Disclosure when a private company sells shares via Second Market?

Interesting post today by Mark Boslet of PEhub on secondary markets and lawsuits. Specifically, can private companies take steps to shield themselves from lawsuits by disclosing private info such as financial results? Hmm. Wasn’t part of the reason to not go public the fact that you don’t have to disclose this stuff?

According to Mark’s piece:

“I think companies are saying, ‘I do want some information out there so there won’t be disparities of information,’” says Francis Currie, a partner at the law firm of Davis Polk & Wardwell.

According to Currie, the information most appropriate for disclosure includes a list of material risks facing a company’s business and recent financials, but not projections. The Securities and Exchange Commission hasn’t yet weighed in on the topic, but it is examining issues associated with secondary market trading, particularly the 500 shareholder threshold that forces private companies to disclose financials and other data. So more clarity could come from the SEC over time.

I have no idea why this subject fascinates me so much. I think it’s because we are seeing the evolution of a new type of stock exchange in response to market and regulatory pressure. Pretty cool stuff.


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A Couple of Good Links

A couple of good links, one by me and one by Scott Orn of Lighthouse Capital.

Good Ideas are Never Lonely

Don’t let the fact that there is competition deter you from starting your company. Scott talks about how he beats the competition with his non-funded, not for profit social network Ben’s Friends. Very cool post. Good ideas are Never Lonely.

Don’t Let Old Content Go To Waste

I wrote this post for DIY Marketers – don’t let old blog content go to waste! You can get both SEO love and qualified traffic from highly visited and page ranked older blog posts. This is one way to do it.

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VC Proximity – Do they need to be within 1 mile

It is becoming a big deal in the Boston ecosystem when another VC decides to leave “Mount Money” aka Winter Street in Waltham for trendier digs in Cambridge. Scott Kirsner has a recent post on ATV preparing to move to Cambridge to be closer to the startup action.

I don’t think it’s a big deal if the remaining venture capitalists in Waltham stay there.

Boston/Cambridge doesn’t need more venture capitalists downtown. What is one of the biggest problems for startups trying to operate on the Red Line? Rent. It’s crazy expensive to find decent offices in Cambridge. Who doesn’t mind paying too much for rent? VCs and their service providers like accounting firms and lawyers. There is a really limited amount of space in Cambridge. We don’t need it taken up by venture capitalists. Startups will have to move to the burbs if rents continue to climb.

Having the local startups clustered along the Red Line is really important. A huge amount of knowledge sharing happens due to this proximity. For example, my CTO gets together with other CTOs at least once a month. I get together in the evenings with other startup folks pretty regularly. This wouldn’t happen if everyone was out in the burbs; or at least would not be as easy for startupers who live in the city (note that most senior VCs tend to live in the suburbs).

Scott highlights a very cool story about how Zuckerberg had to get a cab to get out to see Battery Ventures when they were considering raising capital. How do you think Zuckerberg got to the VCs on Sand Hill Road in Palo Alto? It’s not anywhere near public transportation. Getting there is a total pain in the ass if you live in the city, unless you live along 280 (I know because I did that commute for almost three years.) In fact, Sand Hill is a lot like Mount Money, with the VCs in their own little world, surrounded by investment banks, law firms, etc. There are a few startups on the street, but it’s really expensive. (Stanford is really close, which is a major advantage.)

Sand Hill has another advantage, in that it’s in the geographic center of the startup scene in the Bay Area, in between San Francisco and San Jose. I guess Waltham does NOT have that going for it. But being active in the startup community still requires the California VCs to get out of their offices and visit with startups and attend events. Boston area VCs can achieve the same thing if they get out and about and attend local startup events. If Mount Money VCs feel cut off from the action, I bet it has less to do with their geographic location and more to do with their attitude. You see a few of the same VC faces at most of the “cool” events, and there are some venture capitalists who make an effort to speak various startup panels. Instead of encouraging Waltham VCs to move to the city we should be encouraging them to get out of their offices more often.

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Recent OfficeDrop Press

Ok I’ve got to brag a little here. OfficeDrop recently launched our newest mobile app, the OfficeDrop Android Paper-to-Go app, and we’ve had great success with new users and downloads. I’m working on a post about how SEO may be dying, at least for SaaS services, since the huge majority of our new users are coming from app marketplaces these days. I really think we are undergoing a significant shift in the way people find and buy software and web services… and I’m personally having a ton of fun trying to figure it out!

Anyways, here is some of the recent press OfficeDrop has gotten on our new Android app:

May 18, 2011

OfficeDrop: Scan Docs, Turn Them into PDF & Make Searchable (Android)

Using Paper-to-Go you can scan physical documents using your smartphone’s camera and store these documents … other file formats can be uploaded and processed as well. Read OfficeDrop’s Paper-to-Go Review on makeuseof…

May 16, 2011

Android app OfficeDrop Paper-To-Go turns paper documents into electronic ones.

Just snap a photo with your phone, then sit back while it converts the page into a searchable PDF and uploads it to cloud storage. How crazy-handy is that?  Read OfficeDrop’s Paper-to-Go App on bNET…

May 13, 2011

OfficeDrop’s Paper-to-Go for Android Scans Your Documents

Paper-to-Go is a document scanner that uses your device’s camera and converts the image into a PDF. The app is directly tied to OfficeDrop’s cloud service, where the PDF documents get processed with Optical Character Recognition (OCR) to make any text in them searchable. Processed documents can be searched from both the app and through the web site at any time.  Read OfficeDrop’s Paper-to-Go App on LifeHacker…

May 12, 2011

Digital Filing Service OfficeDrop Now on Android – this one also got reposted on the New York Times

OfficeDrop, an application for scanning, accessing and sharing paper and digital files via the cloud has been rolling out onto a variety of platforms. The company has announced that the OfficeDrop Paper-to-Go app for Android is now available, in addition to existing applications for Mac Windows and iPad.  Read OfficeDrop Now on Android…

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OfficeDrop Post on Techcrunch – Competing in the Cloud

Prasad just had a post published on TechCrunch. It’s about something we’ve been focusing on for a while – the cloud is making companies who should be competitors friendly. Entitled “Competing in the Cloud – Let’s be Frenemies,” it is our current “cloud manifesto.”

We are really thinking a lot about how to grow a cloud based SaaS business, and have learned a ton over the past year. OfficeDrop was one of the first startups to get into Amazon’s cloud services back in 2007, and we’ve noticed that cloud/SaaS software is very different from the packaged software business model.

Open APIs and integrations are really changing the way companies interact with each other. Startups that would once have tried to aggressively compete with larger players are now helping the big platform companies round out their product offerings, and large players who once would have squashed every startup in sight are now helping distribute competitive offerings.

OfficeDrop is really benefiting from these “frenemy” integrations – Google Docs, Evernote, FreshBooks and more have helped grow our business and make for happy customers. We aren’t trying to lock customers in and keep their data hostage. We understand that people want data portability and that our service is not a soup to nuts solution for all business cases. Anyways, we are really pleased that TC let us publish our thoughts. Please check out the post!

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