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"Ten Temptations of Tech CEO's" by Todd Tidgewell from Nixon Peabody LLP

"Ten Temptations of Tech CEO's" by Todd Tidgewell from Nixon Peabody LLP

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    Todd Tidgewll from Nixon Peabody LLP Todd Tidgewll from Nixon Peabody LLP Presentation Transcript

    • Ten Temptations of Tech CEOs Startup Weekend - Tech Valley Todd Tidgewell Nixon Peabody LLP March 3, 2012 © Nixon Peabody LLP, 2012
    • Unrealistic Predictions
      • Temptation to:
      • Underestimate costs and time (to market, to milestone, to raise capital); and
      • Overestimate abilities and market.
      • “ Everyone else is doing it …”
      • Results in unhappy investors and board, discouraged team and discredited management, specter of litigation.
      • Lesson: “An honest beer makes its own friends”
    • Wrong Business Form (or worse, no business form)
      • Temptation to wait until the last minute and then grab the last form used by some other company.
      • “ I ain’t got time to [pay lawyers] …”
      • Results in uncertainty as to ownership, liability protection and can significantly complicate future financings.
      • Lesson: Don ’t be “pennywise and pound-foolish.” If done right the first time, this will free up your time (and money).
    • Inappropriate Investors
      • Temptation to:
      • Focus on valuation versus value-added;
      • Look for “love in all the wrong places”
      • “ I was young … I needed the money …”
      • Results in complex capitalization, unhappy investors, fundraising challenges
      • Lesson: In the end, it ’s really about the size of the pie.
    • Unwritten Rules
      • Temptation to leave important relationships undocumented.
      • “ A man’s word is his bond …”
      • Results in due diligence disasters, uncertainty around ownership of company (and IP), specter of litigation
      • Lesson: “An oral agreement is worth the paper it’s written on.”
    • Unprotected IP
      • Temptation to neglect protection of company ’s IP out of concerns over cost / time and uncertainty around the process.
      • “ I ain’t got time to [pay lawyers] …” Part II
      • Results in potential loss of IP rights, specter of litigation, decrease in company ’s valuation
      • Lesson: "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. “ – Thomas Jefferson
    • Unwillingness to Delegate
      • Temptation to micromanage.
      • “ I am the master of my fate; I am the captain of my soul’
      • Results in burned-out CEO, lack of efficiency / productivity, disgruntled management / employees
      • Lesson: “What’s gonna work? Teamwork!”
    • Hapless Board
      • Temptation to attract and retain inattentive (or worse, “pigeon”) board members.
      • “ Flies in, lands, [poops] on everything and flies away …”
      • Results in frustration for the CEO, paralysis for the company, disgruntled management, inefficiency.
      • Lesson: Cultivate an engaged and attentive board and harvest valuable guidance and connections
    • Disregarding Advisors
      • Temptation to gather distinguished advisors and then … ignore.
      • “ Everybody else is doing it …”
      • Results in loss of opportunity and potential connections, unhappy advisors
      • Lesson: “It’s a rare person who wants to hear what he doesn't want to hear.” - Dick Cavett
    • Ego
      • Temptation to think that you ’re great.
      • “ I am great …”
      • Results in blind spots, impediments to growth, loss of opportunities, frustrated board, management and advisors
      • Lesson: “Life is a long lesson in humility.” - James M. Barrie
    • Learning the Same Lesson 2x
      • Temptation to forget past mistakes, or to learn the wrong lesson.
      • “ This time it’s different (and US house prices will never decline) …”
      • Results in inefficiency, losses that could have (should have) been avoided, disgruntled management, board, advisors.
      • Lesson: “For the robust, and error is information. For the fragile and error is an error.” - Nassim Taleb
    • Thank you. Todd Tidgewell Nixon Peabody LLP [email_address] (518) 427-2650 www.nixonpeabody.com