Friday, March 30, 2012

The 1970s: A New Global History from Civil Rights to Economic Inequality

The Book: The 1970s: A New Global History from Civil Rights to Economic Inequality, by Thomas Borstelmann (Princeton University Press, 2011).

Why You Should Care: The effects of a major shift toward the free market that occurred during this “kidney stone of a decade” are still with us in both positive forms (entrepreneurial drive) and negative forms (increased socio-economic polarization).
At the risk of waxing nostalgic, I have to admit that it is a moment of cultural awareness that leaps out of my memory, an event in the same category as the Kennedy assassination a decade earlier, though why that should be I’m at a loss to explain. I’m speaking, of course, of the day in 1975 when, as a freshman at a small Midwestern liberal arts college, while browsing in the college bookstore, I spied Bruce Springsteen on the covers of both Time and Newsweek.
Now that I’m well into my middle years, whenever I’ve thought of this, I’ve been puzzled.  Although I later became an unapologetic fan of The Boss, I didn’t know him from Adam at that moment. With all that happened in that decade, why does this stand out?
Now, at last, Professor Thomas Borstelmann has come to my rescue with a rational—if hindsight- oriented—explanation. It seems Springsteen’s lyrics capture the middle-class angst of the decade and, in retrospect, they remind us that this was a time when “military, political, economic and environmental crises unfolded rapidly on top of each other, leaving many citizens uncertain of which to address first and how to do so.”
And here I thought it was all about the wicked guitar riffs.
Seriously, Professor Borstelmann does have a point; one that may interest all of us 99-percenters. And that point is this: it was during the 1970s that “the loss of confidence in public authority laid the foundation for deregulation and a turn toward the free market, a path that led to growing disparities between rich and poor.” This is, as he later notes, “a transformation of American society that has gone largely unnoticed, even though its reverberations are still being felt decades later.”
Think about it. It was during the 1970s that some of today’s major blue chip corporations started up in garages. Could it be that the same social shift that set the stage for an explosion in entrepreneurial activity is also responsible for greater economic stratification? 
Unlike disco, this issue might be with us for some time to come.

Tuesday, March 27, 2012

Trademark Scams

If you have ever filed an application for the registration of a trademark, you know that the process takes time and there is generally not a great deal of communication with the registering agency. There are long periods of silence. Or at least that’s what we tell clients to expect. What we frequently forget to tell our clients is to expect third-party solicitations that we generally consider to be scams.
Because trademark application and registration information is public, it shouldn’t be surprising that enterprising souls have figured out ways to use such information to make money. Rarely a week goes by that we do not receive an inquiry from a client regarding a notice, bill, or other communication relating to trademark services that did not come from GPM. 
The most common of these (often received within a few months after filing a U.S. application) is an email communication from a party somewhere in Asia claiming to be an official registrar or auditor of domain names. The notice states that a particular company (name given) is proposing to register a trade name or “Net brand” (or other vague reference to a trademark right) and a number of domain names that include the recipient’s trademark. This party sending the email claims a duty to determine if you have authorized such registrations or if you want to file a dissent application or take some other form of action to challenge the alleged applications. Although the sender provides a name, telephone number, and company name and address (generally real), I have yet to find any information about any of the companies named in one of these emails, which makes me think they probably don’t exist, and if they do, they are unlikely either to be interested in registering the identified domain names or to pose much of a threat if they do.  
Communications from official sounding organizations such as the “US Trademark Registration Office” appear as formal notices for watch or other administrative services, or recommended actions such as recording a trademark with U.S. Customs and Border Protection. Many appear as invoices for recording or service fees, although small print somewhere in the document will state that this is not a bill. These notices typically include nothing more than a post office box for communication. In one case, a client received a notice from an organization claiming that payment was due under “their contract” for the annual renewal of subscription watch services. The notice was directed to “Accounting” and small enough (a couple of hundred dollars) to possibly avoid scrutiny. Surprisingly, there was a telephone number which I called to request a copy of the contract. I spoke to an answering machine andno surprise herewe never received a copy of the contract or any further invoices.
Technically, many of these “scams” offer legitimate services. But when they use deceptive or misleading tactics to solicit business, you have to wonder what else is up. In some cases, the sole purpose may be to sell real but unnecessary services (registrations for every top level domain and brand variation imaginable, U.S. Customs registration, etc.) at inflated prices. More likely, however, the solicitor has no intention of providing any services and is instead seeking “free” money and/or credit card or other financial information that is then used illegally for other purposes. In the case of the Asian domain name scam, a response from the trademark owner indicating concern may be the trigger for the solicitor (acting under the name of the company identified in the letter) to actually register the names and then offer them to you at a highly inflated fee.
So what should you do if you receive one of these letters? If you have filed your application(s) through an attorney, all official communications from the relevant government agencyU.S. or foreignwill come through that attorney. If you have filed directly, official communications will come only from the official agency; if you aren’t sure about the name, look it up in your papers or online. If still in doubt, or just curious, contact your attorney. Organizations such as INTA (International Trademark Association) and AIPLA (American Intellectual Property Law Association) have information about current and ongoing scams, and the USPTO (United States Patent and Trademark Office), WIPO (World Intellectual Property Organization), and the government agencies responsible for intellectual property registrations in most countries include online access to warnings about deceptive and misleading solicitations.

Thursday, March 22, 2012

Taking the Grape for a Test Drive

For anyone who has read some of my previous posts, it won’t come as a surprise that I have more bottles of wine at home than I can comfortably store or, frankly, than I can even really drink and enjoy during their optimal drinking windows. Since I am generally a pretty practical shopper, I’ve been trying to figure out what in the world possesses me to buy so much wine.

As I thought about it, I realized there are a couple of features unique to wine that I’m sure have influenced my buying habits more than I realized at the time I was making these purchases.

1. Vintage Scarcity

Unlike most other consumer products (cars were the obvious exception I thought of), most wine is labeled with a vintage year, which denotes the year in which the grapes used to make the wine were grown and harvested. This means that, now in 2012, we can never reproduce a 2001 Napa Valley cabernet sauvignon. All of the 2001 Napa Valley cabernets that will ever exist have already been made and bottled. Knowing that there is a finite amount of that particular wine out there, even if the amount is huge, still makes it seem a little more precious. Even when I try to talk myself out of it, I tend to feel like if I really like a particular vintage of a particular wine, I need to make sure I stock up before it’s gone because the producer can’t just turn around and make more of it.

2. Wine Tastings

Like many products, one of the most effective ways to sell wine is to allow people to try it out (taste it) before buying it. Wine lends itself better than many products to this type of sales strategy, but the wine industry also does it better than most industries. What sets wine tastings apart from other “try before you buy” marketing is that the industry has managed to turn wine tastings into activities in and of themselves, rather than just a means to the end of buying wines a person likes. I don’t test drive cars for fun when I am not actually in the market to purchase one, but I attend wine tasting regularly, even when I need more wine like I need a hole in my head. Why? Because wine tastings are fun! I see them at area wine markets and plan to meet my friends there as a social activity. Inevitably, there are one or two wines I really enjoy that I end up bringing home with me. Nothing helps encourage purchases like (a) absolute certainty that I’m going to enjoy it because I’ve already tried it, and (b) enjoying the company of my friends while shopping.

How can these methods translate to other industries?

·       For products or services that are not completely commoditized, conveying a message of scarcity for a particular reason that applies to your business (but only if the message is a credible one)
·       More demonstration or sampling of products to a wider audience and/or an ability for the ultimate consumer to try things without cost
·       Events including those demonstrations or samplings that people actually want to attend, whether or not they think they are planning to purchase your product
·       Substantial personal interaction between the seller and the potential buyer in discussing the product

No comment on the impact of wine consumption on wine buying.

A Post by Alyssa Hirschfeld, Guest Blogger

Tuesday, March 20, 2012

Time to Get Your Business Plans Ready for Start-Up Company Competitions

As we approach springtime in Minnesota (or is it summer?), it’s time to prepare for the annual spring rituals—putting away the winter coats, starting the spring yard work, cleaning out the garage, and tossing your broken NCAA basketball tournament pool sheets. For entrepreneurs, it’s also time to get ready for two prestigious business plan competitions: the Minnesota Cup and the Cleantech Open.
The Minnesota Cup will soon begin its seventh annual competition to identify the best entrepreneurial companies in Minnesota. The Minnesota Cup is a business plan competition that identifies the top Minnesota-based start-up businesses in each of six different divisions: Clean Technology and Renewable Energy, High Tech, BioScience and Health IT, General, Social Entrepreneur, and Student. You can submit your application to be named a top Minnesota start-up company beginning on March 26th and continuing through May 18th. For more information about the Minnesota Cup and this year’s event details, visit the competition’s website. 
I wrote about the Minnesota Cup last year as the application period was kicking off. As I mentioned in my prior post, there are lots of good reasons to compete in the Minnesota Cup, including the prize money—which is $25,000 this year for winners of each of the Clean Technology and Renewable Energy, High Tech, BioScience and Health IT, and General divisions; $20,000 for the Social Entrepreneur division; and $10,000 for the Student division. Winners also are allotted free services from some of the state’s top legal, accounting, and other professional service providers. More significant than these tangible rewards is that the participants in the Minnesota Cup have the opportunity to fine-tune their business plans and connect with some of the state’s most successful entrepreneurs, investors, business leaders, professional service providers, and others. One measure of the impact that the Minnesota Cup has had on its contestants is that the 2009 and 2010 Minnesota Cup finalists have already secured more than $15 million in external investments.
In addition to the Minnesota Cup, businesses in the Cleantech space should also consider applying for the Cleantech Open, which is accepting applications now for its accelerator program. The Cleantech Open is a national business plan competition and accelerator that seeks to “find, fund, and foster entrepreneurs with big ideas that address today’s most urgent energy, environmental, and economic challenges.” The Cleantech Open is accepting applications through May 8th, and if you apply by April 3rd you can take advantage of the early bird entry fee of $90. You can learn more about the application specifics and the various Cleantech Open events throughout the remainder of the year by visiting the competition’s website.


I also wrote about the Cleantech Open last year, which you can read here if you’re interested. As you’ll note on the Cleantech Open website, and in my prior blog entry, the Cleantech Open divides the nation into several different regions, including the North Central Region (Minnesota, North Dakota, South Dakota, Nebraska, Kansas, Iowa, and Wisconsin). Last year’s national winner (a Minnesota-based company), and a national finalist (from Wisconsin), came from the North Central Region. So, there are lots of interesting and successful cleantech businesses in the Midwest, and in Minnesota in particular. 
There are lots of good reasons for participating in the Cleantech Open, similar to those for the Minnesota Cup. In addition to the prize money and professional services you could win (up to $250,000 for the winners), contestants will have the opportunity to network with key entrepreneurs, investors, professionals, and leaders in the Cleantech space. Since its inception in 2006, the Cleantech Open has added tremendous value to its graduating alumni—the 581 participating companies in the Cleantech Open’s accelerator programs have raised more than $660 million in external capital.
So, among the other tasks you have planned for this spring, if you are an entrepreneur with an exciting business opportunity, you should consider applying for either or both of the Minnesota Cup and the Cleantech Open.

Tuesday, March 13, 2012

New Listing Market May Provide Opportunity for Growing Companies

A new listing market owned by NASDAQ is expected to launch later this year, providing early-stage and smaller companies a way to expand visibility and financing opportunities. Approved by the SEC in 2011, the “BX Venture Market” will have lower quantitative (financial) listing standards than major national exchanges, but similar qualitative, corporate governance standards—giving growing companies that are willing to comply with the requirements a transparent platform to reach investors and utilize superior trading technology.
The BX Venture Market is targeting companies trading on the OTC or “pink sheets” market, those that have been or will be delisted by another market for failure to meet that market’s quantitative standards, and smaller, less-liquid companies looking for capital financing opportunities or an exit for initial investors. The new market will help delisted companies, specifically, from leaving the exchange world all together, and may allow institutional shareholders to continue to hold their shares. Companies will not be required to have a majority of independent directors like other current exchanges, will not need to comply with the 20% shareholder approval rule for private placement issuances, and will not be subject to trade-through rules. BX Venture Market companies will, however, still be subject to the SEC’s penny stock rules and, more significantly, will have to comply with state-by-state Blue Sky requirements.
To qualify for an initial listing in this new market, a company must have:
·       At least 200,000 publicly held shares
·       At least 200 public shareholders
·       At least $2M market value of listed securities
·       Minimum of 2 market makers
·       A minimum initial listing price of $1.00 per share for securities not previously listed on national securities exchange, or $0.25 per share for securities previously listed on a national exchange
·       An independent audit committee of at least 3 members

Companies who have not previously listed on a national securities exchange must also have:

·       Either $1M stockholders’ equity or $5M total assets
·       At least a 1-year operating history
·       A plan to maintain sufficient working capital for at least 12 months after listing

In terms of more qualitative standards, a listed class of securities in the BX Venture Market must be registered under Section 12(b) of the Exchange Act. A company must be current in its Exchange Act (quarterly, annual, and periodic) filings, have independent directors make or recommend compensation decisions for executive officers, and hold annual shareholder meetings.  

Although the new market has not yet officially launched, companies interested in being listed will be able to submit applications via NASDAQ’s online listing center before the launch date. Upon submission of an application, the NASDAQ listing staff will verify the qualifications listed above and conduct a public interest review of the application, including a background check of the company and affiliated individuals and a review of a company’s proxy disclosures and other SEC filings.

Whether the new exchange is a boon for smaller public companies or accelerates the market for smaller initial public offerings remains to be seen. For more information, visit the official BX Venture Market faq

A Post by Karen Wenzel, Guest Blogger

Friday, March 9, 2012

Latest Update on Crowdfunding: House Passes JOBS Act

Unless entreVIEW is your only source of entrepreneurial information (if it is, you may need some remedial assistance in this area), you may have read that the House yesterday passed the Jumpstart Our Business Startups (JOBS) Act. The bill (H.R. 3606 ) is an omnibus rollup of several previous pieces of legislation, none of which had as catchy an acronym (e.g. the “Reopening American Capital Markets to Emerging Growth Companies Act of 2011”), designed to facilitate access to capital for “emerging businesses.”
The JOBS Act includes several provisions previously passed by the House (several of which were detailed in my prior post ) along with a few others. Some of the items not detailed in my prior post include:
·       The relaxation of certain reporting obligations for newly public companies that have less than $1 billion in annual revenues. These are called “emerging growth companies,” which seems like a bit of a misnomer to me for such a high threshold, but beggars can’t be choosers.

·       An increase in the threshold for the number of shareholders which requires an issuer to become a reporting company. The existing law requires reporting if a company has $10 million in assets and 500 shareholders. The bill would require reporting only if there are either 500 “non-accredited” shareholders or 2,000 shareholders (in each case excluding both (a) employee shareholders who received their shares under an exempt plan and (b) shareholders who purchased their shares in an offering exempt under the new crowdfunding exemption).
Of course, notwithstanding stated “strong bipartisan support,” the Senate still needs to take up the measure and pass it. It sounds like many of these provisions (with possible modification) are likely to make it to the President’s desk for signature, something he’s indicated he’s eager to do.
I continue to hope that the general solicitation prohibition in Rule 506, which is in the JOBS Act, makes it into the final law because (as I indicated in my prior post) I can see how that could have a direct and immediate impact on the ability of clients to raise seed capital. Stay tuned.

Wednesday, March 7, 2012

Beyond Happy Hour: Modern Marketing and Networking Concepts

Learning to market and network with potential clients, customers, or people that can provide you with referrals for clients and customers can be one of the biggest challenges facing someone charged with producing business. Last summer, I was sitting in the spa with some of my colleagues at a firm retreat when someone said, “why don’t we do this with clients, it’s perfect—we are relaxed, sitting in a beautiful room, chatting.” This was brilliant, and something I had never considered. Why not bring clients to the spa?
We actually did bring some clients to the spa a few months later. The right clients, the right spa service, nothing awkward in robes, and something that gave us time to talk. We went with manicures and pedicures. This turned out to be a hit. We ended up with a tremendous business opportunity, along with some quality client bonding time.
The spa isn’t for everyone and isn’t going to work in every business combination. My point is that we often don’t think beyond golf, dinner, or a game when it comes to marketing and networking options. Some nontraditional ideas might be just what your business needs. 
Along with the spa, I have been reading more about the benefits of taking a client or customer to do something active. Go to the gym and talk next to each other on the treadmills. Play a pick-up game of basketball with friends. Take an opportunity to do something lightly competitive, active, and fun. The concept of networking at the gym is an extension of the idea of playing golf with neither the 5 hour time commitment, nor the requirement for 75 degree weather and a country club membership. You can invite a client to join you for a training session, a spin class, or a long run. These options may only require a 60 minute time commitment, and can occur at any time of the day and in any temperature. 
Aside from inviting a client to the gym with you, the gym itself can be an excellent place to network. Many successful people make a serious habit out of spending time at the gym. Join classes and other opportunities to exercise and compete casually with other active and successful individuals. You may be surprised how many great contacts would come from something so simple.
Finally, rather than the typical long lunch, happy hour, or fancy dinner, think breakfast. Breakfast meetings are something I do more and more often. Breakfast is usually faster than other meals, easier to schedule, doesn’t interfere with people’s 9-5 day, and the morning is often when people feel the most energized and fresh. Immediately after your meeting you go in to the office fresh with ideas from that breakfast meeting. You are more likely to act on those ideas, to actually follow up as you promised, and to make that introduction you mentioned.
Clearly these ideas do not work for all businesses, nor would they work for all clients/customers, but something new to add to what you are already doing to market to clients or network with others.