Note to entrepreneurs: Your idea is not special
– Brad Feld is a managing director at the Boulder, Colorado-based venture capital firm Foundry Group. He also co-founded TechStars and writes the popular blog, Feld Thoughts. The views expressed are his own. –
Every day I get numerous emails from software and Internet entrepreneurs describing their newest ideas.
Often these entrepreneurs think their idea is brand new – that no one has ever thought of it before. Other times they ask me to sign a non-disclosure agreement to protect their idea. Occasionally the emails mysteriously allude to the idea without really saying what it is.
These entrepreneurs think their idea is special and magic. And they are wrong.
The great entrepreneurs are already focused on the implementation of their idea. They send me links to their website or software. They describe the business they are in the process of creating (or have already created). They point me to what they’ve done to implement their idea and show real users who validate that the idea is important. And they quickly move past the idea to the execution of the idea.
Google? Not the first search engine. Facebook? Not the first social network. Groupon? Not the first deal site. Pandora? Not the first music site. The list goes on. Even when you go back in time to the origins of the software industry: MS-DOS – not the first operating system. Lotus 1-2-3 – not the first spreadsheet.
The products and their subsequent companies became great because of execution. First, they had to execute on building a great product. Next, they had to execute on building a great business. Finally, they had to execute on scaling, sustaining, and evolving a great business.
As startups ponder the secondary market, more seem to make private info public
– Mark Boslet is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
The secondary markets for private company stock may seem like the Wild West, with unstructured valuations and less than ideal information disclosure.
Yet several securities laws apply to transactions now taking place, and the onus falls on companies to follow rules meant to level the playing field, including making some confidential information about their businesses public.
This was the key takeaway of a National Venture Capital Association webcast discussing the recent phenomenon of secondary market trading. The bottom line is this: startups interested in permitting their shares to trade on a platform such as Second Market or SharesPost need to take steps to protect themselves from potential lawsuits.
“I think companies are saying, ‘I do want some information out there so there won’t be disparities of information,’” said Francis Currie, a partner at the law firm of Davis Polk & Wardwell.
They realize a lot of the selling and buying involves insiders who have the information, Currie said on the webcast. And they fear a sharp fall in the stock price could lead uninformed outsiders who purchased shares to file a lawsuit.
According to Currie, the information most appropriate for disclosure includes a list of material risks facing a company’s business and recent financials, but not projections. The Securities and Exchange Commission hasn’t yet weighed in on the topic, but it’s examining issues associated with secondary market trading, particularly the 500-shareholder threshold that forces private companies to disclose financials and other data. So more clarity could come from the SEC over time.
I agree. with execution be paramount.
The ideas that I have had, and continue to have, jump into my mind have been counted into hundreds of usable ideas many worth billion or trillion dollar valuations – if launched with capable people. However, my execution and business skills suck, so the valuation is zero. The real question is how to integrate ideas guys and execution guys?
david.apexx@gmail.com