I'm reading Robert Caro's fourth volume of his ongoing biography of Lyndon Johnson.

I haven't read the prior three. What pulled me in to this book was the scene Caro draws to open it: Air Force One, making a vertical climb away from Dallas; Mrs. Kennedy in the back attending the body of her dead husband; and Johnson in the middle of the plane, newly sworn in, ruminating how, some 24 hours before, his request to come down to Dallas with the president on Air Force One had been rebuffed.

That Caro has made the study of Johnson's life half of Cairo's own life's work is a story in and of itself, one told on C-SPAN, radio and in print media.

Caro is good at folding this meta-discussion of his own project, including the race with time as Johnson's contemporaries die off, into the flow of his chronology. It makes the book more readable, not less, the sense that someone who remains your contemporary is doing everything he can, including deploying his own now significant fame and influence, to find truth before all the portals to it close.

I do find it a bit odd, however, that a project as high profile as this one should be in need of copyediting for repetitiveness!

And it's not just the tendency to resituate something that has been said a chapter before, which can indeed aid a reader's comprehension and retention (wasn't this a device used in TV situation comedy in the 60s: the plot development or significant line from just before the break is repeated, albeit in slightly different blocking or from a different camera angle, when the show resumes?). Sometimes you can tell the author has moved a sentence or phrase to another paragraph, but that, in the jumble of marking manuscripts, the verbiage meant to be transposed has been left in both places.

Flaws like these make writing a biography seem less intimidating, however. Put in your time, organize what you have, write it all out. Time is your competitor.

Glenn Kelman has a nice post on the corporate Redfin blog this week.

He's talking about Facebook monetization, and makes a very strong case that the arithmetic for Facebook's public market valuation can't be supported by display advertising. (It's apparent that Glenn thinks carefully about size of markets, rates comparables; part of his job, no doubt.)

Two things I especially like about his post.

One, he talks about how developers value the platform in a different way than do financial types. Because of Facebook, he says, Redfin can know a lot more about a user when she logs in to Redfin than it would otherwise. (He's not talking about me, though. I opted out of being a Facebook user, and I wish that information about identity could be leveraged so ubiquitously from an open system.)

Two, I like how Glenn assumes Facebook might monetize by charging users for services. (Though he thinks they have been smart, so far, to have "focused on growing the cow, not getting more milk."

As for advertising, if that does remain a part of Facebook's monetization strategy, longer-term, I hope the company finds a way to respect, rather than exploit, users' earnest engagement. Particularly if Facebook is going to embed advertising in user newsfeeds, it should share the ad revenue with the participating users.

Photo: "SR 520 Toll Booth - 1979," Washington State Department of Transportation / Flickr.

Just heard a report on the radio, about the allegations that revised Facebook revenue projections were selectively circulating as its IPO was being promoted, priced and sold.

It makes me think again of the information clamp-down provision in the crowdfunding section of the JOBS Act, which states that:

"an issuer who offers or sells securities shall . . . not advertise the terms of the offering, except for notices which direct investors to the funding portal or broker . . ."

Contrast this with a different provision in the original McHenry crowdfunding bill:

"an issuer who offers or sells securities without an intermediary shall comply with the requirements of this subsection if the issuer . . . makes available on the issuer's website a method of communication that permits the issuer and investors to communicate with one another . . ."

The McHenry bill did not pass both houses of Congress of course.

Though Rep. McHenry is justly famous for having sponsored the popular crowdfunding exemption that passed the House, though he led the parade of legislators in the Rose Garden at the signing of the JOBS Act, his bill was completely gutted and replaced by the downright cynical Merkley/Brown bill. (McHenry's contribution to the JOBS Act, as it turned out, was a floor amendment that added the federal broker-dealer safe harbor for angel platforms and incubators, facilitating, ironically, crowdfunding for accredited investors.)

And it's too bad the McHenry bill didn't make it into the final JOBS Act.

One thing a crowdfunding exemption might have done, might yet do if the legislation is revised down the road: come up with a new kind of way for information to circulate among investors. The issuer is always going to have to be scrupulous, of course, for any offering to be fair. But I wonder if the paradigm of tightly controlled, top down, centralized disclosure isn't subject to even more potential abuse, than a system privileging transparency.

Imagine that, at the same time it was allegedly sharing the information with its underwriters (perhaps in good faith!), Facebook had simultaneously posted its revised projections on Facebook.

Under the category tags Facebook and Ad-Free Commercial Web, I've been trying to develop an argument that the honest destiny of social media is to disintermediate advertising. Why push brand messages into a community rather than harvest that community's organic opinions about brands? 

Well, in a piece yesterday in Technology Review, Michael Wolff predicts Facebook will take down advertising all right, if in spite of itself rather than intentionally.

Where I decry a failure of business ambition and fear the poisoning of social media, Wolff, a former editor of Adweek, forsees an inevitable reckoning that relentless growth and the expansion of inventory will drive ad rates so low, the web will be ruined for advertisers.

From Wolff: "I don't know anyone in the ad-Web business who isn't engaged in a relentless, demoralizing, no-exit operation to realign costs with falling per-user revenues, or who isn't manically inflating traffic to compensate for ever-lower per-user value."

Wolff's piece helps me make more sense of the posts I've run across lately on marketing blogs, to the effect of, "Facebook needs to build better advertising products."

Maybe I don't need to be so incredulous that people are wishing something so regressive.

Who needs ambition if arithmetic takes care of the problem?

"All Need Arithmetic" (credited to the 1920 World Book), image by Eric Fischer / Flickr.

It's probably time to start thinking about steps that might be taken by *issuers* (securities talk for entrepreneurs, startups and companies raising money) and *funding portals* (a new necessity conceived by the JOBS Act) to make a go of the equity crowdfunding exemption, such as Congress has bestowed it.

We can revisit the list when the implementing SEC regulations are written (or develop our list in tandem with that process). 

No guarantees - it may turn out that the only crowdfunding under the JOBS Act that will work will be crowdfunding for accredited investors - but here's a start at identifying practices that might help make the equity crowdfunding exemption viable:

1. Don't use lawyers.

Issuers: if you use lawyers, you're going to spend at least 5% of the offering proceeds on them. That's assuming you will succeed in raising the maximum $1 million allowed, and that you haven't raised any money from angels in the past year. If you raise less, the percentage you will pay will be much higher.

Moreover, if you engage lawyers in the process, there will be no end to the discussions and consultations, through the pendency of the offering, and post-closing.  If the lawyers take control dealing with your new shareholders, forget it: you will be consigned to spending over 10% of your proceeds on the law firm, within the same year that you raise your crowdfunded round.

Portals: you might use lawyers to write the templates you should require your issuers to use (see below), but you probably shouldn't. You should pool resources with other funding portals and have standard documents and protocols written up. Thereafter you should use lawyers only with regard to issues having to do with your compliance with the regulations that apply to you as a funding portal.

Furthermore, if an issue comes up with an actual or prospective issuer that suggests you need to consult a lawyer, don't; instead, drop the applicant or issuer. Make sure you have terms of service that make it clear that you will cut and run, rather than obligate yourself to spend on legal fees for problems brought into your tent by others.

2. Standardized everything.

Portals: you are charged with first contact with prospective investors. You have to educate them and qualify them; and you will implicitly be assuring them you have done the requisite statutory diligence on the background of the directors and officers of the issuers. (That's not all you have to do; you have to do a ton more, but that's enough for me to reference here by way of setting up the instant point.)

You will have no hope of discharging these duties of education, suitability matching and diligence if each and every deal has its own terms. Preferred stock, common stock, convertible notes; units of stock and warrants; variations on each of the foregoing - forbid it all. Tell all your issuers they must necessarily use a specific security that you will explain, and will explain once, and will explain a thousand times, without variation, to all the investors accessing deals on your portal.

It doesn't stop with the deal terms. Securities are functions of a corporation's charter, so you will have to dictate what the charters of each of your companies look like. If an issuer has already incorporated, too bad, make it re-incorporate or amend and restate its charter in the form you mandate.

And it shouldn't stop with the charter. Make the issuers you list follow the same checklist a good angel group would insist on: assignments of invention from everyone associated with tne venture; reverse vesting for founders. Moreover, because, unlike angels, you are not going to have time or resources to vet the variants of corporate documents, publish your approved forms and insist that your issuers use them all without variation. If possible, get industry consensus on what these forms look like.

If the law would permit actual crowdsourcing of information, it would be possible to allow variation on valuations. But the law does not permit that. (The McHenry bill would have, but the McHenry version of crowdfunding was killed by the Senate, and the House Republican leadership, for political reasons of their own, didn't fight it.) So, don't just standardize the legal terms of the deals on your platform; standardize the financial terms, too.

3. Have no directors or officers, other then the founders.

Issuers: the new law does this funky thing with the liability for company misstatements or omissions. It says that, for purposes of liability for such errors, the "issuer" is deemed to include your officers and directors.

It may be that a market for D&O insurance will emerge for equity crowdfunding deals. If and when it does, we can revisit this point 3. But until then, assume that you must have no directors or officers, other than the founders. In fact, it may be best to have just one of the founders volunteer to be the sole director and the sole officer. (But check with the funding portal: they may require you to have a broader responsible team than that.)

Photo: "Give it a try" by Maxim Trudolubov / Flickr.