Category Archives: Publications

Startup Superhero Video Series! – This Week Featuring Preccelerator Mentor Lisa Tsou on “Fundraising Tactics”

Stubbs Alderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Preccelerator Mentor Lisa Tsou as she talks about “Fundraising  Tactics.”

Lisa Tsou provides independent strategy and solutions for entrepreneurs so they can grow their businesses to the next level. She is passionate about working with innovative entrepreneurs and startups to develop unique strategies to grow and fund their businesses. Whether you are a startup on the track for traditional venture-capital financing or an entrepreneur on a more offbeat path, she can collaborate with you to develop and implement a creative and practical strategy for success. Lisa also speaks regularly on issues related to startups, tech and women in business. She has been a featured speaker at events including The West Hollywood Women’s Leadership Conference, The SoGal Summit, The USC Graduate Women in Business Summit, Women Founders Network, and Bruin Entrepreneurs, and appeared in publications including The Huffington Post, CNBC, GenHERation and E The Magazine for Today’s Female Executive and the Business Rockstars program.

 

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Transcript

Speaker: Lisa Tsou

Moderator: Heidi Hubbeling

Startup Superhero Series-Intro with Lisa Tsou “Fundraising Tactics”

Heidi: Today we are featuring Lisa Tsou of the Winning Pitch and Lisa is one of our mentors here at the Preccelerator. She specializes in fundraising, pitch-investor decks, helping companies with their formal presentation as well as other kinds of strategies for fundraising. Tell us a little bit about yourself and thank you for being here.

Lisa: Thanks Heidi. I started working with startups back twenty years ago this year, when I graduated from law school. Spent many years on Wall Street doing Venture Capital, Ipos, mergers and acquisitions, all with tech and startup companies. Spent my whole career on startups and am now concentrating on the part I really enjoy which is the growth part of startups. Working with startups on their fundraising, their investor strategy and positioning for investors.

Heidi: All very important things, especially at this stage within the Preccelerator and other startup companies in this Los Angeles ecosystem. Going back to the fundraising and preparing the pitch presentation, what exactly are investors looking for when companies are starting that fundraising process?

Lisa: I think the best way to think about what investors are looking for is to think of it as a risk reward ratio. Basically, venture capitalists are looking for a really big reward and as small a risk as possible. They’re looking for things with really big markets or things a consumer or a business would be using with a lot of frequency. Something that can get really big and then they are trying to find things with as little risk with the really big as possible. Things that would be considered as something like a risk would be does your product work? Does the consumer like it? Things like what other competition might be out there? I like to think of it as that kind of ratio.

Heidi: That’s a great way to look at it. In a life-cycle of a company, especially with these early stage companies When is the right time to start fundraising? What are those key metrics?

Lisa: I’m going to say something that I know is going to sound really contradictory, but it’s a combination of as late as possible and earlier than you think. A lot of startups go “oh I should go out there and find a venture capitalist to fund me” without thinking through when do they really need the capital? Can they go a little longer? The longer you can go without outside financing, the stronger position you’re in. If you go very early, the venture capitalist is going to take a lot of your company control and you are not going to get as much capital as you would like. So, on one hand think as late as possible on the other hand, from that point start earlier than you think. It’s going to take longer to get in front of investors, get them comfortable with you and build that relationship. From that point when you think you need capital, I would say start certainly start six to nine months earlier than that.

Heidi: The due diligence process by itself once you actually have somebody who is interested in funding you can take four, six, eight months at that point. Also, figuring out whether or not venture capital funding is right for you, versus angel investors versus small business loans. Whatever funding that type of company might need depending on their scalability.

Lisa: Absolutely! Investors are going to ask questions and you may need to think things through or vet some other elements of your business before they will write a check.

Heidi: What are your tactics? What do you suggest to startups when they start looking for funding? How can they get in front of an investor or a VC?

Lisa: It’s a combination of research and somehow wrangling a warm introduction. The research part being finding the right VC or investor depending on their situation. That makes sense for them. How big a check the investor generally writes and the industries they may be comfortable with investing in. Doing that research which will take time and then wrangling your warm introduction to get to them. A lot of investors are not going to be receptive just cold email or blind submissions to them. Working your way through your network, which may be a five or six step process to finding the person who knows a person, who knows a person, who knows a person, to getting in-front of that investor.

Heidi: That’s very important. So, you have been a value and a resource to the Preccelerator program. What are some of your favorite things about being a mentor here, about the program and working with the companies?

Lisa: I really enjoy working with the Preccelerator. As I said I was an attorney at one point doing this kind of work. It’s fun being around really smart people like at Stubbs Alderton and the other mentors who are also awesome. I just love working with the companies. I think you put together a really smart batch of companies who are doing a lot of interesting things in different industries. It’s always fun to come over here and hangout for a couple of hours and see what they’re doing and see if I can help them.

Heidi: I am proud of them! It was great to have you here and we will see you guys next time at the Startup Superhero Series.

Lisa Tsou
The Winning Pitch
lisa@winningpitch.com

 

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com.

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Startup Superhero Video Series! – This Week Featuring Preccelerator Alumni Andrew Cheeseman on “Empathy in Entrepreneurship”

Stubbs Alderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Preccelerator alumni Andrew Cheeseman, as he talks about “Empathy in Entrepreneurship.”

Andrew is a proven leader in both sales and marketing in startups and large organizations PLUS a successful startup with an exit.  He is passionate about turning customers’ experiences into revenue and retention. He has deep experience in the software market and loves to build relationships.  Andrew’s gift is to inspire leaders to innovate. Combining creativity, leadership, and technology, he also develops game-changing solutions and products with and for industry leaders.  Andrew grows businesses through innovation, partnerships, and sales, to create profitable new revenue.  He creates vision, influences stakeholders to secure funds, and organizes teams to drive business.   He instigates growth through product and market innovation, and through building internal and external networks.

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Transcript

Speaker: Andrew Cheeseman

Moderator: Heidi Hubbeling 

 

Startup Superhero Series – Empathy in Entpreneurship 

Heidi: So, we want to talk a little bit about your entrepreneurial journey today. What made you take the wild leap into entrepreneurship?  

Andrew: Well, I had been interested in being a creator of things for a long time. Also, I am interested in impact, areas that have a lot of impact. My particular passions are for mind, body, health and community and connectiveness. I was really excited about creating things that could incorporate all these together. 

Heidi: What are some of your favorite things? What do you really love about it?  

Andrew: Apart from those things, the creation the impact and the passions –  I have some interests as well. I love people and what you can do with connecting people. I love creating systems. My belief is that you can’t really grow unless you can delegate. You can’t really delegate unless you have system in place. I just love that stuff. 

Heidi: I think it’s one of those lessons that we all learn. It’s one of those things that can direct us to successes, the organizations and being able to create those systems in place to get you to that next level.  Let’s talk a little bit about Team(You). Talk to us about what Team(You) is and along the journey with Team(You), what was your proudest moment?  

Andrew: Team(You) is a system that addresses one of the issues that is happening in schools. Its widespread. The problem is around learning and apathy and teacher retention. These are all interrelated. Team(You) is a system that addresses those, by creating a culture of empathy vs. apathy. It’s a software based system where students earn points for things like empathy and kindness and service. You asked about what are my most proudest, moments. I think my proudest moment was when we got our first school up and running. Just seeing those points roll in. Realizing, whereas the norm in the industry is about 15% user adoption we had 98% user adoption, we are very proud of that. 

Heidi: You guys really entered a time in the market, where you could really make a difference. It was before there was legislation involved that required incentive based learning as a positive reinforcement. You really had an impact from the start.  

Andrew: Exactly, it was. In fact, we – as of the end last semester, had 30,000 students enrolled who were collectively engaged in the system for 2.2 million hours per month.   

Heidi: Wow, that is very exciting. So, you had those successes. Along your full entrepreneurial journey what’s an important lesson that you learned? What is something you can give back as a lesson of wisdom for other entrepreneurs? 

Andrew: I think the biggest lesson is this lesson around empathy. My company is based on empathy which gave me a particular lens to look at, not just my customers, but the actual business. What I came to realize is how deep the importance of empathy is. Not only for customers, of course and understanding what their journey is, but also for employees. Empathy for developers, meaning when I develop something new for the software, I am thinking of everyone who will have to interact with that change. Customer service, investors, empathy for everybody whose involved. I think the big learning, ultimately, is if you look at business through the lens of empathy you can discover things that you never knew existed. It’s one of many lenses of course, but empathy is the interesting learning that I got from this experience.   

Heidi: Yeah, I think that’s so important, even when it comes to practical aspects such as product development, you mention how users are going to use the platform. Empathy on the side of investors or on the side of other strategic partners that you’re going to have. Other team members, right? Your core employees, I think that, that is such a foundational characteristic. 

Andrew: It is and just to take the customer service example, empathy for the customer service staff is critical. Done the right way, if we position the customer service the right way to customers, investors, partners, and everybody else means that, that role other than just a supporting role becomes the critical role. That means that job is really satisfying because you are executing and carrying out a really important role. It only happens for empathy in that role or people in that role.  

Heidi: Finally, going back to the Preccelerator. You were early, early on in the Preccelerator Program. What is one of the biggest values that a program like the Preccelerator has had for you? 

Andrew: There are, of course many different values. From a place to have meetings, to the expert legal advice, but I would say probably the biggest one is the impact that mentors have had on me. I have had some amazing feedback and support from some of the mentors.

Heidi: Yes, they are a core value of this program, it wouldn’t work without them. We really appreciate you being here.  

Andrew Cheeseman
https://www.linkedin.com/in/andrewcheeseman/

 

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com.

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Startup Superhero Video Series! – This Week Featuring Peter Csathy on “The State of the Digital Media Market”

Stubbs Alderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Preccelerator Mentor and Board Member Peter Csathy, as he talks about the state of the digital media market.

Peter Csathy is a media/digital media/tech advisor, business development executive/dealmaker, strategist, entrepreneur/operator, venture capitalist/investor, and journalist who has consistently led and driven transformative innovation, expansion and enterprise value for both leading public and private companies (including via successful M&A exits and negotiated deals valued in excess of $4 billion). Career equally spans both traditional and digital media/technology (and with significant international experience). Deep senior level decision-maker and influencer contacts and relationships.

He is a recognized thought leader frequently featured in The Wall Street Journal, TechCrunch, Venturebeat, Variety, The Hollywood Reporter, New York Times, Los Angeles Times, TheWrap, Billboard, CNBC, BBC, USA Today, Bloomberg, Forbes, Advertising Age, The Huffington Post, Wired, Fast Company and other leading publications/blogs; frequent moderator and guest speaker at leading industry conferences and events (including CES, NAB, Variety Summit, Digital Hollywood, Siemer Summit, Streaming Media); frequent guest columnist for leading media/digital media/tech publications (TechCrunch, Variety, Billboard, Venturebeat, VideoInk) and prolific blogger on own “Digital Media Update” blog; mentor in the Disney Accelerator and the Points of Light Civic Incubator; appointed to commission making recommendations to President Obama; board member and advisor to for-profits and non-profits.

 

 

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Transcript

Speaker: Peter Csathy. 

Moderator: Heidi Hubbeling 

 

Startup Superhero Series – The State of Digital Media 

Heidi: I would like you to tell us a little bit about Creative Media and what your background is. Tell us about what CREATV Media does as well as why you chose to join the Preccelerator as board member and what value you think the Preccelerator brings to companies? 

Peter: So, I started CREATV Media, a little over a year ago, as to be really a leading digital media focused business development, advisory and investment firm. What that means is that it kind of ties together this network I created. If people go to the website http://www.creatv.media, you’ll see that it is a team of really connected individuals. It’s meant to be a super network of people across traditional media, new media, technology so that we can bridge or bring opportunities for our clients and really identify where to go. Help facilitate these new opportunities, structure deals, get investment into those deals. Also, work with companies on an M&A front, where for larger companies (media as an example), we can identify potential areas of strategic investment. Then for those who are privately held companies they are looking to potentially have a strategic partner, that can eventually be an investment or M&A.  We frequently work with those companies to position themselves, tell their story, identify the partner structure deals. So that there’s ultimately a great result for them.  We do a lot of connecting. We do a lot of business development, identifying opportunities, and then a lot of market intelligence. I have great team of people on the consulting side, who with our unique access and relationships that we have – can get information and market intelligence that nobody else can get. We can bring that to light, to our clients, so that they are smarter and faster and better. That’s on the creative side.

On why I joined the Preccelerator? It’s just this great opportunity to support an organization, Stubbs, and what they are doing here to support entrepreneurs in the LA community.  Accelerators are always interesting because it’s a great place for entrepreneurs to come together and rub shoulders –  the community that comes with that, both within, but also from without when you have market leaders coming in to share their stories. Hopefully, I can bring mine and bring some wisdom of the things I did right and the things that my company did wrong and they can learn from that. Stubbs did a really great thing here because it’s a law firm doing something that is typically not done by law firms. Really being entrepreneurial, creating this space, bringing new opportunities, new mentors, a tremendous package of benefits, as well as this great office space here on Third Street Promenade. That’s a wonderful thing and when they asked me to join, how could I say no?  

Heidi: Now, you provide huge value to the companies with your expertise and your background in digital media. One of the perks in the perks package is consulting services and getting to have your ear, your introductions, and access to your network. What are some of the things in your background, that make you an ideal mentor here? Also, what’s your entrepreneurial story that has brought you to this place.    

Peter: It certainly hasn’t been a straight path which is part of the fun of it all. I started, many many years ago. I’ve been in the media and tech world for over 30 years, which is kind of hard to believe. I started as a media and entertainment lawyer, almost 30 years ago. From that point, I went into the studios. I was at New Line, Universal, Savoy and really transitioned from being a lawyer to a business person and negotiating deals – from a dollar to multi-billion-dollar international joint ventures.  In about 2000, I went to my first entrepreneurial company.  I became a real start-up guy initially where this one was a true start -up where we built up a series B close to $10M round, then moved it to the east coast, I stayed here, then was recruited to go down to San Diego, really the most innovative software, music, and services company at the time. Really the Spotify before Spotify –  so I was an entrepreneur there. We sold that company for $160 million dollars, and then I ran another company that we also sold. I have seen a lot of different things and for the past several years I have been an advisor because I built this network along the way and hopefully I have some war stories that I can bring to help these entrepreneurs.  

Heidi: And then your background is in digital media and technology. Through all your experience, what are your views on the state of digital media and tech market. How do you think LA as an ecosystem fits into where digital media is going? 

Peter: It is such an incredibly exciting time. I have been in the space for more than 30 years, I’ve never been more excited than I am today about just the different opportunities for companies big and small. You have the fundamental traditional media and entertainment business which is completely transitioning or transforming at the hands of technology.  I’ve seen both sides of that which is what makes it particularly fun. You see this transition happening and the media companies need to understand all these new technologies and new ways to engage and reach an audience and create content and monetize it. On the other hand, you have all these technology companies that are becoming media companies. Like the Googles, like Amazon, Facebook, very much these are media companies, they even call themselves media companies which is pretty incredible. All of this is happening at the same time and then you have innovation and it’s becoming a multi-platform world – where its traditional platform and then you have mobile of course which is the first screen. Live events are not going away so that’s another platform. VR, AR immersive platforms are also there, E-sports, and on and on and on. It’s just this really incredible and interesting time and LA is very much the hub of it. When it comes to certainly digital first media companies, absolutely here. When it comes to VR and AR so much of it is happening here. Drone technologies so much of it is happening here in Southern California. So, you have real money being poured into the LA, entrepreneurial community for the first time, really. You are seeing some great exits that flow out of that. Snap is one, where let’s not forget, Snaps right here. Snap of course just recently went public and that’s just one. Oculus of course, was acquired a couple years back and on and on and on.  

Heidi: Right, it’s very an exciting for LA and I think that it’s neat to see all the bourgeoning companies and how the ecosystem here is and how its growing and the neat ideas that are coming out of the space.  

Peter: It’s a really exciting time and now this community is not just able to not to retain the great talent, but actually really for the first time –  attract some of the top talent, both on the creative side, and also on the engineering side – which is great. It’s coming here and fueling innovation all the time. 

Heidi: Right – and I think there’s getting to be more investors that are seeing that this ecosystem is growing and that we really have some solid technology down here too. 

Peter: That’s why we created SAM Creative Ventures, we want to ourselves invest more and more into this tech world. We are primarily focused on LA, but not exclusively. We are going to be taking a very close look at entrepreneurs in this community.  

Heidi: Absolutely, providing a huge value to this ecosystem.  

 Peter: That’s the goal! 

 Heidi: Appreciate you being here and we will learn more about Creative Media and about Peter Csathy and another video upcoming, in the StartUp Superhero Series. Thanks for being here. 

 

Peter Csathy
www.creatv.media

 

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com.

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Startup Superhero Video Series! – This Week Featuring Christine Perakis on “Three Essential Strategies for Small Business Success”

Stubbs Alderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Preccelerator Mentor Christine Perakis as she chats about “Three Essential Strategies for Small Business Success.”

Christine Perakis has been a lawyer, business adviser, entrepreneur, C-Suite executive, adj professor, and professional boat captain, navigating myriad transactions and businesses across 5 continents.  Her work, expertise and interests have taken her beyond a lucrative legal practice in the entertainment industry over a couple of decades. Christine has run or been a part of a management team in 10 businesses, growing, expanding and achieving results beyond the expectations of all involved. The most recent role being as a COO in a company that went from a 100% equity funded startup to a $10 million/year business in 4 years.

 

 

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Transcript

Heidi:  What are three mistakes that you see entrepreneurs make when they are first starting out?

Christine:   Well, when we get started, we’re coming up with an idea that we get so excited about. That we end up talking about the features of it way more, then we focus on the benefits to the client. We need to get inside the head of our ideal target audience and understand what is the number one problem they have that they don’t want and the number one result that they want and don’t have and then we can start talking to them. The second thing is to be aware we are on a buyer’s journey. Most of us don’t have a 50-million-dollar branding budget like some of the big brands that we know about and these days with all the information that comes out at us it takes 20-100 touch points to get people’s attention. So, we want to be able to first recognize that we are on a journey. Knowing that 99% of our target audience, are future buyers and less than 1% are now buyers. We want to take them along that journey, using something I call the conversion equation. You want to get their attention with an interrupt, engage with them, educate them and then be able to make an offer. The third thing is to think strategically. Most people will employ tactical marketing. They throw a bunch of tactics at the wall and hope that something sticks. Rather than, recognizing that if they think strategically their marketing is going to be more effective. So, they don’t want to do anything that isn’t something that their target audience wants.

Heidi: So, to achieve success what are the 5 main areas that a startup or an entrepreneur should focus on?

Christine:  Most of us are familiar with the 80/20 rule, Pareto’s law, right? 80% of our outcomes come from 20% of our efforts. So, that overwhelming job of a small business owner really can be reduced down to five basic steps. Something, I call the five-step profit formula.  Small business owners focus on lead generation, lead conversion, transactions, pricing and profitability.  They will achieve exponential results. They really only have to make incremental changes to get there. I have something I call the profit acceleration software that will show you, by plugging in some numbers, how small changes in these 5 areas only, will create exponential success.

Heidi:  All very important things, so what is one thing that every entrepreneur should know before they start their business?

Christine:  Well, I think Simon Sinek said it best in his book “Start with Why.”  Know your why. He knew that Steve Jobs, Wright Brothers and Martin Luther King had very little in common, but they understood one thing; which is people don’t engage with a product, service, movement, or an idea unless they know your why. We want to get people to invest in us, to buy from us, to work for us and follow us, we have to know our why.  You have sat in many rooms with investors as have I and you have heard time and time again we don’t invest in a product or service, we invest in the people. What they’re really investing is people who know their why. That’s how we get investors, our partners, with our clients, our customers, they want to know. They’ll buy from you if they really want to understand your why and your team. These days the millennial workforces are a growing resource that we have these days and they are committed to knowing their why. They don’t want to do anything without knowing they why. You have to enroll them in your why to get them to work hard for you and then they will. Finally, you need to know your why, most importantly because it gets you through the obstacles and challenges that come up in your business all the time. Keeping your eye on that outcome the benefit, the reason for being that you have and why you’re invested in doing. So, there’s that and when you’re in the early goal setting stages, creating your vision, you have your why as a corner stone for the goals that you create. Once you know that your subconscious can start working to achieve that outcome. The goals in it of themselves aren’t as meaningful as knowing that you’re going to get to where you need to go.

Heidi:  Absolutely, the “why me” and the “why now” – also knowing why this is the right time in the market. Both of those are so important for young companies before they get started.

Christine:  That’s right it’s not about widgets. It’s about what you’re going to get for yourself and what they are going to get for themselves.

Heidi: Well, thank you very much it was great to have you here.

Christine Perakis
www.christineperakis.com

 

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com.

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SAM Partner Greg Akselrud Featured in Peter Csathy’s New Book ‘Media 2.0(18)’

Today marks the launch of Peter Csathy’s new book, “Media 2.0(18): An Insiders Guide to Today’s Digital Media World & Where It’s Going.”  Stubbs Alderton & Markiles’ Partner Greg Akselrud authored Chapter 24 of the book on Investments and Mergers & Acquisitions.  Media 2.0 has received excellent reviews from Variety, Forbes and several other major publications.

Purchase your copy here.

About Media 2.0(18) 
Media 2.0 (18) is renowned media/tech expert Peter Csathy’s critically-acclaimed new book that takes you on a journey of how technology has transformed the worlds of media and entertainment — including Internet-driven OTT video, streaming music, virtual reality, augmented reality, and eSports. Csathy identifies today’s leading players and innovators in Media 2.0, analyzes their strengths and risks, and names his “Fearless Five” companies that made the boldest moves in 2017. Csathy also lays out his “Top 10” predictions for digital media in 2018 and beyond — and identifies concrete strategies and actions that readers can take to thrive amidst these new disruptive market forces.

Greg Akselrud Greg Akselrud is a founder and partner of the Firm and a member of the Firm’s Executive Committee. He chair’s the Firm’s Internet, Digital Media and Entertainment Practice Group. Greg advises a wide range of public and private clients across a number of industries, including companies in the entertainment, digital media, Internet, technology, consumer electronics and apparel industries. Greg is an Adjunct Professor of Law at Loyola Law School, Los Angeles, teaching Business Planning I: Financing the Start-Up Business and Venture Capital Financing. Greg is the author of Hit Man: The Fourth Circuit’s Mistake in Rice v. Paladin Enters., Inc., 19 Loy. L.A. Ent. L.J. 375 (1999).

 

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Preccelerator® Program Announces Its Eighth Class of Companies

​The Preccelerator® Program, a Santa Monica, California-based accelerator program for early- stage startup companies in the digital media and technology space, announced today that it has added its eighth class of companies featuring four innovative startups.

In 2012 Stubbs Alderton & Markiles launched the first-of-its- kind Preccelerator® Program to provide select start-ups with co-working space, mentorship, sophisticated legal services, curriculum and access to a strategic perks portfolio with the objective of helping grow a founder’s idea from business concept to a funded company. Over the past five years, 34 companies have graduated the Program, of which 20 have received funding totaling over $9M.

Preccelerator® Program Class 8 companies include:

Boomer Returns – Boomer is an ecommerce return platform that brings returns to your front door. The company’s goal is to eliminate the pain points in the return process where they hurt online shoppers the most. If you need clothing or accessories returned, you no longer have to leave your home. Instead, you can use Boomer and a reliable person will be at your door within an hour to handle your returns for you. The company is founded by Pat Bauer and Ben Grabow.

Best Food Trucks – Best Food Trucks (BFT) is the largest food truck platform in the U.S., with over 500 trucks booking lots nationwide. BFT is reinventing the office lunch experience, by providing business parks & office buildings with all the logistics of setting up food trucks, booking, and (coming soon) the ability to skip the line and order ahead from your phone. The company is founded by Matt Geller and Kevin Davis.

Lumenus – Lumenus is an IoT safety company, building a Hardware/Software platform using the Internet of Things to provide real-time safety alerts and create actionable insights for both consumers (bike/run/motorcycle) as well as industrial usage (high-risk vocational workers). They license their technology out to existing companies to scale the operation across industries and use-cases. They are currently in production with Timbuk2 on a backpack ‘Powered by Lumenus’ launching Spring 2018. The company is founded by Jeremy Wall.

BluAtom VR – BluAtom VR is a provider of a next-generation motion and haptic game controllers for virtual and augmented reality entertainment and training applications — It effectively turns any player’s body into a game controller. The BluAtom system comes with a wireless motion vest, hand controller and network hub to detect as well as enhance the user’s movements for a more natural and immersive virtual reality experience. The system is plug and play, no special device driver is required. The BluAtom VR founding team are Steve KearsleyDean ShipleyFarzad AhmadkhanlouSean Sharifian, and Mark Thimmig and Sean Lee.

For more information about the Preccelerator® Program, visit www.preccelerator.com.

About Stubbs Alderton & Markiles, LLP

Stubbs Alderton & Markiles, LLP is a Southern California-based business law firm with robust corporate, public securities, mergers and acquisitions, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of, among others, venture- backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent a broad range of industries with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. The firm’s mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of the firm. For more information, visit http://stubbsalderton.com.

About the Preccelerator® Program

The Preccelerator® is a novel platform offered to select start-up companies out of the Stubbs Alderton & Markiles, LLP Santa Monica office that provides interim office space, sophisticated legal services, education,  networking, mentorship and $250,000 in usable perks from Google Cloud for Startups, Amazon Web Services, and HubSpot among others, with the objective of helping grow a founder’s idea from business concept to funded startup. The program also retains more than 50 active strategic mentors providing free office hours and discounted services, and provides over 50-plus educational workshops and networking events each year. The Program expanded in 2017 to accept a greater number of companies in more formalized classes, depending upon where the companies are in their evolutionary growth, expand benefits to accepted companies, and will look to make strategic investments backed by strategic angel investors. To apply to the Preccelerator, visit www.preccelerator.com/application.

Contact:

Heidi Hubbeling
Chief Operating Officer, Preccelerator® Program
hhubbeling@stubbsalderton.com
310-746-9803

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Introducing the Startup Superhero Video Series! – This Week Featuring Jonathan Tavss on “Utilizing Mentorship”

Stubbs Alderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Preccelerator Mentor Jonathan Tavss of Kaleidoko, Inc. as he chats about “Utilizing Mentorship.” Jonathan Tavss is an award-winning entrepreneur, marketer, strategist, and content creator with more than two decades of experience leading content creation, distribution, product development and global marketing for international entertainment studios, Media firms, CPG brands and service corporations.

 

 

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Transcript

Heidi: Jonathan, what do you see being the most important benefit to the Preccelerator companies in regards to mentorship? 

Jonathan: I guess the one that just sticks out the most is connections. Right?  It gives you resources that you might not otherwise have. What I have seen, are the companies that really succeed, are the ones that take advantage. It’s almost like a secret thing, the fact that there’s so many mentors here, there’s so many people that you can call upon. That in and of itself is something that people aren’t used to.  A. having the people to talk to and, B. knowing what to ask of them. It’s interesting because in success you will have a lot of people coming in wanting to be an advisor. Can I be on your board? Wanting to do all that kind of stuff and in this secure environment you can work with different advisors on different things, even advisors that do similar things to each other, to really get a sense of how you are going to work best with them.

Heidi: With your personal background, with your professional background what perspectives do you bring as a mentor 

Jonathan: I think it really is tied to what Kaleidoko is all about, which is to brand holistically. How you position, but it’s not just about the marketing. It’s how you set up your company to be able to deal with change that is constant. With Kaleidoko we usually work with later stage companies and so it’s a matter of going in and seeing what fundamental bricks were not placed as they were rushed to deliver to clients’ needs. We go in with that fresh look we really fill in those bricks. What I deal with for these participating companies is to help them be mindful of those fundamental pieces that you need to be able to set up for your company so that you can be successful moving forward into the future. 

Heidi: If you could give one piece of advice to the companies based on your breath of experience, what would that be? 

Jonathan: I think it would be to have your eye’s wide open all the time. As a founder you’re really heads down, running that sprint to get to where you’re trying to go. You have got to keep your eyes open to see what’s happening culturally, what’s happening technologically. Mentors, advisors, board members, or employees will come up with different ideas. So, it’s a matter of really capturing that. Also, something that I find interesting; there’s a lot of companies out there that set off to do a certain thing and as they were developing that certain thing. They found, this pot of gold, that they were just creating to help them deliver, what they thought was a value, but the real value is over here. So, not that you’re trying to go right, left, all over the place. What you want to be doing is to be able to keep your eyes open. What is that IP? What is that certain thing that might be a different direction, but that might be your real winner?

Heidi: One last question. What is your favorite thing about being a mentor at the Preccelerator. What does it give to you?

Jonathan: I got involved because I really wanted to find a way to give back. Being that I am also a university professor you know I have always just been of the “how can I help other people” mindset. This was just a great opportunity to be able to do so and meet a lot of really great people. Both on the company side and the mentor side. There’s some really strong participants all over the place. That’s why I was really excited to be a part of it.

Heidi: Very much appreciate you.

Jonathan: Thanks.

Jonathan Tavss
Kaleidoko, Inc.
www.kaleidoko.com 
jonathan@kaleidoko.com

 

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com.

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Introducing the Startup Superhero Video Series! – This Week Featuring Chris Bechtel on “Driving Growth For Early-Stage Startups”

Stubbs Alderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Preccelerator Mentor Chris Bechtel of Growth Engine Labs as he chats about “Driving Growth for Early-Stage Startups.”  Chris is a growth consultant, start-up advisor, customer acquisition and sales coach, former SaaS CEO, and marketing executive. Chris brings 20 years of sales and marketing expertise, specializing in demand generation, marketing automation, pipeline optimization, content marketing, and sales technologies. Chris has extensive experience in B2B, internet and SaaS technologies working with start-ups, growth stage organizations and brands to maximize the results of their digital marketing, PR and revenue generation activities through the use of content and technology.

 

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Transcript

Heidi: What do you think is the most important thing for driving growth for early stage companies?

 Chris: I think really, the most important thing is really the market. Being in the right section of the market, really focused on customer needs. I think that most start-ups, start with a hypothesis. It usually comes from personal experience, but people often forget there’s many potential buyers of that start-up’s initial idea. There’s a problem, there’s a pain that needs to be solved and think sort of the biggest barrier is not really focusing on the right growth segment within that market. So, I think first and foremost it’s about making sure you’re in a strong market, where the customer’s segments under served. I think then it’s really about that focus. It’s really about focusing on the right section of the market, really understanding who you are marketing to and that’s really going to dictate the value proposition to use and what channels you use to acquire them.

 Heidi: Going back to barriers, talk about the most common barrier to early stage success.

 Chris: I think really the same it’s about focus. With every entrepreneur, it’s both a blessing and a curse to have that creative mind. To be able to come up with unique solutions to common problems. But, then the barrier often comes from overthinking and questioning all those ideas and then not actually being able to focus because essentially every start-up is a hypothesis and then when it comes to marketing that hypothesis those are also a set of hypotheses. The key is focusing and prioritizing a series of tests.

 Heidi: For early stage start-up, how do you find the right people to surround them with to provide attraction and growth.

 Chris: I think that’s a great question, and one that often many founders struggle with.  In terms, of how do I have a co-founder, who’s my initial founding team?  A lot of it starts with what’s the stage that you’re in? What kinds of people? Do you have people, you know, if you’re already at product market fit and you need people to scale? You will need people who have had experience really scaling. In the early days, you needed people who could do many things and are willing to do many things and are able to then also focus on those core things and get us to the next stage of validating product market fit and identifying the actual acquisition channels that are going to help us get to that next stage. Hopefully get some more capital to start scaling.

Heidi: Finally, what’s your favorite thing about being a mentor here at the Preccelerator? What drove you to join us?

 Chris: Well, first of all it’s a great community. There’s great people here and I just really love helping people. That’s why I do what I do I think and helping people get clarity. Because people have so much passion, but it’s hard, it’s really, really hard. So, I love the joy in people’s face when they sort of get clarity, at least what I’m supposed to focus on for the next week or two and get unstuck. I think that’s really what I enjoy the most about being here at Stubbs.

 Heidi: Yeah, community and that sense of empathy, among advisors, mentors, and other entrepreneurs that are advising. It’s been really important and greatly beneficial. Thank you for being here.

Chris Bechtel
Growth Engine Labs
cbechtel@growthenginelabs.com

 

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com.

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Major Legal Pitfalls for Startups – The Case for Hiring a Lawyer before you “Start Up” – Part 2

 

In this two part series, Kelly Laffey discusses the legal pitfalls that startups can avoid when forming their company. Kelly counsels clients on issues related to corporate governance, mergers and acquisitions matters, and securities regulation and compliance. She also assists with financing for large private corporations, and entity formation and succession planning for professional services firms. Kelly provides general business counseling on a variety of up-and-coming regulatory issues for small and emerging companies that offer commercial services, allowing them to explore new business opportunities in various states. Drawing on her diverse work experience in the entertainment arena, including time spent with talent agencies, and music and television production companies, Kelly also assists on matters related to licensing, marketing, and exploitation of intellectual property rights.

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In Part 1 of this series, I described some typical legal problems that startup companies face when they try to go it alone in the early stages of their business related to choice of entity form and jurisdiction and common issues that arise with respect to division of equity.  In this part 2, I discuss issues related to securities laws and intellectual property and finally offer some words of advice regarding how to manage the costs of hiring an attorney early on.

Compliance with Securities Laws

Any issuance of securities, meaning stock, LLC interests, options, warrants, convertible notes, convertible securities (or SAFEs) and more, will be subject to federal and state securities laws.  Startup companies often need to find an exemption to the registration requirements of federal securities laws until they are ready to go public.  Securities law is a large and complex subject that really requires a good corporate attorney to help explain those obligations relevant to a particular company in a particular given circumstance.  Failure to comply with securities laws can result in a huge financial burden on the company, the founders and recipients of equity, including employees and investors, when fines are imposed or the recipients are forced to pay a much higher price for the equity than what was intended.  An experienced securities practitioner can help you find the right exemption and implement the right process to avoid fines and adverse consequences.

Protecting Your Intellectual Property and Employment Issues

It is critical to have proper employment documentation in place and such documentation should properly protect the company’s intellectual property.  Typical employment agreements include “at-will” offer letters, independent contractor agreements, consultant or advisor agreements and stock incentive award documents.  Employment laws vary from state to state so depending on what state you’re in, you may need to include specific provisions to comply with applicable state law. One of the most important employment documents which every employee (including co-founders) should sign is a proprietary or confidential information and inventions assignment agreement.  This document ensures the company’s confidential information will remain confidential and that any ideas, work product or deliverables created by the company’s employees while working for the company will be owned by the company.  These agreements generally prevent key employees who have developed significant intellectual property for the company from claiming rights in such intellectual property in the event that they leave.

Trying To Do It Yourself

For the reasons stated above and many more, one of the biggest mistakes a company can make is trying to do the legal formation work on their own or with an inexperienced legal service provider.  All of the mistakes described above are correctable but correcting them takes time and can incur greater cost than getting professional advice from the beginning.  Many firms have very reasonable startup packages for early stage companies that include both forming the company properly and providing a suite of documents covering most, if not all, of the above issues for the company’s use, for a very reasonable flat fee.  These packages are designed to get the company started and provide you with the basic forms of agreements you need to be protected.  Once these are put in place, the company is unlikely to incur significant legal costs until it raises capital or undergoes another significant event.  While a startup package fee may still seem like a significant amount of money to spend in a company’s early stages, the value is immeasurable over the life and success of the business.

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For more information about Startup Formation and other emerging growth issues, contact Kelly Laffey at klaffey@stubbsalderton.com.

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Major Legal Pitfalls for Startups – The Case for Hiring a Lawyer before you “Start Up” – Part 1

 

In this two part series, Kelly Laffey discusses the legal pitfalls that startups can avoid when forming their company. Kelly counsels clients on issues related to corporate governance, mergers and acquisitions matters, and securities regulation and compliance. She also assists with financing for large private corporations, and entity formation and succession planning for professional services firms. Kelly provides general business counseling on a variety of up-and-coming regulatory issues for small and emerging companies that offer commercial services, allowing them to explore new business opportunities in various states. Drawing on her diverse work experience in the entertainment arena, including time spent with talent agencies, and music and television production companies, Kelly also assists on matters related to licensing, marketing, and exploitation of intellectual property rights.

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In my practice as a corporate attorney, I work primarily with startup and emerging growth companies.  This article may read similar to an advertisement for legal services and there may be some truth to that.  My ultimate goal as an attorney, however, is to save startup companies time and money (and stress) in the long run by doing things right from the start which will allow the company to put more resources to work on growing the business rather than fixing mistakes that could have easily been avoided.

Attorneys are often brought it in to work with clients who have done a significant amount of the formation and organization work themselves or through an online legal service provider at a low cost.  While it is certainly understandable that a very early stage company does not want to incur more legal cost than it has to, what seem like very minor issues to founder can lead to a lot of unnecessary clean-up work and time spent determining the best way to fix those issues including if and how to disclose them to potential investors, strategic partners or others that are critical to the business.

The unfortunate fact is that errors in company formation usually come to light when a company is about to engage in its first major financing or strategic transaction and potential investors or strategic partners start doing their “due diligence” on the company, i.e., looking into its formation documents, the founder agreements, employment agreements, etc.  This is often a critical time for the company as the founders have begun conversations with potential investors or a strategic partner, built momentum and are usually geared to start scaling the business. When the problem areas are identified and those activities are put on hold, it can cause a panic at the company, requiring lawyers to address the errors on a tight timeline in order to minimize the damage and not lose momentum. The result is typically a very high legal bill for a financing or strategic transaction.

In this two-part series, I describe some common legal issues encountered by startups that are not properly considered without legal counsel and which, when thoughtfully discussed with legal counsel prior to forming the company, should spare the company from legal expenses for corrective measures.

Choosing the right entity AND the right jurisdiction for you.

One of the first decisions a new company has to make is what legal entity form to take.  There are without a doubt dozens of articles that say you should be a C-corp for these reasons or you should be an LLC for those reasons.  Maybe you’ve read or know something about S-corps and you think that sounds like a good idea.  The reality is that the right entity form for your company is very specific to the facts and circumstances of your company.  Factors we consider include, among others: How many founders are there? How many employees will the company have? Will the company raise money from VCs or angels (and if so, does it expect to do so right away or will that be much further in the future of the company)? What is the anticipated size of the business? In what industry does the business operate? What might make the most sense now might not serve as the best form later and the form of entity can generally be changed later if necessary.  These are all factors a good lawyer or tax advisor can talk through with a new business and provide guidance regarding which options to select based on the company’s business plans.

The less often thought about issue is where to form the company.  As a lawyer practicing in what’s been termed “Silicon Beach,” most of our clients are based in California and so many assume they should organize or incorporate in California.  For some companies, being formed in California is perfectly fine, however, California can also be problematic for a number of reasons.  Many outside investors do not like to invest in California entities because California does not have the established corporate jurisprudence that Delaware has and so there is an element of unpredictability in California.  Companies will often be advised to incorporate in Delaware because Delaware corporate law is seen as both business and investor friendly.  However, if a company incorporates in Delaware, it has to engage a registered agent located in Delaware and so for some companies, it does not always make sense to pay the registered agent fees. Other factors to consider when choosing a jurisdiction are filing fees, franchise taxes and required annual filings. These are all considerations a corporate lawyer can help startups navigate.

Division of Ownership; Dilution and Vesting.

This can be an awkward conversation amongst founders but it is an important conversation to have early on in the life of the business.  How much of the company should each founder own? What is each founder bringing to the company in terms of skills, resources and service and how do we value what each founder adds? How much dilution are the founders willing to endure and from which sources, i.e., outside investors, an employee option or stock pool, venture debt transactions, etc.? Should the equity be subject to vesting and continued service to the company?

I’ve often encountered very early stage clients who have 2 to 3 initial founders and they have already diluted themselves by giving away equity such that together, they own less than half of the company.  Founders are so passionate and focused on developing the idea and growing the business, they don’t necessarily have good insight when it comes to managing the cap table.  Further, I’ve seen companies provide equity grants to service providers or intended partners of the business without subjecting the grants to vesting or continued service to the company over time.  We typically recommend that all service-related equity vest over a certain number of years to ensure the company is getting the intended value in exchange for that equity.

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For more information about Startup Formation and other emerging growth issues, contact Kelly Laffey at klaffey@stubbsalderton.com.  Stay tuned for Part II of the Startup Pitfalls Series on Monday, October 16th.

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