NEVER SAY NEVER! Startup client Revolution Rickshaws returns to fight onwards toward electric assisted small vehicle package heaven. Culling through to the best of the best, Revolution chooses Cycles Maximus for optimal performance and long term capital utilization efficiency, Intrigued? www.revolutionrickshaws.com, http://www.cyclesmaximus.com
Star appeal is easier to capture in New York City. New client, www.DanasBakery.com, is working hard to find great endorsement opportunities from its retail location in the trendy Chelsea neighborhood where Google's New York headquarters is the anchor. See pastry Chef Dana Loia hanging with quirky and super funny guy actor Bill Murray here: http://www.threespaces.com/network/image/m/724.jpg
Democracy lives in our laws for corporate governance! A group of managers from a startup I worked on a few years back called me out of the blue to help them force the founder to share power. Read about what happened in my Blog on my persona page. http://www.threespaces.com/peterhubshman/venturepreneur
I'm excited about startup businesses! I'm working on a few great projects now (see my last feed.) But ThreeSpaces has me really going. We are a calling card that tells the whole story of who you are. Choose three or more things you love to do. Don't they really describe you? ThreeSpaces has a target market entry point and we are pitching, and it's b2b. It's an exciting time in the life of any startup! Stay tuned!
To me being a startup specialist is always special and exciting. This year and next I've gone green, with 3 of my four projects in green verticals: Solar power for commercial and light industrial buildings in Miami; Near urban, hyperlocal networks of aquaponic mini farms in Palm Beach County; And, last mile package delivery using electric motor assisted cargo trikes in Manhattan. My only pure Internet technology startup right now? ThreeSpaces, which includes this website and new beefy social login features and products. Want to learn more or discuss your own startup? Please contact me.
Some startups can take a long time to get started. Take ten year old Revolution Rickshaws in New York as a great example (http://revolutionrickshaws.com/). Revolution started as a pedi-cab company and in its heyday in this mode was charging upwards of $3 per minute for pedi-cab services. But when the market became overcrowded and the last recession hit, most of the NYC pedi-cab businesses folded. But not Revolution: They pivoted to a new business model, taking advantage of new advances in electric motor technology to create a true green last mile delivery business that is poised for real growth. Watch here for updates.
I've just posted an article on the Blog tab of this persona: What I'm doing here on the first persona network: http://www.threespaces.com/network/browser/what_am_i_doing_here_on_the_first_persona_network.jsp
ThreeSpaces is continuing to develop its innovative persona network and identity services. Personas are an incredibly succinct and formidable representation of a strong interest or expertise area. Far more focused and intelligent than a resume, personas can help you to represent a professional level expertise as an alternate career pathway, or to deepen your resume by highlighting your strongest experience sets outside the career setting.
Shoutout to Florida venture enthusiasts and startup minded friends: Blackdove Digital Art Platform made it to the Florida Venture Forum presentation group! http://blackdove.com.
Startup Boatsetter.com is continuing to innovate in its space. Make your next boating experience a luxury personal cruise! Turn your boating hobby from a money pit into a winning venture. CaptainsOnly over 35'... Go Boat Setter!
Democracy lives in our laws for corporate governance!
I had a unique experience in my professional life as a corporate finance person. A group of managers from a startup I worked on a few years back called me out of the blue to help them takeover their startup. They were unhappy with the CEO founder because he had never provided any of them with the authority to act on behalf of the company. They were frustrated because he thwarted group decisions on strategy with actions that failed. And they had, at the moment in time they called me, a majority of voting shares and a good number of investors behind them.
Democracy transfers power to the voters. It prevents the unfair and ill advised misuse of authority.
I work at the initial stage of the startup, where less than a million is usually invested. Shareholder takeovers require in depth knowledge of corporate law and large law firms have special departments that deal with governance issues. I'm not a lawyer or a specialist in this area, just an experienced corporate finance person, so I knew this would be a bit of a technical challenge.
Take it to the law:
After studying the company's Bylaws and the Delaware laws governing corporate governance, our research and due diligence revealed that we could proceed without notice and move fast. Here's why they wanted to proceed quickly. The CEO of the startup had kept all managerial and director powers for himself and refused to empower any other decision makers on the team. Despite receiving counsel to empower a group that could coalesce with him and act, he felt inclined to do as he pleased for the initial startup years, and had failed to complete his technology implementation and market entry using the several hundred thousand he had raised. While he was pressuring the team to bring more investors to the table, he was refusing their specific business advice and had failed to appoint directors and the team as officers.
Take it to a vote:
The group of managers, however, were also shareholders. Together they represented a slim majority, just enough to vote out the CEO and put themselves in charge. The reason for this is that often law firms structure initial capital rounds as convertible notes so that they can be priced at a conversion discount in the first round of capital when the company has a presumed value for the capital round. So despite significant potential shareholdings that would have changed the vote, perhaps in his favor, the management group had enough power at that moment to vote and then do as they pleased.
What was the vote?
They decided to see if the CEO would play ball and work with them. After all, they were also founders and had invested their time and energy along with him. Instead of voting him out, they voted to share power with him and to move forward as a group, if he would only join with them and let them succeed where he had failed without them. But they also agreed that they would walk away if he refused to join them as a group. They elected themselves and him as the board of directors, appointed themselves and him as officers, and then waited for his reaction the next day. Democracy rules!
It's pretty tough, emotionally, to lose power overnight for a baby you birthed. To weather the storm the CEO would have to coalesce with the group and, perhaps, step back from management, or reshape his leadership to be inclusive. This is a good moment to seek advice so that your thinking becomes less narrow and emotional. Would the CEO grab victory from his defeat and realize he has the motivated team he needs? Or would he come out guns ablaze and say "give me back my darn company or I'll sue you each..."
You guessed it. Much to his amazement and surprise, once he revealed his angry intentions, the group voted again. They rescinded their action, putting him back in charge by himself, and then sent in their managerial resignations and walked away. Taking this as a sign that he should negotiate, he attempted to bring some of them back, but failed. Broken by his own short sighted power view, he will now have to recruit and provide good incentives to a new team before he can raise more capital.
Don't let this happen to your startup!
You don't have to share power. If you have your own investment capital, you can do as you please. But you better have a solid vision and execute, because no one in this scenario will share the blame for failure with you, and if you raised capital, your investors will be angry, and justifiably so. If you are not the specialist you think you are, and if you are bringing equity stakeholders into your business then you better share power with a competent team that helps you implement your business. We do not live in an autocratic society and people will not share responsibility here or the excitement and inspiration required to execute on a startup venture, without being empowered to do so.