Path, a high-profile San Francisco social media startup, ignited a firestorm this week with the revelation that its mobile application uploads users’ entire iPhone address books to the company’s servers without their knowledge or permission. The practice, discovered by Singapore developer Arun Thampi, provoked outrage within the user community and was broadly condemned by the tech business press. Jon Mitchell at ReadWriteWeb wrote that the upshot of Path CEO Dave Morin’s initial response was “We did it first, and we’ll ask you for permission in a little while.” The company quickly apologized on its corporate blog and, as I write this, plans to push out an updated version of the iPhone app to quell users’ privacy concerns. Read more
A couple of days ago a friend asked me whether I’m in favor of startups getting angel investment. He pointed out this post on this blog, which is me writing about five good reasons not to seek investment. My answer is that – like so much else in this field – it depends on the specific situation. A business that can grow organically and stay independent probably should; but there are also times and situations that call for ramping up a business as fast as possible, and that, in turn, means you need more money faster. So in those cases, forget bootstrapping. Read more
The Funding Gap between typical angel rounds ($250-$750K) and average venture round of $7-8 million is really difficult to bridge. Over the past five years, angel group leaders have found that syndicating deals with neighboring angel groups and other early stage investors has several distinct advantages: Read more
Entrepreneurs are often surprised when investors refuse to sign non-disclosure agreements (NDAs) or confidentiality agreement when offered an opportunity to read the entrepreneurs’ new business plans. After all, every new startup features secret ideas, partnerships, intellectual property and/or technology.
If you startup is your dream, why would you want to think about an exit? It’s going to be so successful and so much fun that you don’t need to think about what comes after. Wrong. There are two very real and practical reasons why you need to plan an exit: Read more
I’ve gotten on my soapbox before about the importance of forming a business entity as soon as there’s a new product or business worth protecting. The most common messes encountered in my startup law practice involve founding teams that somehow never got the formation done right, including the contributions and assignments of intellectual property to the new company and the related issuances of stock to founders and other contributors. As they say, an ounce of prevention is worth a pound of cure, so let’s drill down and look at the places where things can go right or wrong. Read more
First, I admit it: sometimes I exaggerate for effect. And I just did, with my title here. In truth, you still need those summaries.
By the time you’re here on gust.com you’ve probably figured out that the relationship between business plan and short summaries is something like between movie and movie trailer. Investors don’t read the whole plan if they didn’t like the summary. Read more