State of Startups 2016

First Round Capital just released its State of Startups 2016.  It is chock full of interesting stuff!  No need for me to recap it here.  Just view it for yourself.  Here is the link.  Thanks!

PS:  2 prominent team members at First Round Capital are Cornellians (Bill Trenchard and Howard Morgan)!

Make a Donation to UVC

Warning:  this is a non-profit fund raising email!

I am on the board of Upstate Venture Connect (UVC).   UVC is a non-profit focused on helping build the upstate NY startup community.  Among other things, UVC (i) connects people via events and newsletters, (ii) helps groups create seed/angel funds, which then invest in NYS companies, and (iii) maintains an ecosystem map and calendar.

As you plan your year end giving, please consider UVC.  It is worth the support.  All donations are fully tax deductible.

I have set up a simple way to give via GiveGab (yes, GiveGab is a CVF portfolio company).  Here is the link.   Thanks in advance!

New Podcast – Public Service Announcement

A colleague of mine recently told me about a new podcast called “How I Built This”.  It goes into the stories of famous entrepreneurs and innovators.  Guy Raz (well known radio host at National Public Radio) interviews founders, etc., and turns the interviews into compelling ~30 minutes narratives.  GREAT for car rides.  I just drove home from Maryland and listened to about 5 of them.  I think my 14 year old daughter even enjoyed.  I forced her to listen to one so she would better understand what I do with startups.

GREAT stories.  Enjoy.  Available on iTunes, etc.

Immigration Issues

Guest post today from Steve Yale-Loehr, a leading immigration law expert who lives in Ithaca.  Steve teaches at Cornell Law School and is a partner at Miller Mayer, LLP (a law firm in Ithaca).   Steve sent me this email today, which I thought was perfect for a post.  Immigration hurdles are a serious issue for startups.  The proposed rules are a step in the right direction.  Here you go:

Zach: Today the U.S. Citizenship and Immigration Services (USCIS) issued a proposed rule to allow certain international entrepreneurs to be considered for parole (temporary permission to be in the United States) so they may start or scale their businesses in the United States.

The proposed rule would allow the USCIS to use its existing discretionary statutory parole authority for entrepreneurs of startup entities whose stay in the United States would provide a “significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation.” Under the proposed rule, the USCIS may parole, on a case-by-case basis, eligible entrepreneurs of startup enterprises:

  • Who have a significant ownership interest in the startup (at least 15 percent) and have an active and central role to its operations;
  • Whose startup was formed in the United States within the past three years; and
  • Whose startup has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by:

–      Receiving significant investment of capital (at least $345,000) from certain qualified U.S. investors with established records of successful investments;

–      Receiving significant awards or grants (at least $100,000) from certain federal, state, or local government entities; or

–      Partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.

Under the proposed rule, entrepreneurs may be granted an initial stay of up to two years to oversee and grow their startup entities in the United States. A subsequent request for re-parole (for up to three additional years) would be considered if the entrepreneur and the startup entity continue to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue, or job creation.

The U.S. Alliance for International Entrepreneurs (USAIE) has written the attached summary (usaie-comments-on-proposed-immigrant-entrepreneur-rule-1 ) and initial analysis of the proposed rule.  It is also on the USAIE website at http://usaie.org/uscis-proposes-international-entrepreneur-rule-usaie-summary/.

I am a founding member of USAIE, and helped draft the summary and analysis.  Please forward to interested international entrepreneurs.

USAIE will draft a model comment on the proposed rule.  Please let me know if you or anyone else at Cornell would like to receive that model comment to help you submit your own comments on the rule.

Thanks, Steve

If it smells bad, it probably is

We all live in a world of conflicts.  I am particularly sensitive about conflicts due to the roles I have at Cayuga Venture Fund and Cornell.  I think that everyone should conduct business in a way that will not provide fodder for an unsavory newspaper article.  All the recent press about Theranos is a great example of this.  Regardless of your views on situations like Theranos, it is likely that some of what you might read in the newspaper is true.

You might call me naive, but my approach to competing accounts of juicy situations is that there is probably some truth in both sides.  This applies to all sorts of situations, be it feuding companies or feuding people.

So, this morning my wife forwarded me an article on Hampton Creek, “Hampton Creek Ran Undercover Project to Buy Up Its Own Vegan Mayo”.  Now, my wife loves Hampton Creek Mayo, but even this one caught her attention enough to forward to me.  Furthermore, the company’s CEO is a Cornellian (yes, I knew him when he was a student).  The article claims that Hampton Creek had a systematic program of having its employees and contractors literally buy lots of product off store shelves thereby inflating velocities (i.e., how fast a store sells a given product typically measured in units/cases per week) and effectively overstating sales.  Hampton Creek has raised millions and millions of dollars from VCs and wealthy investors……and this is not the type of press that any investor wants to see.

Without saying much more, this type of practice would and should produce a media frenzy.  I am picturing myself in the management meeting when this idea first came up. “Hey, let’s buy up lots of product under the guise of quality control.”  Kind of ridiculous.  Ok, not “kind of”, just ridiculous.  Note:  for all I know, the company’s board of directors approved the plan.  I have no idea.

And I have no clue as to the merits of the press’s coverage or the company’s position.  I have only read one article on this.  The lesson though is simple:  if some plan or proposed action leaves a bad taste in your mouth then don’t do it.  Chances are it will back fire.  Said another way, if something smells like rotten mayo, then don’t eat it.

I believe that being transparent and dealing with people who are transparent is a proven road to overall success and achievement.  Sometimes I am overly direct and have been criticized for it.  Yet, trust is a fundamental pillar of relationships.  If you sense any pang of distrust in someone you are dealing with then trust your own instincts.

In the meantime, go buy some mayo!