sorts of interesting nuggets of information, all drawn from studies conducted between 2001 and 2006 (and thus likely out of date for today’s economy—but  maybe the best information we have at this time).
For example, it surprised me to learn that “most angel investors are unaccredited investors, but accredited investors provide the majority of dollars invested.” Frankly, I would have thought almost all angel investors would be accredited. Between 2001 and 2003, up to 629,000 people provided an estimated $23 billion per year. (Remember, that’s not venture capital—that’s money from angels.) It is a very high risk game, and those looking for a quick return should not play. “Between 0.17 and 0.2 percent of the companies financed by angels go public, and between 0.8 and 1.3 percent are acquired.”
My assessment? This is a very good read for those interested in “more accurate estimates than were previously available of the market and demand for angel capital, the companies that receive angel capital, and angel deals.”

Friday, December 9, 2011

Silicon Valley: Hollywood for Entrepreneurs

I was a second year law student at the University of California at Berkeley Law School when I first heard about Palo Alto, California. The school had announced that a guy named Larry Sonsini was going to teach securities law the second semester. The famous securities law professor who taught it previously was semi-retired and had decided to retire early, so the school had asked Mr. Sonsini to teach spring semester. 
Larry did a great job of teaching us securities law but he also convinced a couple of us to spend the summer with his (then) small 25 person law firm in Palo Alto. He described it as a growing area for small companies where we would get the chance to both provide legal advice and mentor entrepreneurs. So that summer of 1984, eight of us descended on Palo Alto Square and received an incredibly realistic view of what recently had been labeled Silicon Valley. 
I ended up joining the firm full time upon graduation and immediately was thrown to the lions. My first week, I was the “second chair” lawyer on a number of public offerings, mergers, and venture capital financings. I also did day-to-day work for several small private and public companies. I ended up meeting and working with a number of now famous people like Steve Jobs, TJ Rogers, Vinod Khosla, and Larry Ellison, but I also spent a great deal of time advising entrepreneurs on strategy and becoming their trusted adviser.
Fast forward to today and Silicon Valley is like Hollywood for entrepreneurs. It has its superstars like the late Steve Jobs, Larry Ellison, Mark Zuckerberg, etc., but also its fallen stars. It has its melodrama and career challenging stories, like Jerry Yang fighting to save Yahoo or the continuing saga at HP. It has its money moguls like John Doer, Vinod Khosla, and Promod Haque. But the most interesting thing is that there are thousands of wannabes who have come to Silicon Valley to become a star. They work in companies just biding their time until they launch the “next big thing.” They are not just engineers but marketing and financial people. People work extremely hard and the cafes, restaurants, and coffee shops are full of people talking deals and proposals. There are also thousands of lawyers now in Silicon Valley all trying to get clients, but very few offering advice like we did in the early days. One venture capitalist told me “there are a lot of lawyers but few real entrepreneurial lawyers.”
As a lawyer in Silicon Valley, I realized then and I realize now that I really enjoy and I can really play an integral role in the aspirations of these individuals (maybe not like a director or producer, but as a trusted agent or adviser, certainly more than just a “best boy” or “key grip”). When I’m asked about the allure of Silicon Valley and what makes so many companies out here succeed, I mention the number and quality of people in the entrepreneurial community, the access to so much capital, and the willingness of people to risk everything to fulfill a dream. I also add it is those in the background away from the glory sitting up at nights with the entrepreneur or CEO trying to figure out how to make payroll this month, convince someone to invest money, or fend off the competitive threats.
The other day I was sitting at Starbucks in Mountain View (nobody can actually afford to live in Palo Alto anymore) and I met a young man who had come from Nigeria to the United States to follow his dream. More than that, he told me he dreamed of becoming the next “Mark Zuckerberg or Bill Gates.” He asked if I would help him reach his dream. I just smiled and said “sure…”

A Post by Frank Vargas, Guest Blogger

Wednesday, December 7, 2011

Copyright Laws Limit Availability of National Jazz Museum’s “The Savory Collection”

Last year, the National Jazz Museum in Harlem acquired a private collection of nearly 1,000 jazz recordings from the estate of William Savory. What makes this collection so remarkable is that it is comprised of unpublished recordings of some of the greatest jazz musicians of all timeBillie Holiday, Coleman Hawkins, Lester Young, Count Basie, Benny Goodman, and many others. 
In the late 1930s, William Savory (born William Desavouret) worked for a studio that transcribed live performances for radio networks. At the time, technology was limited to 78 rpm shellac discs that only held about three minutes of recording time. Bands, which contracted with the networks to make the recordings, would perform arrangements that worked within the confines of the recording limitations.
But Savory apparently was a technical genius, and while commercially recording 78s, was privately recording on bigger discs (12 to 16 inches) made of aluminum or acetate, and at slower speeds (33 1/3 wasn’t officially invented until after WWII by a team that included Mr. Savory). This allowed him to capture performances that were not staged for recordinglonger versions of rehearsed material, improvisation, and jam sessions that were otherwise heard only by live audiences.
There is nothing to suggest that Savory hid what he was doing, but neither did he attempt to publicly distribute or commercialize his recordings. In fact, he allowed only a few to even hear any of his recordings during his lifetime, and no one really knew how many he had until after his death in 2004, when his son saved the recordings from being tossed out with the garbage. It was only then that the size and quality of the collection was discovered. Although much of the collection was damaged, only about a fourth was considered to be in very poor shape, and despite damage, the quality of the recordings was impressive. Savory clearly knew what he was doing.
The National Jazz Museum (NJM) is currently in the process of digitizing the music, and a few short excerpts are available online at the museum’s website. (Even if you are not a jazz fan, it is worth checking this out to hear the quality of these untouched recordings from the late 1930s). Beyond that, one can make an appointment with the museum to hear more. 
Sadly, although the NJM would like to make all of the recordings publicly available, commercially or otherwise, it may never be possible to purchase recordings of all or even a significant portion of the collection because of current copyright laws. I’m a fan of copyright laws. I respect the body of law intended to protect and compensate the creators of literary, musical, and artistic works. So why, if everyone is willing to pay for the privilege, can’t these recordings be publicly distributed? Because most are considered “orphan worksmaterial for which copyright owners cannot be determined. 
There can be numerous copyright owners with rights in a single performance, e.g., the writer(s) of the music and lyrics, the arranger, the publisher, the performers (as a band or individually), and the broadcaster. These recordings were created outside the scope of the contracts between the networks and the performing musicians, and subject to no separate written contract.
Although Savory apparently kept a meticulous catalog of the recordings, he probably didn’t record the name of each performer, nor have a written agreement himself with any of the performers. Clearly, Savory did not contemplate distribution of the recordings, and identifying and locating the persons with legal rights after nearly 60 years is clearly a Herculean task. At the same time, distribution without authorization could subject the user to substantial damages for “willful infringement,” while use without compensation would be unfair to the creators and their heirs, and an economic windfall to the distributor.
Recommendations for resolving or at least reducing the impact of orphan works have come from various industries and interested parties, including the Copyright Office, and the matter has twice been introduced before Congress. While no proposal is perfect, there are a number of reasonable recommendations that could make it easier to identify copyright holders, eliminate the risks associated with intentional infringement, and/or provide for compensation to copyright holders should they emerge and make a legitimate claim. 
Although individual constituencies might be able to resolve these issues for some industry segments (books, photographs, commercial film, etc.), it is unlikely that a universal solution will be resolved without legislative action. Unfortunately, Congress is busy doing nothing about more critical issues, so I’m not holding my breath on this one. And yet, I so want to hear every minute of this music! Maybe the National Museum of Jazz allows camping.

Thursday, December 1, 2011

Minnesota Angel Tax Credit—What Else You Need to Know for 2012

Many of you saw Karen Wenzel’s blog post on the Minnesota Angel Tax Credit earlier this week, which noted that Minnesota has exhausted its $15.9 million of available credits for 2011 and is now accepting applications for credits in 2012, when it will have $12 million available to allocate. This post will provide some additional information regarding the application process for 2012. 

If you are intending to take advantage of the angel tax credit in 2012, the process is the same as for 2011. That is, a qualified investor needs to make a qualifying investment in a qualified business and apply to receive a tax credit allocation before the pool of available tax credits has been fully allocated. The first step in the process is for the company and the investor to become qualified. This is accomplished by submitting a certification to the Minnesota Department of Employment and Economic Development (DEED). There are separate forms for businesses, individuals, and funds.

There are several requirements to becoming a qualified business or qualified investor, all of which are summarized on DEED’s website. After the business and investor have been qualified for the angel tax credit program, they must use this form to jointly request an allocation of available tax credits before the qualifying investment is made. Once the investment has been approved for an allocation by DEED, the investment must be made within 60 days. Within 15 days of completing the investment, the investor must send evidence to DEED of the investment using this form. 

The process for obtaining a tax credit is not particularly difficult, and all of these forms are short and straightforward, but it can take several weeks (6-8) before an allocation is granted. That time period can be a serious challenge for a company that needs money and has investors ready to invest. My recommendation is for companies and investors to begin the application process as soon as possible, preferably at the beginning of an offering, so that there is no unnecessary delay waiting to become qualified for the investment. I know of at least one company that is already beginning the process of certification for the angel tax credit in anticipation of raising capital in 2012. 

Given that $15.9 million in tax credits was exhausted before Thanksgiving this year, it’s likely that the $12 million available for allocation next year will go even more quickly.