The Trouble with Venture Lawyers

Jason Mendleson over at Foundry Partners (he's the guy on the far right) has an excellent post up on his frustration with venture lawyers.

His analysis is better given that, before he became a VC, he was a lawyer.

His two primary points are cost and execution.

The first point on cost resonated strongly. He compared the average VC deal in 1998 to 2008 and concluded that the amount of the deal had gone up about 11%. The salary of a starting venture lawyer, during that same time, went up 114%.

We've felt the pain. Before we call, or even email, our lawyer, we ask ourselves long and hard: do we really need this? The minimum billing for a startup lawyer is 1/6th of an hour. 10 minutes. At the low end, that's $50.

Fifty bucks to send an email asking them to change something on our yearly Delaware filing paperwork. Minimum. More likely $150. They have to read the email (10 min charge- 1 minute of reading time), go do something else, come back and make the changes to the document (10 min charge... 2 minutes of work), go do something else, then come back and put the paperwork in an envelop (10 minutes charge- 1 minute of work).

$150.00

God help you if you want an actual contract reviewed, which comes to the second point re: execution.

We had a large contract with a big company that our then CEO 'ran by the lawyers'. $25,000.00 later, we had a passable contract. Chances are it would have been more if our CEO at the time hadn't left the company. To this day I'm not clear how we spent that much money on a simple contract with pretty clear terms to start with.

Even at $500 an hour, that's 50 hours. I'm wondering if that's really possible. Does it really take 50 billable hours of a partners time to 'review' a contract?

There's definitely an execution problem there. I have no idea if it was on our side or the law firms, but at $500 an hour, it's pretty easy to lay at least part of the blame on the law firms doorstep.

So, I couldn't agree more with Jason's take on venture lawyers.

I do know this: If I wasn't paying $500 an hour for the advice, I'd ask for alot more of it, and I'd count the lawyer as more of a partner in my business than a hideously expensive last resort 'check' to keep us from getting nuked when dealing with a big company or a litigious partner.

It's a little like health insurance costs: You skip getting the health insurance because it's just too damned expensive and pray you don't get sick.

Powers of Ten

I first saw this film in 1988 when I was working at Apple. It was supposed to knock out our assumptions about how to think of scale and how to 'think different' in addressing new problems.



I know this is old hat for many of you (it's been around forever), but it's still worth watching every year or two just to put things into perspective.

Interestingly, the version we saw didn't say anywhere that it was made for IBM. This is the first time I've seen that bit of info. I'm betting, back then, when IBM was still a real competitor to Apple, we'd have seen it was originally made for IBM and either ignored it, or it would have scared the hell out of us.

Sometimes it's just better not to know.

Selling Macintosh Trash

I'm almost (but not quite) speechless.

Someone is actually selling empty Macintosh computer boxes on Craiglist.

We have fourteen 24" iMac boxes in like new condition with styrofoam inserts available.



Best offer...

Only $100, or, as noted, 'best offer'. And styrofoam inserts 'available' (I wonder, is that extra?)

Can you imagine someone doing this with Dell boxes? I don't know what I find more outrageous, someone posting this or the thought that someone might actually buy these off of them.

No wonder Apple's so arrogant.

Fight Club in Silicon Valley

This is pretty amazing. A real fight club in Silicon Valley that pre-dated the movie.



Wonder if we'll get one of these in happening in politically correct Boulder.

My friend, Jon Henderson

We lost a friend last night. Jon Henderson passed away after a 9 year battle with cancer.

I met Jon through boulder free radio where he and his brother David played some fantastic hippie shit music and blues. I saw him many times over the last several years playing gigs, at Conners and, the last time, with he and David at the Boulder Theater a few weeks ago.

He was happy, and he never ever complained, although we sometimes gave him a hard time about how his hair grew back all curly after particularly onerous cancer treatments.

The last thing he did on this earth was visit Conners for a few beers with friends, something he dearly loved to do.

These last words from Jon:

"Oh well, I was lucky to have made it this far. And, I put up a pretty damn good fight. No crying....."

And then in his own writing:

"Enjoy Life"

You will be sorely missed Jon.

OLPRC One Laptop Per (Rich) Child

Hells Bells.

Saw this in today's The Inquirer (no, that not that one). Seems Negroponte, the visionary behind the One Laptop Per Child project is going Windows on the OLPC.

IN A SOMEWHAT shocking revelation, One Laptop Per Child has said that they might dump Linux from their XO laptops in favour of the Vole’s Windows XP. The seeming surrender to the evil corporate world comes just a day after the company’s president tendered his resignation.

OLPC, the educational project which purportedly aims to provide small, cheap laptops for kids has, since its inception, been running its home-made Sugar application, run on Linux, but on Tuesday, OLPC chairman and founder, Nicholas Negroponte, told AP that this was all about to change.

In an attack on pro open saucers, Negroponte slammed “the fundamentalism in some of the open-source community" and reckoned that by pushing the free, open-sauce software on OLPC XOs, the company was scaring people away. "One can be an open-source advocate without being an open-source fundamentalist" he snarled.

I completely get his comment on open-source fundamentalism. The pure Linux crowd can get a little overbearing at times, but dumping it? I'm not sure that makes much sense.

Putting Windows XP on the OLPC means they'll have to at least double the 1GB of disk space to 2GB (minimum). Not much, granted, but it's going to up the price of the $100 (umm.. I mean.. $200) laptop even more. Keeping a Linux based machine allows them flexibility in their pricing they'll lose with an XP only OLPC.

I have nothing against XP. I have it running on all my computers (PC's and Mac's) along side Linux (yes, I do indeed triple boot all my personal machines). I like the option of using different OS's for different things and XP is, by all accounts, stable and ubiquitous. Good traits in an OS.

But dumping Linux because of perceived fundamentalism is a mistake. Maybe he'll shake out the Linux bigots from the OLPC project (their president and head of software just quit.. most likely because Nick wants to add XP to the mix), and that may be a good strategic move, but I sure as hell wouldn't dump Linux outright.

Even Dell gives the option of a Linux install on their PC's.

I'm sorry to say that the OLPC project may well be on it's last legs. They have raised the awareness of the need (and market) for low end PC's. Intel's Classroom PC, the ASUS notebook and others would most likely never have come about had it not been for the OLPC vision, but the original, as is often the case, is likely to lose in this battle.

Negroponte, an academic by training and nature, just doesn't understand the world of business (and as much as he'd like this to be solely a 'movement' and not a business.. it's sure as hell a business). Anything that threatens the markets of, be they existing or new greenfields, the existing PC and OS makers is going to be viewed by them as a business. Too bad Negroponte can't seem to adapt to that reality.

That said, I've got a used Linux based OLPC for sale.

Anyone interested? Anyone? Hello?

The Beginning of the Chinese Century

I think it's really happening now.

Can anyone imagine a western power, in this case France, trying to 'limit the damage' and reacting to China's pressure 20 years ago? 10 Years ago?

What's happening here is a test run on China's part to see how much influence and pressure it can exert to get it's way.

France Tries to Limit Olympics Fallout

By KATRIN BENNHOLD

Published: April 22, 2008

PARIS — After a wave of anti-French protests in China, President Nicolas Sarkozy of France is sending three top officials there this week in a diplomatic charm offensive to limit the political and economic fallout from the controversy surrounding the preparations for the Beijing Olympic Games.

Thousands of protesters targeted outlets of the French supermarket chain Carrefour in China over the weekend, demonstrating against what they see as France’s sympathetic support for pro-Tibet agitators.

France has become the main focus of the protests in China, notably after footage of a Chinese athlete in a wheelchair protecting the Olympic torch from protesters as it passed through Paris earlier this month turned her into a national hero and talk show star.

Among the three top officials, the president of the French Senate, Christian Poncelet, was headed for Shanghai on Monday, to be followed by a former prime minister, Jean-Pierre Raffarin, on Thursday.

On Friday, it will be the turn of Mr. Sarkozy’s chief diplomatic adviser, Jean-David Levitte, to reassure the Chinese leadership that France has no intention of straining relations.

This is pretty much a carbon copy of how the US has been acting for the last 50 years. China is taking a page from the US play book (who took a page from the UK play book... and on and on back to the Romans).

I think we're seeing the beginnings of the 'power' transfer happening right now. I also think the 2008 Olympics may be looked back on as the time China began the process of taking the lead as most powerful and influential nation in the world away from the United States.

Guess I should brush up on my Mandarin.