Adventures in Venture Capitalism

Code Complete

2009-12-28T14:42:00.003-05:00

OK - so we officially are coe complete as of today. WHat that means it entirely up to how well the code was written and how hard it will be to figure out what went wrong. Given that a) we have built the first-ever mobile processor emulator (BTW - NOT the main invention, just a sidebar) and b) it took 6 weeks to fix the code-complete UI, I am excited and concerned all at once.

That said, we did use a more intelligent approach to this part as it is core to our value proposition and hopefully the modular nature of the code will make it easier to debug. So tomorrow I will either be VERY HAPPY...or looking for new work...

My Rant

2009-12-24T10:46:00.002-05:00

I am watching the health care fiasco and I have to admit that I am growing increasingly outraged at the "taxing the wealthy" garbage everybody is spewing. Now, do not get me wrong, I have a permanent grudge against Republicans given there incessant destruction of the environment, but these Democrats are ridiculous.

First, nobody is "taxing the wealthy" - they are taxing the people, like me, who are actually starting to make real money. The truly wealthy receive no hits - and will most likely get yet another tax break if things continue as is. Since they run the country, nobody really talks about THAT.

Me, on the other hand, I get severely punished and for what?!? I literally used to live in a car, I was so poor for so long that hunger was a constant companion and eating was not a "when" thing but an "if" thing. I remember eating a cup of rice every 3 days because I could afford nothing else, taking "showers" using the construction site garden hose and drinking large volumes of water right before bed so my hunger pangs would ease enough for sleep. I remember rejoicing when I landed a McDonald's job at night - not for the money (they barely paid anything) but because the job came with a free meal each night. And I remember the first night at McDonald's when I tried, but failed, to eat an entire cheeseburger because my stomach was too small.

But I persevered - I worked (and work) nights, weekends, holidays. I put in 18 hour days, 7 days a week and while most people are playing on the weekend, I am working. I pulled myself through college and dozens of menial jobs and now I am finally starting to make it. I do not see most people working anywhere nearly as hard as me and yet the Democrats want me to pay to make everybody's lives easier - this is ridiculous.

I am frustrated and angry that I am being punished for overcoming the odds and making something of myself. I never got ANYTHING from the government and, in fact, when I needed help I was discriminated against. That's right - I had the senior Financial Aid director at my college tell me flat out that while I definitely deserved aid given my financial situation the fact that I was Caucasian meant I would never receive a dime. Nobody has taken me under their wing or given me a break - I have scraped and clawed for everything I have and now I have to pay for other people to screw off - seriously?!?

See, I am finally getting close to the point where I can actually create profitable businesses and hire people and if you think for a minute I am staying in a country that punishes my success to do so, you are gravely mistaken. As soon as I can, I am out of here and away from such a bizarre world as the harder you work, the more you get punished.

Think I am alone?!? Think again. I seem to have a history of thinking the same things that most people in my position think - are there a ton of us "upper middle class" income people that are fed up with being screwed over by a government that wages class warfare and punishes those that are trying the hardest to succeed.

Where is our fair representation, why do we have to bear this burden???

Issues with Google

2009-12-19T12:28:00.003-05:00

So I am generally a huge fan of Google but I have to admit that actually finding somebody there to talk with about my invention is unbelievably frustrating.

I know, I know 90% of the startup world ends with "...and sell it to Google". In this case, however just imagine it - the next version of Droid comes out and it can literally play any application from any other device. Is there an iPhone you like - no problem. How about a Blackberry, Palm or any other platform app? Got it covered.

We literally have the ability to expand Droid into a truly universal application platform and this is the Ideal Time to get them involved...we have a prototype...it would take us 3 to 6 months to finish everything and Google significantly less time...and I Cannot Find Any Way To Talk To Google!!!

Sure I am trying the VC route, and the "who do I possibly know" route and every other route I can imagine - nothing is working. The VC route - as you can read - keep throwing up hurtles that are meaningless to Google. This technology can literally be baked into Droid but only once Google opens up access to us (or takes the technology for themselves) - until then everything we build is pretty much throw away code on the playback side.

It is so frustrating to literally see how your revolutionary technology can really make a huge impact and yet to be unable to do anything about it...

To Be Fair...

2009-11-30T15:20:00.001-05:00

So I have been complaining about this proof of concept code but I think it is only fair to state that what it is doing is actually very cool. Mr DT wrote the first ever (as far as I know) Mobile Virtual Processor and the system runs FAST. I wish it were simpler but that might just be ignorance shining.

I spent the past few hours looking for a way to rearchitect things and I really just cannot see how things could be less complex. Who would have known - the Complexinator was actually needed after all...maybe I should patent the Complexinator - I would LOVE to have that conversation with the PTO...

"So you are patenting the ability to make things complex"

"Jes"

"Ummm...is this for a government project?"

"Could be"

"Done!"

Seriously - hats off to Mr. DT - he rocks but this program is COMPLEX!!!

The Complexinator

2009-11-30T09:39:00.002-05:00

Back when I worked at the Department of State, I created an imaginary machine called The Complexinator. This machine could take in anything - a problem, a program, an idea, etc... - as long and whatever was being passed in was simple and understandable. The Complexinator would then churn and chug...typically emitting clouds of noxious smoke...and then return to you an extremely complex morass of indecipherable results - thus your input was Complexinated using the process of Complexination.

The purpose, of course, was to teach more novice developers and business analysts the value of keeping things simple...

Little did I know that Mr. DT got a hold of my Complexinator behind my back, increased the Complexination process by a magnitude of absurdity, and used it on our proof of concept.

Never have I seen such a pit of intertwined, over-engineered, simply frustrating code as I see when I look at what was built. I will admit that I am a hack - I typically only write code sufficient to complete a given task and I never try to write "reusable code" or code frameworks. To me they are simply wastes of time as everything changes too much to make those approaches worth the effort.

Mr. DT somehow started to created a framework several times, stopped, started on another framework, etc... And then he left them all in the solution and is using bits and pieces from each.

When I write code and there is a bug, I immediately know where that issue originates - I might not know how to fix the problem but it usually does not take very long. This project? It can take DAYS just to figure out where an issue originates and fixing one issue typically results in a series of systemic bugs that can take weeks to resolve. Case in point, we have been trying to get images to paint on a screen for 3 weeks. Most of the issues have been resolved now - total UI bug count - 4. Total systemic issues from those 4 fixes - endless.

If I had been Really Smart, I would have also developer the Decomplexinator to decomplexinate this mess...oh well...time to dive back down the rabbit hole...

Exploratory Development

2009-11-25T14:02:00.000-05:00

So the problem with building something new it that is it...well...new. Last Monday we thought we were easily going to make our deadline as all we had left to do was to debug our UI and then write some code to connect our recording to our mobile engine.

As of today, we are STILL debugging the UI and have yet to even touch, much less debug, the connection code. The part of this proof-of-concept that we touted as inventive has long since been completed. However, in order to run things, we also had a to build a generic processor emulator - that runs on a mobile device. Turns out nobody has ever done that before and it turns out that it is an incredibly complex morass to work through.

So Mr. ST (Sure Thing - our main investor) has told us to show him a working demo and then he will set up a meeting. Probably fair given that I have NO IDEA when we will be finished. Of course, accordingly to Mr. DT (Deep Technologist - the main developer), we will definitely be ready tomorrow. Of course he has been saying that every day since last Monday...

This is painful...

Slow Burn

2009-11-23T09:02:00.000-05:00

So today was supposed to be The Day - we were going to walk into our meeting against the "experts" and show them who is really in charge in this town...

Of course my trusty developer - Mr. DT - let me know at the last second that LO AND BEHOLD there was more work to be done...a LOT more work. In fact we are STILL looking at weeks of work today - forget about being ready for any meeting.

Thus, even though I am a deep .NET guy, I have been programming furiously in J2ME since Wednesday, pulling all-nighters and generally trying to salvage this mission. Ever heard of "crash-and-burn" - well this burning is taking its time and really letting me feel the pain.

Of course we are close to getting something out today and if that happens then our investor, Mr. ST, will stick around for another week before running away for good. Pretty impressive if you think about it - this guy barely knows me, due to Mr. DT all I have ever delivered is vaporware and a LOT of Spin Talk and yet he is STILL sticking it out...at least for now.

Burn baby, burn...

The Inevitable Delay

2009-11-20T15:56:00.000-05:00

So Mr. DT (Deep Techologist) informed me Monday that everything would be done in time for our trip to the Big Demo...

On Tuesday Mr. DT told me that he was experiencing some delays...

By Wednesday I demanded the project and did my own review...and saw that there was at least 80 hours of programming to be completed - and that was prior to fixing any unforeseen bugs

So, on THursday, I cancelled the Big Demo and tried to push it off for two weeks...so far Mr. ST (the main investor) appears to be onbaord but WHO KNOWS. We are still trying to produce something by Monday to prove we are not total liars but right now we are seriously skating on thin ice...is that ice???looks Very Thin and somewhat Brown...

So Stressed

2009-11-18T09:32:00.000-05:00

So we have our Big Demo on Monday (actually Sunday with a couple of people) and the stress is definitely mounting:

We still do not have a fully functional prototype
Our main investor (Mr. ST) keeps inviting people to the demo despite our requests not to
We are all but out of money

So obviously #1 is by far and away the biggest stressor and there is nothing I can do about it. I have been working with the main developer (Mr. DT) for YEARS and I know how he operates. So when he told me that he would be done by Nov. 1st, I automatically added almost a full month - to a 2 month project - and he still might not finish on time. I have started coding his part of the solution, he is now working 23 hours a day, and still NOTHING WORKS

At the same time, Mr. ST apparently would rather we show our invention to the world than try to maintain any confidentiality. He keeps inviting more and more technical people - people that can (and probably will) steal our technology. When I ask him how these people help us, he has no answer - he just wants to invite them. Nothing that anybody says is deterring him and I have No Idea how to control this issue...and I will NOT give away our system to the world!!!

Further, to make matters Just Peachy, we are all but out of money (of which I have yet to receive a dime) and, even if things go well on Monday, we will have no funds with which to move forward. Isn't this GREAT?!?

Oh, wait, I forgot...the Bestest Part. The "experts" I do know are coming have literally staked their reputations on the fact that we cannot do what we did, they have ulterior motives that work against us succeeding (they want any money Mr. ST might give us) and they have already strongly stated that we must have cheated and they will do "everything possible to figure out how".

Does life get any better than this???

Control Issues

2009-11-09T15:14:00.000-05:00

So our main investor - who I will call Mr. Potential - appears to be heading towards a huge confrontation with the rest of the team and I am not sure what is going to happen next.

Mr. Potential was originally going to give us all of the first round funding within a month and $50K immediately to bridge us over. We had agreed that we could have the full invention built and ready for sale by December of this year.

It took 2 months to get the $50K and we have yet to see any other money. Rather than keep things close to the vest as originally planned, Mr. Potential has forced us to show our inner workings to a series of external "experts". We are also now finishing up another proof-of-concept (we had one prior to Mr. Potential) instead of working on the main invention - all to get Mr. Potential on board.

The proof-of-concept was originally going to be sufficient by itself, then Mr. Potential wanted us to show our code to one expert to obtain "independent verification". Now Mr. Potential wants us to show the invention to at least 5 "experts" and several other investors...

Of course none of this makes sense as we are trying to sell what we have and neither the "experts" nor the investors help in that regard. Is this all just to get Mr. Potential back on board? When is it too much?!?

The original mistake was not shopping this opportunity around and by jumping on the first viable option, we really put ourselves in a corner. Further, we have never pushed back on Mr. Potential because of all of his...err...potential. Outside of the bridge loan, he has never delivered on anything he has promised and is constantly throwing up more obstacles to overcome.

So we are on the verge - on the verge of pushing back, cutting him out of any future deals, finding other sources, etc... In the end, how much is it worth to have control over the strategy and when do you honestly push back?!? There are no books or guidelines and any expertise really...

Thus we are grasping in the dark and hopefully we can find the best path out...even if we have to leave Mr. Potential behind...

The Balancing Act

2009-11-05T10:49:00.000-05:00

So we had a bunch of "experts" tell us a few months ago that our invention was garbage and could not be done. We are now about 85% complete with a proof-of-concept that proves we are the experts and those guys are not so much.

The problem with tight development time lines, however, is the anxiety derived when you push-push-push and you run up onto the deadline. In our case the deadline is in 2 weeks and we think things will be done...but we just do not know. The main investor (who is presenting us to his peeps) is asking how things are going and we are stuck.

Do we tell him the brutal truth that we think things are going well but that, as nobody has built anything like this before, who knows what is going to happen. Do we lie and say we are 100% on target and so overly-confident that we will make the deadline that we are offended he would question us? Where is the balance here?

I tried to go down an intermediate road in telling him that things so far were progressing as expected and that the inventive work is over. We have more typical development to complete and we should be fine unless something completely unexpected occurs.

So was that the right message?!? I guess time will tell...

Back to the Startup

2009-11-04T13:27:00.000-05:00

Now that my computers are all upgraded to Windows 7 (and the upgrade from Vista to 7 was a joke it was so easy and painless), it is now time to revert back to the startup efforts.

The original IP has now spawned 4 different companies that we hope to build out over the next 2 years. We are now trying to figure out our best path forward and I have been introduced to the concept of bootstrapping.

So the first company - whose prototype should be completed in a couple of weeks - would probably sell in 7 months for between $50M and $75M given all of the inputs I have received up to this point. That stated, the only different between the solution at the end of the proof-of-concept phase and the full version is a bunch of grunt work that, while significant, has been done before for other projects. In fact this work is not even cutting edge - just monotonous and detailed.

Given this latter fact, the main investor right now wants to essentially sacrifice the potential value of this first company in order to get money in the door without sacrificing ownership - hence bootstrapping. He strongly feels that companies will easily purchase the proof-of-concept (and it is actually already quite a system...) for between $15M and $20M and that we can take $3M of that and used it for the building out of the other, more valuable, commercialization options.

He calls this a necessary sacrifice for a long term gain but let's be honest - his "sacrifice" would make me a millionaire...SACRIFICE AWAY:)!!!

Graphics and Projects

2009-11-02T13:31:00.000-05:00

So first the Great News - I have about 150+ software projects in .NET and I was very concerned that moving them from the My Documents XP system to the Users folder system in Windows 7 would cause huge file reference issues. Instead there were no issues at all! I did rename the Documents Library in Windows 7 to My Documents and that was enough for Windows 7 to figure out how to change all of the file references - go Windows for finally supporting file system upgrades!!!

On the not-so-good side, there are two annoying things that I have not been able to overcome:

Desktop Icons - So if you perform any updates that process AFTER a reboot, all of your desktop icons disappear. Man that scared the you-know-what out of me the first time but all you need to do is to right-click on the desktop and go to View => Show Icons. Of course this happens EVERY TIME - very annoying.
Background Image - I specifically use a background image that is supposed to span two screens - but Windows 7 repeats it separately for each screen. I have tried every option, upgrade, patch, etc... but it appears that I am stuck in split screen land...

Firewire sucks and Vista to The Rescue

2009-10-31T08:44:00.000-04:00

So I had moved my very large My Documents folders to my external HD rather quickly - 25 minutes - via a firewire. It took 10 hours to move it back from the external HD to my computer. That SUCKED!!!

Furthermore it was not necessary - WIndows 7 packaged up everything I had in Windows XP into what it calls Windows.old - literally everything was there and there was no need to move anything...oh well.

On a more interesting topic, I had said that all of my deivces had automatically been discovered and setup - I was wrong. My wireless HP printer did not install - so I tried to install it manually - but no luck as Windows 7 did not have the driver. I then went to the HP site but they did not offer any Widnows 7 drivers for my high end printer - seriously?!?

I never thought I would say this but Vista ended up saving me! I wondered if I just installed the 64-bit Vista driver what would happen. Sure enough, I installed the driver, Windows 7 "upgraded" that driver and now my printer works even though HP officially does not offer a Windows 7 driver for it!!!

Impressive Install!

2009-10-30T09:13:00.000-04:00

So I copied my 150+ GB of My Documents data onto an external hard drive and started the install...and I was amazed!!!

First the install actually read my internal RAID card without any of those annoying floppy drive inserts. Now, mind you, it took me about 3 days to get XP to read this same card - way to get caught up Microsoft!

The install itself is the easiest thing in the world - but also a bit disconcerting. After telling the install to use my existing C: drive, numerous things happen and Microsoft does a great job of keeping you in the loop. The system then reboots several times and you get to the final step where Windows 7 is configuring your system.

Now for those of us who have had Windows configure our systems in the past, this really means writing out the registry, asking you for your timezone and other nonsense. So when Windows 7 sat there for about 45 minutes without moving at all I thought "oh crap here we go again"

Good news - have patience! Windows 7 actually went out and configured all of my peripheral devices - my Blackberry, scanner and every other USB connected device. Further, Windows 7 actually figured out the correct drivers for my custom graphics and audio cards - not the "generic Driver" garbage from the past - but the actual drivers I was going to install myself after the setup was complete. Absolutely amazing!!!

This was easily the most pain free, easy, impressive Windows install I have ever done (and I have literally done them all). Now all it seems that I need to do is to install my programs, move my data back over and I am back in business!!!

Going to Windows 7

2009-10-29T18:56:00.000-04:00

Intermixed with everything else that is starting to ramp up, I wanted to chronicle my move from XP to Windows 7.

First of all there is NO SUCH THING - you do not "upgrade" from XP - you have to completely reformat your hard drives and install Windows 7 from scratch.

So why the move? Well I have a very high end, custom system - 32 GB of RAM, 5 TB RAID 5 system with dual quad core processors. Well this high end system lasts about 48 hours on Windows XP 64-Bit and then I need to reboot it. If I do anything labor-intensive (you know as in why I got this level of machine to start with) then that 48 rapidly dwindles.

So I am going to suck it up and "upgrade". I have contacted all of the hardware folks and supposedly Windows 7 is unlike anything else on the market and I do not need a ton of additional drivers...we shall see.

Wish me luck...

What To Do When Your Investor Disappears

2009-10-22T09:40:00.000-04:00

So my main investor is actually quite busy running much larger venture opportunities (i.e. $200M companies that have been around for years) and he completely disappears from time to time. Normally that is not a huge issue but now I need him to actually get some work done for our Big Presentation and he is nowhere to be found.

Sure we have succeeded in creating our proof-of-concept and sure we are focused on making the technical demo look good but without the deep market diligence previously offered by this investor, the Big Presentation will be a Big Dud

It is not like I can pressure him or force him to do anything - I cannot even get him to return a call or an email!

So what do you do when your main investor and primary market guy disappears?!?

I have no idea but I hope to figure something out soon...

Proof Update

2009-10-05T16:03:00.000-04:00

So we are well on our way to building our proof-of-concept - you know the one that nobody thought we could build. It is interesting that we have met every milestone thus far, figured out any real obstacles and that all that is left is some grunt work...yet nobody seems to care.

This reminds me of my college days when my professor told me that a good theory is one that cannot be proven true or false. He said that you can write articles and run experiments all day long and nobody cares unless something definitive actually occurs. Great for research I guess but not for making money.

Stay tuned, in about 6 weeks we are going to shove our proof-of-concept up some very arrogant technical asses and then we will see how is the expert!

"Free" Labor

2009-09-29T09:21:00.000-04:00

One of the unavoidable realities facing a startup is the need for unpaid help to get things going. But how free that labor is has become more and more unclear to me recently.

My current set of patents will spawn at least 4 companies (I hope 2 will make it...) and I need marketing research help, patent legal aid and development work to get things to the point where I can get a good Round 1 investment.

So the legal folks keep "re-prioritizing things" and I am STILL waiting to get patents filed. The marketing research people are "hopefully going to start working on things soon" and I only have one developer besides myself willing to work on the cheap. Note - on the cheap not free. In fact all of the money I have raised thus far has gone to pay this one developer and he has lived on my startup for 5 months while I yet to make anything on it.

So how free is free???

Money vs. Time

2009-09-25T09:40:00.000-04:00

Now that we are building out our next proof-of-concept, we are starting to obtain a completely different perspective on money. Whereas we were looking at giving up 33% of the company to get started 2 months ago, in another two months we will actually obtain more money and yet only have to give up less than 20% of the company.

At the same time, we are faced with a 4 month delay on a project that will take a total of 6 months to build out to the point where it can be sold. So this appears to be a negative but I am not sure how negative it really is.

OK there is the whole "end of year" thing - you know where companies tend to spend most of their budget at the end of the year. That said, the economy is still recovering and it might not be until next year that Big Checks are written. In fact, our current timing places us in the second quarter of 2010 and that might end up being perfect.

On the flip side, we are missing out on the holiday season and who knows how that might affect us in the end. It is interesting to ponder as I had a friend ask me if the savings in equity was worth the time delay - I simply do not know.

Not that we had a choice in the matter ...

Hourly vs. Monthly

2009-09-17T08:47:00.000-04:00

While we are building our proof-of-concept - and if anybody knows how to go from 32-bit images to 8-bit images please LET ME KNOW!!! - I will post some things on non-VC-related items. Today is all about hourly vs. monthly payments.

In the hourly corner, I have clients that blissfully pay me rather large hourly rates, completely screw up what they want and then pay me even more money to fix their mistakes. Based on these clients, the hourly game is a good thing.

On the other hand, I can get many more clients to sign up for a monthly retainer based on the number of hours they think they need from me - and this is what takes me to the next level. In the hourly game, I am limited to about 240 hours per month (60 hours per week) and at, let's say for this example, $250 per hour, that comes out to $60,000 per month. Good money but not the end game.

When I book monthly contracts I ask people how much work they want from me and then how many hours they feel this work will take. Now I have a great capacity to work significantly faster than most people so this type of negotiation really works in my favor. I then give about a 20% discount off of my hourly rate and then sign people up to 6- to 12-month contracts. Back in July, I had 5 such contracts each paying an average of $20K per month - MUCH better money!

Of course I gave all of those contracts up to build my new company because, in the end, even the monthly contract game has a low ceiling. While $100K sounds awesome per month, it fluctuates wildly and I have yet to break $600K for a year. To put that in perspective, most lawyers I know consistently make $800K to over $1M with much less experience in their field than I have in mine.

However, even starting up a single company is not really the end game - rather starting a company that generates companies is the final goal. To that end, I do have yet another patented invention that, once built, will automatically generated 12 spin-off companies (at least) without further effort on my part. While this is a good start, I am constantly noodling for better company-generating concepts as this, to me, is the ultimate money-generating solution.

Side Work

2009-09-14T16:02:00.000-04:00

So the frustrating thing about startup - especially when you are building proofs-of-concept - is that the primary inventor needs to look elsewhere for money. Sure I dumped all of my major clients but now I have to feed my family for the next 4 months and that means begging for scraps.

It is not that the money sucks - quite the contrary - but I am switching between extremely smart developers and lawyers from my startup to people who send me the same email questions on a daily basis and NEVER READ MY RESPONSES. "Oh, was I supposed to read that?!?"

I think this is the biggest hit to my ego - after all of the "we are going to change the world", the only thing that has changed is my ability to tolerate ignorant clients...

The Challenge

2009-09-11T14:37:00.000-04:00

So we have determined that we are going to use the following calcualtor:

http://mobile.clauss-net.de/touchcalc/screenshots.php

to prove our invention to our critics. The proof of concept is straightforward - make this iPhone calculator run on a Blackberry device without ever placing any of the code from that calculator on the Blackberry, without reverse-engineering, using device emulation or a custom compiler.

To be honest we already know we can build this - it is just going to take a couple of months to build out our platform.

Of course our critics are CONVINCED we are idiots and will never build this solution...it is ON!

Here We Go...Again

2009-09-09T09:20:00.000-04:00

So we had our Big Meeting yesterday and I got the investors to give us one more shot at proving that we know what we are doing. Of course there is no money now and we have two months to build our next proof-of-concept.

It is interesting to hear investors discuss how little value that actually ascribe to any deal - even if the deal have a very large potential. They simply see to much and have seen too many failures. Sort of like a stripper trying to impress a long time bouncer at a strip club - it is just not easy to do...

Maybe I need to work out more...

Marketing People Are Crazy

2009-09-08T10:53:00.000-04:00

So Marketing People - you know those people that are brought in to Move Your Company Forward, Sell Your Idea - are crazy. Let me provide you with a couple of actual stories that proves my point.

Mr. Seriously?!?

I met one guy when I was first getting my universal mobile company together (I will write about my equity nightmares another time). He was a nice person, young (maybe 26) and very energetic. Over the course of a few weeks he got what I was building and he even had one of his friends provide a (complete worthless BTW) pre-money valuation of $20M that would, according to the report, probably sell between 10x and 20x within 12 months.

So I then meet with this guy to discuss terms of a possible equity deal. I first ask him what he is willing to do and what he wants for his effort. He said that he could introduce me to a few companies and set me up to possibly obtain partnerships and that this effort would take him up to 3 weeks. I said that sounded great and I offered him a, rather rich, 5% finders fee for his efforts.

At this point he actually got offended. How DARE I suggest that a finder's fee would be sufficient - he was MUCH too valuable to be anything other than a core part of the team. He demanded that he be a CMO or higher. To be clear, I told him that, based on his own valuation I was giving him $1M in equity that his own report said would be $10M to $20M within a year. "That is not enough for my abilities" he responded - seriously?!?

I then asked him what major things had he done in the past to warrant such a position. Well, he had actually not done much of anything. I then asked how he was going to connect me to various companies. Through direct and indirect friends he responded but not through any direct contacts. Now he was doubly upset that I had the gall to question his credentials - even though he had no credentials that were worth anything. He got so offended that he dropped everything and left the $1M in equity to return to his $120K a year job as a salesperson for another startup! Crazy.

Mr. Invention

Early on in the development of the universal mobile company, my Deep Technologist (Mr. DT) and I went through numerous scenarios in order to determine the best way to monetize our invention. We knew we needed to place something on a mobile device but would that something be very simple or much more complex. The underlying question came down to whether we were building out technology or an actual retail company. We decided to build out and sell the technology using a rudimentary mobile platform that would prove our invention but not support full retail capabilities.

I then discussed this invention with Mr. Invention. This is important - we had TWO conversations about this invention - that is it. While he did discuss other items with me about the company they were all in the aim of obtaining funding. We agreed to a set finder's fee (I guess he was better than Mr. Seriously...)

So during our two calls Mr. Invention pushed me hard to go down the retail road. Since I am not a marketing guy, I listened and we decided to pitch that idea instead of just the technology. Mr. Invention understood that he did not actually change anything other than how we presented the concept to investors.

So we meet investors and - LO AND BEHOLD - we are told that going down the retail road is death and that we will be MUCH better off building and selling the technology. Yes folks, just like Mr. DT and I had thought originally.

OK, now the fun part. I am discussing equity with Mr. Invention and listing out his finder's fee and possible future equity should he do any work down the road. "But what about my upfront contribution?" he asks me. Thinking I missed something, I told him that we agreed that his efforts to land money was why he got the finder's fee. "No, no", he responded, "I helped you guys form your core invention."

So I asked him what he meant and he said that his efforts to push us into the retail space was core. When I showed him that we already had a rudimentary platform and he agreed he did not help with that part. I then got him to agree that we were not going to build out a retail component. "But I still gave you the retail idea", he said. He then agreed that the "retail concept" did not change the actual invention and that it only appeared as vaporware in a couple of presentations.

"But I still pushed you guys down that road". Sure, I said but first we explored that road prior to you and rejected it and, second, you took us down a road no investor agreed was a good idea. Did not matter to him - he felt he deserved at least 5% of the company for his contribution. To put things in perspective, I only have 30% and I have been paying people, writing patents and developing code for 6 months. His "contribution" stems from 2, 30-minute conversations that we ended up not using. He now refuses to talk to me and is still upset about only getting a finder's fee.

Crazy, right?