My company, CapLinked, has been in the news a fair amount in recent weeks.
Earlier this month, Forbes published a Q&A with me about using CapLinked to manage a business transaction such as a capital raise:
Q: How does the system work? What are the benefits?
A: CapLinked is a collaborative platform for making business transactions simple and secure. While Fortune 500 companies have the option of using expensive virtual data room services such as Intralinks, startups and other middle-to-lower-market companies haven’t had an affordable platform designed to help them manage transactions. That’s where CapLinked comes in.
TechCrunch covered our recently announced partnership with Startup America:
CapLinked’s platform includes private workspaces where entrepreneurs and investors can share fundraising documents and manage other transactions, as well as a network tools for connecting the two groups can meet. Now startups who are enrolled in Startup America will now get access to the company’s premium features, says CEO Eric Jackson. Those tools include workspace activity reports, multiple workspace administrators, the ability to create additional workspaces, plus more tools for networking with investors.
PandoDaily reported that online accelerator Wahooly has chosen CapLinked to help them manage due diligence and investor reporting for their startups:
Wahooly is a service that gives actual startup equity to influential people in exchange for their social media marketing services. That might sound like a recipe for legal disaster, but today the company took a step toward bringing further legitimacy to it’s platform. The company has teamed up with financial services startup CapLinked to help the company perform due diligence, without the hassle of face-to-face meetings.
Earlier this month I discussed key tactics for startups to raise seed funding at a meetup sponsored by LB Tech. Here are the slides from my presentation. They’re provide a simple checklist of issues a startup needs to address when putting together an early stage funding round.
VentureBeat recently published my editorial 6 Tips for Raising Capital in 2012. One of the most important tips I included was a warning not to break the ban on public solicitation of a private offering:
There’s a lot of euphoria out there now about the potential for crowd-funding to ease restrictions on obtaining startup capital. But nothing has yet been signed into law yet. For now, make sure you’re familiar with Regulation D, which governs who can invest in a private company. Reg D also puts strict limits on public advertising for private investment opportunities, so be sure that you’re not soliciting investments on a public medium such as Twitter or your blog.
Many entrepreneurs have no idea that Reg D exists — we sometimes hear from CapLinked users who ask how they can advertise their private deal room in tweets. (You can’t! It’s private for a reason.) Click here to read the other 5 tips that I shared.
That’s the title of my Huffington Post editorial that ran today. In the wake of Yelp filing for an IPO a couple of weeks ago, I explore the issue of the amazing track record PayPal alumni have in starting companies:
Why are PayPal alumni so successful? Or, to consider the question a different way, what factors turned PayPal into an incubator for so much entrepreneurial talent? As PayPal’s first marketing director and now the founder of a startup called CapLinked, I’ve been privileged to see the entire process firsthand. The answer lies not just in PayPal’s hiring practices but also the unique circumstances and vision of the company’s founding.
I go on to identify four reasons why the experience of working at PayPal prepared the company’s alumni to become great entrepreneurs.
The editorial was based on a presentation I gave at Startup Weekend in Orange County a couple of weeks ago. Here’s the slide deck for those of you intimidated by a 900 word HuffPo essay.
The Washington Post published my editorial on the “Buffett Rule” — a proposal from President Obama to hike the effective capital gains rate on large payouts. I wrote that over time this would hurt technology startups because it increases the cost of capital and lowers the pool of available funds.
The editorial has provoked some vigorous debate. Reader comments in the Post have been mostly negative, which comes as no surprise given that the publication’s audience likely tends toward left-of-center readers and DC insiders. Here’s a quick roundup of responses:
- Post columnist Ezra Klein responds to my editorial by ceding that my argument (i.e. the Buffett Rate is a capital gains hike that would diminish the investment pool for tech startups) might be correct, but then asserts we ought to tax the rich more anyway and concludes the logical way to protect tech is via a subsidy.
- MotherJones’ blogger Kevin Drum covers a lot of ground in 3 paragraphs, saying higher capital gains rates don’t really impact investment, implying that there should be taxes on unrealized gains, and concluding that cap gains rates ought to be “maybe 30% or so” with no explanation offered as to why. Yikes.
- Over at the Heritage Foundation, Mike Brownfield writes that the experience of California further serves to enhance my point. The Golden State, he notes, has relied heavily on taxation of the wealthy for revenue, and as a result has experienced wild boom-or-bust swings depending on the stock market.
My editorial stands on its own, and I don’t see a reason to amend it other than to point out that it’s a case study of the tax proposal’s unintended consequences on one industry. But a broader macro-economic analysis of Warren Buffett’s idea leads me to the same conclusion. Why? Because of several broad and simple principles:
Capital is good. Our country needs capital. Capital makes the economy grow and allows businesses to start and expand. All the political rhetoric is about taxing “millionaires” and “billionaires,” but the proposal really is about taxing capital. Passing this plan means that more capital will be taken from the (productive) private sector and given to the (unproductive) public sector.
Capital is fluid. National capital gains rates do not exist in a vacuum. If rates go too high, capital will leave our country in search of more fertile ground. Our nation’s 15% federal rate is the 4th highest of G7 countries (according to a 2009 study), and many developing countries have rates around 0%. It’s hard to conclude that our rates are too low when benchmarked globally.
Capital is property. What’s getting lost in the debate is that this discussion centers around seizing private property. Politicians and pundits engaging in “sticking it to the fat cats” rhetoric seem almost gleeful about taking away capital gains. While taxation is obviously legal, it ought not be flippant.
Earlier this week I appeared as a guest on Tech Coast Angels’ “Business Communication” show hosted by Barbara Seymor Giordano. The topic was “How to Raise Money in a Tough Economy,” and we discussed a number of strategies and tactics for getting funding for your business. I explained how companies can use CapLinked to help manage their capital raise, and I slipped in some old PayPal war stories, as well. Click here to watch the video on Vokle.
Matt Drudge is still the king of the hill when it comes to online news. From my new GigaOM editorial, Why Matt Drudge Still Beats Mark Zuckerberg:
Facebook is closing in on 700 million users, but according to a new study by the Pew Research center, the Drudge Report sends more than twice as much traffic to the nation’s top news sites…
Forget the wisdom of the crowd. When it comes to online news, Matt Drudge is the one friend that news outlets really need to have.
Given how news outlets have struggled to adapt to the rise of the web, this should make Matt Drudge a hero. He’s sending outrageous amounts of traffic to traditional news outlets, giving them a chance to monetize their professionally generated content. But if you mention Matt Drudge in the tech world, the best you can hope for is a smirk.
I go on to make the case that Drudge deserves credit for being a truly great web pioneer, and that others online news entrepreneurs who’ve had big pay-days (such as Mike Arrington and Arianna Huffington) owe a debt of gratitude to the trail blazing Drudge, who helped change the way we consume news.