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Karen Callahan

Exit Like Springsteen

February 11, 2022 by Karen Callahan

By Larry Gennari Boston Business Journal January 10, 2022

Bruce Springsteen’s latest album, Letter to You, reveals an artist at the height of his songwriting powers. It’s a deeply ruminative reflection on growing older and making sense of one’s work, legacy and place in the world. That’s a sentiment I hear a lot these days from business owners, especially with the pandemic and the introspection it has ushered into all of our lives.

Springsteen is a music entrepreneur who has emphasized authenticity, lyrics that capture a current zeitgeist, and a keen and steady attention to technology, all so that he remains connected to a loyal, core audience. Last December, like many entrepreneurs, and no doubt after much thought, he completed a transaction, selling his core catalog to Sony Music, reportedly for more than $500 million.

That’s an enviable return for a lifetime of work, and for many founders contemplating a farewell tour of their own, an example of the possible, especially if they start thinking now about an exit later. As always, a successful exit strategy begins with honest introspection, experienced advisers and, of course, a few insightful business books.

For starters, sellers need an objective take on what makes them unique in their industry. I wonder if Springsteen read Major Labels: A History of Popular Music In Seven Genres, the recent book by New York Times music critic Kelefa Sanneh. Music is the soundtrack to our lives, and Sanneh takes the reader on a deep and nostalgic journey through industry history, including rock, R&B, country, and pop. His insights are sharp, thoughtful and fun (I think we all can agree, Nickleback is the worst and their execrable music should be used only for aversion therapy.) Amazing how technology trends like streaming can take an industry by storm and allow savvy newcomers (Lil Nas X) to thrive and experienced players to capitalize at just the right time. Small wonder Bob Dylan, Stevie Nicks, and the Red Hot Chili Peppers all cut their own lucrative catalog deals last year too.

No matter the industry, every owner/entrepreneur also must assemble an experienced team of advisers, including an accountant to model after-tax scenarios, an M&A lawyer to understand “both-sides,” an investment banker to create a competitive auction, and ideally, a “hidden hand” adviser/coach to offer perspective and shake things up. On the latter point, I’d recommend entrepreneur Ted Schlueter’s Branding For Buyout: How To Tell Your Story And Get The Deal You Deserve, an entertaining, read-in-one-sitting book that provides plenty of food for thought on exit planning.

Positioning matters, especially to potential buyers, and Schlueter offers numerous examples of how owners can explore, develop, and “brand” their unique competitive value. Of course, “the numbers” matter too, and every manager and team would do well to read Making Numbers Count: The Art And Science Of Communicating Numbers, the clever new book by Stanford Business Professor Chip Heath and science journalist Karla Starr. Stark, dry financials can get lost in an acquisition-offering memo or teaser unless they are weaved into narrative and grounded in familiar and memorable frameworks. For example, 40% of people who don’t wash their hands upon exiting the bathroom instead means 2 out of 5 people whom you shake hands with have used the toilet and not sanitized before touching you. Yikes — and you thought concert crowd-surfing was scary!

Finally, like Springsteen, business owners also need to think through the post-transaction phase of their exit strategy. Some undoubtedly will wax existential and embark on quiet retirement solely as the next and last chapter of their lives. Those are the “planners,” and they should liven up and read American Afterlife: Reinventing Death In The 21st Century, the disarmingly reflective and funny new book by University of Chicago Professor Shannon Dawdy on the funeral industry and our changing American rituals around death. I like the idea of green burials and who wouldn’t want to be shot out of a cannon into a forest or the ocean during their memorial service?

For others, post-deal means more time to pursue actively questions of existence, greater truths, and a consequential life. Those people should read Rescuing Socrates, Columbia Professor Roosevelt Montas’ powerful new book on the enduring value of classic liberal education and the search for truth through the eyes of St. Augustine, Socrates, Freud and Ghandi. They also should consider the lyrics in Springsteen’s Listen to You.

Dreaming of a final tour one day soon for yourself? With the right team, advice and planning, yours can be meaningful too —even if you didn’t write Born To Run.

Read in the Boston Business Journal

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival. Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: General

Feeling Like Charlie Brown

January 12, 2022 by Karen Callahan

By Larry Gennari
Boston Business Journal
January 10, 2022

2022 has arrived and so many of us feel like Charlie Brown. When Peppermint Patty asks “Chuck” whether he has made resolutions in Happy New Year, Charlie Brown, he answers for all of us: “Yes. You know how I always dread the whole year? Well, this time I’m only going to dread one day at a time.”

By now, we all know this feeling. Yet we also understand the need to stretch beyond, and with each passing season and each successive year we get that much better at — or at least learn more about — change, uncertainty and preparation for the road ahead. No surprise that I am recommending business leaders triple down on positivity, learning and experience in 2022 by reading a few new books to consider next best steps for their companies, their communities and themselves.

At every company, managers should embrace — not dread — innovation and quickly adapt to customer needs. How they do that will have profound implications for society, according to The Voice Catchers: How Marketers Listen In to Exploit Your Feelings, Your Privacy and Your Wallet, by University of Pennsylvania Professor Joseph Turow. This is a fascinating look at the voice intelligence industry and Turow offers countless, cautionary examples of companies using artificial intelligence to mine voices for clues about our emotions, sentiments and personality, all in real time. Call centers actually now can identify a person’s gender, weight, height and race, and even illnesses, via voice biomarkers. Further, if you use Alexa or similar cloud-based voice services, consider the possibility that the network recognizes your voice in a retail store so your “profile” appears on a dashboard, advising you on what you might like before you even know it. Turow urges industry leaders and policymakers to have crucial conversations about standards and legislation, and he wants consumers to know that voice assistants most definitely are NOT our friends.

For every community in 2022, of course, building friendships, managing alliances and sharing resources remains critical. That’s why I really enjoyed The Power of Geography: Ten Maps That Reveal The Future Of The World, the compelling latest book by foreign affairs expert Tim Marshall. His previous book, Prisoners of Geography, was terrific as well, and here Marshall updates and takes us through 10 regions that will shape our future in the next decade, including space and beyond. Are past geographic skirmishes and rivalries prologue for the future? Could the next arms race take place on the moon and depend on “satellite-killer” systems? Do we need new alliances for sharing innovation around food, medical technology, and communication? Shouldn’t every country be working harder to preserve its own communities by using and sharing natural resources most efficiently? For more on that here at home, I’d recommend Oklahoma Professor Luca Bessires’ provocative, page-turner Running Out: In Search Of Water On The High Plains, a part memoir, part call to action about the fast-diminishing Ogallala aquifer that has served American farms on the Great Plains for millennia. Time is running out, and the depletion of these aquifer waters will reverberate across the nation for generations. In fact, both books emphasize a simple truth: We need to identify and build on common interests for a better shared future — and we should make a resolution to do that now.

Finally, and for ourselves, after the past two years managers need to dispel the dread and be more intentional about the things that truly matter and bring joy. For me, that means food, family and travel, and actor and Oscar nominee Stanley Tucci’s new book: Taste: My Life Through Food offers all three.  I enjoyed this smart, incredibly funny book about growing up Italian, with a backdrop of great food, unforgettable people and unique and beautiful places. Tucci’s recipes — especially for Timpano and Negroni cocktails — are worth a try, and his movie Big Night should be on your must-see list.

As for Charlie Brown’s other resolutions, for 2022 he’d probably repeat what he told Peppermint Patty: “Keep the ball low, don’t leave crayons in the sun, use dental floss every day … and feed your dog whenever he’s hungry.” That’s the key, he advises, to a “better life” and a “fat dog.”

Looking ahead to 2022, let’s hope for that and a lot more.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: General

Gifts for Thinkers: The top 10 business books of 2021

December 17, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
December 17, 2021

This year has been an eventful one, and as we close it out, you may be looking for that perfect gift for a colleague, friend or family member. Now more than ever, we all can benefit by taking the time to read, learn and listen more deeply. I’ve read some great books this year, and I’m happy to recommend 10 titles that should appeal to the most entrepreneurial minds on your list. Check them out:

Machiavelli For Women: Defend Your Worth, Grow Your Ambition, and Win The Workplace – Stacey Vanek Smith’s premise is simple and true: despite decades of progress, most women are still not thriving and rising to the highest levels of power. Using an unlikely 500-year-old political manifesto as a platform, Vanek Smith advises women to observe what’s happening, assess and strategize, and know and then grow their own power.

You Have More Influence Than You Think – Cornell Professor Vanessa Bohns wants you to appreciate the significant impact we all have on others in our daily lives. I loved this book and the important learnings on the simple power of compliments, the basic human fear of rejection, and the potential we all have for making a difference when it matters.

The New Builders – Venture capitalist Seth Levine and journalist Elizabeth McBride tell the important story of how the New Builders: brown, black, older and increasingly female entrepreneurs, are remaking and redefining our communities and our economy. You’ll root for them and want to learn more about how we can reduce barriers and increase access to capital to ensure their success.

American Made: What Happens To People When Work Disappears – Pulitzer Prize-winning journalist Farah Stockman chronicles the lives of three hard-working people (one of whom has a criminal record) laid off from a manufacturing plant that had anchored an Indiana town for decades. Want to understand today’s puzzling job numbers? Read this book.

The Power of Trust – Harvard Business School authors Sandra Sucher and Shalene Gupta explain how trust’s four components: competence, motives, means, and impact shape how we feel about companies, large and small, as customers, employees, suppliers and communities.

Think Again – Wharton Professor Adam Grant advises us to listen like we are wrong. Many CEOs will find his easy-to-follow tips on becoming a more “persuasive listener” incredibly valuable.

High Conflict: Why We Get Trapped and How We Get Out – Journalist Amanda Ripley’s smart and engaging book is a page turner. You will learn a LOT about how basic framing and listening can diffuse even the most fraught situations.

Better, Simpler Strategy – This is a powerful book and HBS Professor Felix Oberholzer-Gee lays out a compelling “value stick” approach for pleasing customers, retaining employees, and placing value creation at the center of your business strategies.

The Unspoken Rules: Secrets to Starting Your Career Off Right – HBS grad Gorick Ng has the book we all needed as our younger selves. Ng’s smart, practical and direct advice (“Yes, you should ask questions at every Zoom and in-person meeting.”) will have every manager — and parent — reading along and vigorously nodding up and down. This is easily the most valuable career-oriented book I’ve read in years.

Living a Life That Matters – Rabbi Harold Kushner reminds us that we should never stop asking why and how we can matter to the world. Every library has essential books that are worth returning to again and again. This short and profound book is among them in mine.

This year, give the gift of insight and knowledge and support your local independent bookstore.  We’ll all be better off if you do.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: Book recommendations, General

You can’t fire me. I quit.

December 3, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
November 25, 2021

Michael Scott from “The Office” is the world’s worst boss. In one of the sitcom’s funniest scenes, Scott is hosting a ridiculous orientation for employees from a merged Dunder Mifflin branch, when one employee tries to quit on the spot. Scott refuses to hear of the resignation and instead fires him because the company can’t have “quitters,” a decision that costs the company an unnecessary severance payout.

These days, my conversations with local CEOs have been all about quitters, or more specifically, how they can attract and retain a team in the midst of labor-market turmoil. Let’s fact facts: Something big is happening. In August, more than 4.3 million people quit their jobs and in September, another 4.4 million did the same, all as job openings remained near record levels. So what can a CEO do to navigate these challenges and develop strategies around talent, compensation, acquisitions and overall growth? Well, consider a few ideas from some insightful new books.

Look Deeper: Much of the current labor-force disruption started pre-pandemic, and now the so-called “new normal” is taking shape and changing the social contract that defines the rights of citizens, government and businesses. So argues, New York Times writer and professor Alec Ross in his provocative new book, The Raging 2020s. Ross argues that a focus on shareholder value above all else has led to monopolies, short-term thinking, international race-to-the bottom tax policy, erosion of worker rights, and a breakdown in civility and community. We now need a greater focus on stakeholder capitalism. I found much of this compelling and Ross’ data-driven observations definitely will make you think.

Look Harder: Yes, our social contract is changing, and so is the labor force. The pandemic has hastened retirements, slowed immigration, and reduced labor force participation for women especially. Many U.S. economists are predicting a long and continuing labor shortfall. Time for a second look at those who need a second chance. In Untapped Talent, investment strategist Jeffrey Korzenik makes the sensible case for hiring talented and motivated people burdened with a criminal record. All too often, returning citizens are painted with a broad brush and denied employment, housing, benefits and basic opportunities long beyond their completed sentences. Giving capable people a chance to work is part of every social contract, and after all, we are all more than the worst thing we have ever done.

Look Ahead: Going forward, global market forces and the labor supply will reflect a realignment of the how we think about work. This is the future and it is rooted in the past.  People want better pay, meaningful work-life balance, and a sense that what they do matters — to them, their co-workers, their families and their communities. In American Made: What Happens To People When Work Disappears, Pulitzer Prize-winning journalist Farah Stockman chronicles the lives of three hard-working people (one of whom has a criminal record) laid off from a manufacturing plant that had anchored an Indiana town for decades. Seems to me that economic justiceand contributive value are inextricably linked and this book proves the point. You will recognize these people and their all-too-familiar stories.

In the end, we need to recognize the connectedness of work and wages to community, hope, and progress.  We need to think about possible solutions, and we should do that, as Michael Scott would say, “as ASAP as possible.”

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: Book recommendations

Gennari Aronson 2021 Super Lawyers

November 4, 2021 by Karen Callahan

November 1, 2021

Needham Law Firm Attorneys named New England Super Lawyers

NEEDHAM, MA – The business law firm of Gennari Aronson, LLP is proud to announce that its senior partners have again been selected as Super Lawyers in the New England region for 2021.  Neil Aronson was recognized as a Securities & Corporate Finance Super Lawyer, Lawrence Gennari and Laura Glynn were both named Super Lawyers in the Mergers & Acquisitions category.  In addition, both Aronson and Gennari were named Top 100 Massachusetts Lawyers. Other attorneys selected from the firm include partner Michael Douglas, as a Rising Star, and partner Elizabeth Davenny, both of whom were selected in the Business/Corporate practice area

As Super Lawyers, Gennari, Aronson, Glynn, Douglas, and Davenny are part of an elite group of top attorneys in Massachusetts.  No more than 5 percent of the lawyers in the state are selected by Super Lawyers.  Lawrence Gennari and Neil Aronson have consistently been awarded this recognition each year since its inception in 2004.  Laura Glynn has been awarded Super Lawyer status for the last 11 years.

Gennari Aronson serves innovative companies, entrepreneurs and the investors and venture capital firms that finance them.  The firm also curates the annual Authors and Innovators Business Ideas Festival.

# # #

About Super Lawyers

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. Only five percent of lawyers in the state are chosen. The annual selections are made using a rigorous multi-phased process that includes a statewide survey of lawyers, independent research evaluation of candidates, peer reviews by practice area, and a good-standing and disciplinary check. For more information about Super Lawyers, go to superlawyers.com.

About Gennari Aronson, LLP

Gennari Aronson, LLP serves innovative companies, entrepreneurs and the investors and venture capital firms that finance them.  Founded by veterans of Boston’s largest law firms, Gennari Aronson exemplifies the same entrepreneurial spirit that guides many of its clients.  The firm has established a strong network and commitment to the technology, consumer, innovation, and emerging growth sectors. The firm also curates the annual Authors and Innovators Business Ideas Festival, www.AuthorsInnovators.org.

The firm has offices at 250 First Avenue, Needham, MA. The website is www.galawpartners.com.

Filed Under: General

You’ve got the power. Now use it!

October 27, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
October 21, 2021

In Dave, one of my very favorite movies, actor Kevin Kline plays the owner of an employment agency who is plucked from obscurity and thrust into power as a body double for an ailing U.S. president. At first, Dave is a bit confused by all the attention, but as his enthusiasm for the job grows, so does the “president’s” popularity — and with it, the expectation that he actually do broad and good things with the power at his disposal. The movie is incredibly charming, fun and implausible, but I have a soft spot for Capra-esque films and the theme of ordinary people doing extraordinary things in challenging circumstances. So what can Dave tell us about leadership, power and achieving common goals, both public and private? For more on that, we need to consult a few good books.

In the film, Dave is first overwhelmed and then emboldened by the challenge of solving the crushing problems facing the nation. He has power and according to the fascinating new book Power for All  by professors Julie Battilana of Harvard Business School and Tiziana Casciaro from the University of Toronto, that means the ability to influence others’ behavior, through persuasion or coercion, because someone controls access to resources that others value. Moreover, we all have power; it’s not inherently dirty or corrosive — it’s a human element, a relational energy and the “resources” we control go far beyond money and material incentives and also include recognition and relationships. The best leaders are empathetic and intentional in using “power” in business and personal relationships and avoid decisions that simply entrench their position regardless of collateral consequences on others. NYU-Stern Professor William Silber has a lot more on that typical behavior in his entertaining new book, The Power of Nothing to Lose: The Hail Mary Effect in Politics, War and Business.

Dave, as president, has the right power focus and a collaborative, problem-solving mindset. He brings in his accountant, Murray, to analyze the budget deficit and later on, announces a plan to find a job for every American who wants one. Bold moves and yet, unsurprisingly, he soon learns that not all problems can be finally solved through sheer power; many simply reshape, evolve and re-emerge from an achieved steady state. That’s an important lesson for leaders according to the four co-authors of the insightful new book The Transformation Myth: Leading Your Organization Through Uncertain Times, which distills feedback, insights and practical tips from more than 50 executives and thought leaders in multiple industries on pandemic, supply-chain, and other seismic disruptions and ever-present uncertainty.

In the end, Dave learns that his words, gestures and actions — whether as a friend or colleague or as a leader exerting authority — have a tremendous and lasting impact on others. No surprise to anyone reading You Have More Influence Than You Think, Cornell Professor Vanessa Bohns’ essential new book on the often-underappreciated influence we have on others in our daily lives. I loved this book and the important learnings on the simple power of compliments, the basic human fear of rejection, and the potential we all have for making a difference when it matters. As President Dave says in one of the best lines of the movie, “You really don’t know how much you can do until you stand up and decide to try.”

With all of my “influence,” then, I recommend that you watch the movie and read these insightful new books. Hmm … I feel more powerful already.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: General

Machiavelli, women, and the art of talking back

September 24, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
September 24, 2021

For my daughter, a high school senior, this is the season for college tours, a return to more “normal” traditions, and a focus on planning for next year’s adventures far from home. She’s smart, irrepressible, a percipient writer, and possessed of a sharp EQ she inherited from her mother. So, as she grows into a fuller person in the broader world, I’m trying to distill and dispense as much advice as possible this year, much of it borrowed, some of it learned, all of which will be met, at least at first, with eye rolls and a polite, dismissive thanks. I know, I know… you have to pick your spots. Truer still, you have to choose great sources and examples.

The late and wonderful Mary Oliver advised: “You must not ever stop being whimsical. And you must not, ever, give anyone else the responsibility for your life.” NPR’s Stacey Vanek Smith, co-host of the podcast Planet Money and author of the disarmingly powerful new book, Machiavelli For Women: Defend Your Worth, Grow Your Ambition, and Win the Workplace, would agree wholeheartedly. Vanek Smith’s premise is simple and true: despite decades of progress, most women are still not thriving and rising to the highest levels of power and too many take daily disrespect, including “overtalk” (male lawyers interrupting even female Supreme Court Justices) and “he-peats” (her idea is not a good one until he repeats it) in stride. Small wonder 90% of CEO’s of Fortune 500 companies are men, corporate boards are more than 80% male, and women still earn only 80 cents for every dollar a man makes.

Using an unlikely 500-year-old political manifesto as a platform, Vanek Smith advises women to observe what’s happening, strategize, and know and then grow their own power. Her tips on negotiating for a raise, a new title, and basic respect in the workplace, are practical, smart, and clear-eyed. Every woman, and indeed, every businessperson who knows a woman, should read this timely book.

You’ll find examples of Vanek Smith’s advice in action in Michael Lewis’ riveting new title, The Premonition, a chronicle of the federal government’s chaotic first response to the pandemic and how brave and smart officials like Dr. Charity Dean, former assistant director of California’s Department of Public Health, unflinchingly cut through misinformation, bad science, and bureaucracy to implement health measures that saved lives. Lewis is perhaps America’s best non-fiction/business writer and his description of how women like Dean asked simple direct questions and weren’t afraid to lose their jobs to do the right thing is detailed, infuriating, and incredibly entertaining.

Not that moving past strong opinions and intransigent male decision-makers is anything new for women.  Our workplaces, legislatures, and public debates have long been fraught with partisanship, misogyny, and unremedied discrimination.  So says writer and Smithsonian Museum curator Jon Grinspan, author of the recent book, The Age of Acrimony: How Americans Fought to Fix Their Democracy 1865-1915, centered on the inspiring and intertwined lives of Congressman William “Pig Iron” Kelly and his outspoken, activist daughter Florence. Turns out that when smart women and good people step up in business and government, we can make discernible progress on poverty, pay, equal rights, and the things that truly matter. This is a history well worth reading with lessons worth relearning.

We need these new books, more examples, and advice from long ago. As Machiavelli would advise: find a way to make change happen — “leaning in” most definitely is not enough.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations, General

You’ve got mail…again

August 29, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
August 20, 2021

We’re buried in email! According to recent statistics, in 2020 alone, the average person received more than 120 daily emails at the office out of more than 300 billion daily emails sent and received globally.

Sure, spam filters can help us avoid the worst. (Thank you, Mimecast, for saving me from countless killer-SEO proposals, weight-loss supplements, and a few dubious cash investments with people who otherwise seem really nice.) Still, that’s a LOT of communication and not all of it is effective, necessary, or useful. So, what’s a busy executive do to remain productive at work, at home and to be a thoughtful person in this world? Well, you might just learn and implement strategies from a few new books.

Leadership expert Erica Dhawan takes theses challenges head-on in Digital Body Language: How To Build Trust & Connection, No Matter The Distance, an insightful book that definitely will make you think twice before hitting the irksome “Reply To All” on most messages. Non-verbal communication is critical in conversations, and our posture, hand gestures and facial expressions can convey as much meaning as the words we use (trust me, I’m Italian). With email and text, all of that is lost (even with emojis), and we can spend countless hours sorting out the emotional uncertainties of short texts or delayed email responses. Dhawan’s tips on how best to convey value, trust and meaning to colleagues and friends and across generations are smart, timely and important. Indeed, writing clearly “is the new empathy,” and let’s remember that a videoconference or phone call easily outweighs the most carefully crafted email or text.

Next, although you may be the center of a business universe or transaction, you need NOT be copied on every email, every time, all the time. That’s not helpful, and it certainly isn’t collaborating.  So emphasizes Babson professor Rob Cross in his incisive new book Beyond Collaboration Overload, which includes in-depth examples, practical tools and direct coaching on new routines and digital communications for these post-pandemic times. You’ll identify with or at least know protagonist Scott, the overworked, overcommitted, and overwrought executive who is “in on” everything, but eventually must find a way out so he can drive performance and avoid professional and personal burnout. Among other things, Cross urges execs to step back from the typical technology-enabled, “always on” approach and create a “persistent dialogue on what is worth doing.”

Sound advice indeed.

For all of the emphasis on communicating effectively from our homes, desks and phones, we can’t let digital isolation displace community, purpose and things worth doing. We still need the wonder and meaning that comes from travel and in-person connections, once that feels normal and safer for all. That has me thinking about Republic of Detours, journalist Scott Borchert’s engaging new book on the Federal Writer’s Project, founded in 1935 during the New Deal to employ jobless writers as they created travel guides and stories for each state and region. Inspired by a collective love for storytelling, it was a messy, far-flung project that included future luminaries Zora Neale Hurston, Richard Wright, Studs Terkel and others in a raucous conversation about the American experiment and the crazy, diverse and thoughtful people and places in it.

Dialogue matters and by engaging each other genuinely, we advance the work of our lives and enrich our communities. We need more of this, especially now, and a lot less “Reply to All.”  [Emoji intentionally omitted.]

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations, General

SAVE THE DATE

July 19, 2021 by Karen Callahan

The Authors and Innovators Festival is being held again this October. More news to come as we work out the details. In the meantime, save the date!

October 28th & 29th, 2021

Filed Under: General

Monopoly: A new take on an old game

July 9, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
July 1, 2021

During the throes of the pandemic, board games were a refuge, and we dusted off and played a few that miraculously survived my childhood and multiple moves, including Scrabble, Masterpiece, and of course, Monopoly. You can learn a lot about a person (and yourself) when playing Monopoly. Winners end up with hotels on Boardwalk and losers settle for the meager rents offered on Baltic Avenue and the fleeting refuge of Free Parking.

Sure, strategy plays some role (I always buy railroads), but more likely than not, the smug winner of one round can be trounced in the next based on the luck of the dice. So what insights can Monopoly offer on today’s real economy, given that creating vast and dominating wealth at the expense of others is just a game (right)? For answers, we need to consider a few books.

Interestingly, Monopoly dates back to 1904, when Elizabeth Magie first patented the “Landlord’s Game” to promote awareness of income inequality and poverty. If only she knew that the game would reach generations of Americans, among them Monopoly enthusiast and U.S. Sen. and Antitrust Subcommittee Chair Amy Klobuchar, whose new book Antitrust is a compelling tour de force on U.S. antitrust policy and on the state of the national and global economy today. Starting with American anti-monopoly impulses dating back to the Boston Tea Party and covering more than a century of antitrust action and inaction by Congress and the federal courts, Klobuchar details modern-day competitive challenges in a wide range of industries, including pharma and Big Tech. Her Top 25 list of policy fixes seem sensible, bipartisan and doable. The breadth and depth of this book is impressive, and I especially appreciated Klobuchar’s connection of “competition policy” to the critical state of entrepreneurship in the U.S.

For more on that, you need to read The New Builders, the engaging book by venture capitalist Seth Levine and journalist Elizabeth McBride, on how the next generation of Brown, Black, older, and increasingly female entrepreneurs are remaking and redefining our communities and our economy. Most media attention is on the fewer than 1% of entrepreneurs who are venture capital-backed. Levine and McBride instead introduce us to inspired and inspiring entrepreneurs who are creating “Main Street” businesses that employ fewer than 20 people and yet accounted for over 1.6 million new jobs in 2019 alone. These “new builders” are the lifeblood of the U.S. economy, and they face a host of competitive and systemic challenges. You’ll root for them and want to learn more about how we can reduce barriers and increase access to capital to ensure their success.

Indeed, our nation’s continued prosperity depends on a renewed commitment and a shared trust in a vibrant, diverse and competitive business community. All the more reason to read The Power of Trust, the important new book by Harvard Business School authors Sandra Sucher and Shalene Gupta on how trust’s four components — competence, motives, means and impact — shape how we feel about companies, large and small, as customers, employees, suppliers and communities. This is a terrific framework, and for anyone starting a business or managing strategy in an existing one, an essential read. I finished it alongside Fulfillment: Winning and Losing in One-Click America, Alec MacGillis’ superb book about Amazon’s dominance, which gave the overall theme of trust even more resonance.

We need to get this right — and you should read these books. After all, our economy, much like a great board game, works best when everyone has a chance to win.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations, General

Commencement and Beyond

May 23, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
May 21, 2021

Spring has arrived just in time, and with it, a busy calendar of graduations, celebrations and memorable commencement speeches.  You can’t help but admire the optimism, inspiration and soaring rhetoric of these addresses, even if much of this is fleeting and dissipates as the graduates return their caps and gowns. Still, with so many young people heading off to new jobs and new adventures, we all have a stake in their success. How can we ensure that the oft-spoken words of wisdom have a more lasting impression? Well, we can start with a few good books.

“Hold Fast to Your Dreams.” A laudable sentiment that often gives way to the mundane practicality of a day-to-day career, starting at the lowest rung.  I think the better take is to hold on to the willingness to imagine and dream. That task should be easier with The Imagination Machine, by Boston Consulting Group’s Martin Reeves and Jack Fuller, a new lively, well-illustrated book focused on the power of imagination and “cognitive diversity” in fostering new ideas and solutions. From product ideas (who knew that Play-doh was originally a wall-cleaning product?) to complex problems like climate change and inequality, every organization needs lifelong learners and imagineers to thrive.

“Question the Status Quo.” Ok, sure, but first investigate the “understory,” reduce side-taking, and “complicate the narrative” with active listening. So advises business journalist Amanda Ripley in her smart, engaging book High Conflict: Why We Get Trapped and How We Get Out. The chapter on how blue and red state voters hosted each other in their homes and eventually found common ground was fascinating. Of course, maybe the status quo should be blown up by asking the basic “why.” I loved Better, Simpler Strategy by Harvard Business School Professor Felix Oberholzer-Gee and the “value stick” approach of mapping the most a customer will pay to the lowest price suppliers will provide or the minimum compensation employees require. Every manager should think about product and service “complements” and every new professional should read this disarmingly powerful book.

“Don’t Follow The Rules.” Fine, but first, what are they? For that, you’ll need The Unspoken Rules: Secrets to Starting Your Career Off Right by HBS grad Gorick Ng, a career adviser focused on helping first-generation, low-income students navigate their careers. This is the book we all wanted as our younger selves. Ng’s smart, practical and direct advice (“Yes, you should ask questions at every Zoom and in-person meeting.”) will have every manager — and parent — reading along and vigorously nodding up and down. This is easily the most valuable career-oriented book I’ve read in years.

“You Will Accomplish Great Things.” Yes, but achievement is more than awards and money and making a living is different than making a life. For more on that, I recommend a classic: Rabbi Harold Kushner’s Living a Life That Matters. During the pandemic, we’ve all had time to think and reassess priorities. Kushner advises that the tension between conscience and success not only is healthy, but incredibly necessary. Never stop asking why and how you matter to the world. Every library has essential books that are worth returning to again and again. This short and profound book is among them in mine.

So what to do as follow up to an inspiring commencement speech? For those young graduates near and dear, you might just start with a book as a good and thoughtful gift.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations, General

Guy Raz reveals his most important piece of advice

May 21, 2021 by Karen Callahan

Watch the full interview with Guy Raz at Authors & Innovators 2020:

Filed Under: General

We meant social distance, not emotional distance

May 8, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
May 7, 2021

Now that 2021 is in full swing and we can see a light at the end of the pandemic tunnel, most business leaders are assessing next steps and making plans. We all long for the comforting rhythm of the normal, but does that mean heading back to the office, navigating traffic, and downloading those since-deleted parking apps on our smartphones? As for the office, we have questions: What will it look like? Who will be there? And do we really have to stop wearing comfortable sweatpants instead of just being presentable from the waist up? Important questions all and for answers, I’m advising my CEOs to turn to a few new and compelling books.

HBS Professor Tsedal Neely’s latest book: Remote Work Revolution: Succeeding From Anywhere, offers important learnings, perspectives, and collaboration tips. Remote work is not new, of course; many domestic and global companies have had virtual work arrangements for decades, and Neely covered important ground on global teamwork in her previous thoughtful book The Language of Global Success. What’s new is the mix and assessment of the digital tools companies use and also the critical recognition that leaders must be even more intentional and develop “cognitive” and “emotional” trust when managing global teams of talented people don’t speak the same language or share the same cultural understandings and cues. Neely’s terrific and usable “action guide” offers important exercises and must-dos for managers who might be leading teams across the globe or just across two states. Sadly, you won’t be deleting Zoom from your browser favorites anytime soon, but you can use it more effectively.

In fact, technologists Matthew Mottola and Matthew Coatney argue in The Human Cloud that many teams, jobs and new businesses can and should only live online. This is a lively, fast-moving and fun book, and every chapter embraces the authors’ clarion call to forget the buzzwords “virtual economy,” and “gig economy” and embrace a simple fact: “The human cloud is just how we work in the cloud.” I enjoyed their advice and examples for both entrepreneurial freelancers (a nod to Babson alum Mottola) and also established businesses on how to reach more markets and customers online than ever before. Their book recommendations at the end of each chapter also are spot-on and I’ve added a few to my online cart already.

Finally, if we can’t find humor amidst the tumult of the last year, we truly are lost and to that end, I strongly recommend Humor, Seriously: Why Humor is A Secret Weapon In Business And In Life, the new book by Stanford Business School profs Jennifer Aaker and Naomi Bagdonas, who teach the enormously popular course there: Humor: Serious Business, which covers the behavioral theory and application of humor in relationships and business. I enjoyed this from the first page, not only for the dry wit, snark and hilarious examples of what works and what doesn’t, but also for the advice on leading with humor while creating an appropriate “Culture of Levity.” As we all begin to sort out this new business normal, Aaker and Bagdonas advise us: embrace the “Yes, and” tool from improv comedy, play along, and don’t forget to put “your funny to work.”

The “new normal” of 2021 is almost upon us. Let’s make sure we’ve read ahead!

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations, General

Guy Raz on the future of ideas and invention

April 1, 2021 by Karen Callahan

Watch the full interview with Guy Raz at Authors & Innovators 2020:

Filed Under: General

Family Business Advice Fit for a Godfather

March 22, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
March 18, 2021

Last December, veteran filmmaker Francis Ford Coppola released a new version of The Godfather Part III, the last chapter of the iconic crime-family movie series. Coppola is a cinematic genius and the reimagined ending allowed him to paint the characters and overall story in a new light.  He may even do it again. That has me thinking: What if, for another version, maybe for CEOs, he could incorporate helpful tips for “family” businesses, especially those wishing to succeed without guns, violence, political payoffs and equine decapitations?

Hmm…for that kind of reimaging, he would need to turn to a few good books.

Let’s start by reexamining the oft-repeated principle from Michael Corleone: “It’s not personal. It’s strictly business.” Sure, this advice might work in the short run, but over time, a ruthless priority of profits over people inevitably breaks down. Just ask management experts Josh Baron and Rob Lachenauer, authors of the new Harvard Business Review Family Business Handbook, which chronicles how families easily can derail their businesses and vice versa. With family businesses representing 5.5 million U.S. businesses and 85% of the world’s companies, the insights on decoding family dynamics, navigating tricky transitions like marriages and divorces, and managing conflicts fraught with emotion, are must-reads. As a consigliere to some family businesses, I certainly can validate the smart, practical tips and checklists, especially on separating family members when “it just doesn’t work out.” Maybe things could have ended better for Michael’s brother Freddo at the end of Godfather II?

That so many business conflicts feel personal most definitely is worth examining. We often invest way too much in defending our long-held opinions and hunches instead of embracing honest disagreement and healthy intellectual tension. So argues Adam Grant in his phenomenal new book Think Again, and he advises us to listen like we are wrong. That sounds impossible, but Grant’s examples, which include how to use “genuine” and “coaxing” questions to get Red Sox fans to rethink — and possibly like — Yankees fans, are compelling, memorable and fun. Many CEOs will find his easy-to-follow tips on becoming a more “persuasive listener” incredibly valuable. I’m actually re-reading the book for a second time now and highlighting even more turned-down pages. If Michael Corleone had read Grant’s book, maybe Sollozzo and McCluskey could have enjoyed an after-dinner drink with him instead of getting their just desserts, ruining a perfectly good white tablecloth.

Finally, I think all family business participants should read Connect: Building Exceptional Relationships With Family, Friends, and Colleagues, the new book by David Bradford and Carole Robin from Stanford Business School based on their incredibly successful long-running Interpersonal Dynamics course. Building trust and knowing when and how to bridge personal and professional topics with business colleagues is challenging, especially now, with more email and remote work. I really enjoyed the material on avoiding “pinches and crunches” in relationships and much of it felt uncomfortably familiar, which is likely the point! Stated expectations are paramount for stable relationships. One example: “Some day, and that day may never come, I will call upon you to do a service for me.”

Great movies entertain and thoughtful books inspire. If we can combine them to think about the things that matter: family, relationships, and business, well, that might just be an offer we can’t refuse.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations

Guy Raz: Building any business matters

March 11, 2021 by Karen Callahan

Watch the full interview:

Filed Under: General

New SEC Rules: Impact on financing strategy

March 2, 2021 by Karen Callahan

Did you know…

New SEC rules may expand private capital formation?

by Zachary Fountas

New SEC rules touch on a variety of private offerings and certain changes could have significant impacts on entrepreneurs and their financing strategies.[1]

Finding investors!: Mostly, federal private offering exemptions either outright prohibit or painstakingly regulate the use of general solicitation of investors. One situation that has been problematic for early-stage companies are demo days, when the company displays its product or vision to interested attendees hoping to attract interest. However, the details included in the demo, the statements made the day of, and the type of offering pursued after such an event, all impacted whether such a demo day presentation would fall under general solicitation and bar certain exemptions or require such burdensome disclosures to make other exemptions impractical.

Changes: One change is the new Rule 148 which deems demo days that are sponsored by colleges and universities, other higher learning institutions, state/local governments, nonprofits, incubators, accelerators and angel investor groups, would not constitute general solicitation.

This should be a welcome relief to most as the number of startups that pass through an accelerator or incubator has skyrocketed in the past few years.

Federal exemptions for offerings done close in time: Integration is the idea that an issuer’s multiple securities offerings should in fact be considered one larger securities offering. If multiple offerings are “integrated” each such offering must comply with the securities regulations and exemption rules that the other offerings were relying upon, otherwise the issuer will NOT have the necessary legal exemptions and investors may have the right to sue the issuer for rescission (the right to recoup their investment and often penalties). Prior to the new framework the SEC used a 5-factor balancing test to determine if offerings were subject to integration.

Changes: To provide issuers with bright line rules on when offerings will not be integrated, the SEC has established four non-exclusive safe harbors under Rule 152(b). Offerings will not be integrated under the following circumstances:

  1. If the first offering is made 30 days prior to commencing a subsequent offering, or if the prior offering has terminated at least 30 days prior to the subsequent offering; or
  2. If one of the offerings is made in compliance with Rule 701 (the most relied upon exemption for the issuance of restricted stock and options to employees, consultants, and advisors), Regulation S, or pursuant to an issuer’s employee benefit plan; or
  3. If an offer or sale made subsequent to any terminated or completed offering is made and it relies on an exemption that allows for the issuer to use general solicitation ; or
  4. If an offering pursuant to which a registration statement will be filed is made after: (a) a completed or terminated offering that does not permit general solicitation, (b) a completed or terminated offering that does allow general solicitation and such offering was made only to qualified institutional buyers and institutional accredited investors, or (c) a completed or terminated offering that permitted general solicitation ended at least 30 days prior to beginning the offering that will utilize a registration statement.

We expect that the SEC will have much more to say on small business capital formation issues in the days and months ahead.  For now, the new guidance from the SEC provides some important clarity for entrepreneurs on mapping out a financing strategy—for which investors and when—in 2021!

[1] The above should not be considered legal advice and readers are encouraged to consult legal and accounting advisors of their own choosing for more information on the above topic.

 

Filed Under: Financing, General

Amplified Team Training – Be a Radiator, Not a Drain

February 22, 2021 by Karen Callahan

Filed Under: General

Anti-Money Laundering Act

February 19, 2021 by Karen Callahan

Did you know

You may soon need to disclose your shareholder list to the US Treasury?

by Shilpa Iyyer

We are watching the recently passed federal anti-money laundering law that, over the next few years, likely will subject small businesses to new disclosure requirements?

Last month, Congress passed the Anti-Money Laundering Act of 2020 (AMLA). The AMLA represents the most consequential legislation on the subject of corporate accountability and transparency in decades. Among the many sweeping changes, expansions, protections, and penalties introduced under the AMLA, it is the new beneficial ownership reporting requirement under the AMLA’s Corporate Transparency Act (CTA) that merits the immediate attention of small business owners.

The CTA requires certain corporations and limited liability companies in or operating in the United States to file a statement of beneficial ownership to the Financial Crimes Enforcement Network of the U.S. Treasury Department (FinCEN).

Who is subject to this requirement? The reporting requirement applies to all “reporting companies”, which is defined to include all U.S. corporations or limited liability companies, as well as foreign entities qualified to do business in the U.S. The CTA provides a number of exemptions to this broad definition. In particular, the obligation will not apply to companies that are already subject to certain federal reporting obligations, as well as financial institutions, political organizations, non-profits, and charitable trusts. Larger businesses are also relieved as the definition further excludes entities that (i) employ over 20 full-time employees in the U.S., (ii) had over $5 million in gross revenue in the past year, and (iii) operate from a physical office within the U.S. The reporting requirement will thus deliberately target smaller businesses.

What do reporting companies have to disclose? The disclosure submitted to FinCEN must include the full name of each beneficial owner, date of birth, current address, and an identification number from a government-issued identification document. The CTA defines a “beneficial owner” as any individual who directly or indirectly exercises substantial control over the entity, or one who owns or controls at least 25% of the ownership interests of the entity. As yet, substantial control is an undefined term, and further guidance on the interpretation of this term is expected to follow.

When must reports be filed? The Department of Treasury has until the end of 2021 to publish regulations on how to implement the provisions of the CTA. Existing companies subject to the reporting requirements will have to file within 2 years of the effective date of those regulations; companies formed following the effective date will need to file at the time they are formed. Procedures specifying where and how to submit are still being determined.

How is the information going to be used?  Beneficial ownership information will be held in a secure, non-public registry managed by FinCEN. Though inaccessible to the public, information in the FinCEN registry could be shared for compliance or intelligence purposes with financial institutions, law enforcement agencies, national security agencies, and other regulatory agencies (all in accordance with applicable law regarding the confidentiality of personal information).

These new measures – along with other components of the AMLA – are meant to discourage individuals from relying on shell companies to transfer or disguise the origin of illicit funds. Time will tell how well the AMLA framework will serve this larger mission. As the year goes on and further guidance is issued, we encourage companies to consult with their legal and accounting advisors on their federal reporting obligations in light of this new development.[1]

[1] The above should not be considered legal advice and readers are encouraged to consult legal and accounting advisors of their own choosing for more information on the above topic.

Filed Under: Business articles

Leaders Must Be Readers

February 12, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
Feb 10, 2021

So far, 2021 is turning out just as we expected: A little turbulent, a lot more focused, and of course, still fraught with anxiety leavened by hope. Much of this relates to our government’s ability to manage the end of the paralyzing pandemic while also rebuilding an economy that has left far too many people scrambling. We have talented and committed people in government and we need them to be successful on our behalf. So I’m hoping that policymakers and business leaders will take the time to check out a few new good books. After all, as Harry Truman noted: “Not all readers are leaders, but all leaders are readers.”

First, let’s recognize that democracy might be imperfect, but the alternatives are worse. Just ask award-winning correspondent and China expert Kai Strittmatter and read his fascinating book: We Have Been Harmonized: Life in China’s Surveillance State, an in-depth, in country, in person account of how China’s government is using technology, especially artificial intelligence, to intercept, monitor, and track conversations, online posts, and day to day movements of its citizens, all with an eye toward enforcing a chilling, rigid ideology centered on ensuring absolute loyalty to the ruling Communist Party and its current head, Xi Jinping. Innovation and tech industry dominance now are the main policy goals in China, but the overall outlook for human rights appears pretty bleak. Any CEO doing business in China and any policymaker trying to make sense of regulation for the fast-moving field of AI should read this book.

We can and should approach policy differently here in Massachusetts and throughout the US. HBS Professor Mitchell Weiss, former staff chief for Boston Mayor Tom Menino, thinks so too and in his new engaging book We The Possibility, he suggests a positive and entrepreneurial shift to “Possibility Government” and provides plenty of tips and examples for reframing missions around problems, not resources, and watching and engaging citizens as “users,” instead of assuming next steps based on what’s worked before. Weiss’ calls to action are smart, practical and compelling and he’s correct in noting that the “idea that governments can’t pursue possibility will prove the hardest idea to displace.” Weiss also salutes economist Mariana Mazzucato, whose recent book The Entrepreneurial State, is one of my favorites, especially when she reminds us that every technology on which industry giants, Apple, Google, and Tesla and others, depend can be traced back to innovating thinking and applied research funded by “the State.” We need to recognize and celebrate leaders who think broadly and take reasonable policy risks.

An informed, patient and supportive electorate also will be necessary to move beyond the current malaise and maybe more than a few of us should share our unique and personal passions as part of rebuilding the economy and community. If that might be you, check out The Passion Economy, by Adam Davidson, host of NPR’s Planet Money podcast; it’s a fun, inspiring, must-read compilation of stories of average people doing just that!

These are challenging times and as Truman and other leaders have noted, we need to rebuild together. Whether as a policymaker, CEO, investor, entrepreneur or just as thoughtful and active citizen, now is the time for all us to play our part! Reading these terrific and insightful books is a start in that right direction.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Book recommendations

Minimum Viable Products

January 19, 2021 by Karen Callahan

Did you know…

that Lean Startups and Minimum Viable Products (“MVPs”) may be the way startups navigate the pandemic?

by Zachary Fountas

The ongoing pandemic has changed the way most of us work, shop, dine out, and interact with others. For early stage companies hoping to launch, connecting with investors, advisors and potential strategic partners has been challenging. So what’s an early stage company to do to move forward?

Well, maybe a look into the past makes sense. Shortly after the dot com bubble burst, startups around the country ran into an enormous impediment: capital was scarce and investments were lean. Adapting to survive, “Lean Startups” (coined by Steve Blank) pursued MVPs, streamlining product conception to assembly line, scrapping business plans, and pivoted away from what a company “thought” customers needed and focused on what customers said they wanted. Speed was important, since without a product on the market (even one full of bugs), you couldn’t keep the lights on.

Now, more than ever, new companies will need to “show” not just “tell” and more will be returning to the important framework of MVPs. So how are companies going to fund their MVPs? Maybe with one of the following:

  • Convertible Notes
    • Pros: Traditional instrument. Simple and straightforward. Avoids placing a valuation on the Company, especially important to those without enough operating history.
    • Cons: Notes are debt on the Company balance sheet that must be repaid or converted to equity. Notes come with accruing interest. Notes generally convert with a discount or other investor friendly provisions.
  • SAFEs
    • Pros: Generally a short agreement. Does not require interest, and no requirement that the Company repay the investment or guarantee that the investor receive equity. No deadlines for conversion.
    • Cons: As a newer investment vehicle, SAFEs may trigger extensive review and negotiation with sophisticated investors. The more Company friendly terms and limited investor upside may deter some investors.
  • Small Business Innovation Research (SBIR) Grants
    • Pros: Non-dilutive to capital structure of Company and no transfer of IP rights. If terms are adhered to, the Company does not need to pay back the funds. Winning an SBIR grant can also be seen by post-SBIR investors as a “stamp of approval” that your product is viable and has potential.
    • Cons: Application proposals are time consuming and difficult. The timeframe from submission of the application to grant funding can be long. SBIR grants are highly competitive and maintaining reporting and regulatory compliance under the terms can be burdensome on the Company.

Every company’s financing strategy will be different and conferring with legal and accounting advisors is critical. When done right, developing an MVP now could be the key to a successful launch during these challenging times.

 

Filed Under: Business articles, Financing

2021? You Got This!

January 12, 2021 by Karen Callahan

By Larry Gennari
Boston Business Journal
Jan 8, 2021, 6:55am EST

Finally, 2021 has arrived, and with it the promise of a new year, a return to “normal,” and if we are honest with ourselves, especially after some reflection, more new perspectives on old thinking. Pre-pandemic, of course, doing the same thing tomorrow as we did yesterday was simple, but inertia becomes a choice in itself, and through the adversity of the last 10 or so months, we now have the chance to see and implement a few innovative and positive strategies for ourselves, our companies, and our communities. Best of all, many are outlined in a few good business books.

First, start with you and treat yourself to a new take on an old problem and read New York Times contributor Kate Murphy’s recent book You’re Not Listening: What You’re Missing and Why It Matters, in which she examines how our constant focus on “listening” to everything online, all the time, often means we don’t hear anything at all, much less one another, leaving so many of us lonelier, more isolated and less tolerant. Her simple, easy-to-remember-and-follow tips on listening at work and at home are thoughtful and entertaining, and the subtitled chapter “Why People Would Rather Talk to Their Dog” will stay with you for a while.

Next, for some professional development, spend time with Amazon founder Jeff Bezos and his new book, Invent & Wander, a collection of writings that include shareholder letters, a commencement speech, and his interesting take on strategy, execution, climate change, and the challenge and necessity of space exploration. Bezos is a true visionary and the story of how he created the juggernaut of Amazon Web Services from what otherwise was a draining cost center is the stuff of business legend. (If you bought Amazon at $6 during the dotcom bust and held onto it until now, you are a visionary too.) The book left me wanting to learn more about what’s next for this mercurial entrepreneur, especially given his focus on Career Choice, an expansive employee tuition-reimbursement program for lifelong learning, and his perspectives on innovation and the future of work.

For more on the topic and its implications for our communities, you’ll need to read Long Life Learning, by writer and workforce strategist Michelle Weise, which examines current education policy and business trends while asking the searching question: Is a four-year college education enough to sustain a 100-year career? Short answer: No. Weise is a knowledgeable, thorough and skilled writer on the issues and if you are looking for that one book on community workforce challenges and creative solutions, this one is well worth your time. So, too, is The Deficit Myth, the provocative, engaging, and thoroughly readable new book on modern monetary theory, economic policy, and job creation by SUNY economics professor Stephanie Kelton, who does a masterful job of challenging conventional wisdom with new facts, trends and data.  You may not end up agreeing with her, but Kelton most certainly will make you think.

This new year, like the last, will bring plenty of challenges — and more time for contemplation, at least until we all can line up for a vaccination. Let’s use that time to develop a more informed, fresh and positive perspective that comes from reading a few worthwhile new books.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: General

Must-reads of 2020

December 17, 2020 by Karen Callahan

By Larry Gennari
Boston Business Journal
Dec 17, 2020

The end of any year, especially one like this, has many of us scrambling to find just the right gift for friends and family. Now more than ever, we value insight, knowledge, perspective and the chance to become our best selves, personally and professionally. I’ve read a lot of books this year, and I am happy to recommend 10 2020 titles that appeal to the thoughtful and entrepreneurial readers on your list. Check them out:

Post-Corona, by NYU business school professor Scott Galloway. As direct, audacious and thoughtful as its author, this book is a must-read for any CEO, management team or investor trying to set strategy in this soon-to-be post-pandemic economy. I loved Galloway’s spot-on take on the power and influence of the “Big Four” (Apple, Amazon, Google, Facebook), and I think that every parent of a college age student would do well to read his predictions about the coming disruption of higher ed and the future of work.

How I Built This, by NPR’s Guy Raz, the creator and host of the popular podcast of the same name. Raz is the son of entrepreneurs and a former war reporter, and he’s pulled together an important “lessons learned” volume from interviews with hundreds of successful and inspiring entrepreneurs from across a wide range of industries. Every chapter, with topics ranging from idea development and financing to executing, pivoting and creating buzz, centers on the experiences and hard-won wisdom from now-famous entrepreneurs with recognized brands and products.

The Growing Season: How I Saved an American Farm and Built a New Life, by Sarah Frey, CEO of Frey Farms. This is easily is one of the most memorable business books of the year. Frey, one of 21 children of a colorful, entrepreneurial father, grew up on a farm in southern Illinois, where she learned the agricultural business literally from the ground up. You can’t help but root for this energetic, brash young entrepreneur as she confronts sexism, inconsistent weather, crazy delivery logistics, and the mercurial buyers and supply chains at Walmart and Lowe’s, all the while building a sprawling, billion-dollar enterprise of wholesale fruits and vegetables as well as an impressive natural beverage product company.

Blindsight, The (Mostly) Hidden Ways Marketing Reshapes Our Brains, by neuroscientist Matt Johnson and consumer-marketing guru and neuromarketing expert Prince Ghuman. Our own expectations can shape the message we are hearing. I was fascinated by the countless, entertaining examples of how shapes, colors and smells can influence decisions around pricing, product development and marketing.

The Power of Bad and How to Overcome It, by New York Times Science Editor John Tierney and psychologist Roy Baumeistertackles how our built-in human bias for the negative colors first impressions, shapes how we build relationships, and ultimately, becomes a darker lens through which we view the world. Put simply, with news, projections, and our initial views of topics in general, why do we always assume the worst?  I’ll now spend even less time watching cable TV. Maybe CNN’s ratings formula really does stand for “constantly negative news”?

The Startup Playbook, by Will Herman and Raj Bhargava, now out in its latest edition, is a terrific and practical “how to” book for any aspiring entrepreneur. The chapters are logically sequenced to set out the very real challenges behind team building, product development, and financing strategy. If you know someone considering a new business beginning, this is the book for them.

First Pitch: Winning Money, Mentors, and More for Your Startup, by Debi Kleiman, director of the Blank Center for Entrepreneurship at Babson College. Centered on the engaging stories of actual entrepreneurs, the book takes the reader step-by-step through the early, daunting task of creating a compelling and impactful pitch for investors, advisors, and customers. This is a book worth adding to any business library—and for enthusiastically passing on to entrepreneurial friends.

Girl Decoded, by Rana el Kaliouby, single mom, Ph.D, Muslim woman scientist in an overwhelmingly male field — and founder of an artificial-intelligence startup spun off from the MIT Media Lab. This engaging book is part personal memoir, part clarion call for applying emotion recognition technology to virtually every field, including mental health and autism.  With AI sorting and sifting our online choices, this book reminds us that the human always must come before the artificial.

Overground Railroad: The Green Book and the Roots of Black Travel in America, by author, historian, and Harvard fellow Candacy Taylor. It’s a riveting chronicle of the Green Book, the travel guide published for black motorists from 1936-1967. Taylor takes the reader back in time to the Jim Crowyears and through the civil rights movement when a simple road trip for a black motorist was a demonstrable act of courage in many parts of the country. We know that traveling builds community. When you finish Taylor’s book, you’ll have a better understanding why it matters and the work that lies ahead—for all of us.

The Tyranny of Merit: What’s Become of the Common Good, by Harvard professor Michael Sandel, is among the most consequential books of 2020. Sandel takes on our business and media culture of crowning “winners and losers” and offers a new and compelling way of thinking about success, moving away from the all-too-familiar and often misleading “rhetoric of rising” that holds “anyone can make it if they really try,” which he argues is not only untrue for so many, but also erodes community and demoralizes millions left behind by globalization.

As this unusual year comes to a close, we all will gain from stepping back and reflecting on our personal and business lives.  These books, available from your local independent bookseller, will be a great addition to that important task.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: Book recommendations, General

Welcome to the Rest of 2020

November 30, 2020 by Karen Callahan

By Larry Gennari
Boston Business Journal
Nov 24, 2020, 3:23pm EDT

Unsettled. That’s the best word I have to describe the many clients and friends who have reached out over the last several weeks. This combination of business and market uncertainty, political turmoil and increasing pandemic fatigue is creating plenty of angst for CEOs, managers, entrepreneurs.

We are, most all of us, fraught with anxiety about the roiling economic, and cultural changes here at home and how we might find a steady and stable place for our businesses and ourselves within them. Yet, as you reach for another handful of Tums, a yoga mat, and a smooth jazz playlist — all of which are helpful to maintain proper balance — I would offer the following simple advice: This is part of being a person in the world, especially now, and often we find our own way forward only after taking the time for careful research and thoughtful reflection. As the late and wonderful Mary Oliver once said: “To pay attention, this is our endless and proper work.”

With that in mind, I have a few recent and significant books for you to consider. Given the recent election, Harvard professor Michael Sandel’s latest work, The Tyranny of Merit: What’s Become of the Common Good, just might be the most consequential book of 2020. Sandel takes on our business and media culture of crowning “winners and losers” and offers a new and compelling way of thinking about success, moving away from the all-too-familiar and often misleading “rhetoric of rising” that holds “anyone can make it if they really try,” which he argues is not only untrue for so many, but also erodes community and demoralizes millions left behind by globalization.

Sandel persuasively cites Martin Luther King Jr. and Pope John Paul II to say we need to connect economic policy and respect for all jobs, at every level, to the common good. With only a third of people in the U.S. (and declining) holding a college degree, this contentious debate around the future of work and the dignity and importance of alternative pathways to success is very much worth having. You should read this book and be part of the debate.

Of course, none of this is new, and Harvard historian Jill Lepore might tell you that innovation and change always give rise to collective anxiety and debate. Her latest book, If Then: How the Simulmatics Corporation Invented the Future, tells a story that could inform how we can manage that tension in our politics, at our businesses, and in our daily lives. The Simulmatics Corporation, launched in 1959 during the Cold War by a colorful and brilliant group of social scientists, pioneered the focus on using data analytics to predict and target human behavior, from the impact of political speech on voters to monitoring the “mood” of war protests. Lepore mined a trove of archived documents at MIT for the book and the tale of the company’s rapid rise and calamitous fall is an engaging and cautionary one.  I loved the background on how JFK’s campaign navigated the use of these then “cutting-edge” social-science-driven technologies knowing full well the negative and misleading press coverage around these innovations that would follow.

Technological change can be unsettling, and early media coverage around its economic and societal impact often can be shallow, sensational and off the mark, especially in hindsight. We need to dig into the issues ourselves, push past the unease, and do our best to ensure that new advancements play a positive role in our lives.

For some, including many of the potential change-makers I encounter every day in my practice, that “endless and proper work” means embracing the uncertain and taking on a new role as creator, maker, founder and entrepreneur.  I’m recommending two new books for them: first, The Entrepreneur’s Journey by entrepreneur/angel investors Hambleton Lord, Christopher Mirabile and Joseph Mandato, a terrific, straightforward and direct narrative on how to launch something new while balancing doubt, anxiety, and overall business fundamentals. And second, Good Company by Home Depot Co-founder and Atlanta Falcons owner Arthur Blank: a thoughtful and personal memoir of a life in business that is full of hard-learned wisdom and actionable advice, with an overall directive that making a living and making a life should reflect an overall value of putting other people first.

Without a doubt, these are unprecedented and unsettling times and as humans, we are used to stories that have a beginning, a middle, and an end. Let’s use this time to be reflective and intentional as we adjust to this unfolding history together. After all, life is not about always knowing, and none of us is on our own.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: Book recommendations, General

Founders’ Shares

November 20, 2020 by Karen Callahan

Did you know…

that “founders’ shares” could play a major role in structuring your start-up?

by Shilpa Iyyer

Let’s be clear upfront: legally speaking, there is no such thing as founders’ shares. Corporate codes do not mention or define this term, and certificates bearing the words “founders’ shares” do not exist. That being said, the phrase has undeniable practical significance for start-ups and early-stage companies. Founders’ shares represent shares of common stock that are issued to the early participants in the formation of a company. These are the folks who have helped evolve the idea of the company into a reality and have taken significant personal risks in the process. “Founders’ shares” are generally issued at a nominal price – usually the par value set per share.

Here are a few important considerations when determining how to allocate “founders’ shares”:

  • Establish appropriate vesting schedules. Vesting stock over time is a mechanism that incents founders to continue contributing to the company in the long-term. Without an appropriate vesting schedule in place, a founder who departs after a brief stint with the company may continue to retain substantial equity and sit on the company’s cap table well past their value. In this way, vesting schedules (and cliff periods) can help protect the company from free-riders. Your advisors can give you a sense of “what’s market” and also help tailor alternatives for unique situations.
  • Beyond vesting, consider which other special restrictions and rights are appropriate for you and the founding team. Based on their vision of the company’s growth, team dynamics, and other factors, the founders can agree that certain exclusive rights make sense to include in the founders’ stock grants. You may want to address board seats, super-voting rights, rights of first refusal on founders’ shares, lock-up agreements, accelerated vesting rights upon sale of the business, and co-sale provisions. These terms can meaningfully differentiate the founders’ rights and privileges from those of other holders. In terms of frequency: accelerated vesting, rights of first refusal, and lock-up agreements regularly appear in founders’ stock agreements; co-sale provisions are slightly less common, and super-voting rights are relatively rare.
  • Overall, allocate equity with an eye toward company growth. As the company grows, more equity will be issued to recruit and retain talent. These additional employees and participants will have risked less than the founders by joining an established company. Initial allocations should be designed to respect founders’ seniority and maintain meaningful control of the cap table even as new equity is issued.

The starting equity structure of your company is foundational and should be designed to ensure cohesion and collaboration. We advise you to discuss these matters with your financial and legal advisors to determine what set-up makes most sense for your business.

Filed Under: General

Gennari Aronson Super Lawyers 2020

November 13, 2020 by Karen Callahan

November 6, 2020

Needham Law Firm Attorneys named New England Super Lawyers

NEEDHAM, MA – The law firm of Gennari Aronson, LLP is proud to announce that its senior partners have again been selected as Super Lawyers in the New England region for 2020.  Neil Aronson was recognized as a Securities & Corporate Finance Super Lawyer, Lawrence Gennari and Laura Glynn were both named Super Lawyers in the Mergers & Acquisitions category.  In addition, both Aronson and Gennari were named Top 100 Massachusetts Lawyers.  Other attorneys selected from the firm include partner Michael Douglas, as a Rising Star, and associate Elizabeth Davenny, both of whom were selected in the Business/Corporate practice area

As Super Lawyers, Gennari, Aronson, Glynn, Douglas, and Davenny are part of an elite group of top attorneys in Massachusetts.  No more than 5 percent of the lawyers in the state are selected by Super Lawyers.  Lawrence Gennari and Neil Aronson have consistently been awarded this recognition each year since its inception in 2004.  Laura Glynn has been awarded Super Lawyer status for the last 10 years.

Gennari Aronson serves innovative companies, entrepreneurs and the investors and venture capital firms that finance them.  The firm also curates the annual Authors and Innovators Business Ideas Festival.

# # #

About Super Lawyers

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. Only five percent of lawyers in the state are chosen. The annual selections are made using a rigorous multi-phased process that includes a statewide survey of lawyers, independent research evaluation of candidates, peer reviews by practice area, and a good-standing and disciplinary check. For more information about Super Lawyers, go to superlawyers.com.

About Gennari Aronson, LLP

Gennari Aronson, LLP serves innovative companies, entrepreneurs and the investors and venture capital firms that finance them.  Founded by veterans of Boston’s largest law firms, Gennari Aronson exemplifies the same entrepreneurial spirit that guides many of its clients.  The firm has established a strong network and commitment to the technology, consumer, innovation, and emerging growth sectors. The firm also curates the annual Authors and Innovators Business Ideas Festival, www.AuthorsInnovators.org.

The firm has offices at 250 First Avenue, Needham, MA. The website is www.galawpartners.com.

CONTACT:
Leah Russell

Chief Marketing Officer
Gennari Aronson, LLP
Phone: 781.719.9900

Fax:      781.719.9853
lrussell@galawpartners.com

www.galawpartners.com

Filed Under: General

Rewriting Your Story

October 16, 2020 by Karen Callahan

By Larry Gennari
Boston Business Journal
Oct 13, 2020, 3:18pm EDT

“Tell me, what is it you plan to do with your one wild and precious life,” my favorite poet, the late Mary Oliver asks. As we move forward through this pandemic, this is a question I’m hearing more and more clients and friends consider out loud as they manage back-to-work schedules, school online, and day-to-day lives in an eventful year that is almost at its end.

I often find myself quoting Warren Buffet in suggesting that an entrepreneurial course might be the best one. After all, who wouldn’t want to “find the job that you would do if you didn’t need a job.” As we gear up for the Fourth Annual Authors & Innovators Business Ideas Conference, I’m also recommending a few books for those who might be open to this advice.

I’m looking forward to speaking with NPR’s Guy Raz, the creator and host of the incredibly popular podcast How I Built This, and now the author of a new book by the same name. Raz is the son of entrepreneurs and a former war reporter, and he’s pulled together an important “lessons learned” volume from interviews with hundreds of successful and inspiring entrepreneurs from across a wide range of industries. I received an advance copy of the book and finished it the same day; it’s that good. Of course, being a loyal fan of the podcast put me in the right frame of mind. Every chapter, with topics ranging from idea development and financing to executing, pivoting and creating buzz, centers on the experiences and hard-won wisdom from now-famous entrepreneurs with recognized brands and products. The stories are authentic, raw and inspiring, and Raz, as he is on his show, is an active listener and a consummate storyteller.

Sara Frey, CEO of Frey Farms, is a talented storyteller too and her new business memoir The Growing Season: How I Saved an American Farm and Built a New Life, easily is one of the most memorable business books of the year. Described by The New York Times as the “Pumpkin Queen of America,” Frey, one of 21 children of a colorful, entrepreneurial father, grew up on a farm in southern Illinois, where she learned the agricultural business literally from the ground up. You can’t help but root for this energetic, brash young entrepreneur as she confronts sexism, inconsistent weather, crazy delivery logistics, and the mercurial buyers and supply chains at Walmart and Lowe’s, all the while building a sprawling, billion-dollar enterprise of wholesale fruits and vegetables as well as an impressive natural beverage product company. Farmers, says Frey, are the ultimate optimists, and this just might be because they understand how best to plan and use the scarcest resource of all: time.

For more on that specific entrepreneurial and life challenge, you’ll need to read Time Smart: How to Reclaim Your Time & Live a Happier Life, the forthcoming book by Harvard Business School professor and organizational behavior expert Ashley Whillans, who studies how people navigate tradeoffs between time and money. This is a fascinating and incredibly thoughtful book and Whillans, a self-described “time nerd,” helps us think about and compare our own time balancing to central characters: “Taylor” who always prioritizes time more than money and “Morgan,” who values money more than time. Throughout the book, Whillans gives us specific and actionable lists, steps and exercises to become more “time affluent,” so that we begin to appreciate the cumulative effect of many small behavior changes in our lives. You can create that amazing new business and still have time to think about the purpose of your life and make a strategy for it.

These unusual and unsettling times have forced more of us to reflect and consider how we spend our time and whether we are striving to become the highest and best version of ourselves or just settling in for the week after next. You should check out these books if your plan is to be more intentional and possibly entrepreneurial when this pandemic ends. As with many things, hearing other people’s stories and comparing them to ours could be an important first step in making a pivotal change.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: Book recommendations, General

Bill Murray, Negotiating, and the Art of the Deal

September 12, 2020 by Karen Callahan

By Larry Gennari
Boston Business Journal
Sep 10, 2020, 3:18pm EDT

In Rock the Kasbah, a short and not-so great movie with an all-star cast, Richie Lanz (played by Bill Murray) is a downtrodden music manager who takes his one client to Afghanistan to try her musical luck. In one of my favorite scenes in the after-credits, Lanz negotiates the purchase of a stuffed animal with a street vendor who doesn’t speak English and who offers him colored string instead. Lanz’s response to this opening volley? “Do I look like a guy who uses string?”

This can be us. We negotiate every day. Whether the stakes involve a multimillion-dollar merger, a follow-on financing round, a salary boost at work, or a toddler who refuses to try anything green, we’re navigating the oldest of human conditions: finding a way to get what we want.

In many years of M&A lawyering, I’ve come to know that the most effective negotiations start with careful preparation, thoughtful positioning, and a studied focus on the other side. What do they want you to do and equally important, what do they need you to know? After making my way through some recent business books these past few weeks, I’m definitely more inclined to keep this in mind.

Every negotiation is different and that’s especially so when it’s global, in whole or in part. Lanz hilariously learns that the hard way when he discovers a young Afghan girl with an amazing voice who, by local custom and practice, isn’t allowed to sing. A guy like Lanz needs to read Protocol: The Power of Diplomacy and How to Make it Work for You, the fascinating new book by Capricia Penavic Marshall, former U.S chief of protocol for the Obama administration. Marshall coordinated the details of countless state visits and treaty negotiations, many of which could have been upended by a flag turned the wrong way, a wrong-colored shirt, unpolished shoes, or a beautiful but culturally insensitive gift. (The auspicious No. 8 figures prominently in an exchange with the Chinese Premier.) For Marshall, the mind-set of diplomacy should be a mind-set for negotiation — and knowing the history, style and customs of the other side can mean the difference between an eventual “yes” and an immediate “no.”

Of course, like Richie Lanz, too many negotiators skip the hard work of learning and listening. After all, sometimes you already know what the other side is going to say, right? Think again, and read Blindsight, The (Mostly) Hidden Ways Marketing Reshapes Our Brains, the engaging new book by neuroscientist Matt Johnson and Prince Ghuman, consumer marketing guru and neuromarketing expert, about how our own expectations can shape the message we are hearing. I loved the countless, entertaining examples of how shapes, colors and smells can influence decisions around pricing, product development and marketing. Yes, in a blind test, if people believe they are drinking more expensive wine, their experience is more enjoyable and they’ll even describe wine from the same bottle: white and red (the same white with red food coloring) quite differently as their perception shapes their reality. We all instinctively engage in this “thin-slicing,” snap judgments based on quick impressions, and the best negotiators know that all too well.

Just ask former FBI hostage negotiator Chris Voss, author of Never Split the Difference: Negotiating As If Your Life Depended On It, an incredibly useful and quick read on the basic psychological tactics of “mirroring,” reciprocity, anchors and loss aversion, all foundational to one of Voss’ basic themes. The other side needs to know that YOU know their story before cutting a deal. Voss has clearly “seen it all,” and I’d certainly like to have him along for my next trip to the car dealership. Entrepreneurial Negotiation, by Harvard negotiator/instructors Samuel Dinnar and Lawrence Susskind, a terrific book I’ve recommended in the past, would be a great companion read on the overall topic.

Some people are born negotiators who relish the art of the deal. Richie Lanz is one of those, and watching him try to cut percentage deals with warlords, merchants and a sex-worker-with-a-heart-of-gold (Kate Hudson) is predictable fun in a romantic comedy. For the rest of us, negotiating has important, real-life implications. If we can learn to be better at it, we can easily end up with more than colored string.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Filed Under: Business articles, General

Accredited Investor

August 28, 2020 by Karen Callahan

Did you know…

The definition of Accredited Investor has been expanded by the SEC?

by Zachary Fountas

On August 26, 2020 the SEC announced that it was making changes to the definition of “Accredited Investor” which could impact private placements under Regulation D. Over the years startups and emerging businesses have relied on Rule 506(b) securities offerings in order to take advantage of federal preemption and exempt the offering from regulation by various state regulators. However, under Rule 506(b), securities could only be sold to high net-worth or high-earning individuals, or certain qualified entities.

Emerging growth companies now will be able to reach out to an expanded category of “accredited” investors in financing rounds.

The following are general descriptions of individuals/entities that qualify as Accredited Investors, but it remains imperative to consult with legal counsel to ensure investors meet the requirements of the category:

Individuals

  • Regardless of net-worth or income, individuals with Series 7, Series 65, or Series 82 certifications are considered financially sophisticated enough to qualify as Accredited Investors
  • Individuals who are “knowledgeable employees” of a private fund (if such investment is in the aforementioned fund)
  • Inclusion of “spousal equivalents” in the individual test. Previously an individual could only pool net worth and income with a spouse. “Spousal equivalent” as defined in the “family office rule” is a cohabitant occupying a relationship generally equivalent to that of a spouse. (See 17 CFR Section 275.202(d)(9))

Entities

  • Limited Liability Companies with $5 million in assets are expressly designated as Accredited Investors
  • State-registered investment advisers, exempt reporting advisers, and rural business investment companies
  • Indian tribes, governmental bodies, funds, and entities of foreign countries, that own “investments” (specifically requires investment test not an asset test) under the Investment Company Act in excess of $5 million
  • Family Offices with at least $5 million assets under management and their “family clients”

Filed Under: Financing, General

Zombies, Books, and the End of the World as You Know It

August 17, 2020 by Karen Callahan

By Larry Gennari
Boston Business Journal
Aug 12, 2020, 2:50pm EDT

“If I had known the world was ending, I would have brought better books,” Dale Horvath laments to another survivor in an episode of the Walking Dead, the long-running post-apocalyptic television series that I binged-watched recently one rainy evening. These days, with the threat of a second wave of the pandemic, staged re-openings and all-too-tentative school and work schedules, some of us might be tempted to think that we, too, are living through a similar experience and we must again stock up on alcohol, more toilet paper, and spam.

We aren’t, and please don’t.  So far anyway, this isn’t about siphoning gas from abandoned cars or marauding zombie hordes. This is a public-health crisis, and it will have an end. Yet we still find ourselves captivated by these post-apocalyptic stories and the questions they present: What if our elected government fails us and the economy crumbles? How would we build a more inclusive and diverse community if we had to start from scratch? What kind of person are we when confronted with the end? With the backdrop of the global pandemic and the ongoing conversations about social and economic justice, I’ve been giving all of this some thought — and I’m not the only one.

The shutdown has lain bare the economic vulnerability of millions of people, a reality presaged by Nobel Prize-winning economist Joseph Stiglitz in his latest book People, Power & Profits. Over the past few decades, Stiglitz argues, the American standard of living and those of many other advanced countries has declined considerably and income equality is stretching our societal fabric to the breaking point. Corporate monopolies (especially those in the tech world) have proliferated, creating unfair barriers of entry, stifling innovation, undermining growth, and resulting in angry, polarizing discontent across the country and the globe. Stiglitz details why this won’t improve “on its own” through neutral market forces and he calls for targeted, timely government action on healthcare, student debt, voting rights, infrastructure, and education.  Look no further than the uneven government pandemic response and the ongoing BLM protests to understand why this is an urgent and important book for policymakers, CEOs, entrepreneurs and frankly, every voter, come this fall.

Moreover, open communication about our shared challenges is essential for community, and right now, we are increasingly “not on the same page,” according to journalism professor Samuel Woolley in his new and chilling book: The Reality Game: How the Next Wave of Technology Will Break the Truth. Digital disinformation and computational propaganda, Woolley’s preferred terms for “fake news,” is proliferating online as a tool for shaping public opinion, distorting truth, dividing people, and silencing opposition. Woolley, former research director of the Computational Propaganda Project at Oxford University, lays out how governments, terrorist organizations, and political campaigns use artificial intelligence and bots to assault reality and truth.  Even worse, according to tech journalist Rana Foroohar in her thought-provoking recent book Don’t Be Evil, our largest tech companies have built billion-dollar business models centered on hijacking our personal data so that we increasingly only see tailored ads and content that reinforces our assumptions, desires, and biases. As Foroohar makes clear with detailed and disturbing examples throughout the book: When the service and app are free, YOU are the product. Both authors urgently call for much greater scrutiny and tailored regulations to prevent propaganda, control our own data, and to preserve and maintain a functioning democracy. A tall order, but a necessary start.

If all of these challenges make you want to move to a remote cave with your own mini-cell tower and wi-fi, that’s certainly understandable. Just be sure to read Irish writer Mark O’Connell’s new book, Notes From an Apocalypse, before you go. This is a darkly funny meditation on O’Connell’s search for meaning and self -awareness, and he engages with doomsday preppers, conspiracy theorists, and fellow earthlings hoping to colonize Mars. He tours survival bunkers in South Dakota, considers Silicon Valley billionaires’ planned retreats in New Zealand, and actually visits Chernobyl, the ultimate post-human, apocalyptic experience.  O’Connell’s reflections, helped by his 4-year-old son and the magic of Dr. Seuss’ amazingly prescient book The Lorax, give us plenty to think about as we confront our own fears of the finite and a future we can’t control.  This is a book for the times.

The history we are living through gives us a unique chance to read, reflect and re-anchor, and of course register (to vote). We should seize these opportunities. Sadly, Dale from the Walking Dead can’t do that. A zombie took a bite out of him towards the end of Season 2. Damn zombies. They really do ruin everything.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: Business articles, General

Working Capital in M&A Transactions

August 5, 2020 by Karen Callahan

Did You Know…

If you are entering into an M&A transaction, chances are you’ll hear a lot about “working capital”?

by Joseph Ramadei

Simply put, working capital is the capital that is used to operate the business on a day-to-day basis. In an M&A transaction, a buyer typically demands that the seller leave behind some amount of Working Capital, so that the buyer will be able to seamlessly operate the business after closing without an immediate need for a capital infusion.  As a result, the two sides will agree on a Working Capital “target.” On the most basic level, Working Capital equates to the current assets of a business (less cash), minus its current liabilities (less borrowed debt).

Typically, at closing, the seller will estimate the Working Capital of the business as of the closing date.  The purchase price will then be adjusted dollar-for-dollar based on this calculation, upward if the estimate is greater than the target, and downward if the estimate is less than the target.  Within a certain period after closing, the buyer will calculate what the actual Working Capital was on the closing date, and the purchase price will be further adjusted depending on whether this amount was higher or lower than the estimate.

For M&A deals, buyers push for higher targets, which has the effect of reducing the purchase price, while sellers aim for lower targets, and the target is often tied to the historical practices of the business.  Both sides will spend a fair amount of time negotiating and finalizing what is to be included in “current assets” and “current liabilities” when determining the definition of “Working Capital.”

Understanding the basic concept of how Working Capital impacts a transaction is important for buyers and sellers, and having counsel to shepherd the parties through the nuanced details that arise is just as crucial!

Filed Under: General, Mergers & Acquisitions

Representation and Warranty Insurance

July 29, 2020 by Karen Callahan

Did you know…

That insurance can be just the thing to help you close your M&A transaction?

by Elizabeth Davenny

Representation and warranty insurance is being used a lot more frequently and what was once offered by a few insurance vendors for very large transactions, with big exclusions and lots of lead time is now a robust, streamlined, efficient process available in deals of many sizes and shapes. According to the 2019 ABA Private Target Mergers and Acquisitions Deal Points Study, fifty-two percent of transactions from 2018 and Q12019 included recourse to a rep and warranty insurance policy (up from twenty-nine percent in 2016/2017).

As a seller, rep and warranty insurance will let you walk away from the sale of your business with more money in your pocket up front, and with greater certainty that you’ll be able to hold onto it – rep and warranty insurance can significantly reduce or eliminate an escrow or your liability for indemnification obligations! You may even be able to lower your transaction costs with less negotiation over the representations and warranties you make about your business because the ultimate source of recovery in the event of a breach is the insurance policy.

Acquirers benefit too – leading with an offer that incorporates rep and warranty insurance will allow an offer to stand out from otherwise comparable offers. Further, you can price higher amounts of coverage in certain key areas to the target business, allowing you to “right-size” your coverage for the relative risks of the industry. And with the insurance policy as the ultimate recourse, there’s no need to chase handfuls of securityholders to claw back proceeds.

Rep and warranty insurance policies can be issued in as little as 7-10 days. Whether you’re a seller or acquirer, you’ll generally want an acquirer-side policy in place to get the most benefit, but who bears responsibility for the premium and any retention amount can be negotiated between seller and acquirer – often, both are split by the parties.

As with everything around a sale or acquisition, details matter and you’ll want to discuss thoroughly with your advisors whether rep and warranty insurance is for you. If so, the benefits are significant—and that’s a good thing to know!

Filed Under: General

Rethinking the Attorney’s Role in Building Your Startup

July 21, 2020 by Karen Callahan

Listen to the conversation between Jonathan Boyarsky of Newchip Accelerator and Larry Gennari as they discuss the important role of an attorney in building a successful startup.

 

Filed Under: General

Black Entrepreneurship Matters

July 17, 2020 by Karen Callahan

by Larry Gennari
Boston Business Journal
Jul 16, 2020, 2:22pm EDT

The senseless killing of George Floyd in Minneapolis last month is yet another infuriating injustice, all too familiar for people of color. This time, at least for now, it has galvanized people throughout the country to reengage in conversations about racial equality, nonviolence, collective activism, and economic justice.

That so many corporations, venture funds, and institutional investors are issuing inclusive statements, creating diversity initiatives, and encouraging thoughtful dialogue, is positive and encouraging. Ultimately, for all of us, actions will speak louder than “likes” on social media, but words and intentions do matter and to that end, I’m recommending a more focused reading and listening framework for entrepreneurs, CEOs and members of the innovation community so that we can amplify them. Black economic lives matter — and we are all better off when we work together with a shared historical understanding and a common forward purpose.

Let’s start with a book I’ve recommended previously, Michael Honey’s recent book: To the Promised Land: Martin Luther King and the Fight for Economic Justice, which chronicles MLK’s speeches, comments, and strategies around bringing greater opportunity to millions of people he saw “at the bottom of the economic ladder.” MLK certainly wanted to change hearts and minds, but he also understood that business drives change, growth and progress. Honey observes that MLK didn’t advocate that everyone should receive the same pay, but more that everyone should have the same chance to create a better life through access to education, healthcare, and jobs. When I revisited another prior recommendation from my own library, Ripples of Hope: Great American Civil Rights Speeches, a thoughtful compilation of history and rhetoric by Josh Gottheimer, I noted how often speakers connected economic opportunity to a just society.

We should too — and that requires a greater awareness and openness to supporting entrepreneurs of color. For example, VC: An American History, the new book by Harvard Business School Professor Tom Nicholas, outlines the riveting history and birth of venture capital in the U.S., starting with the financing of whaling voyages and “winning ship captains” and moving to the collective investment by captains of industry in government supported partnership structures, many now centered in Silicon Valley. This is a bold and rich history, but people of color will not find themselves in it — even today. According to recent data from Axios, black men represent a mere 2% of leadership positions at VC firms, and black women less than 1%. Moreover, historically black college and university endowments are rarely limited partners in VC funds. No wonder a mere 1% of VC-backed founders between 2013 and 2018 were black.

This is an area where actions need to speak louder than words. Softbank’s just-announced $100 million Opportunity Growth Fund that will invest solely in companies founded by people of color is a long-needed step in the right direction.

We also need to take an honest and urgent look at mass incarceration and systemic injustice. For an overview, I’d recommend Shane Bauer’s recent book American Prison, a riveting, inside account of America’s for-profit prison industry, and the law, policies and policing practices that fuel it. In addition to reconsidering who really should go to prison, we need new policies to support those people, disproportionately Black and Brown, who survive it. You should read Chris Wilson’s engaging new book The Master Plan: My Journey from Life in Prison to a Life of Purpose, recent winner of the UK’s 2020 International Business Book Award. Wilson was sentenced to life in prison as a teenager and through diligence, education, and the sheer force of character and will, later won release and created a Baltimore-based multi-service social enterprise, specializing in residential and commercial contracting work.

We need more of this. How we treat those who have made mistakes and paid for them defines us as a society. For far too long, a criminal conviction has meant inmate exploitation and post-prison poverty. We need to eliminate myriad post-prison restrictions on jobs, benefits and housing facing returning citizens. I’m excited about programs aimed at these vulnerable entrepreneurs, such as Defy Ventures, Project Entrepreneur at BC Law School, and the Pivot Program at Georgetown. We can and should do more at the federal and state level to support these efforts. These programs also need outside mentors and advisors — and that should be you.

Let’s take this opportunity and use these new conversations to move forward as a community. Black economic lives matter.  When you finish a few of these books, you’ll have a better understanding of the work that lies ahead.

Read in the Boston Business Journal

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Filed Under: General

Well Being Walks with Kip Hollister

July 15, 2020 by Karen Callahan

What does it take to lead a soulful life? What inspires you and how are you inspiring? Kip discusses these questions and more on this week’s podcast.

This week Kip takes a walk with Larry Gennari. They dig into the concept of service leadership and what that means to each of them. Larry discusses how service leadership has been a guiding principle throughout his career.

Larry Gennari, co-founded his own firm, Gennari Aronson, LLP, after more than two decades in several large law firms in Boston. He teaches corporate & entrepreneurial law at Boston College Law School, where he developed his current course: Project Entrepreneur, a student-led business fundamentals bootcamp for returning citizen entrepreneurs, most of whom previously were incarcerated.

Click below to listen:

Filed Under: General

3 Simple Things with Carol Fulp

July 1, 2020 by Karen Callahan

Carol Fulp is CEO of Fulp Diversity, Inc., former CEO/President of the Partnership, and Vice-Chair of the national non-profit, American Student Assistance. She is the author of Success Through Diversity: Why the Most Inclusive Companies Will Win, previously featured at Authors & Innovators

 In Success Through Diversity, you urge decisionmakers to consider the Rooney Rule—Why?

Many times managers don’t know where to start when it comes to diversity. The Rooney Rule is a process that ensures you interview a diverse pool of candidates when filling an opening. It allows you to broaden your typical candidate pool. In this competitive marketplace, it enables managers to gain perspectives about the many advantages people of color and women bring particularly when it comes to diversity of thought and innovation. And as a result, managers have a wider selection of candidates to consider.

In these unprecedented times, what can companies, large and small, be doing to enhance learning and listening among their workforce?  

1) Listen, 2) Learn, then 3) Effect Change

When listening it is important to create a safe environment and culture where individuals can speak-up and share their deep concerns about society and the organization.

When learning, it’s important to understand the impact of white privilege. It comes with birth.  It is built into our systems. It all stems from slavery.

We have to understand how our systems and processes are stacked for some and against others in order to reframe and effect change. Employees are a great resource in providing these insights. And they will value that you want to listen, learn from them to effect change.

What books should CEO’s be reading now?

New York Times Magazine journalist Nikole Hannah-Jones The 1619 Project. She received a Pulitzer Prize for her work commemorating the 400th year the first slave was brought to America. Her work discusses America’s journey 244 years later emancipating 4 million slaves. She eloquently articulates the impact of slavery in our culture today.

Also, I suggest, Race, Work & Leadership: New Perspectives on the Black Experience by Drs. Laura Morgan Roberts, Anthony Mayo and David Thomas.

 

 

 

 

 

Filed Under: General

Love It or List It!

June 26, 2020 by Karen Callahan

We enjoyed hosting this timely dialogue!  Check out this bite-sized, 25 minute conversation loaded with great thoughts and ideas pertaining to this key question:

Given these unprecedented times, should you pursue a financing round and invest in further growth or explore the M&A market and a strategic sale now?

Thanks to our panelists Debbie Gustafson – CEO, Energetiq Technology, Bob Emmert – Partner, McCarthy Capital, Scott Glaid – Managing Director, Needham & Company,  and Meredith McPherron – Venture Partner, Glasswing Ventures.
We enjoyed our virtual time together.

 

Filed Under: Financing

3 Simple Things with Jeff Bussgang

June 8, 2020 by Karen Callahan

Jeff Bussgang is General Partner and Co-Founder at Flybridge Capital Partners, Senior Lecturer at Harvard Business School, and the author of Entering StartUpLand and Mastering the VC Game

Flybridge has so many promising technology companies in its existing portfolio, what general advice are you giving them during these unprecedented times?

  • Change your mindset to transform these obstacles into opportunities for your business.
  • Over-communicate with your employees, partners, and customers. They should be sick of hearing from you.
  • Prepare for the long haul. The pandemic and its ripple effect are going to be with us for a long, long time. 12-18 more months at least.

You’ve been an entrepreneur yourself and you also advise countless startups on their launches—what do you want to say to a new team getting started in this environment?

  • Outstanding talent has never been more readily available – take advantage of it in a creative fashion!
  • Stay focused on customer discovery before you rush to build. Customers are willing to spend more time with you than ever before.
  • Prepare for 12-18 months of cash runway. It’s going to be a long journey from here.

As an author and teacher, you must spend a fair amount of time reading—what 3 books are essential for entrepreneurs right now?  

  • The Obstacle is the Way by Ryan Holliday
  • The Hard Things About Hard Things by Ben Horowitz
  • Radical Acceptance by Tara Brach

Filed Under: General

Financial relief resources

June 2, 2020 by Karen Callahan

Did you know?

That right now several private companies and organizations are offering cash grants and low-interest loans to COVID-impacted small businesses and entrepreneurs?

Below are a few financial relief programs currently accepting applications from small businesses and start-ups:

by Shilpa Iyyer

  1. Facebook’s Small Business Grants Program
  • Facebook has reserved $100M to distribute in cash grants and ad credits to up to 30,000 eligible businesses across the world. Businesses in most major cities in the U.S. are now able to apply. Eligible businesses must: (1) have between 2-50 employees, (2) have been in business for over a year, (3) have experienced challenges from COVID-19, and (4) be near a location where Facebook operates. Learn more about the fund and how to apply here.

 

  1. Grow with Google Small Business Fund
  • Google has partnered with the Opportunity Finance Network to launch a small business fund of $125M. Eligible small businesses will receive these funds in the form of low-interest loans through local lenders. The fund is open for applications until 11:59 EST on June 1, 2020. Learn more about this program and how to apply here.

 

  1. Hello Alice – COVID-19 Business for All Grants
  • Hello Alice, an AI-driven platform that connects business owners to personalized growth opportunities, is offering $10,000 emergency grants to small business owners impacted by COVID-19. Grant awards are determined based on demonstrated need and proposed use of funds. Applications are being considered on a rolling basis from March 26, 2020 to July 16, 2020. Please visit Hello Alice’s grant website for general information about the program. The terms and conditions of the grant program are available here.

 

  1. The Red Backpack Fund
  • The Red Backpack Fund is offering at least 1,000 grants of $5,000 each to eligible female entrepreneurs in the U.S. Eligible businesses must: (1) be at least 51% majority women-owned; (2) have fewer than 50 employees total; (3) be registered in the U.S; and (4) have annual revenues not exceeding $5M in any of the past three years. Applications will open in monthly rounds from now until August, and 200 recipients will be selected from each round. The next round of applications will open on June 1, 2020, and will run until June 8, 2020. Learn more about the fund and how to apply here.

 

Additional funding can help protect and move your business forward through these unprecedented times. We encourage you to consult with your trusted advisors to determine whether a specific funding opportunity is right for you.

Filed Under: Financing, General

3 Simple Things with John Prior

May 29, 2020 by Karen Callahan

John Prior is CEO of Needham & Company, LLC, a globally recognized investment banking and asset management firm focused solely on growth companies and their investors.

You have seen countless developments impacting business cycles over the course of your career – how is this pandemic different?

From the first oil shock in 1973 through 9/11 and the events thereafter, the economic impacts of crises were primarily felt (and in several cases targeted at) the United States.  Over the last 20 years, as economies have become interdependent, information travels at the speed of light and large sections of the global population have become more mobile, the severity of the crises and the potential for long-term damage has increased significantly.  In 2009, when my college freshman son was diagnosed with Swine Flu, he was banished from his dorm room, campus and restaurants … for one week and stayed in the same hotel room as his Mom and sister.  Today, they shut down the college, they shut down the state and they would have quarantined my entire family.  The fear that has circled the globe for this pandemic is orders of magnitude higher than any other crisis in my lifetime.

What’s next for M&A for the rest of 2020?

The M&A environment for deals that were underway in Q1 will remain challenging for many reasons: many buyers are trying to unwind agreed upon deals, resulting in litigation from both buyers and sellers; for deals in process, limited visibility is hindering diligence; even when the diligence issues are satisfied, the closing processes have become complicated and require more time to complete; and foreign buyers must cope with a less favorable CFIUS panel.  Strategic buyers continue conserve cash and have become extremely selective in their evaluation of potential targets.  Private equity buyers have instructed many of their portfolio companies to focus their efforts internally to avoid defaulting on existing debt obligations.

For motivated sellers in this tumultuous period, what should they be doing now to enhance prospects for a meaningful transaction in the next 12 months?

Prospective sellers should focus on those levers that are within their control.  Strengthen the assets that drive buyers to pay a premium: people, customer relationships, brand and intellectual property.  Consider soft approaches to likely buyers to explore partnership opportunities.  Develop a compelling rationale for why you are pursuing a sale in a historically poor deal environment. Prepare for a rigorous diligence process by increasingly skeptical buyers.  Make sure that the cash balances are sufficient to get to a finish line that is further away than it was a year ago – sellers can no longer play chicken and expect a favorable outcome.

 

Filed Under: General

C Corp versus LLC

May 27, 2020 by Karen Callahan

Did you know?

That your choice of forming a C corporation or an LLC could mean the difference between a sizable tax bill or zero capital gains on an exit?

by Elizabeth Davenny

How?  Section 1202 of the Internal Revenue Code, which was enacted to encourage investment in new ventures and small businesses, may allow the exclusion of up to 100% of federal tax gains on qualified small business stock on an exit transactions, subject to certain limitations.

If you are positioning your company for a sale, check in with your legal and accounting advisors to see if you meet the general requirements:

  • Did you receive the stock directly from the C-corporation?
  • Have you held the stock for at least five years at the time of the exit transaction?
  • Is the C-corporation a “qualified small business” that (a) uses (and has used for substantially all of your hold period) at least eighty percent (80%) of its assets to conduct an active business, and (b) that, both immediately before and after your investment, had no more than $50,000,000 in gross assets.

As with everything around an exit planning, details matter and you’ll want to analyze these issues carefully with your advisors. If you qualify, the savings are significant—and that’s a good thing to know!

 

This communication is for informational purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.  Copyright 2020. All rights reserved.

Filed Under: Business articles, General

3 Simple Things​ ​with Demos Parneros

May 20, 2020 by Karen Callahan

Demos Parneros is a Board member, investor, former CEO – Barnes & Noble,  and former President – Staples (North American Stores & Online)

Over the course of your long career, you have spent a lot of time thinking about traditional and online retail. Given the pandemic, where do we go from here?

For more than a century, good retailers have demonstrated the ability to adapt to changing customer shopping behavior. For the past twenty years, the challenge for many traditional retailers has been to add a meaningful online and mobile experience. Today’s most innovative retailers start with the customer in mind, not the channel, and we are seeing many successful digitally native brands build stores in order to respond to customers’ needs. Today’s pandemic has pushed us to change and adapt… ready or not. The solution starts with a model that works and that meets not only the business needs, but also guarantees the safety of employees and customers. Retailers must embrace rapid change, be willing to learn from their mistakes, and accept that the cost of doing business will be higher. Quick and decisive action will be key for retailers to find the way forward.

A great example of this is CVS Health, which created a safe, socially distant, and contactless checkout process where you can still interact with your cashier through a plexi-glass divider, and bag your own items.

As a sought-after advisor, Board member, and investor, you are seeing a lot of business plans these days—which ones stand out?

I meet smart, passionate and hard-working entrepreneurs every day who share their ideas and business plans. The plans that truly stand out, identify a clear and focused goal or problem they are solving. They also have well defined purpose and distinctive advantages that will help them succeed. Just as important are tenacity and an aligned and talented team that places high value on learning and curiosity.

This is was clear with Wealthramp’s business plan — “Simplified access to personalized, fiduciary, financial advice”.

In this tumultuous period, what should new product or service companies be doing to build their brand and find customers?

Listen, learn and iterate. While this crisis has challenged the way we live and work, it is also a catalyst driving change, innovation and new models. When forced to change, we are forced to reinvent and also think deeply about what we truly need. Our priorities have changed, so thinking about customers, products, and brands must go through today’s post pandemic filters. Is your brand delivering a solution to a real problem? We know today’s consumers have heightened sensitivity about shopping safely, so clearly communicating what new processes you have implemented to ensure their well-being is vital to calming their anxiety. Finding customers is easier when the product or service meets a true need.

I like the quickness and flexibility shown by the Cleancult team. They have satisfied customer needs, kept their supply chain running smoothly, and taken care of their employees.  Besides that, they are reaching out to donate to their community in this time of need.

 

Filed Under: Business articles, General

3 Simple Things with Christopher Mirabile

May 15, 2020 by Karen Callahan

Christopher Mirabile is Senior Managing Director and Board Member at Launchpad Venture Group, a nationally recognized angel group providing human and financial capital to help entrepreneurs build successful companies.

Launchpad has a broad portfolio of companies in its existing portfolio, what advice are you giving them these days?

Entrepreneurs who have just launched or are contemplating launching a startup are undoubtedly feeling a bit panicky as the social and economic consequences of Covid-19 start to pile up. There is a reasonable basis for concern in this climate, but I am here to tell you that the situation is not hopeless. If you have a good idea, it’s focused on a problem truly worth solving, and you are still feeling passionate and motivated about it, then hang in there a little longer and don’t give up on trying to raise money for your company.

I am not saying everything is going to be a cakewalk, however. This situation does present some challenges and there is no point in sugar-coating them. In the near term, fundraising is going to be harder and take longer during these uncertain times. Valuation expectations will most likely reset to lower levels as we have just been through a period where valuations increased unrealistically as other areas of the economy grew rapidly.

If you suspect you could be a successful entrepreneur, please don’t give up. At least not without trying. If your idea is good, the need is real, and you can prove some customers might care, we at Launchpad, and many of our early stage colleagues across the country, definitely are open for business and want to hear what you are up to. If nothing else, as individuals who have survived multiple downturns and lived to tell about it, we can give you some great advice. Come see us!

You’re an experienced public company executive, angel investor and advisor to companies large and small—what would you advise company decisionmakers about marketing their products in challenging times?

The challenge right now is that the list of “top priorities” for customers is much shorter.  In difficult economic times, people are more careful about what they spend, and they have less to spend overall.  Trying to market your product to people who won’t view it as a top buying priority in times of crisis is a waste of money you cannot afford to lose.  Hone your message down to the key reasons your product is a “need to have” rather than a nice to have, and focus that message on the subset of customers for whom your product is a top buying priority.  Not only is it an efficient way to spend limited marketing dollars in a crisis, you might be surprised by what you learn about product-market fit.

In this tumultuous period, what should new innovative product companies do now to attract funding, get launched and gain traction?  

In terms of gaining traction, I’d refer you to my previous answer.

In terms of attracting funding, there are a few things you need to do.  First, you are going to need to run as lean as you possibly can. Of course, that means staying in your current cramped headquarters – now is definitely not the time to sign a big lease. But it also means you can probably only run one “experiment” at a time, rather than several at once (whether it be testing a sales model, product-market fit, or a new marketing or sales approach.)

You are probably going to have to do more with less in terms of numbers of employees and types of employee roles. Your sales people and engineers may have to do some customer success work, for example, or you may have to do more of the sales and marketing yourself.

It also means you are going to want to be as revenue-forward as you possibly can, and focus as much as possible on bringing early customer revenue in the door. Not only is customer revenue the best possible type of financing for a business, the added proof of traction is going to be necessary to prove to investors that this business falls into the “need to have” category for an identifiable group of customers.

There is still plenty of investor money out there, but there are some bigger than usual “investor psychology” hurdles you are going to have to get over. Many investors are going to be inclined to “slow-down/cash-up” a bit and will approach all new things with greater skepticism than normal. Proving your conviction and determination to endure for the long haul has never been more important than in this kind of climate. You also have to recognize that investors are in somewhat of a defensive mindset in hard times – the top priority will be supporting existing companies that are salvageable, not adding new “problems” to their portfolio.

But perhaps more fundamental than anything else is the fact that investors are simply not going to be willing to pay as much for the privilege of being in your startup as they might have in more careless times. The portion of valuations attributable to pure speculation is off the table. Valuations are always an expression today of confidence in tomorrow. In uncertain times and facing economic headwinds, that irrational and unquestioning confidence is simply not going to be there. Even in the best of times, early stage rounds need to be crafted to result in a post-money valuation the company can realistically grow into using the money raised in the round. In tough times that equation is an especially harsh master. Not only is it more challenging to prove your “value” is equal to your post-money, you may also have to get there by stretching and doing more with a smaller round.

Why is this? There are two basic common-sense drivers of this phenomenon. First is the greater likelihood of failure during hard times. Companies can succeed, but it will be a smaller number, and it will be those with the most compelling value propositions. Further, even with the companies that succeed, it may take much longer, resulting in a lower time- and risk-adjusted return for investors. All things being equal, investors of all types are going to pay less for riskier investments with lower time-adjusted returns.

The final complicating factor is perceived future financing risk. When the world is facing difficult and uncertain times, an investor today is always concerned that their companies might have difficulty raising money in the future; even companies that have grown into their reasonable post-money valuations. The earliest angel stage investors may stay relatively active, but their enthusiasm will be tempered by greater-than-normal concerns that later stage financing may prove harder to get. There is already some anecdotal data to suggest some LPs in venture funds may be telling GPs to slow down and delay pending capital calls. That in turn will drive VCs to let up on chasing deals a little and be extra choosy about the things they look at. As a result, the earliest-stage investors will factor into their valuation expectations the possibility that necessary future funding may not be available. Or the possibility that where available, it may be offered only on punitive terms. Remember: the earliest investors are at the bottom of the stack; there are plenty of situations where a company ultimately succeeds, but, due to difficulty staying financed, and resulting lopsided financing terms, all the exit value goes to the later investors rather than founders and angels.

The only way to combat that situation is to keep post-money valuations down in the super reasonable range by trying to do more with smaller rounds and raising those rounds at lower (and let’s face it, slightly more dilutive) valuations. No matter what the situation is out there, all things being equal, it is always going to be easier to finance a business that has proven some solid traction, in a capital efficient way, and has a valuation that is clearly in line with what the company has accomplished so far.

Filed Under: General

3 Simple Things with Peter Sacco

May 11, 2020 by Karen Callahan

Peter Sacco is the Founder and CEO of Adelante Shoe Co., a made-to-order shoe company committed to paying its Guatemalan craftsmen a living wage.  www.adelanteshoes.com

What makes Adelante different from other shoe companies?

Adelante makes each pair to order, and delivers direct to the customer’s door in 10 days. Made-to-order means our customers can order from a much broader range of lengths and widths, personalize the aesthetic of their pair, and connect with their craftsman via multimedia while he handmakes their shoes.

We were born from a vision of economic development in Latin America, which is why all Adelante craftspeople earn over the Living Well Line. Furthermore, the COVID-19 pandemic has prompted us to launch an emergency aid program for craftspeople who are out of work as a result of the crisis.

Adelante has ties to Guatemala and you have extensive experience in Latin America—what are you hearing about business and economic conditions there these days?

Countries across Central America are facing the same challenging question as the United States: Is there a way to re-open the economy without exacerbating the pandemic? Some countries in Latina America got a jump on preventative measures (Guatemala, El Salvador) and are better off as a result, while others have a longer road ahead (Mexico, Ecuador). As a general rule, Latin American economies are largely intertwined with the US economy so the faster the US can rebound, the less economic pain Latin America will feel.

What are you learning about customers and the overall customer experience during these challenging times?  

We always want to be transparent, empathetic, and human with our customers. Folks want their purchase to have a direct, positive impact on the damage caused by this pandemic; everyone wants to be part of the solution. Luckily, none if this is an adjustment for our brand actions or voice. Folks are also looking for lower price point products, so we’ve been doing some secondary product development at our workshop in Guatemala.

 

 

Filed Under: General

Channeling Warren Buffet

May 6, 2020 by Karen Callahan

“Only when the tide goes out do you discover who’s been swimming naked,” Warren Buffett, America’s favorite rich uncle, has told us.

For many of us, this pressing pandemic certainly feels like low tide, especially for our committed first responders and for the many service providers at restaurants, hotels, barber shops and grocery stores who create the fabric of our daily lives. We now have more than 30 million people out of work, and as we look to rebuild the economy and reframe a sense of normal, these circumstances are challenging and fraught with financial risk. Yet, they also might present for many an opportunity for change, a chance to adapt and create, and a space for something new.

As Mr. Buffett once said: “chains of habit are too light to be felt until they are too heavy to be broken.”

So I’m thinking about Uncle Warren, the shrewd investor and committed reader, thinker and writer, and on what he might advise right now. I bet that in addition to recommending classics like Benjamin Graham’s The Intelligent Investor, he’d probably also add a few new books.

“In the world of business, the people who are most successful are those who are doing what they love.” Buffett said in a rebroadcast interview I recently watched. He’s right. That’s why I use Chris Guillebeau’s terrific books The $100 Startup and 100 Side Hustles: Unexpected Ideas for Making Extra Money Without Quitting Your Day Job in my Boston College Law School class, “Project Entrepreneur,” a student-led business fundamentals bootcamp for returning citizen entrepreneurs. These are practical, fun, read-in-one-sitting books, and they lead from the motivating premise that opens The $100 Startup: “Imagine a life where all of your time is spent on the things you want to do.”

You don’t have to do tomorrow what you did yesterday. Whether you call it “passion” or “purpose,” Uncle Warren might advise, you can do more than just imagine.

He’d also probably tell you to build any new venture on facts and data, rather than hunches, and on integrity and honesty, instead of flash and sizzle. For more on that, I highly recommend The Power of Bad and How to Overcome It, the insightful new book by New York Times Science Editor John Tierney and psychologist Roy Baumeister, that tackles how our built-in human bias for the negative colors first impressions, shapes how we build relationships, and ultimately, becomes a darker lens through which we view the world. Put simply, with news, projections, and our initial views of topics in general, we always assume the worst. As the book confirms and Buffet once noted: “It takes 20 years to build a reputation and five minutes to ruin it.”

We all need to work on this. I really liked the tips on overcoming bad customer reviews and for consciously avoiding negative interactions overall.  I’ll now spend even less time watching cable TV. Maybe CNN’s ratings formula really does stand for “constantly negative news”?

Finally, before you launch, use some of your quarantine time to map out a thoughtful vision, and get a copy of First Pitch: Winning Money, Mentors, and More for Your Startup, the smart new book by Debi Kleiman, director of the Blank Center for Entrepreneurship at Babson College. Centered on the engaging stories of actual entrepreneurs, the book takes the reader step-by-step through the early, daunting task of creating a compelling and impactful pitch for investors, advisors, and customers.

Kleiman believes that pitch development catalyzes critical business thinking and she rightly emphasizes the basics of brevity, research, and storytelling, with lots of allocated time for rewrites.  She’s the professor who reminds us to review the entire question before starting and also to check answers, especially with feedback and experience. Uncle Warren, who advises investors to “…never swing at a ball while it’s still in the pitchers glove” undoubtedly would agree. This is a book worth adding to any business library—and for enthusiastically passing on to entrepreneurial friends.

Starting fresh after the familiar is not for the faint of heart.  I’ve lived it myself in leaving a comfortable BigLaw position to start a smaller, nimbler firm. You prepare, you try, and you adapt; the rest is grit and magic.  As Uncle Warren reminds us “In the business world, the rear view mirror is always clearer than the windshield.”

Read on Boston Business Journal website.

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.

Filed Under: General

3 Simple Things with Meredith McPherron

May 5, 2020 by Karen Callahan

Meredith McPherron is a Venture Partner at Glasswing Ventures

Glasswing has so many promising technology companies in its existing portfolio, what advice are you giving them these days?

Our Glasswing portfolio is well positioned having a focus on AI-enabled enterprise software and cybersecurity companies which are seeing growth amid the pandemic.  We are advising our portfolio companies to stay focused on their fundamentals.  This includes 1) assuming a more conservative posture on their overall burn, 2) exploring appropriate sources of capital to weather the storm and maintain their market position, and 3) carefully examining and re-examining their product/market fit, making adjustments where and when necessary as the environment dictates. We recommend companies dig deeper into their customer’s world and even further downstream into the world of their customer’s customer to understand their underlying health and stability. This analysis allows them to anticipate potential challenges and opportunities that may not be readily apparent. There are exciting opportunities for entrepreneurs to think differently and push their thinking about how technology can help insulate, mitigate, and even accelerate their growth when faced with supply and demand shocks that force behavioral change.  It requires financial stability at the outset and strong leadership and organizational agility throughout when markets are in turmoil. At Glasswing, we encourage our companies to think about the offense even when playing defense. We support our portfolio by leveraging the Glasswing Platform, bringing them customers and revenue, helping them connect with the highest caliber talent, and championing our founders from funding through to exits.

You have helped a number of companies with their launches, what would you advise company decisionmakers about scaling in challenging times?

Scaling in challenging times requires greater organizational discipline and prioritization around a roadmap for expansion.  Focusing on high priority, profitable and well-vetted customers and customer segments, for instance, makes more sense than funding experimental pilots into new channels and segments.  New customer acquisition is always expensive but during challenging times, it can rise considerably as spending stalls on new contracts and services. For B2B models, focus instead on a “land and expand” strategy. If expansion is out of the question, lean into a “land and love” strategy to ensure the needs of those with whom you already have relationships and contracts are fully satisfied. When the economy recovers, these customers will serve as important ambassadors for future growth.

For CEOs, this is the time to engage in visible leadership, even if that must happen over Zoom or other UCaaS providers. In times of uncertainty, conveying a sense of confidence around your mission, compassion that times are challenging, and conviction that you can and will get to the other side is vital. It can engender a powerful “take the hill” mentality necessary for rapid innovation, pivots or scaling.

Avoid the natural impulse when “sheltering in place” to put your head in the sand and simply weather the storm.  Instead find ways to learn more and use the forcing mechanism of a tougher environment to drive innovation and creativity from your teams into your products and services.  Use the opportunity to connect with your customers to understand their needs, find new ways to serve them and build stronger loyalty and partnerships. Challenging times can often bring people together in deeper, more lasting ways than the more transient tidings of gold and glory.

In this tumultuous period, what should new innovative product companies do now to attract funding and maintain morale?

Learn from the unicorns which were founded during the 2008 financial crisis (e.g. Credit Karma, Slack, Uber, Venmo, WhatsApp). Their ability to see and leverage important behavioral changes resulting from the crisis and deliver innovative new products in response, was essential to their ensuing inflection and scale. The challenge is that capital markets funding innovation are most difficult to access in times of uncertainty. New venture funding outside of existing investments can quickly freeze up as caution and capital preservation become a greater priority. Start-ups seeking follow-on rounds are often met with suppressed valuations and requirements for stronger adoption proof points and higher level growth rates over longer periods of time.  If existing startups require additional capital to hit stretch milestones, they might consider bridge rounds with current investors to extend their runway, in addition to focusing on high quality execution with current customers and finding new and relevant ways to win as the market evolves.

To maintain or even boost morale, I recommend entrepreneurs remind their teams of their mission and vision for the future. Anchor them in realistic roadmaps and resources they can access to deliver against that vision. Set shorter term targets and goals for individual and collective work to provide a sense of traction, accomplishment, and psychic reward. This is the time to double down on culture, find opportunities to acknowledge how people are stepping up to “take the hill” together.  Great leaders will make lemonade out of lemons and provide their teams with the drink all start-ups thirst for: passion and purpose.

Filed Under: Financing, General

3 Simple Things with Debi Kleiman

May 1, 2020 by Karen Callahan

Debi Kleiman is the executive director of The Blank Center for Entrepreneurship at Babson College, a former marketing executive, and author of the forthcoming book: First Pitch: Winning Money, Mentors, and More for Your Startup.

 

First Pitch is your first book—why did you write it?

In my role at Babson, I work with so many early stage entrepreneurs. Time after time they say how much they dread pitching and feel overwhelmed by the process. Information is scattered and in bite-sized pieces, that’s hard to use if you don’t have an organizing framework for how to move through it. It shouldn’t be something to dread – it should be something exciting! You are getting to tell the world about what you are building and inviting them to join you on the journey.

I wanted to take some of the angst out of the process by providing really concrete ways to create a compelling and memorable pitch, but also delve into the other dynamics around pitching that are so important – demonstrating the right interpersonal skills, proving your coachability, building relationships, and understanding your audience.

The book is an all in one resource for entrepreneurs that not only gives them an inside look at the process but also gives them ways to take action right away to begin mastering their pitch and other startup communication skills.

What makes for a “perfect pitch”?

Storytelling – people love stories, in fact, our brains are wired to remember stories so bringing your pitch alive with storytelling is important. Not only does being memorable matter to get people interested in helping you, but it also helps them tell your story to others who might be helpful, so it creates a ripple effect. Storytelling also puts people in listening mode vs sharing data and dry information puts them in evaluation mode, judging the idea and looking for errors.

Making an emotional connection with the audience – odds are that your business has a unique value proposition (it’s special sauce), and the stronger the unique value proposition, the higher the success rate. Many times this is about meeting an emotional or social need for a consumer, that maybe they didn’t even know they had. Using words that convey emotion or establishing an emotional connection with your audience can create magnetic energy that people can’t ignore, they just are compelled to jump in with you.

Using simple, direct language – no jargon or buzzwords. People don’t want to listen to a bunch of empty words that are just trying to hang onto a trend. You should be able to describe what you do in the simplest terms so that your grandma or your 12 year old nephew can get it.

Level up the pitch to something inspiring. Show that even in these early stages you have big ambitions and want to make an impact or start a movement. I’ve found that entrepreneurs constantly think too small, they need to have bold ideas that make people’s eyes widen and their pulse quicken.

It’s not just the pitch itself, the Q&A following the pitch or the conversation with an investor after your formal presentation is just as important. They want to know that you are coachable, open, trustworthy and truly understand the details of the industry. You are likely to get some negative feedback, don’t get emotional or defensive, instead use a catch phrase (“that’s interesting, let’s dig into that…”) that reminds you that this feedback, however harsh, is helping you learn and make the business better.

And last, never ever go into a pitch without researching the people you are pitching to. Learn about them as people, on a personal level if you can, but most definitely learn about what motivates them in business and what really lights their fire so you can tap into it.

In this tumultuous period, what pitch adjustments should entrepreneurs and innovators be doing now to attract funding and launch a product or service?  

Demonstrate you are being thoughtful about pivoting your business model to be relevant in a COVID-19 world, not only short term but longer term, when the world will likely be really different.

Show that you have in-depth understanding of your customer. This is true always, but now more than ever having great insight into how your customer thinks and what they want is a massive competitive advantage.

Have really sound financials, show how you can weather the storm and make a little money go a long way.

Demonstrate that your business is a “pill” rather than a “vitamin” – it should be based on a pain that absolutely needs to solved, a necessity – not a nice to have.

Be ready to pitch in a virtual environment, and use the time to build a relationship. Investors often feel compelled to invest because of a connection to the founder or the founding team as well as the business idea. Find ways to reveal the kind of partner you can be and show that working with you will be a rewarding experience. Even if they don’t invest in you, there might be other ways they can help if they’re excited about you and the business.

 

Filed Under: General

3 Simple Things with Rana el Kaliouby, Ph.D.

April 29, 2020 by Karen Callahan

Rana el Kaliouby, Ph.D., is co-founder and CEO of Affectiva and author of the insightful new book: Girl Decoded. 

Girl Decoded is both a personal memoir and a primer on AI—why did you write it?

When I first set out to write Girl Decoded, my goal was to evangelize human-centric technology and advance the AI industry. But as I reflected on my path to humanize technology, I realized that my professional mission – and the work of Affectiva, the company I co-founded – was so closely tied to my own personal journey. I knew that I had a more universal story to share about perseverance and embracing your emotions.

I’ve spent my career teaching computers to read emotions, pioneering technology called artificial emotional intelligence (Emotion AI). But, I wasn’t always in tune with my own emotions. For the longest time, I didn’t embrace them – I thought it was easier to push them out. Writing Girl Decoded forced me to reflect on my emotions at different points in my professional and personal life. I’ve realized the power of being open about your emotions, and finding your voice – first with yourself, and then sharing that with others. It’s only when we share our emotions that we’re really able to connect with one another.

My hope is that Girl Decoded will encourage people to embrace their emotions, and use them to form empathetic connections with others – whether we’re communicating in virtual worlds (especially amidst the global pandemic) or in-person.

Why is “Learning Human” so difficult for some companies?

In business, there tends to be an emphasis on quantifiable business goals, KPIs and data-driven decisions. Those metrics are obviously important, but oftentimes the human element of work gets overlooked – both in how leaders interact with employees, and how people interact with clients/partners. Another issue that some companies may face is that ego can get in the way of empathetic leadership. But I feel strongly that empathetic leadership is essential, especially in the times we’re living in now – and you don’t have to be a C-Suite exec to lead with empathy.

At Affectiva, our mission is to humanize technology. So, naturally, one of our company’s core values is human connection. We attribute our success to being open, collaborative, and striving to build meaningful relationships with the people we interact with – both internally as well as with our clients and partners. I’ve always believed that it’s ok to bring your emotions and your whole self to work. So, we’ve built a culture where, in our dealings with peers and partners, we’re empathetic and mindful of the fact that people may have things going on in their lives outside of work. 

In this tumultuous period, what should AI entrepreneurs and innovators be doing now to attract funding and launch a product or service?  

Right now, we’re completely reinventing the way we work, the way our kids learn, and the way we socialize – especially as those things are now taking place at home for many of us.

As challenging as this is to navigate, I believe these shifts will open the door for innovation. So, AI entrepreneurs and innovators should be thinking about how their technology can help address the challenges and changes presented by this new normal.

For example, with everything now shifting to virtual, I think we’ll see an increasing need for companies to understand engagement and their emotional impact on customers as they interact online. And, consumers will crave more meaningful interactions with technology, and by extension, with one another. That creates a market opportunity for companies like Affectiva, and others in the Emotion AI space, to explore use cases of our technology that will incorporate emotional intelligence into online interactions.

Finally, even in this tumultuous time, the fundamental principles of attracting funding or launching a product still stand. It’s important to have a well thought through plan for developing products or services that will solve a specific problem. And along the way, there must be clear goals and milestones in order to keep your team focused, and prove that you’re delivering on those objectives.

Filed Under: General

3 Simple Things with Brad Feld

April 27, 2020 by Karen Callahan

Brad Feld is an entrepreneur, author, investor, board member, keynote speaker (www.authorsinnovators.org), and entrepreneurial advisor to countless early stage companies in a variety of industries for decades.  Feld.com

How can promising technology companies and entrepreneurs—especially those not in a healthcare or related space—help with the current crisis?

It’s a tricky question because “how can I help with the current crisis” is multi-dimensional. First, explore the “why.” Why do you want to help? Explore your personal and professional motivation. Get your mind around whether this is a defensive financial dynamic (e.g. “I don’t want my company to fail”), a moral imperative (e.g. “I want the world to be healthy”), a need for personal engagement (e.g. “I’m scared and need to do something”), or something else. There is no right answer here, and there could be several “Whys.”

But, start with the “Why”. If you don’t, you won’t be able to define the What. “What are you going to do?” And you can’t get to the “How” until you have enumerated the “What.”

You have helped so many companies think through their launches and you remember the last global financial crisis—what would you advise company decisionmakers about scaling in challenging times?

Don’t worry about scaling. Right now, your goal should be to make your cash last as long as possible. Your company is likely in one of three categories:

  • Your business benefits from the Covid crisis. If this is the case, you should focus on scaling efficiently. For the past few years, companies were rewarded for growth at any cost. It didn’t matter if you spent $5 to get $1 of growth (ok – maybe that was a little sarcastic). However, growth efficiency will matter, so take advantage of the tailwinds since your products or services benefit from the Covid crisis but be efficient about your spending. Basically, be smart and do good business.
  • Your business is under duress from the Covid crisis. If your product depends on either (a) people traveling or (b) people going to / working in an office, you are probably screwed right now. There are many other categories that are under extreme duress. Scaling right now is irrelevant. All that matters is survival.
  • It is unclear whether your business benefits from or is stressed by the Covid crisis. This is the really difficult category. Immediately pull back on all your variable spending, especially around growth, and refocus incrementally on new experiments to see what works and what doesn’t. Don’t assume that what you were doing will still work going forward. Also, don’t assume that things will fall off a cliff some time in the future. The data is changing so quickly that you need to use short term situational analysis to plan. Annual plans, quarterly plans, and even monthly plans don’t mean anything. Focus on things daily, and reassess at the end of every week.

What three books should entrepreneurs be reading now?  

Until about a week ago, my brain was too exhausted to read anything. I’m still watching a bunch of movies (I did the Pandemic series: Contagion, Outbreak, and 12 Monkeys) and TV shows that I missed (We just started Breaking Bad, finally …)

But, if you really want to read, here are my top three for this moment.

  • Atlas Shrugged (Ayn Rand). This is in the “it’s complicated” category. I’m not an Ayn Rand Objectivism acolyte, but this remains a powerful book about a variety of topics, including leadership (or lack thereof), individual vs. collective power, public vs. private sector, and catastrophic failure of systems. There’s a lot of noise in the message, and it’s easy to overinterpret messages (including some of the fundamental Objectivism philosophy that I personally disagree with), but it remains thought provoking and seems remarkably relevant for a book written over 60 years ago.
  • Station Eleven (Emily St. John Mandel). I read this when it came out in 2014. All I can say is that it was way ahead of its time.
  • Searching for Stars on an Island in Maine (Alan Lightman). I read this early in the year, prior to the Covid crisis, and I’ve referred back to it a few times. It helps us understand our place in the universe.

Filed Under: Business articles, General

3 Simple Things with Ashley Whillans

April 24, 2020 by Karen Callahan

Ashley Whillans, Ph. D.,  is a Behavioral Scientist, Asst. Professor at Harvard Business School and author of the upcoming book, Time Smart: How to Reclaim Your Time & Live a Happier Life, which will be featured this fall at Authors & Innovators (www.authorsinnovators.org).  

www.awhillans.com

 You have spent a lot of time thinking about the intersection in our lives of time, money, and happiness, and this is your first book—why did you write it?

As I describe briefly in the book, I had been doing a lot of research during my PhD on the trade-offs that people make between time and money and how these trade-offs shape happiness. Should I work longer hours and make more money, or work less and have less money? While I felt like I had learned a lot empirically, my personal life was suffering. I had prioritized work for a long time. Within the first two years of being a faculty member at Harvard Business School, I had gotten divorced, not been able to attend the funeral of my close cousin, and had missed out on the birth of my best friends’ child. Why was it so easy to say I valued time, and so hard to live that truth? I wrote this book to try to take all of the best research on the psychology of time, money, and happiness, and help myself and others put it into practice in their everyday lives—by providing the empirical science and concrete ways of turning that science into action through a series of exercises and a brief workbook that is contained at the end of every chapter.

Working from home is the newest challenge for so many executives—what’s the one (of many) most important rule we all should follow now?

If this ‘forced experiment’ in total work-life integration has taught me or my clients anything, it is that we have to—more than ever—adhere to personal boundaries. With home as work and work as home, we need to create rituals that help us separate our work and personal lives. Set one room as the office, let your entire family know when you are on an important work call so they won’t interrupt you, put on perfume and get dressed as you would going into work. Don’t work on the weekends. Creating physical separation and personal rituals that help you set boundaries between work and life has never been more important than it is now. And, take your weekends. With everyday feeling like the same day, many executives are saying the only way to maintain their sanity is to maintain a semblance of a weekend.

In this tumultuous period, what can companies, large and small, be doing to enhance the well-being of their workforce?  

In this stressful time, it is tempting to overcompensate.  You want your employees to feel supported, so you support them too much or impersonally. If you want to let your employees know you are thinking of them, send a short text message with no expectation of a reply, just to say hello. If you want to have a team check-in, do it at the beginning of an already scheduled meeting (vs. scheduling yet another 1-2 hour zoom call happy hour). If you want your employees to use the latest resilience app, give them the permission to use it in the middle of the day—or even better—try it altogether during a company-wide meeting. By tailoring your support to each person individually, and providing it in small manageable bite-sized snacks you will be more likely to improve employees’ well-being and reduce overwhelm as opposed to contributing to the very problem you are trying to solve in the first place. Also, don’t be afraid to be personal and fail in front of your employees. Employees feel more comfortable in asking for what they need to get their work done, when they see their manager come to a meeting sweaty (because they worked out in the middle of the day) or when their cat is roaming around the background of their meetings. Tell your employees if you aren’t doing OK, chances are they aren’t in an ideal situation either. Sharing how you are all struggling, together, can help to create an environmental of psychological safety and trust.

 

Filed Under: General

3 Simple Things: Peter Blacklow of Boston Seed Capital

April 9, 2020 by Karen Callahan

3 Simple Things with Peter Blacklow, General Partner at Boston Seed Capital, a venture fund investing alongside founders who are striving to improve life, work, and play, through building innovative tech companies. www.BostonSeed.com

Boston Seed has a broad portfolio of companies in its existing portfolio, what advice are you giving them these days?

No earthshaking news here, but we have to ensure Boston Seed’s portfolio companies’ ongoing operations with cash in the bank, and we emphasize to them that raising new capital in a very uncertain market may be difficult or impossible.  As a result, it’s critical for teams to make excruciating decisions in reducing expenses with the ultimate goal of extending the runway for new capital into the business or achieving a break-even model.

Also, it’s a fascinating insight into the DNA of entrepreneurs — I have observed that many founders believe our new social/economic reality could actually be accretive to their business.  I would even say that most founders I speak with see a silver lining or a unique opportunity in today’s challenges as it relates to their business.  I believe entrepreneurs are positive opportunists, which is what makes them special, but nobody has a clue what the short and long-term impact will be for our  customers and their ability to do business with us.  So, even those portfolio companies that are demonstrating short-term gains or no negative effect on their business need to plan for a deeper impact in Q2 and beyond.

You’re a marketing veteran with deep industry experience prior to joining Boston Seed—what would you advise company decision makers about marketing their products in challenging times?

It’s not easy.  In our consumer businesses, many of our companies have significantly slowed or completely shut off marketing as a result of these uncertain times.  In our B2B businesses, our customers are making similar cuts to marketing budgets, and SAAS implementations are much more difficult with a remote workforce.  But, that doesn’t mean we can give up on marketing.  However, companies have to be thoughtful around 1) finding an approach that will work with their customers and 2) speaking in a way that is sensitive to the upheaval in our daily lives.  Alyce is one of our portfolio companies that has reacted quickly and thoughtfully to their customers’ needs.  As a B2B AI gifting business that helps companies acquire and enhance communication with customers, Alyce understood that smart physical gifts delivered to business contacts via direct mail would be irrelevant today.  So, they emphasized their digital and charitable gifting offerings and customer response was amazing.  In this sense, Alyce listened to their customers, developed a product that worked given the confines of remote workforces, and provided a charitable component which resonates even more strongly in today’s world.

In this tumultuous period, what should new innovative product companies do now to attract funding, get launched and gain traction?  

Many entrepreneurs talk about building businesses during bleak economic times, like in 2002 or 2008.  This feels different for a couple of reasons.  First of all, we don’t know how long or to what extent an economic downturn will last.  Second, even an innovative product may have new challenges in terms of go-to-market given the massive social/economic changes their customers are facing.

We clearly need to continue to develop and launch innovative products.  But, those companies also need to understand the current needs of potential customers and how to build a loyal customer base in times of social/economic turmoil.  Bootstrapping a business and demonstrating proficiency in connecting with customers will continue to unlock capital, but not just because they are clever ideas – you’ll need to show customer traction.

Filed Under: Business articles, Financing, General

Thinking Fast Means Going Slow. Take a Moment with a Book.

April 3, 2020 by Karen Callahan

Like most everyone these days, I am working virtually, which has me online and connected to both my work and the news, all day, every day, all the time. I learned a long while ago that fasting, or more specifically, news fasting — no online papers, no cable TV, and no NPR, whether just for a few minutes or sometimes a few hours — is essential for mind and heart.

This fasting should be simple, and it means finding your joy, even for a fleeting moment, as often as you can. As my favorite poet, the late Mary Oliver, said in “Don’t Hesitate”:

“If you suddenly and unexpectedly feel joy, don’t hesitate. Give in to it. There are plenty of lives and whole towns destroyed or about to be. We are not wise, and not very often kind. And much can never be redeemed. Still life has some possibility left…… It could be anything, but very likely you notice it in the instant when love begins…. Anyway, whatever it is, don’t be afraid of its plenty. Joy is not made to be a crumb.”

One of my joys is finding balance in a decent book. So, these past two weeks, I’ve been counseling CEOs and entrepreneurs, and also reading business books, some from authors who will join us this October for the fourth-annual Authors & Innovators community event.

For starters, I just finished and thoroughly enjoyed an advance copy of Girl Decoded, the upcoming book by the enormously talented Rana el Kaliouby, single mom, Ph.D, Muslim woman scientist in an overwhelmingly male field — and founder of an artificial-intelligence startup spun off from the MIT Media Lab. This engaging book is part personal memoir, part clarion call for applying emotion recognition technology to virtually every technology field, including mental health and autism. In a world of text, email and code, el Kaliouby teaches us that words convey less than 10 percent of the true meaning of a message and new communication technologies will need to account for emotion, facial expressions and vocal intonations to capture real and true meaning.  With video meetings becoming the norm these past few weeks, this book reminds us that the human always must come before the artificial.

I also heartily recommend Lift, the new book by MITRE Corp. engineer and author Dan Ward.  It’s an incredibly thoughtful and entertaining history of innovation from the unique perspective of flying machines and airplanes.  Ward starts with the Wright brothers in Kitty Hawk over a hundred years ago and traces their success to the many unique and persistent innovators who came before them, made mistakes, and paved the way for modern aircraft design and technology.  Ward is an upbeat and spirited writer and his perspective on considered “experimenting” versus random “risk taking” is a refreshing and important take for today’s entrepreneurs.

History readers also should consider Overground Railroad: The Green Book and the Roots of Black Travel in America, the new book by author, historian, and Harvard Fellow Candacy Taylor. It’s a riveting chronicle of the Green Book, the travel guide published for black motorists from 1936-1967. Taylor takes the reader back in time to the Jim Crow years and through the civil rights movement when a simple road trip for a black motorist was a demonstrable act of courage in many parts of the country. The many pictures Taylor includes convey as much as her compelling text. Traveling builds community. When you finish Taylor’s book, you’ll have a better understanding why it matters and the work that lies ahead—for all of us.

These are challenging and stressful times. To get through them, you’ll need strength and the constant renewal that comes from rest and reflection. No better way and no better time to find all that, and more, in a good and thoughtful book.

Read on the Boston Business Journal here.

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.

Filed Under: Business articles, General

Challenging Times: Four Things CEOs Should Do Right Now

March 16, 2020 by Karen Callahan

We are fielding lots of messages for CEO’s, board members, and other decisionmakers about how to adjust to the changing circumstances around us.  Here’s a simple summary of the topics and responses:

Access to Capital?  Most teams are assessing cash flow and runway on a daily weekly basis and making plans, even if budgets may change rapidly. (As former BigLaw attorneys now practicing from a much more cost-efficient platform, we’ve been through previous crises and we “get it.”)  Good news is that VC’s, investors and commercial bankers also are working from home and they want to do deals too. Consider polishing your one pager or deck and sending that email intro.  Chances are, they will get it and respond to it.  Talk to your legal and accounting advisors and outside marketing or business development staff—they understand that you are budgeting and making fast and difficult decisions. (As usual, we are not afraid to tell clients to defer any unnecessary projects or notably, how to do them now, but cost efficiently.)

Exit/M&A Events?  See the above.  Investment bankers and potential buyers, whether strategic or financial/private equity buyers, also are working remotely and often from their home desks!  Diligence can be done through remote data rooms and preliminary management meetings can be done via video conference. From what we are hearing, we may see the M&A world pick up significantly once the current fog clears.

The Team. Your team is reading the same headlines and challenging economic predictions as you are today—can’t be helped when we are connected online and all day, especially with the world of sports and entertainment largely on hold!  Keep everyone up to date, and if salary cuts or reductions may be part of your go-forward plan, get in front of that messaging and consider new equity incentives and creative longer-term cash bonus plans. Align their long term thinking to yours.

The ecosystem: the small businesses around you—NEED you.  Think about the small businesses and vendors who are part of your network and eco-system. They are likely hurting right now and they need your help.  Consider buying a gift card for later use from a local restaurant, sandwich shop or catering company. Small business owners often don’t have cash reserves and they depend on all of us to keep them going. Consider sponsoring a food delivery to a local shelter—they get the food, the restaurant gets the business, and you might even get the charitable donation?  Let’s be creative and do all we can.  After all, we’re all in this together!

Filed Under: General

MLK and the Unfinished Fight for Economic Justice

January 17, 2020 by Karen Callahan

PUBLISHED IN THE BOSTON BUSINESS JOURNAL
By Lawrence Gennari – Chief curator, Authors & Innovators
January 17, 2020

This month will mark the 37th year that we as a nation honor the life and work of Martin Luther King Jr.  Now, more than 50 years since his death, we remember MLK’s tireless advocacy for racial equality, nonviolence, collective activism, and of course, his words of inspiration.

I’ve kept him especially in mind while making my way through a few books over the holidays. For any entrepreneur, CEO or member of the innovation community, MLK’s words and legacy continue to have urgent relevance — well beyond the eloquent quotes that gather so many “likes” on social media every January. I recommend a more intentional reading, listening and thinking tour this time around.

For starters, check out Michael Honey’s incredibly engaging recent book: To the Promised Land: Martin Luther King and the Fight for Economic Justice, which chronicles King’s speeches, comments and strategies around bringing greater opportunity to the millions of people he saw “at the bottom of the economic ladder.” MLK certainly wanted to change hearts and minds, but he also understood that business drives change, growth and progress. Honey observes that MLK didn’t advocate that everyone should receive the same pay, but more that everyone should have the same chance to create a better life through access to education, healthcare, and jobs.

When I revisited a favorite from my own library, Ripples of Hope: Great American Civil Rights Speeches, by Josh Gottheimer, I noted how often MLK and other speakers connected economic opportunity to a just society. MLK most definitely considered social justice in an economic framework. We should too — and that requires a greater awareness and openness to supporting entrepreneurs with barriers.  For example, I enjoyed VC: An American History, the new book by Harvard Business School Professor Tom Nicholas, which outlines the riveting history and birth of venture capital in the U.S., starting with the financing of whaling voyages and bets on “winning” ship captains and moving to the collective investment by captains of industry in government supported partnership structures, many now centered in Silicon Valley. This is a bold and rich history, but women and people of color will not find themselves in it — even today. For the vast majority of top VC firms, women hold no senior positions. Moreover, a recent HBS study found that black investors make up less than 1% of the industry, and 81% of VC firms don’t have a single black investor. MLK would find this ironic because, as Nicholas notes, “venture capital is based on the premise of financing radical, often revolutionary change.” I think he’d be urgently impatient for industry progress and change, given the human stakes in play.

More still on these barriers, you should consider The Broken Road: George Wallace and a Daughter’s Journey to Reconciliation, the new memoir by Peggy Wallace Kennedy, daughter of the former Alabama governor. The book attempts to present George Wallace in a broader, more human context, but the author’s parsing of his support of segregation and his “personal opposition” to violent racism struck me as a distinction without a difference. The descriptions of black inmates toiling away at all-white receptions at the governor’s mansion (while Wallace sowed racial animus for votes) left me especially angry and disappointed.

I do believe that MLK would be speaking out for criminal-justice reform, especially around the myriad post-prison restrictions on jobs, benefits and housing facing returning citizens, who are disproportionately people of color and substantially female. Sadly, much of this would be familiar to him. For far too long, in too many states, a criminal conviction has meant inmate exploitation and post-prison poverty. MLK would be encouraged by programs aimed at these vulnerable returning citizen entrepreneurs, such as Defy Ventures, Project Entrepreneur at BC Law School, Project Remade at Stanford, and the Pivot Program at Georgetown, but he would agree that we can and should do more at the federal and state level to support these efforts — now.

Many rightly revere MLK as an inspiration to the working class and the downtrodden. As we celebrate his life and work again this year, let’s recall not just his soaring rhetoric, but also his central commitment to economic justice.

Read on Boston Business Journal site

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.

Filed Under: Business articles, General

Boston Speaks Up: Meet BC Law Professor and M&A Lawyer Larry Gennari

January 14, 2020 by Karen Callahan

Boston Speaks Up is a multi-platform storytelling series from Fabric Media documenting the civic leaders, entrepreneurs, creators, innovators and artists with connections to Boston. 

LISTEN TO THE PODCAST and LEARN MORE HERE

Larry Gennari is a general counsel for a wide range of Boston-based businesses. He has a reputation of being a trusted and beloved business advisor to public companies, venture-backed companies, early-stage ventures, entrepreneurs, investors and board members. Many in the Boston innovation community rely on Gennari for expert legal counsel on financing strategies, partnerships, and mergers and acquisitions. He is a founding partner of Gennari Aronson LLP, which has consistently been named New England Super Lawyer for mergers & acquisitions, securities and corporate finance.

Having served as a corporate and transactional lawyer for more than two decades, Gennari’s work includes countless mergers and acquisitions, private offerings, venture capital financings, joint ventures, and public offerings as well as SEC compliance for public companies and their directors and officers. He’s also an Adjunct Professor at Boston College Law School, and developed one of the Law School’s newest courses, Project Entrepreneur, a student-led business fundamentals bootcamp for entrepreneurs with criminal records, many of whom were previously incarcerated.

 

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National Nonprofit American Student Assistance Announces New Board of Directors Leadership

December 19, 2019 by Karen Callahan

Larry Gennari, Carol Fulp to guide the education organization in its mission to help students find their path and plan for their future 

BOSTON – December 10, 2019 – American Student Assistance® (ASA), the national education nonprofit dedicated to helping students make informed choices about their futures, today announced it has appointed two established business leaders to the helm of its board of directors. Lawrence Gennari, partner at the Boston-area law firm Gennari Aronson LLP, will serve as chair, and Carol Fulp, retired former president and CEO of The Partnership, Inc., will serve as vice chair.

“We are incredibly lucky to have such accomplished and insightful leaders guiding our organization,” said Jean Eddy, president and CEO of ASA. “Larry and Carol have been trusted advisors to ASA for years, leveraging their experiences in talent development and education, and each brings unique skills and incredible savvy to our board. We look forward to their new leadership roles as we work together to help students know their options and make informed choices for life after high school.”

Gennari, a corporate and transactional lawyer for more than two decades, has been a member of the ASA board of directors since 2011. Gennari is the co-founder of Gennari Aronson, LLP., a boutique law firm serving private and public companies and entrepreneurs in a wide variety of industries. He also has been an adjunct professor at Boston College Law School for more than 15 years, and recently developed the Law School’s Project Entrepreneur course, a student-led business fundamentals bootcamp for entrepreneurs who previously were incarcerated. He is a frequent contributor to the Boston Business Journal on corporate finance, venture capital, and entrepreneurial topics, and he spearheads Authors & Innovators, an annual, community-based business book and ideas forum. Gennari earned his J.D. from the College of William and Mary and earned his bachelor’s degree in accounting from North Adams State College.

“ASA is doing important work at the intersection of education, innovation and the future of work. I’m honored to assume the role of chair of the board of directors for ASA at such a critical time,” said Gennari. “For our country, our states and our communities, the future begins now. I’m excited to work closely with Carol Fulp, our colleagues on the board, and ASA’s leadership team to ensure that more young people complete high school with a sense of what they want to do in life and a plan for how to get there.”

Fulp has been an ASA board member since 2009. She is the Founder and CEO of Fulp Diversity Consultants, where she assists CEOs and their organizations in advancing diversity and inclusion.  Previously, she led The Partnership, New England’s premier organization dedicated to enhancing regional economic competitiveness by attracting and retaining multicultural professionals. Fulp is the author of Success Through Diversity: Why The Most Inclusive Companies Will Win, and she also led philanthropy at John Hancock. In 2011, she was appointed by then-President Barack Obama as U.S. Representative of the 65th Session of the United Nations’ General Assembly. A trustee for Eastern Bank and the New England College of Business, she was one of the co-founders of the Massachusetts Conference for Women, the largest conference for women in the country. She also is a recipient of the Greater Boston Chamber of Commerce Distinguished Bostonian Award and is a graduate of the University of the State of New York.

To view the full ASA board of directors, visit www.asa.org/aboutus.

###

About American Student Assistance® (ASA)

American Student Assistance® (ASA) is a national nonprofit committed to helping kids know themselves, know their options, and make informed choices to achieve their education and career goals. ASA® has a 60-year legacy of working directly with students to increase their access to higher education through loans and financial education. ASA has turned its experience into impactful solutions for students in grades 6-12 to help them pursue their dreams. To learn more about ASA, visit www.asa.org/about-us

 

Media Contact

Candice Perodeau

Director of Public Relations

cperodeau@asa.org

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Give The Gift of Ideas: 10 great reads for innovators

December 3, 2019 by Karen Callahan

Ready or not—The holiday season is upon us!   Instead of the old, the tired, and the usual stuff, consider the gift of inspiration & ideas. Here are 10 great reads, some of which were featured at this year’s Authors & Innovators event:

  1. Do More Faster by Brad Feld (and others). Starting up, getting stuck, moving forward; advice from those who have been there.
  2. Smart Collaboration by Heidi Gardner. Collaborating is easy right? Nope. Here’s why and here’s how.
  3. Jumpstarting America by Jon Gruber and Simon Johnson. Innovation thrives –and so do communities and universities –when government invests in our intellectual infrastructure!
  4. Leading With Dignity by Donna Hicks. Dignity is more and different than “respect:” understanding how and why makes all the difference for every team and company.
  5. The Sun Does Shine by Anthony Ray Hinton. The compelling story of perseverance, integrity, dignity and grace by a former death row inmate; a must-read for those who wish to cultivate those qualities for their companies and in themselves.
  6. Reboot: Leadership & the Art of Growing Up by Jerry Colonna. Great companies are built by humans, some brilliant, many broken, all with their own story and strengths.
  7. Are We There Yet? The American Automobile: Past, Present and Driverless by Dan Albert. A fun walk through the history of cars in the US and how they shape our lives today.
  8. How We Make Stuff Now by Jules Pieri. Innovators are creating citizen commerce, cool new products, and the next generation entrepreneurs.
  9. The Gifted Generation: When Government was Good by David Goldfield. An engaging history of federal programs created and implemented in the decades after World War II to ensure economic and business growth.
  10. The Birth of Loud by Ian Port. The fascinating parallel lives of inventor Leo Fender and musician Les Paul, the evolution of the electric guitar, and a turning point for rock and roll.

More book recommendations here, here, here, and here!

Filed Under: General

The Truth About Sharks

November 22, 2019 by Karen Callahan

PUBLISHED IN THE BOSTON BUSINESS JOURNAL
By Lawrence Gennari – Chief curator, Authors & Innovators
November 21, 2019

To succeed on TV’s Shark Tank, you better have a good story. If you can’t give the sharks/investors a compelling narrative that includes an innovative product or service, a growing and underserved market, and demonstrable and repeatable revenue, then you won’t generate competitive investor interest. Instead you’ll end up with Kevin “Mr. Wonderful” O’Leary, or one of the other sharks, offering you $25,000 for 90% of your company.  Not a great reward for a venture just started — and you’ll be embarrassed on TV.

The narrative matters off-camera too, especially if you want to attract talent, pitch investors or, after some growth and progress, sell the company. That’s what I counsel my corporate clients at all stages, in many industries, all of the time.

We are all storytellers. It’s a natural part of the human condition. The stories we tell and the stories we hear help us make sense of the world. We also know what makes someone better at storytelling than others: a heightened perceptiveness, a gift for observation, a feel for language, and a visceral understanding of the listening audience. That’s why reading and exploring new ideas is so fundamental for entrepreneurs, C-suite executives, board members, and … well, everyone.

I just finished Narrative Economics: How Stories Go Viral & Drive Major Economic Events, the new book by Nobel-prize winning economist Robert Shiller. This is a thoughtful and compelling read about how popular narratives start, take off and impact the economic decisions people make every day. Shiller makes a strong case for incorporating narratives into economic theory and public-policy mechanisms. His take on how politicians and investors can be influenced by the oft-repeated and overbroad narratives of machines replacing people (dial-phones replacing switchboard operators in the 1930s; robots replacing factory workers from the 1960s through the 1980s) is spot-on.  Stories can, and do, move investors and markets.

Shiller also thinks a lot depends on who is telling the story. Columbia Professor Stephen Martin and MIT Researcher Joseph Marks would agree, and in their new book, Messengers, Who We Listen to, Who We Don’t and Why, they explain how “hard messengers” convey status, wealth, achievement and dominance and can drive a message about tangible benefits, while “soft messengers” emphasize warmth, vulnerability and trustworthiness and can build long and lasting business relationships. Hint: just adding a red “power tie” or bold-colored suit to your wardrobe for that next presentation is old thinking. This is a book that any prospective Shark Tank contestant — or CEO pitching for business or investors — will find useful.

Of course, the most important story might just be your own and for that, I would recommend Jerry Colonna’s new book Reboot: Leadership and The Art of Growing Up. Colonna is an executive coach, an experienced venture capitalist, and a skillful storyteller. In Reboot, he urges decision makers and CEO’s onward to a journey of radical self-inquiry through stories, anecdotes, and strategies and examples from his own experiences, good, bad and ugly. Colonna’s writing is unflinchingly honest, raw, and numinous. I marked no fewer than 20 pages so that I could return to them later with greater intention. No surprise, he encourages writing, reading and introspection as a path forward.

We all have a story to tell, and whether in the realm of business or personal, those stories are connected. I’m reminded of a quote from Barack Obama in Jeanne Laska’s recent engaging book, To Obama: With Love, Joy, Anger, and Hope, in which she chronicles the former President’s practice of putting politics aside to read 10 letters from the more than 10,000 he received each day at the White House, some supportive, many not, all fraught with emotion. “Everybody’s got a sacred story, an organizing story. Of who they are and what their place is in the world,” he said, and the trust in telling and the faith in listening is the glue that creates community. That strikes me as enduringly true and important.

Even if your waiting audience is a smiling pod of sharks.

Read on Boston Business Journal
Authors & Innovation is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.

Filed Under: General

Imagining A Better Way—Reentry, Recidivism, and Returning Citizens

November 19, 2019 by Karen Callahan

by Larry Gennari

Bloomberg Law
September 26, 2019

Citizens returning to their lives after serving in prison face more than 40,000 state and federal penalties and prohibitions. Attorney and adjunct law professor Lawrence Gennari calls on Congress and state legislators to eliminate unnecessary and punitive restrictions that prevent people with criminal records from getting a job.

Last fall, Florida voted overwhelmingly to restore voting rights for 1.4 million people with criminal records. This past July, however, the Florida Legislature and governor rejected that directive and enacted a law requiring those same people to pay new fees and penalties before voting.

The measure will be tied up in the courts for a long while. Hard to imagine for most of us, but for people with criminal records, a new poll tax is just more of the same.

So, let’s go there. Imagine a life where you spend every day, all day, in a room no bigger than a parking space. You may not have a window, but you’ll have food and water. Your human interaction will be limited. If you earn the privilege of an assigned job, you’ll be free from the mind-numbing tedium for a short while. That leaves plenty of time for contemplating how your life is now defined by the worst thing you’ve ever done.

That’s prison and the path that brought you here may have started with addiction, mental illness, a life of bad choices, a momentary lapse of judgment, or simply because a beleaguered defense lawyer told you that this was the least worst of your then bad options.

Now imagine that you’ve done your time, and you’re out. Will you get a second chance to remake your life?

For the more than 2.2 million men and women currently in U.S. prisons, the 11 million cycling through U.S. jails, and the 600,000 people released from incarceration each year, the answer is a resounding: maybe.

Read full article published in Bloomberg Law

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Experts recognize iboss’ ‘hot area’ for IPO, question CFO hiring timeline

November 15, 2019 by Karen Callahan

By Lucia Maffei  – Technology Reporter, Boston Business Journal
Nov 14, 2019

Paul Martini, the CEO of Boston-based cloud security company iboss Inc., recently said that an IPO is “definitely” down the road, providing details regarding revenue goals and expected IPO range. While cybersecurity and IPO experts agree that cybersecurity is a growth area, they were surprised to hear Martini’s proposed timeline for hiring a CFO. Martini is aiming to have a CFO just three to four months before the planned IPO.

iboss bills itself as the checkpoint of data that moves between devices and applications, securing Internet access on any device in the cloud. In October, Martini said that the company may file the regulatory documents to go public in the next 12 months, provided they hit an annual recurring revenue goal of $100 million. The capital that iboss might raise in an IPO is between $200 million and $600 million, Martini said.

“He’s implying a valuation for his company probably somewhere around $1 billion or more,” Neil Aronson, corporate and securities lawyer and partner at Needham-based Gennari Aronson, said of Martini. “It’s a little bit hard to gauge how successful he would be. He certainly doesn’t lack for confidence … That’s good in a CEO, I suppose. Although, within reason, right? You know, you can very confidently drive off the edge of a cliff.”

Read full article here

Filed Under: General

Tapestry of Key Business Topics

November 1, 2019 by Karen Callahan

October 28, 2019 By Jacqueline Ganim-DeFalco

Larry Gennari is a master at weaving together a trend-spotting tapestry of innovative business ideas. The very notion of keeping up with the plethora of new business books is an intimidating challenge.  For those of us who can’t, he offers us highlights with the value added of a compelling story that ties it all together.  The 2019 3rd Annual Authors & Innovators Festival took place last week at the UMass/Mt. Ida Campus with a roomful of avid “listeners!”  The three panels included 13 speakers and VIP moderators – Larry himself, Doug Banks – Boston Business Journal, and Carol Fulp.  Topics included: Team Building, Retaining your competitive edge, and Success through Innovation.  Here’s my quick topline of these highly energetic and informative panels.

Read the full article here on Marketing Recon

Filed Under: General

Love It or List It: A look at M&A and must-read local books

October 12, 2019 by Karen Callahan

By Larry Gennari – Chief Curator for Authors & Innovators
From the Boston Business Journal, Oct 10, 2019

I’m a bit addicted to home-renovation shows, and one of my recent and recurring addictions is Love it or List it, the home-design show on HGTV. The premise of the show is simple: the hosts, Hilary, a home designer, and David, a real estate agent, visit couples trying to decide whether to renovate or to sell their homes. They visit with the homeowners to hear them out, set budgets, and assess alternatives.

If you watch the show, then you already know: By and large, these people are crazy. They tell Hilary what they “must have” to be happy in their current house, and they advise David about “what it will take to make them move.” For Hilary, the requests often are unrealistic or outrageous: a luxurious new master suite, massive walk-in closets, a renovated larger bathroom for their six kids and a spacious home office — all for a 1,100-square-foot house and a budget of $40,000.

For David, people often want brand-new construction, ideally in the same neighborhood, but also somehow with a better commute to work, all for the same price as their current home. Why not throw in a Shetland pony too? My own pet peeve is with those who also want “man caves” or “lady lairs.” (The very use of those terms is an alarming practice that must be stopped before it spreads.) My wife and I often end up yelling at the TV screen, which is fun and cathartic.

At this time of year, many business owners wrestle with similar existential questions, and I see much of the same angst in my M&A practice. Luckily, I have a few business books to recommend for the love-it-or-list-it business decision: Does your established growth company need a renovation (or at least, some innovation to sustain its competitive advantage)? Then you need to read HBS Professor Gary Pisano’s new book, Creative Construction, a smart, direct and thoughtful guide to creating and maintaining innovative strategies, even and especially for established companies that are considered well-run. I liked Pisano’s practical ideas about forcing an organization to search for new ideas in novel and unfamiliar places, inside and out.

Read more

Filed Under: General

Bill Murray is Everywhere You Want to Be

September 6, 2019 by Karen Callahan

PUBLISHED IN THE BOSTON BUSINESS JOURNAL
By Lawrence Gennari – Chief curator, Authors & Innovators
Aug 30, 2019

I’m a big Bill Murray fan and my fondness for his work and his enigmatic style, both on-screen and off, has grown over the years. Whether he is photobombing tourists or visiting Fall River for pierogies, his Zelig-like ability to show up, to be intentional, in the moment and randomly there, speaks to all of us who dream of a world where every day could be spent doing what we love to do. That has me thinking about entrepreneurs and the creation of innovative businesses, not because everyone actually is ready to start and run a new venture, but instead because we all should be thinking about our life’s possibilities and who we want to be. So what movies and books might Bill recommend to anyone with an entrepreneurial mind-set? Unless he returns a message I might leave on his iconic 800 number (which is the only way anyone can connect with him for the last decade), I can only imagine.

Let’s start with one of Bill’s first films, Ghostbusters, the fun and familiar tale of three paranormal investigators who lose their plum university positions and decide to strike out on their own with not much money, no meaningful organization, and just an idea for a market-defining new service.

The movie is hilarious and shows how entrepreneurs who are smart (and lucky) enough can take advantage of an immediate (and paranormal) market need. Could such a crazy business ever get off the ground? Ask Jules Pieri, co-founder of The Grommet and author of the thoughtful and entertaining new book How We Make Stuff Now, a must-read for anyone who wants to launch an innovative product. Overall, it’s a compelling first-hand narrative from one of the region’s most recognized and successful entrepreneurs. The Grommet team has launched thousands of products and dreams. Pieri’s well-learned tips on marketing, positioning, financing and partnering are timely and true, and she skillfully weaves unique “grommet” (product or service) examples into every chapter.

Of course, entrepreneurs can’t just rely on timing and a cool new idea. They also need persistence and pluck, best demonstrated in Groundhog Day, in which Murray portrays Phil Connors, a TV weatherman caught in an endless life loop until he can learn about his best and truest self. I love this film, especially the memorable scenes of a dispirited Phil driving first off a cliff in a stolen orange truck, groundhog in tow, and then again on train tracks in a purple Eldorado with police in hot pursuit — another day, another drive forward.  Bill Murray would love car enthusiast and cultural historian Dan Albert’s new book: Are We There Yet: The American Automobile, Past, Present and Driverless, a witty, thorough and incredibly engaging history of how automobile innovators from Henry Ford to Lee Iacocca persisted through depressions, world wars, and recessions to bring us the driving experiences that have shaped our lives today. Where and how indefatigable entrepreneurs like Elon Musk will drive us next is still a work in progress.

Finally, no entrepreneurial venture can persist or thrive without funding and on this point, you might consider Murray’s most underrated comedy Quick Change, in which Bill’s character, “Grimm,” dressed as a sad clown and aided by two other incompetent co-conspirators, ridiculously and successfully robs a bank, only to screw up the getaway almost completely.

No, I’m not suggesting that you steal from a bank — but only instead that you should talk to one. Before you do that, read former SBA Administrator Karen Mills’ outstanding new book: FinTech, Small Business & the American Dream, a smart, savvy, and useful landscape of lending, fintech, and small business. Mills knows how the engine of small business powers the U.S. and her recommendations about how to sustain it through technology are thoughtful and direct. Her observations about how small banks can anchor communities are especially astute and important. Relationships still matter, especially today and even with online banking. As even a sad clown might tell you, access to the money just might be the easy part. What happens next can be an adventure, and you can never have enough friends.

About a month ago, Bill Murray turned up at Ted and Wally’s ice cream shop in Nebraska with Warren Buffett. When asked what brought him to Omaha, Bill answered: Alaska Airlines. The two reportedly then shared a deep and thoughtful conversation over ice cream. I’m incredibly jealous: Oh, to be a fly on the wall ….

To learn more from these authors, attend the Authors + Innovators Business Ideas Festival on October 24th and 25th.

Read this article in the Boston Business Journal.

 Lawrence Gennari is a business lawyer, law professor, and chief curator for Authors & Innovators, an annual business book and ideas festival.  

Filed Under: General

Knowing the Past Before Looking Forward

July 19, 2019 by Karen Callahan

In his recent article in the Boston Business Journal, partner Larry Gennari reflects on those who came before us, who pioneered new worlds, fought for our freedoms, and helped preserve our way of life to ensure a future of economic opportunity for all. Current disparities in venture and other available funding for businesses headed by women and people of color undoubtedly have historical roots, some dating back to World War II.  There are several great books worth reading to know more about this history which may surprise, infuriate and probably inspire you.

Read full article here

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Branding and Marketing are Not the Same Thing

June 21, 2019 by Karen Callahan

By Lucia Maffei

Jeff Schiamberg, managing director at financial services firm Macquarie Group, says that years ago, people would go to the mall and “watch people walk out with six, seven shopping bags.”

“Now they walk out with one … because they’re laser-focused on brands,” he said at a “Brand is everything” panel this week at the Mount Ida campus of UMass Amherst. The panel was arranged by Gennari Aronson, a Needham-based law practice specializing in mergers and acquisitions and financing.

For any enterprise, building a valuable brand is critical to attract customers or M&A interest, or raise capital. The process of building a brand must come before building marketing strategies, experts say, and those brands must evolve together with the fast-moving needs of customers.

“It’s not the same world that we were 15, 10 years ago when you could just create a brand and, you know, ‘If you build it, they will come,’” Julie Hall, marketing communications strategist, said. “You need to constantly be iterating, understanding, changing … to be able to address the changing needs of consumers.”

Schiamberg and Hall discussed brand and marketing techniques at the panel on Wednesday. The event was meant to provide entrepreneurs from both emerging and established businesses with advice on social media must-haves for brands and strategies for identifying customer needs. The panel was moderated by Lawrence Gennari, and Schiamberg and Hall were joined by Tom Copeman, managing director of investment management firm Nomadic Capital Management and Anne-Marie Kline, marketing executive at cosmetics company Living Proof.

Read full article at the Boston Business Journal to learn about the key takeaways from the event.  Requires subscription.

Filed Under: General

Digging into Food Entrepreneurship

May 3, 2019 by Karen Callahan

Interested in food entrepreneurship? In this interview by Rachel Greenberger of Babson College, Larry Gennari shares some key pointers on getting started.

Filed Under: General

Hello, Cleveland

April 26, 2019 by Karen Callahan

The Boston Business Journal Executive Pursuits column featured thoughts from Larry Gennari, partner at Gennari Aronson. Larry shared highlights from some of the business books he has been reading as curator of the annual Authors + Innovators Business Ideas Festival.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: Cleveland was music to my ears

by Larry Gennari

Cleveland: If it isn’t exactly first on your list for a weekend getaways and executive retreats. I want you to think again. 

Sure, it once was one of America’s largest cities, with a storied past that reflects the complicated economic history of the American Industrial Revolution. Even today, we look to such cities as Cleveland to make sense of the nation’s angst about innovation, the future of work, and an economy in transformation. The emerging balance of industries and pockets of creative development there now are incredibly interesting and vibrant. But that’s not why you should go to Cleveland. You go to Cleveland for rock ‘n roll — and the Rock & Roll Hall of Fame. 

After a direct flight from Boston, you’ll need at least two to three hours to tour the place. I spent five. Of course, before you go, you’ll also need some books. For background, I recommend that you start with a favorite from my bookshelf, Mark Winegardner’s Crooked River Burning, a ponderous, entertaining, and iconic novel set in Cleveland. Then, you’ll need some history on the start of rock and roll as a business. Lucky for you, author Ian Port’s new book The Birth of Loud is an incredibly entertaining saga of the rivalry and parallel lives of electric guitar innovators Les Paul and Leo Fender, both early Hall of Fame inductees. 

For perspectives on challenges in the industry today, you should read Eamonn Forde’s The Final Days of EMI, as well as Music on the Chain, Anthony McGuire’s new, short, readable book on the promise of block chain and the opportunities for artists to use technology to connect with their fans in direct and even more meaningful ways. 

So grab your headphones, a few business books, an old black concert t-shirt, and then head to the airport.  You know you want to do this.  As the King , Elvis Presley himself, once said: “You only pass through this life once, you don’t come back for an encore.”  

Please click here to read the entire Boston Business Journal article. Subscription required.

Lawrence Gennari is a business lawyer, law professor, and chief curator for Authors & Innovators, an annual business book and ideas festival.  

Filed Under: General

In M&A deals, here are 3 points buyers and sellers should keep in mind

April 12, 2019 by Karen Callahan

By Lucia Maffei  – Technology Reporter, Boston Business Journal

Preparation, preparation, preparation. That’s the word that was probably most repeated at the “Anatomy of a Merger” panel organized on Thursday by Gennari Aronson, a Needham-based law practice specializing in general counsel services, mergers and acquisitions and financing. 

The event was aimed at providing attendees, including many business owners, with a sense of the legal technicalities that are in place when companies are either sold or acquired. 

The takeaway? In an M&A deal, shaking hands and uncorking champagne are, of course, part of the picture. But these moments come after months of questions asked, numbers crunched, and risks assessed. 

Hence, preparation: Particularly on the selling side, people who go through an M&A deal need to prepare the ground before bringing up the subject. They need to be mentally prepared to what’s next, when the actual process begins. 

Moderated by Lawrence Gennari, partner at Gennari Aronson, the discussion at the Wellesley College Club brought together panelists with expertise in all the ingredients of a deal, including accounting, corporate counseling and insurance. They were: Jim DeLeo, managing partner at accounting firm Gray, Gray & Gray; Imran Haque, corporate counsel at HealthcareSource; Laura Glynn, partner at Gennari Aronson; Emily Maier, senior vice president at Woodruff Sawyer Insurance; and John Prior, CEO at Needham & Company.

Here are three points that both buyers and sellers should keep in mind when negotiating an M&A deal: 

Value-drivers for buyers and value propositions for sellers

Essentially, buyers want to see “a lack of problems,” or in other words, “a very clean, very well-run, very documented company,” Maier pointed out. Conversely, the very first thing prospective sellers want to do is getting their business in order. “If you were selling your house, and the fence outside from the front of your house was falling down, chances are you’d probably fix it before you put the ‘For sale’ sign in front of your house,” DeLeo said. Preparing a business for sale doesn’t take a month, but a year or more, DeLeo added: “Sometimes, you might not be in a tax-efficient structure, in which case you’ll need to do some pre-planning in order to give yourself as a seller flexibility to, basically, sell stock, sell assets.”

Three basic structures for getting sold

How exactly are companies being sold? “You can sell the equity, you can sell the assets, or you can have a merger—and a merger is selling the equity,” Glynn explained. “The tax consequences can be very different.” Generally speaking, selling the equity or a merger is easier than selling the assets, she continued. But when selling equity, you have to be sure that every person who has a piece of equity is going to be at the table to sign the documents, Glynn pointed out. 

The ‘letter of intent’ is only the beginning

Typically, buyers are going to do the draft of the agreement, Gennari said. On the sale side, sellers need to “clean up the closet” and “find all the skeletons,” DeLeo said; on the buy side, tax consequences need to be taken into account. The last thing that is settled? “The seller is supposed to deliver a certain amount of working capital: current assets over current liabilities,” Glynn said. “If what they deliver at closing is more or less than that target, then the purchase price is adjusted dollar for dollar.”

Filed Under: General

Fishing for Answers

March 24, 2019 by Karen Callahan

The Boston Business Journal Executive Pursuits column featured thoughts from Larry Gennari, partner at Gennari Aronson. Larry shared highlights from some of the business books he has been reading as curator of the annual Authors + Innovators Business Ideas Festival.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: Springtime fishing brings questions, answers

by Larry Gennari

Spring arrives, as the late poet Mary Oliver wrote, “year after year, humble and obedient.”  For the philosophical among us, the change of seasons reminds us to number our days and to seek out that which truly matters with the time we have left. For the more business focused, more daylight just means greater productivity, fewer cancelled meetings, and a commute that doesn’t end in the dark. 

So, what can the thoughtful executive do now, at this time of year, to balance the needs of the head, the heart and the practical day-to-day? I have a suggestion: Go fish. Lucky for you, April 1st marks open-water fishing season on all lakes and ponds in Maine. 

While you are planning, you also might want to grab a great book. I enthusiastically recommend Langdon Cook’s Upstream: Searching for Wild Salmon, from River to Table, a must-read for those who want to learn more about the natural history of this majestic fish and the varied efforts to protect its habitats and the fragile supply chain that brings it to our tables. 

For C-suite executives navigating this volatile and changing global economy—you need to read Crashed: How a Decade of Financial Crises Changed the World, by Columbia University Professor Adam Tooze, an ambitious and sprawling book that details the predictable reasons for and the troubling aftermath of the 2008 financial crisis.  As an essential (and much shorter) companion read, you also must pick up Tim Marshall’s Prisoners of Geography: Ten Maps That Explain Everything About the World (now in paperback). 

As my favorite character, Ishmael, accurately observed in Moby Dick, the greatest fish story ever written, “Ignorance is the parent of fear.” That’s a lesson worth keeping in mind as you read these insightful books. 

Please click here to read the entire Boston Business Journal article. Subscription required.

Lawrence Gennari is a business lawyer, law professor, and chief curator for Authors & Innovators, an annual business book and ideas festival.  

Filed Under: General

We’ve Moved!

March 8, 2019 by Karen Callahan

We outgrew our old office…so we packed up our things and moved across the street to a bigger space!

Stop by and see us if you are in the area.

250 First Avenue, Suite 200

Needham, MA

02494

All other contact information, including phone and email, will remain the same.

Filed Under: General

2019 is Here!

February 1, 2019 by Karen Callahan

The Boston Business Journal Executive Pursuits column featured thoughts from Larry Gennari, partner at Gennari Aronson. Larry shared highlights from some of the business books he has been reading as curator of the annual Authors + Innovators Business Ideas Festival.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: Reading Makes You Smarter

by Larry Gennari

Ready or not, 2019 is here — and with it, at least according to most pundits and economists, comes the prospect of slower growth, more uncertainty, and continuing general anxiety about divided politics and our overall place in the world.

So, what should you do in this first quarter or for that matter throughout the entire year? No surprise, my advice for C-suite executives is to read, more thoughtfully and expansively, but also to write and reflect— all while putting down your phone – because our brains are changing and adapting as we become more dependent on digital technology.

Check out the new and incredibly entertaining book, written in the form of letters to us: “Reader Come Home: The Reading Brain in a Digital World,” by Tufts professor and cognitive neuroscientist Maryanne Wolf.

If you think you don’t have time to read, remember that Warren Buffet credits many of his best business decisions to his habit of spending 80 percent of his time reading.  So, if you, too, want to track business trends, you should read “AI Superpowers: China, Silicon Valley and the New World Order,” by Kai-Fu Lee, founder of Sinovation Ventures and former president of Google-China.

What about writing? Writing regularly and more deeply, whether for a blog or just for yourself and via every digital medium, is great practice and it’s critical for engaging communication. Just ask Aron Ain, CEO of Kronos and the author of the smart new book: “Inspired: How to Build an Organization where Everyone Loves to Work” and pay close attention to his chapter “Overcommunicate.”

You may think you already do plenty of reflecting, but if you read Hans Rosling’s timely and insightful book Factfulness, you’ll learn that most all of us process information through continually reinforced biases and pre-conceived notions of what must be true.

In short, 2019 will present some of the same challenges that we have seen before — but that doesn’t have to mean “more of the same” for you. A renewed focus on reading, writing and reflecting may be just what you need as you make your way through it.

Lawrence Gennari is a business lawyer, law professor, and chief curator for Authors & Innovators, an annual business book and ideas festival.  

Please click here to read the entire Boston Business Journal article.  Subscription required to read the entire article.

Filed Under: General

Time to reflect on ‘vocational discernment’

January 1, 2019 by Karen Callahan

The Boston Business Journal Executive Pursuits column featured thoughts from Larry Gennari, partner at Gennari Aronson. Larry shared highlights from some of the business books he has been reading as curator of the annual Authors + Innovators Business Ideas Festival.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: Time to reflect on ‘vocational discernment’

by Larry Gennari

As we close out one year and begin another, many of us use this as a time for reflection, both personal and professional.   If you are contemplating your career and your work, you are not alone.  While there are many books to turn to, here are some that are worth your consideration.

Boston University Professor Ellen Ruppel Shell’s latest book, The Job: Work and its Future in a Time of Radical Change, discusses how work gives us an identity and a sense of purpose and place in the world.

For the entrepreneurs out there, begin with the basics, including startup guru Chris Guillebeau’s books: The $100 Startup: Reinvent the Way You Make A Living, Do What You Love, and Create a New Future and the more recent Side Hustle: From Idea to Income in 27 Days. Both are fun, engaging and easily readable.  Or check out lawyer-turned-chocolatier Shawn Askinosie’s thoughtful book, Meaningful Work: A Quest To Do Great Business, Find Your Calling and Feed Your Soul.  Just a note, if you can’t find a job you like, you might do well to create your own.

Other compelling reads that will give you insight into various professions and professionals include Phuong Uyen Tran’s new book, Competing with Giants, Paul Freedman’s Ten Restaurants that Changed America, or former Saleforce CMO Tien Tzuo’s new book Subscribed.

Finding meaning in our work is a challenging and often lifelong process.  Reading insightful stories about how others have found meaning in theirs — might help you take the first step.

Larry Gennari is a business lawyer and chief curator for Authors + Innovators, an annual business book and ideas festival (www.AuthorsInnovators.org)
Please click here to read the entire Boston Business Journal article
Subscription required to read the entire article.

Filed Under: General

Holiday food, family, friends, and common ground

November 21, 2018 by Karen Callahan

The Boston Business Journal Executive Pursuits column featured thoughts from Larry Gennari, partner at Gennari Aronson. Larry shared highlights from some of the business books he has been reading as curator of the annual Authors + Innovators Business Ideas Festival.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: Holiday food, family, friends, and common ground

by Larry Gennari

With all the anxiety in the world this year, conversations around the Thanksgiving table and at other holiday get-togethers are bound to be a bit more intense.  What can the thoughtful entrepreneur or innovator do now to navigate that potentially awkward dinner? Maybe not much … but you might at least prepare by reading a few business books in the coming weeks.

Start by taking a deep breath and putting yourself in the other person’s shoes. That’s timeless advice you’ll get from Harvard negotiators Samuel Dinnar and Lawrence Susskind in their terrific new book: “Entrepreneurial Negotiation.”  Hint for Thanksgiving: listening is critical and you do NOT have to win every single point to make meaningful progress.

For more specific topics across the dinner table, you should read Harvard Business School Professor William Kerr’s new book: “The Gift of Global Talent: How Migration Shapes Business, Economy and Society.” I laughed out loud at Kerr’s metaphor about Moore’s Law and the Tooth Fairy in describing the unstoppable advance of technology.

If all else fails in reaching common ground while you are breaking bread, share a reading or two from “Devotions,” a recent and powerful collection from my very favorite poet, Mary Oliver, who would tell you to find the great good in every small interaction.

Larry Gennari is a business lawyer and chief curator for Authors + Innovators, an annual business book and ideas festival (www.AuthorsInnovators.org)
Please click here to read the entire Boston Business Journal article
Subscription required to read the entire article.

Filed Under: General

Gennari Aronson Partners Named New England Super Lawyers

November 19, 2018 by Karen Callahan

FOR IMMEDIATE RELEASE

Needham Law Firm Partners Named New England Super Lawyers

Neil Aronson Named Top 100 Massachusetts Lawyer

NEEDHAM, MA – The law firm of Gennari Aronson, LLP is proud to announce that Neil Aronson has been named a Top 100 Massachusetts Lawyer and that all of the firm’s senior partners have again been selected as Super Lawyers in the New England region for 2018.  In addition to Aronson being named a Top 100 Massachusetts lawyer:

  • Neil Aronson was named a Securities & Corporate Finance Super Lawyer
  • Lawrence Gennari was named a Super Lawyer in the Mergers & Acquisitions category
  • Laura Glynn was named a Super Lawyer in the Mergers & Acquisitions category

As Super Lawyers, Gennari, Aronson and Glynn are part of an elite group of top attorneys in Massachusetts.  No more than 5 percent of the lawyers in the state are named as Super Lawyers.  The Massachusetts lawyers who receive that highest point total during this selection process are further recognized in the Top 100 list.  Gennari and Aronson have consistently been awarded Super Lawyer status since the inception of the award in 2004.  Glynn has been awarded Super Lawyer status for the past eight years.

Gennari Aronson serves innovative companies, entrepreneurs and the investors who finance these entities. The firm also curates the annual Authors and Innovators Business Ideas Festival.

# # #

About Super Lawyers

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. Only 5 percent of lawyers in the state are chosen. The annual selections are made using a rigorous multi-phased process that includes a statewide survey of lawyers, independent research evaluation of candidates, peer reviews by practice area, and a good-standing and disciplinary check. For more information about Super Lawyers, visit their website www.superlawyers.com.

About Gennari Aronson, LLP

Gennari Aronson, LLP serves innovative companies, entrepreneurs and the investors that finance them. Founded by veterans of Boston’s largest law firms, Gennari Aronson exemplifies the same entrepreneurial spirit that guides many of its clients.  The firm has established a strong network and commitment to the technology, consumer, innovation and emerging growth sectors. The firm also curates the annual Authors and Innovators Business Ideas Festival, www.AuthorsInnovators.org.

The firm has offices at 300 First Avenue, Needham, MA. The website is www.galawpartners.com.

Filed Under: General

Boston Business Journal – Head to Sweden…

November 16, 2018 by Karen Callahan

The Boston Business Journal Executive Pursuits column featured thoughts from Larry Gennari, partner at Gennari Aronson. Larry shared highlights from some of the business books he has been reading as curator of the annual Authors + Innovators Business Ideas Festival.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: Business advice? Head to Sweden, and bring these books

by Larry Gennari

If you happen to head to Sweden for your next executive retreat, check out the Museum of Failure in Helsingborg, which features a wide range of failed products from some of the world’s best-known companies. This very well may prompt you to spend time reading about how business decisions are made — both the good and the bad.

The most successful CEOs and management teams listen to advice, test old and new assumptions, and make informed bets on what lies ahead. Much of the advice we get is from those we trust the most: our mentors. Two recent books are illustrative. New Orleans Mayor Mitch Landrieu’s “In the Shadows of Statues” and “The Traveling Feast: On the Road and at The Table with my Heroes,” by, Rick Bass, share stories of the impact of mentorship.

Three recent business books can tell you how to actually implement that good advice. Andy Molinsky’s engaging “Reach” provides a step-by-step framework for pushing beyond our comfort zone and connecting to our own sense of purpose in implementing business decisions. “The Startup Playbook” by Will Herman and Rajat Bharagava is a really fun romp through the process of business building that every entrepreneur should read. Finally, in “Detonate,” expert strategists Geoff Tuff and Steven Goldbach show us how to embrace impermanence and “blow up” tried and true best practices that many in the business world consider gospel.

Larry Gennari is a business lawyer and chief curator for Authors + Innovators, an annual business book and ideas festival (www.AuthorsInnovators.org)

Please click here to read the entire Boston Business Journalarticle
Subscription required to read the entire article.

Filed Under: General

Innovation and the Future of Work

November 2, 2018 by Karen Callahan

If you missed the 2nd annual Authors + Innovators business ideas festival last week, Jackie Ganim-DeFalco from Marketing Recon wrote a great recap of the event.  Click here to read her summary of the event.

 

 

Filed Under: General

Executive Pursuits – Boston Business Journal

October 5, 2018 by Karen Callahan

Executive Pursuits, a regular column in the Boston Business Journal, features articles written by Boston-area executives sharing their interests and hobbies outside of the workplace.

Larry Gennari, partner at Gennari Aronson and curator of Authors + Innovators Business Ideas Festival, shared highlights from some of the business books he has been reading in preparation for the upcoming second annual Authors + Innovators event on October 25 & 26.

Below is an excerpt from this article with a link to read the entire piece in the Boston Business Journal.

Executive Pursuits: In Search of a Good Business Book

by Larry Gennari

“When was the last time you read a really great book?” A reasonable and engaging question, I think, and one for which the answer is different for everyone.

Recently, I’ve turned my attention to business books, looking for ones that tell you something relevant and new and include key takeaways that you can implement today, next week or next quarter.

A few recent reads fit the bill. In “A New U: Faster & Cheaper Alternatives to College,” Ryan Craig of University Ventures covers the growing gap between college and actual employer needs and begs the question of what degree requirements should companies consider when hiring.

I also enjoyed two other recent business books that focus on corporate culture and priorities. Nigel Travis, author of “The Challenge Culture,” has written an engaging history of his storied corporate career, from Blockbuster to Dunkin’ — and he tells why creating a culture of listening, challenge and curiosity is fundamental for businesses and professional relationships.

Another local author, Carol Fulp, CEO of The Partnership, agrees. In her insightful book, “Success Through Diversity,” she lays out direct and commonsense steps managers can take to ensure that the way they think inside the company reflects the greater customer world outside.

The best books open our minds and challenge our assumptions and make reading a worthy pursuit for any executive.

Larry Gennari is a lawyer and chief curator for Authors & Innovators, an annual business book and ideas festival.

Please click here to read the entire Boston Business Journal article
Subscription required to read the entire article.

Filed Under: General

Farmwise closes funding round

September 26, 2018 by Karen Callahan

Congratulations to our client, Farmwise, on the closing of their financing round.  Great work, great products, great team!

For Immediate Release                                                                                                     

FARMWISE® (MAKERS OF VEGGIE FRIES®, VEGGIE TOTS®& VEGGIE RINGS™ CLOSES FUNDRAISING ROUND LED BY CLEVELAND AVENUE, LLC INVESTMENT FIRM

BOSTON, M.A. – April 2018 – Farmwise LLC based in Boston, Massachusetts—makers of Veggie Fries®, Veggie Tots® and Veggie Rings™announces closing a $4.5 million financing round led by Cleveland Avenue LLC*, the venture capital firm founded by Don Thompson, former President and CEO of McDonald’s Corporation.

For more information, visit us at www.eatveggiefries.com.

Farmwise®has been providing a fresh take on America’s favorite frozen foods since 2014, when, with families and fries in mind, Boston-based couple Dave and Cristina Peters and their three children created the first batches of Veggie Fries® in their home kitchen.  Using a blend of farm-grown vegetables and beans, the Peters developed a patent-pending process to provide consumers a healthier alternative to America’s beloved fry. Farmwise continues to deliver break-through innovation with the launch of three varieties of Veggie Tots® (Broccoli, Cauliflower and Beets) and two varieties of Veggie Rings™ (Cauliflower and Butternut Squash).

“Our Cleveland Avenue investment philosophy is to search for emerging companies that have potential for mainstream success across multiple channels,” said Thompson.  “What Dave and Cristina have achieved in just four short years is impressive, and we look forward to helping Farmwise further accelerate their growth.”

“As parents of three daughters, we’re focused on creating healthy products that we’re proud to serve our own family.  Veggie Fries, Tots and Rings are a parent’s dream – crispy, fluffy and delicious with an exceptional nutritional profile,” said Cristina Peters.

“We’re so excited to be partnering with the Cleveland Avenue team to bring our products to every family in America.  Don and his wife Liz are also strong believers in “family first” and giving back to the community, and we are proud to be a part of their extended Cleveland Avenue family,” said Dave Peters.

Joining Cleveland Avenue is Home Market Foods, Inc., a leading protein company with the number one brand of frozen meatballs (Cooked Perfect) and one of the fastest growing brands in the frozen chicken category (Fire Grilled).

ABOUT FARMWISE LLC

Based in Boston, Massachusetts, Farmwise LLC is a privately held company with a mission of developing healthier alternatives to some of America’s favorite foods without compromising on taste. All Farmwise products are made from real, farm-grown vegetables and beans, are Non-GMO Project Verified, Free of the Top 8 Allergens, Vegan Friendly, provide a Good Source of Fiber, 3+ grams of Protein and an Excellent or Good Source of Vitamin A, C and/or K.   Farmwise products are found in over 8,000 supermarkets in the USA.

ABOUT CLEVELAND AVENUE, LLC
Cleveland Avenue, LLC is a privately-held venture capital firm which accelerates and strategically invests in innovative restaurant, food and beverage concepts and emerging brands including Beyond Meat, Drink Maple, Bhakti, Farmer’s Fridge and SomruS.

*Cleveland Avenue is the General Partner of the Cleveland Avenue Food and Beverage Fund I

Visit us at www.clevelandave.comand @CleveAveLLC on Twitter and Instagram.

 

Filed Under: Financing, General

Super Lawyers 2017

November 8, 2017 by Karen Callahan

NEEDHAM, MA – The law firm of Gennari Aronson, LLP is proud to announce that its partners have again been selected as Super Lawyers in the New England region for 2017. Lawrence Gennari was named a Super Lawyer in the Mergers & Acquisitions category. Neil Aronson was named a Securities & Corporate Finance Super Lawyer and Laura Glynn was named a Super Lawyer in the Mergers & Acquisitions category.

As Super Lawyers, Gennari, Aronson and Glynn are part of an elite group of top attorneys in Massachusetts. No more than 5 percent of the lawyers in the state are selected by Super Lawyers. Lawrence Gennari and Neil Aronson have consistently been awarded this recognition each year since its inception in 2004. Laura Glynn has been awarded Super Lawyer status for the last seven years.

Gennari Aronson serves innovative companies, entrepreneurs and the investors and venture capital firms that finance them. The firm also curates the annual Authors and Innovators Business Ideas Festival.

Filed Under: General

Authors & Innovators “Festival”: An Audience of Lifelong Learners & Connectors!

November 8, 2017 by Karen Callahan

by Jacqueline M. Ganim-DeFalco | Marketing Recon

Whether seeking to press the “refresh” button in your business network or curious to find out about the latest discussions puzzling academics and entrepreneurs, you would have been pleasantly surprised to find this and more at the Gennari|Aronson event hosted at the gentile Wellesley College Club last week. (Oct 26-27).

The first compliment goes to Larry Gennari who was a gracious and knowledgeable host to the speakers and the attendees.  [Note: he must be a speed reader as he was able to offer insight on every single book.]  The format was unique in that the speakers were all authors, primarily from academia and the “innovators” were embedded in the audience, some with exhibits.  The word “law” was never mentioned – this was about supporting the innovation  community with ideas, best practices, thoughtful discussion and interaction… continue reading

Filed Under: General

Considering selling your business now or in the future?    

May 12, 2017 by Karen Callahan

Check out this M&A webinar from Trulytics featuring  Larry Gennari and Terry Mullen.

You may be running a successful and thriving business but do you know how to sell it to the right buyer at the right price? If the perfect buyer strolled through the door tomorrow, would you be ready to launch into the sales process?

Lack of knowledge, poor preparation and insufficient business sales experience are the three main factors that contribute to poor sales results in the wealth management sector.

If you’re planning to sell your business in 2017 or beyond, check out this free webcast and achieve an outstanding result.

Filed Under: General, Mergers & Acquisitions

What Do Customers Want?:Quick Tips for Branding, Engagement and Lasting Relationships

April 14, 2017 by Karen Callahan

For all companies – regardless of size or industry – one question remains paramount: What do customers want? We recently hosted a thoughtful and informed discussion about the stages of the customer relationship, from initiating interest and developing a brand to maintaining contact and building a long-term relationship.

What should I think about before launching a product?

When developing a marketing and branding plan, a company should begin with the end in mind. After a product is launched, how do you want to be viewed? What do you want your customers to say about you? Once you have framed your ideal scenarios, think about what you can do now to achieve those results, then build your marketing plan around those results.

Also consider asking for advice from analysts, advisors, and other influential personalities in your industry. These advisors can provide valuable insight as to where the market is heading and how you should brand and market your products to fit with those future trends.

Should this be an internal or external process?

Developing and marketing a brand, as well as customer engagement, should be both an internal and external process that is based on research. You should understand the strengths of your products and develop a way to convey your passion to the customer. If you are a creating a new category of product or services, then you may not have external data to rely on, and you will have to work with your instinct and passion. However, if your category is a competitive one, then you should focus on external processes and understand what customers are used to seeing in the market.

Alternatively, a company could develop their brand by repackaging ideas from other industries to explain your new product and its purpose. Use well-known methods to describe how you will shake up an established field. For example, your company could be described as the “Uber for ____” or the “Netflix for ____”; these analogies brand your company based on something that is already accepted by consumers and is easily understood.

Don’t be afraid to invest in the process, and hire a marketing professional or team. Often founders are too close to their own product to effectively market it. Founders should still be involved in the process and provide a vision, but the execution should be done by a marketing professional. Your senior marketer also should not be your last hire – you should own the process and get your marketing team involved early.

Regardless of the type of process, it is important to remember that your branding should be creating customers rather than creating a product.

How do you protect your brand?

You will want to consider legal protections for your brand. There are registered legal protections such as trademarks and patents. Additionally, you should also consider protecting your intellectual property with assignment agreements, non-disclosure agreements, and other documents that establish ownership for the company. These legal protections may require additional up front work, but can pay dividends down the road. However, you should also work to protect your brand by building relationships. Creating a memorable customer experience engages your customer and generates brand loyalty. Creating value is not enough, you also will also need to communicate how you created value. Advertising, promotions, and content are other important ways to maintain your customer relationships. Above all, you should remain consistent with your brand.

Why should you proactively protect your brand – who will care?

Investors and potential acquirers of your business! Brand and goodwill are important to both the short and long term success of a company, and investors will take notice of how the market views your company and your products.

It is important to receive constant feedback and periodically assess the effectiveness of your marketing. Social media and advisors are great resources to test the strength of your brand. Be wary of always relying on sales teams, who may have a biased reading of your customers. Also consider utilizing customer surveys, white space reports, or secret shoppers. You should focus on the metrics that matter, including near term revenue, concentration of customers, competitive advantage, repeatable business model, and your future growth potential.

How do you market a services business?

Marketing and branding a service business should be based on the customer experience. Focus on your customer relationships and have your customers tell your story. Create customer engagement and build your brand by utilizing referral programs or creating your own.

What should I not do when marketing and developing a brand?

  1. Don’t speak in purely technical terms – translate your product or service into something the customer will understand. Keep it simple!
  2. If you produce consumer products, then the packaging should follow consumer expectations and understanding. Your cereal may not sell if it is in an ice cream container. Make your product innovative, not the packaging.
  3. Don’t sell to your customer before creating a relationship and understanding the customer’s needs. Create a customer, not a product.

Gennari Aronson would like to thank our panelists for this thoughtful discussion:

  • Michael Welts, Vice President of Marketing, BlueArchive
  • Joe Del Regno, President, Nothing But The Fruit (Welch’s)
  • Eileen Debenham, Co-Founder, GoBig Branding
  • Tom Cates, Chief Storyteller, salesEQUITY
  • Neil Aronson, Partner, Gennari Aronson

 

If you are interested in learning more or attending one our future events, please join our mailing list by contacting ceden@galawpartners.com.

Filed Under: General

Don’t Get Caught in the Content Trap

March 3, 2017 by Karen Callahan

Getting noticed and getting paid are challenges for every business. These challenges can be overwhelming in today’s digital world, where there is an overabundance of content. However, focusing on content may be a trap rather than the road to success.

Gennari Aronson, LLP recently hosted a conversation with Professor Bharat Anand of Harvard Business School to discuss his latest book, “The Content Trap.” In his book, Professor Anand addresses navigating business strategy in the fast-changing digital marketplace. He recommends that businesses should foster connections rather than focus exclusively on content. He demonstrates his point through various case studies across several industries including media companies and educational institutions, by examining what works and what failed and then discussing the strategies each company pursued.

Content is important, but creating and fostering connections with the content is the actual key to success. Professor Anand identifies three types of connections that businesses can cultivate through content – user connections, product connections, and functional connections. User connections allow the users of your product and content to connect with each other. These user connections make your content social. Just because you are reaching a wide audience does not mean that you are engaging that audience. Product connections involve focusing on complements to your core product. Complements include products and services that increase the value your core product delivers to users. Professor Anand recommended thinking outside of the box for complementary content – such as movie theatres providing child care services. Functional connections involve denying the age-old mantra of “copy your competitors.” The context matters and every decision you make in your company will affect the success of your content and connections. According to Professor Anand, “success comes from being different, not similar.”

Professor Anand stressed three important points:

  1. Don’t just create; create to connect.
  2. Don’t look at your business too narrowly; focus on complementary connections to strengthen your core products.
  3. Making connections is not a one-size-fits-all process – use your strengths and unique characteristics to create and foster connections.

Professor Anand’s book is available now via www.thecontenttrap.com. If you are interested in learning more or attending one our future events, please join our mailing list by contacting ceden@galawpartners.com.

 

Filed Under: General Tagged With: Janelle Peiczarka

Is an LLC right for your business?

December 28, 2016 by Karen Callahan

how-to-llcChoosing the right form of business entity is an important and critical decision for any entrepreneur. A sole proprietorship or partnership is easy to form, and each has low administration costs, but they offer no meaningful liability protection for the entrepreneur. A corporation can provide limited liability and often this is the preferred entity for outside investors. However, with typical “c-corporations,” an exit transaction may result in “double-taxation,” with tax at both the entity and then the shareholder level, as sale proceeds are distributed. For some businesses, LLCs offer the best of both worlds – limited liability and one-level, pass-through taxation. The key to taking full advantage of the LLC as a form of entity is drafting an effective operating agreement. Here are five things to consider when drafting the operating agreement for your LLC.

  • Member-managed or Manager-managed? When creating an LLC, you need to determine what the management structure will look like. Do you want a centralized management system with a Board of Managers making the major decisions of the company or would you rather have a member-managed company where all members are entitled to vote? There is no “one size fits all” approach and you need to weigh multiple factors when making your decision because it carries important implications based on which organizing jurisdiction (typically Delaware or Massachusetts) you choose for the LLC.
  • How will you attract talent? Many early-stage companies want to attract talent and may not yet be in the position to compete with established companies from a salary standpoint. Therefore, you will likely need to establish attractive equity compensation packages to bring in and retain employees. Employees of corporations are used to receiving equity in the form of shares or stock options. For LLCs, equity grants typically are in the form of “profits interests” and/or “capital interests” if they are provided for in the operating agreement. You will also want to consider whether and how the interests will be subject to any vesting restrictions.
  • Do you plan on raising money from outside investors? You’ll need to keep your financing strategy in mind as you are drafting the operating agreement. Unlike the “typical” common and preferred stock rights in a corporation, equity or membership units in an LLC are not self-defining or “standard” from the perspective of potential investors. The operating agreement will need to address the different investor concerns about, among other things, board seats, liquidation preferences, anti-dilution and any preemptive rights. Investors may insist on significantly more input on the specific terms of the operating agreement than they might otherwise if the business had been formed as a corporation.
  • How will you deal with distributions? Perhaps the most important provision of any operating agreement—for both employee/members and outside investors—will be the distribution provisions. Because the LLC is a “pass-through” entity, most operating agreements provide for distributions to allow members to pay their annual taxes. Decisions about whether and how other distributions might be made: (i) from regular operating profits and (ii) on a sale of the company, vary widely among companies and should be spelled out in detail in the operating agreement.
  • Transferability of Interests: When drafting your operating agreement, you want to address the transferability of interests. Do you want an absolute prohibition on transfers or will you allow transfers subject to certain conditions? How much notice and to whom will it be required prior to making a transfer? Will the company have a right of first refusal? Will the other members have a right of co-sale? Bottom line is that if you do permit transfers, be sure, as a condition of the transfer, the acquirer becomes a signatory to the LLC Agreement.

The LLC may be the best choice for your new business because it allows for limited liability, pass-through taxation, and significant flexibility in defining the overall business relationship. That flexibility also means that you’ll need to consider a variety of issues and set out details in the operating agreement as the business gets started.

Filed Under: General

Five Common Deal Mistakes to Avoid

December 2, 2016 by Karen Callahan

By Lawrence Gennari

This has been an historic year for M&A and has many companies and management teams wondering whether an exit next year might be in the offing. As strategic planning for 2017 continues, decision makers planning for an exit should avoid five common mistakes in the process.

  1. Forgetting to do due diligence on your own business. How will your business look to a potential buyer? Every sale or financing starts with due diligence and that means corporate books and records and significant contracts should be in good order. Now is the time to complete stock option or restricted stock grants, estate planning transfers or issuances long promised but not papered. In connection with new grants or stock awards, the Company may want to consider securing or updating a so-called 409A valuation of the business, to establish “fair market value” for tax purposes. Also, consider necessary changes to important contracts, leases or customer agreements. Better to negotiate those now, instead of during the compressed time frame of a contemplated sale.
  2. No Competitive Process. Separate from a tax oriented 409A valuation to set option prices, should the Company pay for an outside enterprise valuation now to get a sense of what’s “market”? Not necessarily. An overall “enterprise” valuation won’t necessarily tell the business owners what a company is worth. For that, you’d need a competitive process, most likely run by an experienced and practical investment banker with experience in your market segment. Many companies make the mistake of talking to only one potential partner or in reacting to an unsolicited term sheet from an interested party. Due diligence commences, negotiations quickly follow, and the team finds itself confronting the often difficult choice of status quo versus sale to one particular buyer. Remember: terms, conditions and equity valuations improve only in the context of a competitive process, with multiple suitors with terms sheets bidding against each other. The executive team should consider how to create such a process or meet with investment bankers who know how to make that happen.
  3. No Plan B. Resist the temptation to put off a needed management shakeup or customer contract price negotiations just to maintain the status quo. Projections for 2017 should include a go-it alone strategy, with realistic plans for personnel, marketing and cash flow, including any necessary equity or debt infusions to increase top line revenues for the longer term. Hope for a game-changing transaction is not a substitute for a real time operational and financing strategy. Chances are, finding and negotiating the right transaction will take months, especially if a competitive process is in play. Any team would want the leverage of continuing the business in the ordinary course while the auction/sale process is ongoing.
  4. Avoiding the hard questions in the letter of intent. The letter of intent will set out expectations for both sides as well as the parameters for continuing negotiation. In many cases, the sellers should spend a lot more time on two basic questions: (i) what is the purchase price and (ii) under what circumstances will I have to give some it back. Is the purchase price at closing satisfactory or is much of it dependent on earnout payments, which provide for contingent purchase price payments over time, the details of which still require negotiation? What are the indemnity obligations for any breach or inaccuracy of the sellers’ representations and warranties and are they capped, limited or do they survive the closing for a very long time? What are the terms of any continuing employment, including non-competes and severance? Sellers will save a lot of time and money if they invest the time hammering out these issues for the letter of intent instead of waiting until the deal is at the documentation stage.
  5. Structure matters. The Company should be engaging its accountants and lawyers about tax and structure planning now. What are the tax implications of the proposed deal structure? Next year’s tax code proposals could bring big changes and thoughtful structural changes now could yield significant efficiencies next year. Also, if the team is not familiar with “installment sale” structures, which provide for deferred tax treatment of sale proceeds, they should consult their legal and tax advisors and get up to speed.

Financial pundits are suggesting an uptick in corporate finance activity in 2017. A proactive exit planning strategy—and avoiding typical mistakes—will best position your company for what lies ahead.

Gennari is a partner at Gennari Aronson LLP and an Adjunct Professor at Boston College Law School where he has taught Mergers and Acquisitions, Corporate Finance and now a separate seminar “Advising the Entrepreneur.” He can be reached at lgennari@galawpartners.com.

Filed Under: Financing, General Tagged With: larry gennari

Two Common Mistakes That Startups Make…and How to Avoid Them

October 14, 2016 by Karen Callahan

oops-buttonWith 75-80% of startup companies failing, new founders can feel a lot of pressure to get everything right. There are many business problems that can hamper success, such as a lack of capital, unclear business plans, or a poor product/market fit. However, there are also two points in the actual process of developing a business where mistakes can create unnecessary struggles. Simple adjustments in a timeline can help a startup to avoid these two mistakes and increase the chances of creating a successful company.

  1. Receiving Customer Feedback Too Late

Once you have a good idea, it seems logical to expand and build out the idea, create a brand, then try and find customers. However, this method requires a great deal of resources before you understand what your customers actually want and need. Instead, it is better to get customers involved in the process early. Once you have an idea, start talking to a wide variety of people. Identify who may be interested in buying your product and who wouldn’t be. Understand whether people find your idea useful, necessary, or superfluous. Potential customers can clarify what they truly need in a product and what alternatives that are currently using. Early conversations with customers can provide insight on price points and useful marketing tactics. Beginning with an idea and then receiving feedback will make the building process much more effective and you will be able to understand and tailor your brand to a known demographic. This process confirms early on whether your idea is actually viable. It can save valuable resources and help focus a young company

  1. Assessing How Much It Costs to Acquire a Customer Too Late

Customer acquisition is an exciting phase – you are seeing your product in use, your brand is being marketed, you are receiving feedback, and potentially are generating a revenue stream. Success seems achievable! However, this is an important point to take a step back and assess the long term viability of customer acquisition. Once you have developed a business and marketing plan, look at how much it costs to acquire customers and compare it to the customer’s anticipated lifetime value. If you spend $80 to acquire a customer, but they will only ever spend $75 on your product, then you may quickly run into problems. An early assessment of your customer acquisition costs can help to determine whether your marketing is effective or targeting the right audience.

Gennari Aronson’s lawyers understand that client success depends on much more than carefully crafted legal documents. Our lawyers are experienced in leveraging their expertise and contacts to help our clients find solutions, refine ideas, and focus business strategies. Contact us today to see how we can help contribute to your venture’s success.

Filed Under: General Tagged With: Janelle Peiczarka

Building a Board to Drive Your Business

October 3, 2016 by Karen Callahan

The most successful entrepreneurs surround themselves with the strongest teams, and that includes a Board of Directors. Whether you are an innovative startup company looking to create a brand new board, or a seasoned businessperson who has been asked to join a board, the process can be complex and daunting. We invited a group of experts to demystify the process and offer insight on creating and maintaining a productive board.

Why do I need a board?

Some entrepreneurs may view a board as a necessary evil, but that is approaching the topic from the wrong direction. A board is really a “strategic weapon” that provides an outside view of the company. The board adds layers of accountability – both for management and shareholders. A board can be an especially useful tool for a family business because it separates the kitchen table from the conference room table and invites other independent perspectives from non-family members.

Who do you want on the board?

Often there is a rush to grab industry celebrities, money finders, and mentors, but crafting your board is more of a strategic question. You have to tailor your board to meet your company’s needs at that point in time. For example, in an emerging growth period, you may want a team that is more focused and experienced in growth strategies. A board needs to be able to provide diverse opinions and experience, which will help to anticipate challenges and foster success.

What does the board do?

The board is a group that addresses corporate governance, communicates with management, and provides accountability. A board will periodically meet, and the duration and number of these meetings will depend on the stage of the company. Several good practices include providing materials to directors in advance of the meeting and setting aside at least one meeting annually to discuss strategy and envision a path forward. Some companies have also found it helpful to appoint a lead director, as a separate position from the CEO or Chair, who will organize information and deal with the meeting logistics. This can relieve some of the pressure from the CEO, who may be too busy running the company to run the board. The board plays a unique role and there is fine line between oversight and management. The board often wants to be remain visible to the company, and an established process and policies can help decide what decisions go to the board and what decisions the CEO can make. Dinners and other social events with board members and management can also help to remove the barriers and anxiety surrounding board meetings.

How much should a board member be paid?

There is a wide variety of ways for companies to compensate directors, and each company will need to tailor compensation to the current stage of the company. Often, early stage companies and startups will only offer equity as compensation. Cash compensation is more common in larger, publicly traded companies. When crafting director compensation, it is important to consider the time commitment required of the directors. Further, a director should not view the compensation primarily as a source of income. Directors need to have the freedom to push back on important decisions without the fear that their opinion could jeopardize their position and income.

Gennari Aronson would like to thank our panelists:

– Patricia Negron, Executive Advisor, former Director Nu Skin Enterprises

– Joe Caruso, The Bantam Group

– Caleb White, Board member, CEO Advisor, Newport Board Group

– John Nies, Managing Partner, JMH Capital, LLC

– Travis Drouin, CPA, Lead Partner-Audit, Moody, Famiglietti & Andronico

and our co-sponsors, Newport Board Group and Moody, Famiglietti & Andronico, for such a successful event. If you are interested in learning more or attending one our future events, please join our mailing list by contacting ceden@galawpartners.com.

Filed Under: General

Celebrating HUBweek 2016

September 29, 2016 by Karen Callahan

The Greater Boston area is home to a flourishing entrepreneurial community, and events throughout the region foster growth, innovation, and development. This past week, the Greater Boston area celebrated HUBweek, the second annual fall event that is deemed “A Festival for the Future.” According to the brochure, HUBweek 2016 offered $1.35 million in awards, hosted over 120 events featuring over 200 speakers and artists, and involved over 130 collaborating organizations.

This year HUBweek has three main themes: Ideas to Impact, Intersections, and Inclusive Innovation. Panels and events cover topics such as how startups can engage with MIT, Boston’s new role as the hub for the Internet of Things, and scaling innovative ideas. Beyond entrepreneurship, events will also tackle public policy, civic innovation, arts, and personal wellness.

Friday is also Demo Day, where over 100 Boston-area startups will have the opportunity to showcase their company. Thirty-two companies will even compete in a head-to-head pitch competition. This year the main stage will also feature the Babson Breakaway Challenge where $250,000 will be awarded to a high-potential, women-led business, to promote gender equality in the venture capital industry.

Social and networking events are also a highlight of HUBweek. One highly anticipated social event is brand new this year and called “Brew the Charles.” Local Massachusetts breweries will compete to present their best beverage that was brewed with Charles River water. Attendees will get to sample all of the creations, and a panel of expert tasters will choose the winner.

Gennari Aronson shares Boston’s entrepreneurial spirit. If you think that your idea may be Boston’s next big hit, contact us to see how we can help you launch your company and become a part of the incredible Boston startup community.

Filed Under: General

Newton is Excelling with Accelerators

September 27, 2016 by Karen Callahan

Congratulations Newton, Massachusetts! Recently, Newton was awarded a $150,000 grant for the creation of the Newton Innovation Center, which provides space and supports the formation and growth of local start-up companies. The grant was part of the CommunityWINS program, which is run by The U.S. Conference of Mayors and Wells Fargo. The Newton Innovation Center opened in 2016, as a collaboration between MassChallenge, the Cambridge Innovation Center, and the City of Newton. Members of the Newton Innovation Center will have access to MassChallenge’s mentor network and extensive programming opportunities.

At the check presentation on September 19, 2016, Mayor Setti Warren and MassChallenge founder, John Harthorne, expounded on the benefits of fostering innovation in the greater Boston area. With easy access to downtown Boston and I-90, Newton is a prime location for startups to grow and take advantage of resources provided at the Newton Innovation Center. Accelerator programs, like MassChallenge, provide startups with resources, such as mentoring, networking, and office space. These programs also foster growth and provide job and internship opportunities to the surrounding community.

Gennari Aronson is conveniently located just minutes from the Newton Innovation Center. Our team at Gennari Aronson excels in representing companies that utilize accelerator programs. We serve clients at all stages of growth and are excited to see more opportunities coming to the Newton area.

Filed Under: General

Gennari Aronson receives 2016 Super Lawyers recognition

September 15, 2016 by Karen Callahan

SuperLawyersNEThe law firm of Gennari Aronson, LLP is proud to announce that its partners have again been selected as Super Lawyers in the New England region for 2016. Larry Gennari was named a Super Lawyer in the Mergers & Acquisitions category. Neil Aronson was named a Securities & Corporate Finance Super Lawyer and Laura Glynn was named a Super Lawyer in the Mergers & Acquisitions category.

As Super Lawyers, Gennari, Aronson and Glynn are part of an elite group of top attorneys in Massachusetts. No more than 5 percent of the lawyers in the state are selected by Super Lawyers. Lawrence Gennari and Neil Aronson have consistently been awarded this recognition each year since its inception in 2004. Laura Glynn has been awarded Super Lawyer status for the last six years.

Filed Under: General

Co-Founders: Hash Out Your Rights Early!

June 8, 2016 by Karen Callahan

When you start a company on your own, life can get pretty difficult, and you alone are responsible for building, operating and growing your venture. One positive aspect of being a solo entrepreneur is that all decision-making is in your hands – you don’t need to build a consensus of one.

On the flip side, having a group of co-founders allows for shared responsibilities, with the group allocating tasks to the most suitable person. Having multiple founders certainly eases the burdens of facing the whirlwind of activities required to build a business. But co-founders are often so caught up with tackling the day-to-day challenges of a startup that they pay little attention to hashing out their legal rights.

Very frequently, companies with multiple co-founders will form a legal entity, determine each co-founder’s stake in the company, and then postpone consideration to any other of their respective rights. And why not? Startups are often cash-strapped, and the general line of thinking is: “We’ll wait on further legal work (and legal bills) until we raise a round of funding or need to negotiate a major contract.” Yet, ignoring the interplay between the founders can lead to some uncomfortable situations.

Co-founders should consider how to handle situations in a few basic categories:

Ownership. Consider restricted equity, which is subject to vesting over time. This way, while each founder has skin in the game, none can simply pick up their shares and go home. Too often, one co-founder drops out of the venture in the early stages (whether due to business disagreements or personal issues), but because the equity wasn’t structured to vest over time, the departing founder walks away with his or her full stake in the company. Don’t forget to ask your legal and accounting advisors about an “83(b) election.”

Further, reflect on options regarding the transfer of equity. Should there be restrictions on a founder transferring shares to an outsider? Should the other founders or the company have rights of first refusal to purchase the shares of a departing founder? Should the other founders have co-sale rights, allowing them to “tag along” in sales by one founder to a third party? Answering these questions ahead of time can prevent major disagreements if and when the dynamics among co-founders begin to change.

Control. Multiple founders beget multiple voices and opinions, and decision-making can become difficult without a sense of which voices will carry weight. Should all co-founders sit on the Board of Directors, or just one or two of the group? Board decisions are typically made by majority vote, but give thought to whether major actions should require a supermajority of the founders, or even a unanimous vote. Examples of such major actions include acquisitions, the sale of the company, issuing equity, incurring debt and key hires. Understanding how key decisions are made, and who has a say in these choices, is vital to avoid the possibility of a tug-of-war over the strategy and direction of a startup.

Exit Strategy. “Drag-along” rights can be extremely important, and yet usually are not considered by co-founders at the outset. These rights will force a minority stakeholder to go along when a critical mass of founders has determined to sell the company. This prevents a scenario where, for instance, four out of five founders wish to sell, yet the fifth founder, holding only 20% of the company’s shares, refuses to sell his or her stake. Participation rights also protect founders, giving each founder the ability to maintain his or her percentage of the company by buying in when the company issues additional equity.

*   *   *   *   *

From a legal perspective, forming an entity should not be the one and only step for the founders of a startup. Taking the time at the beginning to sit down and hammer out a clear understanding of these types of issues is critical. If we’re dealing with a corporation, these rights should be spelled out in a separate stockholders’ agreement. If the startup is a limited liability company, these provisions can be added to the LLC’s operating agreement.

Co-founders wouldn’t launch a new business without clear, delineated ideas about their product or service, their market, and the problems they wish to solve. To minimize internal strife or disputes that can disrupt these business goals, they should approach their corporate structure at the outset with the same level of clarity and vision.

 

Filed Under: General Tagged With: joe ramadei

Pitch Perfect

May 18, 2016 by Karen Callahan

Scott Berinato, author of the captivating book: “Good Charts: The HBR Guide to Making Smarter, More Persuasive Data Visualizations,” joined us on May 5 to talk about data visualization and how we all might make more compelling presentations, including via powerpoint.

Scott reminded us that today’s discourse, whether through USA Today, cable news or even billboards, often is an “argument of charts” and the President now uses charts in the State of the Union address.

Scott’s advice to presentation planners is to go back to “the fundamentals” of communication:

*We all love charts and brain science now confirms that we access and process information from shapes, images, tables and graphs at least as readily as words, if not more so.

*You are never NOT persuading in a presentation.

*Every chart is a manipulation of data to persuade and the actual visualization of information on a slide is the manipulation tool.

*Good Charts provides great practical examples of how to prepare data and charts to persuade and not simply inform.

*Context matters—the focus should be on what you are trying to say and how you consider that for every single slide.

*Don’t forget to think through how the chart will be displayed. Is the presentation in a small room or a ball room and will the audience be able to see and process your charts?

*We often judge charts based on font, colors, grammar and not necessarily substance in the first instance. Scott says “our brains react to pretty things.” Think primary colors and consider emphasis and isolation of words and phrases in charts.

Scott’s book is an easy and essential read for anyone who might be called on to present to a board, investors, or a potential strategic partner.

Filed Under: General Tagged With: larry gennari

What Do Buyers REALLY Want?

March 17, 2016 by Karen Callahan

If you’re bothering to read this, it’s a fair guess is that you are a Seller or want to someday be a Seller, so for current and prospective Sellers alike, here are a few takeaways from the event.

Before we get into what Buyers want, let’s talk a bit about who Sellers are (or to start, are not):

In short: You are not a Unicorn. In fact, Unicorns don’t exist.[1]

Now that we’ve established that the private placement market has recently been a bit off its rocker over some types of technologies, and that billion dollar valuations don’t fall from trees, we can talk about what our Seller actual IS.

Sellers fall somewhere along the spectrum of:

FOUNDERS (or latest generation) of “family” businesses – with solid revenue, a mature company and either i.) retirement in their sights, with no succession plan, or ii.) just have the gut feeling that “it’s time”.

TO

ENTREPRENEURS – who have successfully raised money from the investment community

No, I don’t define a Seller in terms of how much money a company is worth, because that is just one motivating factor in a sale transaction, whether to a financial buyer, a strategic buyer or an IPO.

Yes, No. 2 covers a HUGE range of folks but if you’ve taken in financing from investors, then at some point down the road, even if you don’t want to, the investor is going to want an exit.[2]

So from the moment you, Entrepreneur, succeed in raising investment capital, you’ve implicitly decided: “I will sell this business.” And if you’re going to be a Seller someday, starting to think like one now will put you in a better position to give Buyers what they want from the very start of the process, rather than finding yourself starting from a disadvantageous negotiating position years down the road.

So what exactly do Buyers want….and why should the Seller care?           

 When they are evaluating potential deals, Buyers respond to Sellers who are realistic and well-prepared, which make the negotiation, the deal, and the sale price each much more straightforward. Ultimately, if both parties’ expectations are met, both parties get more of what they want.

Be Realistic: Have a Big Tent and Set it up Early.

 Everyone wants to cash out for $100 million…and every child wants a pony. Neither of these things will happen for the vast majority of the population. But even if you know you’re not worth $100 million, your sweat and tears may still cloud your judgment leading you to unrealistically believe the company is worth $25 million when it’s actually worth $13 million.

The key to being realistic is to build a collaborative team of advisors that will help you understand your numbers in context, that know the market, and that can give you an idea of what you can expect in a deal. Putting this team in place before entering the market allows you to have a realistic goal and a plan to reach that goal.

Our most successful clients begin thinking about an exit with a range of professionals from investment bankers to attorneys to accountants already in the room. Each team member brings a particular expertise and can provide input on how to maximize value not only through the absolute price, but through what transaction structure is most advantageous and how we can maximize upfront value. If you’re sending a signed LOI to your lawyer or accountant, it’s likely a bit too late to maximize that person’s value to the deal.

Be Prepared: Have a Long View and a Tidy House.

Knowing what terms you want is not “Being Prepared” (though it is important). Being prepared is knowing what the Buyer is going to ask for and to have the answers before they ask the question.

If you’ve watched Shark Tank, even for five minutes, you’ve watched a VC Demagogue lose their cool over someone not knowing their numbers. And it’s possibly the most (only?) accurate point in the show. But it’s not only startup folks that need to understand and be confident in their numbers: if a Buyer is going to give you a large amount of money for your company, at whatever stage, they are going to want to know that you are selling what you claim to be selling.

For Sellers who have mature companies this is particularly important: it is not enough to simply report historical figures. Even though you won’t be around in five years, your company will be (in some form) and it’s important for the Buyer to understand that you know your market, its future and the role your company plays in that future. So projections are important and reasonably accurate projections are a must. Another must is Audited Financials: without them the Buyer is depending solely on your word until after an LOI is signed.

Finally, you will need to have your house in order: corporate documents, stock ledgers and board minutes should 1. Exist, and 2. Be organized; NDAs should be signed; internal documents should be organized in such a way as to be understandable to an outsider. The more uncertainty that due diligence produces, the less likely that you, Seller, will get the final price and terms that you want.

The Result: Minimized Surprises.

The takeaway is that the best M&A deal is one in which surprises are minimized on all sides, from the Buyer to the Seller to the team, and the best way to minimize surprises is to start thinking in terms of what Buyers want as early as possible.

Even in your “seed” Round, it doesn’t hurt to start thinking in these terms. Get into the habit of documenting all corporate actions and taking the additional step of chasing EVERY employee for their signed Stock Option grants are just two ways a startup can give Buyers what they want, even before they are up for sale.

If you are a mature company, be prepared to do the work it takes to understand the lay of the land and take the time to organize historical documents before the Buyer is standing at the door. By having a firm understanding of what it is you have and don’t have early in the process and communicating with your team early you can come up with a plan to address it.

[1] Unless you are ACTUALLY a Unicorn, then by all means get in touch, we’d be happy to represent you in your Gajillion dollar IPO.

[2] This is one part of why it is so important for early stage companies and investors to build a relationship and communicate clearly the goals and expectations of each party.

Filed Under: General

“Permanent” Changes in Federal Tax Laws: Can investors eliminate or reduce capital gains tax?

March 11, 2016 by Karen Callahan

If you are an investor in earlier stage companies, how would you like to legally (!) avoid paying federal capital gains tax and reduce or eliminate your state’s capital gains tax on gains from these investments?

A new law now makes permanent the 100% exclusion for gains on qualified small business stock (“QSB Stock”) under Section 1202 of the Internal Revenue Code (the “Code”). This 100% exclusion applies for both regular federal income tax and alternative minimum tax (“AMT”) purposes, subject to certain limitations as described below.
Code Section 1202 provides that a non-corporate investor may exclude from federal taxable income 100% of any gain realized from the sale of QSB Stock purchased after September 27, 2010 and held for more than five years.  The amount of the exclusion for shares purchased prior to September 2010 will depend upon the year in which the shares were purchased, but the exclusion amount ranges between 50-75% for shares purchased between 1994 and 2010.

To qualify as QSB Stock, the following requirements generally must be satisfied:

  • The investor must purchase the stock directly from the company in exchange for cash, property (other than stock), or as compensation for services (other than as an underwriter of the stock).
  • The stock must be issued by a domestic C corporation (and not an LLC or S corporation) that does not have aggregate gross assets in excess of $50 million any time prior to or immediately after the issuance of the stock.
  • The issuer must satisfy the “active business” requirement during substantially all of the investor’s holding period. The active business requirement requires that at least 80% of the corporation assets are used in the active conduct of one or more “qualified trades or businesses.” Certain services based businesses, such as professional services, financial and brokerage services, banking, and insurance businesses, among others, do not qualify as qualified trades or businesses.

The amount of gain an investor may exclude under Section 1202 cannot exceed the greater of: (i) $10 million (less any gain attributable to the issuer’s stock already excluded by the investor in prior tax years); and (ii) 10 times the aggregate adjusted basis of all of the issuer’s QSB Stock disposed of by the investor during the current tax year.

Losses on unsuccessful QSBS investments are also eligible for certain favorable tax treatment. While losses on investments are capital losses, they typically may only offset capital gains. Since capital gains are taxed at rates lower than ordinary income, it is almost always more beneficial to have losses that are usable to offset ordinary income. The Code provides an exception for losses on QSB Stock investments, allowing taxpayers to treat up to $50,000 in annual losses from QSB Stock investments as ordinary losses (which will offset ordinary income). Thus, in the event of an unsuccessful QSB Stock investment, the loss results in a more valuable tax asset than those generated by non-QSB Stock investments.

Whether or not gains from the sale of QSBS investments will be taxed on a state level depends entirely upon the state. Under Massachusetts income tax laws, gains from the sale or exchange of capital assets (except collectibles) held for more than one year are generally taxed at 5.1%, except that long-term gains from the sale of qualified small business stock are taxed at 3%. Certain provisions for exemption under the Massachusetts income tax laws differ from the federal tax law, so if you are a Massachusetts investor, you should check with your tax advisor.

The permanent nature of the new 100% exclusion, and the 2010 amendments to the Code which eliminated QSB Stock gains from AMT, make the use of a Section 1202 exemption of particular importance to individual investors. Due to the complex requirements under Section 1202 of the Code, investors and issuers should consult with their tax advisors regarding their specific circumstances prior to relying on Section 1202.

 

Filed Under: General Tagged With: neil aronson

What we learned in 2015

January 20, 2016 by Karen Callahan

Welcome to 2016!  We are excited to bring you another year of insightful and informative events.  But, for anyone who missed some of our events of 2015, a few of the more popular ones are available for viewing through the links below.  Check them out!

Remix Strategy: The Three Laws of Business Combinations

Alliances, partnerships, acquisitions, mergers, and joint ventures are no longer exceptions in most businesses — they are part of the core strategy. As companies look to external partners for acquiring strategic resources and capabilities, they need a practical roadmap for ensuring these relationships generate value.

What’s In A Name?: Brand as Competitive Advantage

For companies large and small, across a variety of industries, brand is paramount. Learn about the latest social media, intellectual property, and other strategies for building and maintaining a brand.

The Science and Art of Compensation
The are myriad ways to structure compensation strategies that are motivating, rewarding, and good for business.  Learn about the variety components that can contribute to a plan and how to assess and create compensation plans for you team, advisors, and board members.

Filed Under: General Tagged With: larry gennari

Crowdfunding: The SEC (finally) speaks……..but will anyone really care?

November 1, 2015 by Karen Callahan

Last Friday, the SEC released its long awaited proposed rules for crowdfunding or put another way: how to find investors online. The new rules and proposed amendments are designed to assist smaller companies with capital formation and provide investors with additional protections.

The final rules, called “Regulation Crowdfunding,” permit individuals to invest in startups via crowdfunding transactions subject to certain investment limits.  The rules also limit the amount of money startups can raise using the crowdfunding exemption, impose disclosure requirements on companies for certain information about their business and securities offering, and create a regulatory framework for the broker-dealers and funding portals that facilitate the crowdfunding transactions.

The rules would allow companies to raise $1M online through crowdfunding in a 12-month period by expanding the universe of investors beyond typical angel investors and those who otherwise are “accredited” within the meaning of the securities laws. In fact, under the new rules, people who never would have thought about investing in startups will be able to go online and invest their hard earned money in early stage companies and promising entrepreneurs.

So these rules will revolutionize the way companies raise seed and series A rounds, provide new and much-needed capital alternatives, bring the arcane regulation of securities into the 21st century, and allow companies to raise money faster and more efficiently than ever before all the while harnessing the infinitesimal power of the Internet—right?

Not so much.

  1. Fees. All transactions relying on the new rules would be required to take place through an SEC-registered intermediary, either a broker-dealer or a funding portal—and that means transaction fees. The rules don’t contemplate that companies will be selling securities to a new category of investors directly from individual company websites.
  2. Information Requirements. Companies that rely on the recommended rules to conduct a crowdfunding offering must file certain information directly with the SEC —including financials that are reviewed or audited by an independent accountant. They also must provide this information to investors and the intermediary facilitating the offering. On top of that initial filing package, companies relying on the crowdfunding exemption also then would be required to file an annual report with the SEC and provide it to investors. Compiling all that information, whether financial statements or updates for investors in a form appropriate for filing with the SEC, won’t be cheap, easy or fast.
  3. Unsuitable Investors. Companies undaunted by the additional time, expense, and information requirements of the new rule would be able to reach a new group of less wealthy and less sophisticated investors online and worldwide. Even investors with a net worth or net income of less than $100k will be able to invest.

 

What could possibly go wrong with that scenario?

Hmmm…..do companies that hope to attract institutional or strategic investment at a later round really want a large group of unsophisticated investors in their cap table? I’ll bet that the answer will be “no” for most promising companies.

Many successful companies get started with a few smart well-heeled investors who can fend for themselves in all matters financial while in turn attracting others like them. Finding and interacting with those potential investors in person, whether through an angel group or old-fashioned serendipity is far more effective than searching for random strangers with money online.

I wish the SEC would focus on how best to allow incentives for those angels themselves to receive commissions (for introductions to other angels) than on “democratizing” investments in early stage—and therefore—risky enterprises, but that is a post for another day……

In short, I don’t see the new rules changing much about the way thoughtful entrepreneurs go about developing a financing strategy, at least in the near term. We’ll hear much more about these rules in the days to come.   The new rules and forms should be effective in about six months.

Filed Under: General Tagged With: larry gennari

Will your plan for angel funding fly?

October 22, 2015 by Karen Callahan

Even in these challenging economic times, angel investors can, and do, provide an essential source of funding for emerging businesses, often filling the gap between funds from friends and neighbors and a round of venture capital.  When considering angel funding, keep a few things in mind:

Once you’ve found a potential angel investor, how do you seal the deal? The answer to this question is as wide and varied as the angels themselves, and entrepreneurs should listen before they offer an angel transaction terms.  Most angels will lay out terms in up to three significant areas: control, dilution, or current value or return. An angel interested in control is hands-on and often demands a board seat, veto power over certain operational decisions and prompt disclosure of financial information. If dilution is the angel’s hot-button issue, he or she might want straight percentage or full-ratchet protection, understanding that these provisions may fall in a subsequent venture funding – but only after a negotiation with the angel. Alternatively, if the angel investor prefers convertible debt instead of equity, an option to convert the note at a discount on a subsequent round of financing (e.g. an additional 10 to 25 percent on top of principal and accrued interest) often is added.  Finally, some angels seek current returns – typically in the form of modest but regular cash dividends or percentages of revenues. The key for the entrepreneur is to match the rights and preferences specifically to the angel’s hot button – nothing should be given to an investor without a reason.

Where do you find an angel? Let’s start with the basics. Angel investors are high-net-worth individuals who invest with their hearts and their minds. This generally means that angels invest based on either a warm feeling about the entrepreneur – because of a personal or professional connection – or a good feeling about a market space or industry.  Savvy entrepreneurs probably know potential investors already, including former bosses, mentors or significant customer contacts. Those who are less connected or less experienced can find introductions to local angel groups through their accountant, lawyer or other advisors. Entrepreneurs also should identify local area angel investor groups, such as Launchpad Venture Group. Although these groups often require significantly more “due diligence” and majority approvals, businesses may attract the interest of one or more angel investors, even if the group declines to invest.

How much do they invest? Although the dollar amount invested varies widely, most angels invest between $50,000 and $250,000 individually and $250,000 to more than $1 million as a group. Many angel investors stagger their investments, putting some money in initially with the rest pegged to business or technology development milestones. In addition, many angels anticipate and like to participate in any subsequent venture financing rounds.

Are angels worth the hassle? Well, that depends on how you might define “hassle”.  Many angel investors are now requiring board seats, and that can be both positive and negative. Most people become directors for three reasons: to add value by virtue of their experience and contacts; to learn something as the enterprise grows; and to make money. Here the focus is on the latter. Angel directors can add value in the form of business contacts, operational experience or financing strategy. However, given the investment focus, an angel director also could end up being quite controlling with different and definite opinions on topics ranging from employee compensation to direct versus indirect selling. To this end, some entrepreneurs are building in term limits for angel directors right from the start as a condition of the investment.

Angels can and do fulfill an essential role in funding emerging businesses and are worth of consideration as a funding option.  But, the smart  entrepreneur should be certain to consider both the pros and cons – before accepting a check.

 

 

 

Filed Under: General Tagged With: larry gennari

Gennari Aronson named 2015 Super Lawyers

September 26, 2015 by Karen Callahan

The law firm of Gennari Aronson, LLP is proud to announce that each of its partners have again been selected as Super Lawyers in the New England region for 2015. Larry Gennari was named a Super Lawyer in the Mergers & Acquisitions category. Neil Aronson was named a Securities & Corporate Finance Super Lawyer and Laura Glynn was named a Super Lawyer in the Mergers & Acquisitions category.

As Super Lawyers, Gennari, Aronson and Glynn are part of an elite group of top attorneys in Massachusetts. No more than 5 percent of the lawyers in the state are selected by Super Lawyers. Lawrence Gennari and Neil Aronson have consistently been awarded this recognition each year since its inception in 2004. Laura Glynn has been awarded Super Lawyer status for the last five years.

Filed Under: Uncategorized

Are you planning for just a deal…or can you pull off a Remix?

August 27, 2015 by Karen Callahan

2015 has been a banner year for M&A, with momentum across market segments and a spike in the size and value of deals. Strategic buyers have driven most of this and more is expected next year, especially in technology, digital media and of course, the IoT, where the overall market for connected things is expected to expand by double digits yet again. As strategic planning for year-end and for 2016 continues, decision makers planning for an exit or major transaction next year should keep a few things in mind.

  1. Sellers and Buyers have a similar goal: maximizing value. Sellers want the highest price; buyers want the best price. Both sides to an alliance or acquisition should understand that a potential deal must have the potential to create “joint value” that exceeds what either could achieve on their own. That means stepping back to think about why before considering how. I recommend Professor Ben Gomes-Casseres book: Remix Strategy: The Three Laws of Business Combinations for starters. An easy read and a plain, practical guide to how to think about M&A, the book sets out dozens of examples and illustrations of successful deals and how to approach acquisition strategy.  The unexamined deal often is not worth doing!  (You can hear Ben share his wisdom directly at our upcoming event.)
  2. Buyers don’t want Seller problems to become their problems. Every major deal starts with due diligence, and that means corporate books and records and significant contracts should be in good order. Now is the time to complete stock option or restricted stock grants, estate-planning transfers or issuances long promised but not papered. In connection with new grants or stock awards, the company may want to consider securing or updating a so-called 409A valuation of the business, to establish a baseline before a significant transaction. Also, consider necessary changes to important contracts, leases or customer agreements. Better to negotiate those now, instead of during the compressed time of a contemplated sale.
  3. A Competitive Process is the best answer to the question: What’s Market? Sellers often make the mistake of talking to only one potential partner or reacting to an unsolicited term sheet from one interested party. After all, in many industries, the players know each other and the conventional wisdom is that only one or two potential acquirers are likely to express interest or actually consummate a transaction. Here, as in many cases, conventional wisdom could be wrong. Due diligence commences, negotiations quickly follow and the team finds itself confronting the often difficult choice of status quo versus sale to a particular buyer as the only alternative. Remember: terms, conditions and valuations improve only in the context of a competitive process, with multiple suitors bidding against one another. The executive team should consider how to create such a process or meet with experienced investment bankers who know how to make that happen.
  4. A Deal is not a Strategy. Transactions should further a growth or exit strategy; a deal is not necessarily an end in itself. (See Remix Strategy above!) Projections for year end and for years beyond should include a go-it-alone strategy, with realistic plans for cash flow, including any necessary equity or debt infusions. Hope for a game-changing transaction is not a substitute for a real-time financing strategy. Chances are, finding and negotiating the right transaction will take months, especially if a competitive process is in play. Any team would want the leverage of continuing the business in the ordinary course while the auction/sale process is ongoing.
  5. Go back to basics for capital. If the company needs a capital infusion, identify the dollar amount and the investor “target audience.” Be creative and think broadly. Sources of capital have changed dramatically over the last few years. Typically, a round of less than $2 million means friends and neighbors and an angel or two. For a financing round of up to $7 million, the company could pursue a combination of angels, a receptive venture capital investor, and possibly a private equity firm interested in the market sector. Terms for those transactions vary widely, and the company will need to pay careful attention to investor expectations, especially as to the timing for return on investment. Your legal and accounting advisors should take an active role in shaping the financing strategy.
  6. Start thinking about taxes: paying or saving! The company should be engaging its accountants and lawyers about tax and structure planning now. Thoughtful structural changes now could yield significant efficiencies next year, especially for employee retention and compensation packages that need to be in place to keep the team aligned. Also, if the team is not familiar with earnout structures, which provide for contingent purchase price payments over time, they should consult their legal and tax advisors and get up to speed.

All signs point to 2016 as another banner year for M&A. A proactive strategy about how to think about and plan for M&A will best position your company for what lies ahead.

Lawrence Gennari is a partner at Gennari Aronson LLP and an adjunct professor at Boston College Law School, where he has taught courses on mergers and acquisitions and corporate and entrepreneurial finance. He can be reached at lgennari@galawpartners.com.

 

Filed Under: Uncategorized

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