The reality is that PayPal limits you to one business account per distinct business.  For a business to be distinct for these purposes it needs its own name and its own bank account.  This means that with some work, you can have multiple PayPal accounts.  Here are the steps to open a PayPal account in another business name:

• Register the name you want to use as a DBA name with your state;
• Open a bank account in that name;
• Sign up as a new user with PayPal using a different email address than used for your existing account;
• Link your new bank account to the new PayPal account;
• Optionally, you can also get a business credit card issued to the new DBA named company and link that to the PayPal account as well.

This process does work, but it is not clear that PayPal would say that it is consistent with their terms, so use it at your own risk.  It is a shame that PayPal does not offer an easy way to have multiple accounts as there are plenty of legitimate reasons to have them.

Yet amid all the hopeful talk about the brave, new green car world, the men from Detroit were studiously silent on whether they can sell these new cars at a profit any better than they can their current lineup. Yes, the restructuring plans, especially GM’s, have some stark numbers about downsizing — 30,000 blue collar jobs are on the chopping block at GM alone. And this is accompanied by gauzy predictions of matching Toyota’s labor costs by 2012. But it’s hard to see how that gets done without a bankruptcy judge to tear up the contracts and start over.

In point of fact, the only reason that Detroit has been able to survive this long is because they were able to make large profits on light trucks and SUVs that supported their bloated production costs and distribution channels.  These are, of course, exactly the sort of vehicles that Congress wishes Americans would not buy, so they are using this bailout as an opportunity to try to change what is available for them to purchase.  I really doubt that this approach will be successful, and I find it hard to believe that members of Congress don’t understand this.  More likely, Congress knows that the only thing that would work — a European-style tax regime on gasoline that changes the economics of the buy side of the equation rather than the sell side– would be wildly unpopular.  Perhaps I overestimate them though.

The other thing that bothers me about all this is captured here:

If there was ever any question whether Congress actually wants to “save” Detroit, this week dispelled it. This is not a bailout that Congress is debating. It is a federal takeover. We don’t mean that in the sense that the feds will own the companies on paper, although that can’t be ruled out. What Congress wants to own is their business plan, and Detroit seems prepared to oblige.

There is a whole body of law pertaining to lender liability.  In a nutshell, it says that lenders are potentially liable if they interfere with the operations of the business.  When I first started out as a commercial lender many years ago, part of my training was understanding that I would be fired if I acted the way Congress is acting right now.  The Detroit bailout proceedings are yet another example of Congress applying one standard to their own actions and another standard to those of everybody else.

In the past week, I’ve had two different discussions with readers of this blog who wanted in on one of our deals. One reader wanted to invest in Twitter, the other in Boxee. I told them both it wasn’t possible. There are all sorts of reasons why it’s not possible, but let’s start with the qualified investor rule. To invest in the sorts of deals we invest in, you need to be a “qualified investor” in the eyes of the SEC.A VC, Nov 2008

His post interests me because over the past ten years we have been heading toward a situation where there is considerable overlap between ostensibly public companies and mature (or at least large and profitable) private companies.

I don’t have the statistics handy right now, (I will find them and put them up in a future post), but suffice to say that the majority of publicly traded companies today (i) have no research coverage, (ii) have market caps that make them of no interest to institutional investors and (iii) have average daily volume of next to nothing whether in terms of shares or in terms of dollar value of shares traded.

At the same time, you have a small but growing contingent of private companies that have reached the size where previously they would have been realistic candidates for an IPO or takeover bait. The IPO is not an option because (i) no deals can get done and (ii) savvy management teams realize that, regardless of what your VCs and bankers are telling them, there is no point in being a public company unless your post-deal market cap will be at least $1 billion. Given that everybody’s stock is in the crapper and hoarding cash is the default posture, acquisitions are few and far between too.

So, we have orphan public companies and orphan private companies. I will save my thoughts on orphan public companies for another time.

Although he spares us the mind-numbing complexities of Reg D and Rule 144 and “Accredited” and “Qualified Institutional” buyers, Fred is correct that the securities regulatory scheme in this country is not conducive to a secondary market for private equity securities.  Still, I do not agree with Fred that regulation is the right place to start.  My guess is that Fred could have sold those readers some stock if he wanted without running afoul of the law.

Normally, a purchaser in a private transaction with an issuer — such as a venture fund buying stock directly from a private company — must stipulate that they do not plan to re-sell the securities they are purchasing. If a purchaser buys shares from an issuer with the intent to then sell those shares to someone else, the purchaser becomes a “statutory underwriter” and must perform due diligence on the issuer or be liable for any losses that the next purchasers suffer. This is why investment bankers’ fees on IPOs (when they happen) are still 7%. The bankers are underwriting the deal (buying with an intent to re-sell) and have a due diligence obligation if they want to have a defense against being liable for the losses of subsequent purchasers.

As with any barely comprehensible regulation, there have to be exceptions.  Rule 144a says that a purchaser can re-sell the securities it purchased without being considered an underwriter if it sells them to a Qulified Instituional Buyer (”QIB”, pronounced “quib”), basically someone who has a $100 million in investable assets or is a bank or an insurance company. This is the way most bond issuances (back when companies could issue bonds) get done.

When he talks about a “qualified” buyer, Fred is alluding to Rule 144a.   If I am reading him right, Fred is saying that in order to sell to the readers that approached him, he would have to rely on 144a (in other words the readers would each have had to have $100 million in their brokerage account). However, just because you don’t have an intent to re-sell the shares when you purchase them from the issuer, that does not mean that you can never re-sell them later in a private transaction. You simply must not intend to re-sell the shares at the time of purchase.

Absent other constraints, if Fred wanted to sell some shares of Twitter to me, he probably could. So what are these other potential constraints?

First of all, Fred may have entered into an agreement where if he receives an offer for his stock that he would like to accept, he must first give the other existing shareholders an opportunity to buy his stock on those same terms. This “Right of First Refusal,” while not universal, is very common in private company deals. Needless to say, I am much less likely to make Fred an offer for his stock if all I am doing is establishing a third party value for others to step in front of me and snap the stock up. Second, investing in private companies requires that you do considerable diligence (there are no “underwriters” doing it for you). While it might be true that the people approaching Fred about Twitter and Boxee are smart, sophisticated people, that doesn’t mean that they really know what they are getting. They might just want to buy some stock in what they perceive to be “hot” companies that have the sponsorship of someone like Fred. Furthermore, they may have no opportunity to perform the due diligence even if that is what they want to do. Fred probably has “Information Rights” where he is entitled to receive monthly financial statements, budgets and other critical information from the issuer, but he is also probably obligated to keep that information confidential. How am I going to know that Twitter is anything other than a company with a lot of buzz if I can’t see how much cash they have in the bank and how much they are spending along the way?

I could go on, but my point is not to bust on Fred. He even says there are lots of reasons why he can’t sell to these readers.  Doubtless one of those reasons is that he thinks these investments will make him a lot of money one day, which is great.

It is true that securities regulations in the United States make it more difficult to sell a security in a private company than in a public one (this is intentional, I might add). Still, until investors like Fred start giving up all of their rights of first refusal, information, co-sale, pro-rata purchase, anti-dilution, etc. ad infinitum, a meaningful secondary market in individual private equity securities just is not going to develop.  This is one area where blaming the government is barking up the wrong tree.

Why not just form another corporation or LLC?  The answer is that it is usually considerably cheaper to file for a DBA name rather than form another entity.  The ongoing costs are usually much less too.  Depending on the State, you can usually register DBA names with the same department that forms corporations and LLCs.  Check out this list of incorporation and LLC formation links in order to get started.

Remember, the disclaimer applies.

The Good:

• The book is a great overview of most of the things that you will need to consider as you pursue a career in blogging.
• The authors make no bones about the fact that is is tough to make a substantial amount of money blogging.

The Bad:

• The book feels a little disjointed.  Each author wrote individual sections rather than collaborated on the whole text.
• While the book gives you the overall lay of the land, there are very few specific instructions.  You are still going to need to do a lot of research beyond reading this book even to get started.
• Given how blunt the authors are about the odds against making serious money, the subtitle “Secrets for Blogging Your Way to a Six-Figure Income” is purely marketing hype and more than a bit distasteful.

The Bottom Line:

Most of the best information from the book is available for free at ProBlogger.net here. I really need to start reviewing books that I can recommend people actually purchase.  That might even be a “Secret” to making money on the internet.

• It is generally functional. I have been able to execute some reasonably complex queries using Base.  It’s visual query designer is about as easy to use as the one in Access.  One thing that I can’t get working correctly is doing a right join.  Base only wants to do left joins.  Go figure.
• Getting data in and out is not difficult, but not intuitive either. It took a while for me to figure out that in order to get Excel data into a table, you simply copied the data, then right-clicked on the table name in the table  list (i.e. the table is not open for editing) and then choose paste.  Similarly, in order to get a recordset out of Base and into a spreadsheet, you need to right click on the query name in the query list, open up a new Calc (the Excel equivalent) spreadsheet and paste the data in cell A1.  You can’t copy the recordset directly and then paste it into a spreadsheet.  The dataset needs to be pasted into Calc.  You can’t paste it into Excel.  Once it is in Calc, however, you can save the file in the Excel 2003 format.
• There are lots of little things that are missing. One that comes immediately to mind is that you can’t move to the last cell in a column by pressing “end” and then the down arrow.  Doubtless there will be more things like that.

Judging from some of the conversations in the forums, this is a pretty common problem.

As always, the disclaimer applies.  Consult professionals if you are not absolutely sure you know what you are doing.

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• District of Columbia
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Puerto Rico
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Virgin Islands
• Washington
• West Virginia
• Wisconsin
• Wyoming

Fortunately, Ferriss is a shameless self-promoter, so you can read the legions of positive reviews that he personally solicited on Amazon and figure it out for yourself.

The Good:

• Ferriss can tell a good story.  There are a few passages that are laugh out loud funny.
• It is a quick read.  I picked it up in an East Coast airport and was finished before I landed in Europe.  I also got a little sleep.
• The book can potentially open one up to lots of possibilities.  Many people think it is about being able to spend all your waking hours beyond the four that you work lying in front of the TV eating Doritos.  That doesn’t have to be the case.

The Bad:

• The key to following Ferriss’ advice is to develop an “automated income.”  In his case, he sells nutritional supplements to bodybuilders.  He outsources the production and fulfillment, so all he really needs to do is check his bank account which supposedly sees annual inflows of $800k or so.  He provides a few examples of others who have achieved similar results.  The reality is that it is very hard to generate that sort of a business and for most of us, it will be difficult to build even a modest business.  Once it is established, you can tweak the model so that less time is needed, but it will probably take years of work to get there.
• Ferriss is ethically challenged.  As I said, many of his stories are entertaining, but they demonstrate a casual willingness to disregard the spirit of rules while complying with their letter.  In many cases, I was wincing instead of laughing.

The Bottom Line:

By now, this book should now be available at your library, and I would recommend borrowing it from there rather than shelling out for it.

Obviously, there is a ton of stuff online, but the best resource I found for learning HTML/CSS was MaxDesign.  In particular, I would recommend starting with their “Floatutorial” and then moving on to their “Selectutorial.”  I now have some really slick Web pages up and running, and even better, I understand how I created them.