I have recently been listening to the tech investor Roger McNamee (most recently of Elevation Partners) on radio interviews and podcasts publicizing his new book, “Zucked,” in which he chronicles the evolution of Facebook, and which he argues, along with Internet and mobile giants Google and Instagram, threaten the integrity of our democracy and are tearing the fabric of our society.
goodcounsel client Nuni Toaster has announced that its flagship product, the NUNI tortilla toaster, is now available on Amazon. Through May 5, you can get one for $59.
Any readers who do “taco nights” with their families, or simply love tacos, know that conventional means are not up to the task of heating multiple tortillas quickly and evenly. The NUNI is here to solve your problems.
To see the rave customer reviews and learn more about Nuni Toaster, visit their website.
Considering the long odds facing startups, it is always very exciting when a current or former goodcounsel client achieves a successful exit. Yesterday, the world learned that ItemMaster, which developed a platform that enables brands to create and manage content for distribution to retailers, was acquired by Gladson.
goodcounsel is proud to have played a supporting role in helping ItemMaster reach this milestone.
In 2012, brothers Andrew and Thomas Parkinson (with whom I became acquainted in the early 2000s, after I founded Fox & Obel Food Market) retained goodcounsel in connection with the spinout of ItemMaster, a new venture they had incubated within grocery multinational Ahold (a/k/a Royal Ahold NV, now Ahold-Delhaize; Ahold had previously acquired Peapod, which the Parkinsons founded in 1989 and took public in 1996).
From the spinout through last summer – a period of more than six years – goodcounsel served as general counsel to ItemMaster through our “Counsel-as-a-Service” (CaaS) program, helping it close angel and institutional financing rounds and negotiate important enterprise sales agreements, including those with corporate giants like Amazon, Walmart, PepsiCo, ConAgra, Southeastern Grocers.
goodcounsel prides itself on providing startups with common-sense representation that, while being alert to risk, is highly practical and supports business growth; we look for ways to tell our clients “yes.” We also use process and technology in a way that few lawyers do. For ItemMaster, we set up several thorough but concise forms of master services agreement, which we updated regularly as we received feedback from the marketplace. We used document automation technology to ensure accuracy and consistency in the generation of these agreements. Together with our network of co-counsel, we helped ItemMaster identify and address the full range of their legal needs.
Congratulations to Andrew and Thomas, who are not only great entrepreneurs but people of the highest caliber; to Dev Ganesan, who took on the CEO reins in 2017 and led the company to and through its acquisition, CFO Kevin Clarke, Chief Customer Officer Helen Baptist, and other past and present members of the senior management team – who collectively built the company and helped it arrive at the point where its value was undeniable; and to early investors Chicago Ventures and Edison Partners, represented on the company’s board by Stuart Larkins and David Nevas, respectively.
goodcounsel wishes everyone continued success, both at ItemMaster and in their future endeavors. All of us here hope to be able to work with you again!
UPDATE 1/9/19: The program is reauthorized for 2019, with a total of $10 million in credits set aside by the state.
We’ve written in a past edition of our goodnews newsletter about an Illinois program to encourage investment in innovative early-stage companies, the Illinois Angel Tax Credit Program. Illinois has recently made an important change, which could affect the way that companies would want to structure an early investment round.
This morning I stopped in at a local market to pick up a little breakfast snack. As seems to be the case everywhere these days, I found myself face-to-face with a large screen TV at the checkout counter. (Heaven forbid we should not have a screen at us in every restaurant, elevator, and public space.)
The TV was tuned to one of the local morning news shows. A segment came on, the title of which was something like “video captures moose fight.” Right then and there, just as Bruce Banner inevitably transforms into the Hulk when confronted with a threat, I knew that the moose story was going to trigger one of my periodic diatribes about local TV news. So here goes. Read the rest of this entry »
For early-stage startups looking to raise a pre-seed financing round (usually from either friends and family, angel investors or Micro VCs), the Simple Agreement for Future Equity, or SAFE, has become a mainstream, company-friendly mechanism to complete the financing. (See goodcounsel’s original post about SAFEs,here.)
goodcounsel often proposes or supports the use of the SAFE for pre-seed rounds, which cuts out some of the “convertible note fat,” i.e., it reduces transaction costs and simplifies the deal terms in a more company-friendly vehicle. And, it is still fair to the investors, because it honors the primary reasons investors should be betting on a pre-seed startup: a home run equity play, with a conversion upon an equity round at a discount to the future price per share, but without the accumulation of interest or the hammer of a looming maturity date, not to mention some heavy-handed control terms we’ve seen in investor-friendly convertible notes).
Our purpose here, however, is not to be the 1,001st blog post arguing the merits of the SAFE. Rather, we came across an article entitled “Why SAFE Notes are not safe for entrepreneurs,” and want to emphasize a critical point that the authors make about the danger to entrepreneurs who don’t understand the future dilution and associated difficulty with raising future rounds. As they put it: “It is critically important that VCs understand cap table math; unfortunately, many do not. Similarly, many CEOs don’t realize the impact that multiple SAFE notes at various valuation caps have on the capitalization table and how these notes can negatively impact the financial viability of the company moving forward.”
We would take this a step further: entrepreneurs and VCs who “do the math” without experience in multiple financings often fail to properly tie “the business deal” with the technical legal terms or understand how those terms affect the cap table as future events unfold. Therefore, it is absolutely critical either to (1) have your law firm prepare a pro forma cap table as early in the term-sheet process as possible, or (2) at minimum, ask the law firm to review and provide comments on the pro forma that has been prepared by the principals – before it is agreed upon.
At goodcounsel, we have a keen understanding of the documentation, the pro forma cap table, and the relationship between the two. We can give clients the benefit of our knowledge in a quick and cost-efficient manner, save them future headaches and legal costs, and most importantly, prevent unexpected dilution in the future.
As a corporate attorney, I don’t often find references to the kind of work I do in popular culture. I was pretty surprised, therefore, when I was listening to Boardinghouse Reach, the newly released album by Jack White, one of my favorite artists (who is rightly viewed as one of the great musical talents in rock). The album features a catchy track called “Corporation” (Spotify, Apple Music), in which White sings:
SXSW lived up to my expectations. Sure, it took time to figure out the best strategies for getting around the convention venues, for getting in to the most interesting sessions, and most of all, for avoiding lines (it felt like the former Soviet Union at times). But I learned a great deal about trends in technology and beyond, met some cool people, and was even able to pick up and share some relevant industry developments with clients.
How can you go to SXSW and not attend some films (or what people outside of film festivals call “movies”)?
Chef Flynn
After visiting WeWork Austin to catch up on client work, I headed over to the Stateside Theatre on Austin’s main strip, Congress Avenue, to view Chef Flynn. It’s a wonderful documentary about a boy who develops a passion for cooking and some incredible kitchen skills, and thereafter enlists his elementary school classmates to be his line cooks and servers at an in-home “restaurant.”
Based on the sheer number of vendors showcasing VR/AR products on the trade show floor of the conference, I would say that the arrival of VR/AR into the mainstream was one of the big themes of SXSW 2018.
