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Entrepreneurs: Help Pass Immigration Reform by Joining the March for Innovation

By Jeremy Robbins

Over the past several weeks, the Partnership for a New American Economy, a bipartisan group of mayors and CEOs dedicated to sensible immigration reform, has seen an outpouring of supporters from all parts of the country, including tech leaders, entrepreneurs, immigrants and citizens alike. All of them have one goal: to fix this country’s broken immigration system.

With the recent introduction of the comprehensive immigration reform bill in the Senate, we’re one step closer to achieving our goals. Passing a bill through Congress isn’t easy, though, and entrepreneurs and innovators can play a critical role in making it happen. That’s why we started the #iMarch for Innovation, the largest ever virtual march on Washington to make sure America’s immigration system fosters innovation and entrepreneurship, not stifles it.

On May 22 and 23, we’re going to #iMarch for reform and we want you to join us! We’ll march to ensure that entrepreneurs can come to America and start businesses. We’ll march to ensure that American continues to recruit the talent it needs to out-innovate the rest of the world. And we’ll march to help the families, businesses, and individuals who are currently hurt by our outdated and outmoded immigration system.

Our campaign is a social campaign, and there are many ways to make a difference. But first you have to join. To join our campaign and make your voice heard, please visit marchforinnovation.com. Once you’ve signed up, we’ve got lots of ways you can get more involved. Visit marchforinnovation.com/act for more information – including sample content, widgets for websites, ways to share stories, and more.

Together, we can pass immigration reform and keep America competitive.          

How We Keep Our Mentors and Investors on Board – Adriana Herrera, The New York Times

One way to build and maintain a relationship is by providing supporters with regular and honest updates.

A New Way to Get Small Business Loans from Neighbors – Patrick Clark, Bloomberg Businessweek

Alex Binkley has identified a loophole in securities law and launched Funding Community, a New York peer-to-peer lending site that helps entrepreneurs raise money.

5 Things to Know About Patents – Susan Schreter, Fox Business

Here are five things you should know about patents as the U.S. Patent and Trademark Office implements the America Invests Act.

Crowdfunding: The Legal Need-to-Know – Under30CEO

There is a large and complex set of regulations on capital fundraising – here’s what you need to know to crowdfund right now.

If my company was sold, how much will my co-founders, the other existing equity holders and I receive in connection with the transaction?

The principal factors that impact how proceeds in a sale transaction are allocated among the equity holders are the following:

• The pre-money valuation of the Company and the amounts raised in the Company’s equity rounds. This dictates the percentage of the Company owned by the investors.

• The size of the option pool.

• Whether the liquidation preference of the preferred stock is equal to one times (1x) the price per share of the preferred stock or something different.

• Whether there are accruing dividends that get paid to the holders of preferred stock in a sale transaction.

• Whether the preferred stock is “non-participating,” entitling the investors to the greater of their liquidation preference or what they would get had they converted to common stock, or whether the preferred stock is “participating,” entitling the investors to their liquidation preference plus what they would get had they converted to common stock after the payment of such liquidation preference.

Relying on customary assumptions, the Capital Calculator allows you to quickly analyze the approximate impact of changes to these and other variables on expected returns in connection with the a sale of the Company at an exit value specified by the user. We hope founders will find this tool useful in understanding how these terms impact them – enabling founders to be more informed in negotiating their term sheets with investors.

Venture Capital Business Is in Midst of Disruption, Says Mark Suster – Mark Boslet, peHub

As the business evolves, success requires that venture capitalists offer start-ups more than money.

How to Get a Top 10 Website to Pay Attention to Your Start-up – Debbie Landa, VentureBeat

Press can be crucial to the success of your start-up – here’s some advice on getting attention from top websites.

How to Ensure You’re Hiring a Trustworthy Marketing Agency – Corey Eridon, HubSpot

When using an external marketing agency, use these guidelines to consider whether the agency is worthy of your trust.

Big-Time VC: Why Aren’t Tech Start-ups Tackling the Important Stuff? – Good + You

Chamath Palihapitiya explains why he’s investing in tech start-ups that aim to resolve more than “1 percent problems.”

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5 Shrewd Ways to Attract Top Talent

You need to stand out as you recruit your start-up team. Here’s how.

Everyone knows that it’s difficult to attract top talent, especially if your company is relatively new and unknown. Here are some strategic ways to help you build buzz around your company’s recruiting efforts.

1.  Start with your employees.

Your current employees are the best advertising for your company. Of course, that means you have to set a high bar of hiring the best, and build a culture where people love working, and are passionate about seeing it succeed.

Since great people know other great people, your employees can advocate on your behalf and create a spider-web effect. Make sure you effectively communicate the vision and mission of your company so that your message is disseminated to prospective employees in a consistent way. You can also speed up the process by incentivizing employees; dole out referral bonuses or other perks for introducing awesome candidates who are successfully hired.

2.  Expose yourself.

Get your company message out there and give prospective employees an inside look. You can do this by adding an informative careers section to your website and distributing updates on social media.

In addition to job listings, your job page should have a description of your company, including why a job seeker would want to work for you: how you’re disrupting an industry, growing fast, or helping people, for instance. Twitter’s jobs section does an excellent job of showcasing why it is a great place to build a career. Shoot and post a fun video to help candidates learn about your company and meet some of the people who already work there. I like Backupify’s, if you want to check out an example. You can also communicate job openings through your company’s Twitter handle and Facebook page. TripAdvisor has a Twitter account called @TripAdvisorJobs for people to follow and stay up-to-date about job openings and other recruiting tidbits.

3.  Be creative, have fun!

Think about your product or the personality of your company and then use it to your advantage.

HubSpot produces parody videos that give you a sense about the company’s lighthearted culture.  Craft Coffee, a subscription service in New York looking for a Ruby on Rails developer, built a microsite to help create buzz for the position and educate developers about why working for the company could be a good professional opportunity. To help out, it also offered a one-week trip to a coffee-growing country like Brazil or Colombia.

4.  Post the job.

Wait, you thought job boards were passé and so Web 1.0? That’s not true! Job boards can be very effective if you are spending your time and money in the right spots. Avoid broad sites like Monster and Craigslist; instead use highly specialized job boards where your target audience is spending time. For creative or user-experience web designers and developers, I suggest sites like Smashing Jobs. There are also regional sites for start-up jobs like VentureFizz (which I founded) in Boston and New York.

5.  Do good!

Give back to the community. Sponsoring an industry event or having your employees volunteer some time locally will get a positive vibe out there about your company. This type of goodwill goes a long way in terms attracting top people.

Be Honest: Do You Have A Social Media Strategy? – Scott Elser, Inc.

Before using social media to market your business, make sure to have a clear strategy.

The Real Problem with the Internet Sales Tax – Megan McArdle, The Daily Beast

While the consumer will likely have no issues with the Internet sales tax, it has potential to complicate small business operations.

A Lesson In Service: How Not To Treat Prospective Customers – Helen Cross, Under30CEO

Helen Cross points out how some businesses are failing to make a positive first impression.

How VCs Can Make a Real Difference in Start-up Success (Part 1 of 2) – David Teten, peHUB

VCs can add value to a start-up through these seven elements, also known as the TOPSCAN framework.

The Capital Calculator can help answer this fundamental dilution question:

How much will you the existing shareholders be diluted when they take on an equity investment?

Dilution is the change in a shareholder’s percentage ownership that results from the company issuing additional equity.

In a scenario where there is only one founder at the time of the proposed investment, the dilution calculation is pretty simple. For example, if there is one shareholder with a pre-money value of $4 million and a proposed investment amount of $1 million, the company, after receiving the investment, would have a post-money value of $5 million.The investors, having contributed $1 million, collectively own one-fifth or 20% of the company (the $1 million investment amount divided by the $5 million post-money valuation), and the sole shareholder would experience a reduction in percentage ownership from 100% to 80%, in other words, the founder was diluted by 20%.

But what if the company has a pre-money value of $4.25 million and the investment amount is $1.33 million? Or what if there will be an option pool or there are outstanding convertible bridge notes that need to be taken into account? How does a founder’s ownership change if there is a 15% option pool rather than a 10% option pool? How does  a founder’s onwership change if the pre-money valuation decreases from $5 million to $4.5 million, etc.?

The Capital Calculator allows users to manipulate these variables, and calculate the relative distribution of ownership among the various constituencies in the post-money cap table, all within seconds – allowing founders to assess and understand the impact of any changes in these variables as they consider their financing options.

Email Marketing Will Never Die, So We May As Well Make It Smarter – Erin Griffith, PandoDaily

Email is still the most effective form of online marketing, and Movable Ink, a New York based startup, is improving the way marketers reach their constituents.

Don’t Wait for the Next Bubble to Start a Business – Martin Zwilling, Startup Professional Musings

While starting up in a lagging economy is risky, there are a number of advantages to forming before the bubble.

10 Recommendations for Better Start-up Website Recruiting – Michael Gaiss, VentureFizz

Your website is a powerful recruiting device – here’s a list of start-ups that have impressive career pages and ways to improve your own.

Someone Has Your Same Start-up Idea? Move Fast, Launch First – Mike Jones, Young Entrepreneur

Mike Jones discusses how to move fast and start up first when you discover another entrepreneur shares your idea.

• How many and which shareholders will need to consent before the company can take a certain action?
• How many shares would equal a specific percentage in the company?
• How might a transaction impact the ownership interests of existing equity holders?
• How would everyone be paid out if the company was sold?

We’re happy to announce that you can get some of these questions answered quickly and directly here on Founders Workbench through our new Capital Calculator. It allows founders to input certain variables, including:

• Outstanding convertible notes
• Company’s pre-money valuation
• Total proposed investment
• Size of the option pool
• Preferred shares participating
• Total accrued or declared and unpaid dividends on the preferred shares
• Exit value of the company

With these inputs, the app will calculate the dilution to the founders base and the distribution of proceeds in a hypothetical exit event, based on certain assumptions.

The Capital Calculator is also available as a web-based mobile app for iOS and Android devices.

We hope you find this new tool useful. Stay tuned for more blog posts on dilution and liquidation.

Happy calculating!
 

Jeff discussed his work with entrepreneurs, legal and financial challenges for startups, and the mistakes founders make. He covered topics including founder equity, vesting, intellectual property and crowdfunding.

Jeff also discussed the tools on the new Founders Workbench, including Document Driver and Deal Dictionary.

To listen to Jeff’s interview, please click here.