Legal Representation; Two Schools of Thought

So you’re starting up a technology company, bootstrapping it, and you think that someday you might take on additional capital. Which lawfirm in Austin should you use?

This is the dilemma facing many young companies these days. I thought it would be interesting to throw some ideas out there in this post, and then see if we can get some replies and start a little dialog going. I think there are two schools of thought here. One says go with the big known law firm that does these kinds of deals all the time. The other says find a solid attorney who is more willing to go “toe to toe” with potential investors on term sheets.

First, I thought I would list some of the law firms that have tech practices. There’s some kind of order in this list from bigger/more relevant to smaller (this will surely generate flames in the comments).

  • DLA Piper (formerly Gray Cary)
  • Wilson Sonsini
  • Andrews & Kurth
  • Fish & Richardson
  • Vinson & Elkins
  • Winstead
  • Baker & Botts

The Proven
One school of thought says to go with the big law firm that knows tech, has a solid IP practice, and can handle any possible need you might have from incorporation, through IPO. For startups, many law firms will have a “tech startup package” that will defer fees till funding, profitability, or 1 year. These firms work with the local VC firms on a daily basis, and know them all. There also may be a certain credibility to be had in the finance community by saying that you’re represented by one of these big firms.

The Scrappy
There could be some benefits to working with an attorney who is the opposite of everything I listed above. These large firms have certainly “graduated” some outstanding individuals who are now practicing on their own. Along with lower billing rates, an “outsider” might be more willing to really fight for you at the bargaining table. When negotiating financing, every term and condition is negotiable. A larger firm might be used to having clients give up full ratchet anti-dilution provisions because “that’s the way these investments work” whereas your scrappy attorney might be more willing to negotiate hard for you.

The point here is not to endorse one way or the other. Both routes have had success for different people. But perhaps this could open up the comments for additional ideas and viewpoints from readers.

Register for ProductCamp

If you want to make sure you have a meal and a T-Shirt from ProductCamp, you had better register today. In the spirit of BarCamp, ProductCamp is a collaborative, user organized unconference, focused on Product Marketing and Management topics. At ProductCamp there are no “attendees,” since everyone participates in some manner: presenting, leading a roundtable discussion, helping with logistics, securing sponsorship, or volunteering. ProductCamp is a great opportunity to learn from, teach to, and network with professionals involved in the Product Management, Marketing, and Development process from the Austin area! This is a free event, sponsored by Austin Ventures, Pragmatic Marketing, Seilevel, and the AustinPMM Forum.

ProductCamp is scheduled for Saturday Jun 14, 2008 from 8A-6PM at St. Edwards University Professional Education Center near 183 and Mopac.

Molecular Imprints Raises $12.9m Round

Molecular Imprints, Inc., Austin’s premier company in nanopatterning systems and solutions, has announced the successful completion of $12.9 million in financing. Investors in this round include Draper Fisher Jurvetson, Tokyo Electron Venture Capital, Wafra Investment Advisory Group, KT Venture Group, Alloy Ventures and Motorola Ventures. This latest investment brings the total amount raised by Molecular Imprints for the development and commercialization of its innovative Step and Flash Imprint Lithography (S-FIL(R)) technology to $91 million — $73 million in strategic and venture capital financing, $15 million from federal government agencies, such as the Defense Advanced Research Projects Agency (DARPA), and $3 million from the Texas Emerging Technology Fund.

“This additional financing will enable further enhancements to our technology and product portfolio, and allow us to expand operations to support increasing demand for our products in a number of markets,” said David Gino, chief operating and financial officer of Molecular Imprints. “Looking a little further into the future we believe this financing will provide a funding bridge to a possible public offering in 2009.”

uControl's New Products and Open Strategy

uControl LogoAustin-based uControl is making some impressive improvements to the product strategy, and they’re taking it on the road to the National Cable and Telecommunications Association show in New Orleans. uControl was founded in November of 2005 and launched their first product at DEMO Fall in 2006, and they won a DEMOgod award! Back then they had created a better home security box that allowed web or cellphone access, and it was a 5-minute swap of the existing home security boxes by ADT and other similar companies. Besides the web access, the original uControl system worked over broadband and cellular, just in case a burglar cut your phone line.

This week uControl is announcing a major new revision to their product. They’ve added a touch screen interface, and they’ve opened up their platform to widgets. The touch screen can be mounted either on the wall, or on a tabletop. With the touchscreen and open widget platform, it’s possible to do additional cool stuff with the uControl hardware, like home automation, weather monitoring, or anything you can dream up. There’s even a YouTube widget! You wouldn’t necessarily want to watch YouTube on your uControl touchscreen, but it demonstrates that you can add pretty much anything to it.

uControl TouchpadWith these new capabilities, it’s easy to imagine all sorts of uses, and it makes the uControl device even more valuable. You could change the home thermostat from the web, turn on lights, or check the status of the doors and windows in the house. If the grandparents had a Flickr widget on their uControl touch panel, you could push pictures of the grandkids to them and show it in a widget. A storm warning widget could monitor the weather for tornado activity, and sound some sort of alarm. You could probably use your iPhone to make sure you turned the A/C off before leaving the house. The possibilities are pretty endless.

You won’t be seeing uControl boxes at your local Home Depot just yet. The company intends to continue selling the device through channels such as home alarm companies, cable companies, phone companies, and others who are typically aware of when consumers are moving into a new house. How big is the market? There are 28 million home security systems in the U.S. Annual recurring revenue from monthly monitoring adds up to $6.4B.

The company has been funded by the founding executives, friends, and family. Executives say the option of institutional financing is always on the table, and they may seek that type of funding when the time is right.

Pluck Signs Film.com and RollingStone.com

Pluck LogoPluck Corporation, which was acquired by Demand Media in March, announced today that it is now powering social media capabilities at Film.com and RollingStone.com. Attracting combined monthly audiences of more than 10 million, Film.com and RollingStone.com will use Pluck’s SiteLife social media capabilities.

“Our primary focus is delivering the very best in high quality social entertainment and editorial content to millions of viewers online,” said Elizabeth Coppinger, vice president of video services for RealNetworks®. “The integration of the Pluck social media tools throughout RollingStone.com and Film.com expands how people engage with our content, our brand and one another.”

“Film.com and RollingStone.com are two of the most popular entertainment sites on the web, providing multi-media experiences to millions of film and music enthusiasts,” said Dave Panos, president of Pluck. “We’re excited to be working with them as they deliver new socially-oriented experiences to a variety of audiences.”

Joel Serface Leaving Incubator for Kleiner

Stacey Higginbotham is breaking the news over at GigaOM property Earth2Tech that Joel Serface, director of the Clean Energy Incubator, will be leaving to become an Entrepreneur in Residence at Kleiner Perkins Department of Energy Program, which is an effort to commercialize clean technology coming out of the national laboratories.

Maybe he will favor us with a comment, and let us know if Kleiner is going to make him move to the valley.

http://earth2tech.com/2008/05/14/austin-cleantech-guru-to-be-kleiner-eir/

N-Trig Going Green

N-trig, the provider of DuoSense™ technology combining pen and zero-pressure touch for mobile and fixed computers into a single device, announced today that it is meeting environmental Green requirements in compliance with international standards. All articles, including materials, parts, assembly, and packaging that N-trig and its affiliates directly or indirectly supply have been designed and manufactured to meet the latest environmental standards for controlling substances which impact the environment. N-trig has now moved from being RoHS (Restriction of Hazardous Substances) compliant to being a “Green” company.

“We have a commitment to protecting the environment and reducing waste, and we’re demonstrating that through the materials and processes that we use,” said Amihai Ben-David, CEO of N-trig. “While our technology improves how we live, we want to improve where we live as well by operating in an environmentally responsible way. We hope other companies around the world will join us as we develop tomorrow’s technology while making the world a cleaner place for all of us today.”

Because N-trig has now gone “Green,” its supply chain is using new, environmentally friendly products as well. N-trig and its supply chain are actively involved in waste reduction and meet Green product requirements that restrict the use of 36 family materials in manufacturing, parts, assembly, and packaging. As an environmentally conscious company, N-trig strives to improve human health by ensuring that all of its processes and products are in compliance with the latest international environmental standards.

Asuragen Lauches RNARetain in Europe

AsuragenAsuragen announced today the CE-mark and European launch of RNARetain™ Pre-Analytical RNA Stabilization Solution, the company’s clinically validated and cGMP manufactured sample collection and RNA stabilization solution. Based upon patented technology, RNARetain is labeled for the collection, storage, and transport of clinical human cellular and solid tissue specimens and stabilization of intracellular RNA within these specimens for subsequent extraction and molecular analysis.

RNARetain was cleared by the U.S. Food and Drug Administration (FDA) in conjunction with Agendia BV’s MammaPrint® breast cancer test in June 2007. “RNARetain will become a valuable tool in molecular diagnostics and future personalized medicine applications by allowing shipment of fresh tumor biopsies at ambient temperature, thus greatly facilitating the logistical process of sample handling,” said Matt Winkler, CEO/CSO, Asuragen, Inc.

RNARetain infiltrates tissues and cells, precipitating nucleic acids and proteins in situ providing powerful protection of cellular RNA from both intracellular and extracellular ribonucleases, which would otherwise rapidly degrade the RNA in the specimen. Ribonucleases are ubiquitous in freshly acquired samples and need to be inactivated in order to effectively analyze the RNA composition of a specimen. The collection of human cellular and solid tissue specimens in RNARetain eliminates the need to immediately process these specimens, allowing RNA extraction and molecular analysis at a later time and/or different location. It also eliminates the need to flash-freeze specimens, a process that involves manipulation of potentially hazardous agents, and to keep specimens frozen throughout storage and transport. Formalin fixation, the most common method of clinical biopsy preservation, is both hazardous to work with and is known to degrade RNA.

Mashable US Tour and Austin Tech Happy Hour

SummerMash AustinMashable.com, the leading blog for social networking, announced their US Summer Tour dates today. Cities include Seattle, San Francisco, Los Angeles, Miami, Boston, New York City, and yes of course Austin, Texas! Previous Mashable events have been incredibly popular, and we lobbied to make sure that Austin was one stop on the tour. Let’s make it the best stop!

Austin Tech Happy Hour is teaming up with Mashable to throw this July 30th event at Buffalo Billiards. Information on how to register will be released in the next few weeks, but for now put it on your calendar!

If you’re interested in being a local sponsor, you can email the editor here at austinstartup and we’ll get the information to you. We also need a couple people who would like to work registration (we will even pay you).

Stay tuned for more details!

Ernst & Young Entrepreneur of the Year

Yes, it’s that time of the year again when Ernst & Young recognizes Austin entrepreneurs. We always have a soft spot for the technology entrepreneurs, but the industry doesn’t matter. So here’s our recap of the finalists this year. Congratulations to all of you!

Entrepreneur Finalists

  • Mark Adams, Advocate MD
  • Tim Costello, Builder Homesite
  • Sam Goodner, Catapult Systems
  • Craig Malloy, LifesSize Communications
  • Satin Mirchandani and Mike Rosenfelt, MessageOne
  • Kirk Rudy, Chris Ellis, et al, Endeavor Real Estate Group
  • Ed Sattar, 360 Training

MessageOne is nominated again, and they say you have to be nominated a few times before you win. Given that they just got bought by Dell, and are probably not really eligible next year, I would wager that they take home a trophy this year. Sam Goodner at Catapult Systems is an incredible entrepreneur, and his company has been around for over 10 years. The powers that be typically don’t reward services companies with this honor (if history is any indication). Craig Malloy at LifeSize has guided the company to tremendous growth and success. This may be the first year they have been nominated, but despite that we’re predicting an award. Endeavor Real Estate is certainly the major powerhouse in Austin, and that whole industry generates significant cash flow to many, so it wouldn’t be surprising to see them win either.

Social EOY Finalists

  • Alan Graham, Mobile Loaves and Fishes
  • Richard Halpin, American Youthworks
  • Karen Langley, Family Eldercare
  • Rachel Muir, Girlstart

Alan Graham is up for this award again, and we’d really like to see him win it this year. We know he would put the prize money to good use. He’s a truly genuine guy. American Youthworks has been nominated before, and has a great chance at winning this year. Rachel Muir has done an amazing job at Girlstart, and she is an incredible marketer and advovate for her charity. This will be the toughest decision the judges will have to make, because these charities are all so deserving.