My Journey to Kathmandu

To view a Google earth version of the entire trip of which this journey is a part, visit acerminaro - ChinaTibetNepalThailandTrip2007

After crossing the Peace Bridge of the Friendship Highway linking Nepal and Tibet, we arrive at the rugged border town of Kodari Nepal. Making arrangements for a jeep trip to Kathmandu proves an interesting adventure in itself, as local boys bargain with each other and drivers for commissions, promising to us a ride as soon as the "driver" returns from Tibet. We finally secure a jeep and set out for Kathmandu.

The descent from the Tibetan plateau to Kodari is like falling off a brown, barren cliff and landing in a lush green forest, complete with waterfalls and more treacherous winding roads.

The rewards for continuing the descent on the road to Kathmandu include many small farming outposts set like gems in the greenery.

We are transported from the sublime to the ridiculous, through the crazy Kathmandu traffic choked with small cars, bicycles, motorbikes and the acrid fumes that go with them. We arrive in the Thamel tourist area, with its narrow, crowed, colorful alleys - a virtual "Disneyland for backpackers".

Booking a room in the laid-back Kathmandu Guest House, we relax in the tranquil garden before continuing our sightseeing journey.

With our Lonely Planet tour book in hand we take the scenic walking tour arriving at the Kathmandu Durbar Square, one of seven groups of monuments and buildings designated as Kathmandu Valley UNESCO World Heritage sites. Others include the Buddhist stupas of Swayambunath and Boudhanath, and the Hindu temple of Pashupati, which we will visit.

Next day we walk from Thamel across the Bagmati river to Swayambunath, also know as the "monkey" temple in honor of its cavorting simian residents. We climb the "365" steps up a forested hill for a breathtaking view of the Kathmandu Valley from this important Buddhist shrine. For more, see this sacredsites page

Next, we're off to Boudhanath, transfixed by the ever vigilant "Buddha Eves" reminding us to stay on the true path in life. Boudhanath is another holy Buddhist site. Its platform is a massive mandala and it contains the largest spherical stupa in Nepal.

A short walk from Boudhanath takes us to the mysterious Pashupatinath Hindu temple, regarded as the most sacred temple of Shiva (Pashupati) in the world. Thousands of pilgrims from all over the globe, particularly from Nepal and India pay homage in this temple everyday. "Shivaratri" or night of lord Shiva is an especially important day in this temple when tens of thousands of people throng here for the annual celebration.



Before leaving Kathmandu, we stop at the oasis of calm and beauty that is the "Garden of Dreams," also known at the "Keshar Mahal Palace and Gardens" and the "Garden of the Six Seasons." The garden is a prominent architectural example of Nepal's Rana period, with its mixture of western and oriental elements, and the adjacent neo-classical Palace.

The complex was built in the 1920s by Keshar Shumshere Rana, the third son of the Rana ruler in power at that time. His gardens abounded with all kinds of plants - not only from Nepal but also from Australia and Europe. The name 'Garden of the Six Seasons' reflects the six seasons prevailing in southern Asia : spring, early summer, summer monsoon, early autumn, late autumn and winter. Each of these seasons was represented with its own pavilion. Only three of the pavilions remain. The site has been and is being restored by Ecohimal.

More photos from my trip are available at Journey to Nepal, my photoset on Flickr

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Top Ten Management Concepts

The 12manage Global Top-10 is a measurement of the popularity of management concepts over time. The organizational approaches are listed in order, number 1 being the method currently most in vogue.

1. Five Competitive Forces Porter
2. 14 Principles of Management Fayol
3. Marketing Mix McCarthy
4. Mind Mapping
5. BCG Matrix
6. Competitive Advantage Porter
7. SWOT Analysis
8. Diamond Model Porter
9. 7S Framework McKinsey
10. Balanced Scorecard Kaplan Norton

From www.12manage.com.

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Check Credit Card Receipts for FACTA Violations

"The Fair and Accurate Credit Transactions Act ("FACTA") ... has spawned more than 250 federal class-action lawsuits ... Section 1681c(g)(1) of the FCRA, part of the FACTA enactment, provides that "no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction." This aspect of FACTA was phased in over time to allow large and small businesses to conform to the requirements and update the cash registers in service. The requirement was fully phased in as of December 4, 2006. Since then, the class-action lawsuits have come fast and furious...

If your company has not been sued for a FACTA violation, you still need to act. Conduct an audit of the receipts issued to customers to ensure that all stores comply with FACTA. If any potential violation is noted, correct it immediately. Also, to avoid future unknown liability, monitor the decisions related to FACTA to determine whether there are any changes regarding the statute's interpretation. With that, your company will be able to immediately correct any "new" violations found to exist under the law.

If your company has been sued, act immediately to come into compliance with FACTA. Simultaneously, obtain legal counsel to help you explore the various defenses available to minimize the potential exposure your company may face. Otherwise, a simple receipt error could lead to enormous expense..."

Read more in this Jones Day article from Mondaq.

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Strategic Partnerships Work - Sometimes

"Northwestern's Kellogg School of Business has a web site called 'Kellogg Insights' that posts research done by their professors. They recently highlighted a study called 'Compete or Cooperate - Choosing the Right Commercialization Strategy as a Technology Start-Up'. The study authors investigated the commercializaton strategies of 118 start-up companies across 5 economic sectors. They found that cooperation is a good strategy for start-ups when one or more of three conditions exist for the start-up:

1) The firm has a high degree of control over its intellectual property rights
2) The firm enjoys low deal transaction costs
3) There is a high sunk cost requirement for the firm to compete in its industry ..."

Read more in this Small Biz Labs post from which the foregoing was quoted.

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Tools and Templates for Entrepreneurs

"Entrepreneurship is vision and values but ... it's also tools and templates. These are those practical agreements, models, checklists, samples, worksheets, and other items so vital to the day-to-day operation and success of your company. The monthly Collections provide them by topic-and we keep track of how much attention they get. Listed here are the tools and templates most viewed by your fellow entrepreneurs from September 2006 to September 2007 on the Kaufmann eVenturing site.

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Eye Camp - Tibet

Like many who visit Tibet, I was struck by the glaring need of ordinary Tibetans for modern medical care. But since 1995, American ophthalmologist, Dr. Marc Lieberman, has been doing something about it, traveling to Tibet twice a year to run mobile eye camps.

"In a country where much of the population lives at elevations of 15,000 feet, where solar radiation poses a high risk for cataracts, the disease has become an epidemic. Many of those afflicted with cataracts come from the poorest communities -- nomadic herders who have limited access to healthcare and face inevitable blindness without surgery...

A deeply spiritual man, Lieberman was inspired by the Dalai Lama to pursue his medical mission. Although his work is often made difficult by the political tensions of Tibetan life under Chinese rule, the primary goal of his nonprofit Tibet Vision Project is to train the Tibetan medical community to do the cataract surgeries themselves..."

Solotaroff's 2005 journey is captured in this Frontline Rough Cut documentary that features many delightful and inspiring moments, particularly among the Tibetan families who arrive at the camp full of anticipation and filled with gratitude when the doctors restore their sight.

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Favorite Tibet Trip Photos

To view a Google earth version of the entire trip of which this journey is a part, visit acerminaro - ChinaTibetNepalThailandTrip2007

Lhasa, Tibet, Misty Street Scene

Potala Palace, Lhasa, Tibet

Buddha Eyes, Kunbum, Gyantse, Tibet

Tibet Mountain Pass Prayer Flags

Long Winding Road, Tibet

Tibet Mountain Village

Mount Everest, Shrouded in Clouds

Rainbow, Himalayas, Tibet

Himalayas, Tibet

Mountain Valley, Tibet

More photos taken by me and my daughter on our recent trip are available in this AOL Pictures gallery or Tibet 2007 - a photoset on Flickr

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The Last Lecture

"46-year-old Carnegie-Mellon professor Randy Pausch delivered his final lecture, entitled 'How to Live Your Dreams' on Tuesday. Paush has terminal pancreatic cancer. The lecture is powerful and uplifting.

"'What we’re not going to talk about today,' he continued, 'is cancer, because I’ve spent a lot of time talking about that … and we’re not going to talk about things that are even more important, like my wife and [three preschool] kids, because I’m good, but I’m not good enough to talk about that without tearing up.'

"What he was there to discuss was how to fulfill your childhood dreams, and the lessons he had learned on his life’s journey. "

Link to story. Link to video. Link to full lecture (opens in new player). Link to Pausch’s website. -via Reddit and Fark and this Neatorama post from which the foregoing was quoted.

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Control is an Illusion

"Leadership is about influence not control... I often hear leaders, particularly younger ones, complaining about their lack of control in various situations...What they are really saying is, 'If I could control these people, I could guarantee the results.' The truth is that control is an illusion. You can’t control anyone, even the people that report to you.

"However, while you can’t control anyone (except perhaps yourself), you can influence nearly everyone. This is the essence of true leadership. By this definition, Jesus, Mahatma Gandhi, and Martin Luther King were great leaders. They had control of virtually no one, yet their influence changed the course of history.

"Aspiring leaders would do well to stop focusing on control and figure out how to expand their influence..."

Refer to this post From Where I Sit for four ways you can become a person of influence, no matter where you are in the organization.

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What's a Reasonable Royalty Rate?

"Among the most frequently asked questions I get from start-up companies is: How much should I pay for licensing in a technology? Answer: As little as possible. Kidding aside, this is really a very complicated question that cannot be answered without a lot of homework. While most companies seem to use a valuation method I like to call “pulling a number out of the air,” there are three primary methods used by licensing professionals to assess the value of IP assets. These are the Cost Method, Market Method and Income Method. With all of these methods, good data and data projection are critical in determining the appropriate numbers.

"In the Cost Method, the value is the cost incurred in developing or purchasing the relevant technology or intellectual property. But what if, as a result of changing markets or new information, you determine that the present value of the total revenues/return expected from this technology is less that the cost?

"In the Market Method, the method for determining value is to learn what comparable technologies have licensed for recently. Of course, to do this you’ll need to (a) determine what transactions are comparable and (b) obtain current, reliable data. Usually, this is through compiled data reports.

"In the Income Method, value is the estimated revenues the technology is likely to produce (and savings it is likely to generate) and comparing this to the estimated cost to generate the same revenues or savings from other sources, that is, total annual returns. Basically, it’s a method of determining what you can afford (or not afford) to pay in the end..."

Read more in this informative post from Patent Baristas

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Photos from China Trip

To view a Google earth version of the entire trip of which this journey is a part, visit acerminaro - ChinaTibetNepalThailandTrip2007

<Great Wall of China, Jinshanling to Simitai section 

Great Wall, Mutianyu 

Locked Door, Summer Palace, Beijing 

Beijing skyline from Summer Palace 

Summer Palace, Beijing 

St. Joseph Church, Beijing 

Xian China temple garden

Terracotta Warriors, Xian China 

Terracotta Warriors, Xian 

Panda, Chengdu Breeding and Research Center 

More photos of China from the Asia journey I completed with my daughter in July and August are available in this China Trip 2007 photoset on Flickr

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What's in a Business Name? A lot

photo by John Davies

Nolo.com advises that as you hunt for the perfect name for your business, keep three main legal issues in mind:

Will your business name receive trademark protection?
Is your proposed business name available?
If your business will have a website, is a similar domain name available?

Adding that, if you're starting a corporation, LLC, or limited partnership, you must comply with a few state rules for naming your business.

The same resource offers a good summary of the legal issues involved by presenting answers to the following commonly asked questions about choosing and registering a successful business name:

What's the best type of name for my business?
What issues should I keep in mind when picking a name for my business?
How do I find out if the business name I want is available?
What is a trademark?
What is the "legal name" of my business?
What is a fictitious business name?
Do I have to register my business name?
Can I change my business name to include "Inc." or "LLC"?

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Greetings from China

Blogging will be light for a while. I am traveling with my daughter in Asia. We are in Xi'an China currently.

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Leadership Quotations

The task of leadership is not to put greatness into people, but to elicit it, for the greatness is there already.
--John Buchan

To lead people, walk beside them … As for the best leaders, the people do not notice their existence. The next best, the people honor and praise. The next, the people fear; and the next, the people hate … When the best leader’s work is done the people say, ‘We did it ourselves!
--Lao-Tsu

Do not follow where the path may lead.
Go instead where there is no path and leave a trail.
--Harold R. McAlindon

If your actions inspire others to dream more, learn more, do more and become more, you are a leader.
--John Quincy Adams

Our chief want is someone who will inspire us to be what we know we could be.
--Ralph Waldo Emerson

Never doubt that a small group of thoughtful, concerned citizens can change world. Indeed it is the only thing that ever has.
--Margaret Mead

From this collection of Great Quotes on Leadership

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Take Charge of Your Life

"Consciously following a path towards your goals instead of blindly drifting through life really is the secret to success..." So concludes this
post from Matt Inglot that explains how an entrepreneurial wake up call rescued him from a career of "writing boring code for stuffy monolithic corporations..." More of the post follows:

"I had a[n]...experience several years ago which completely derailed me from my current path, which at that point was simply going in the direction life took me in. Sure I was making “choices”, such as planning on going ahead with a degree that I deep down knew wouldn’t be right for me, and planning to somehow be happy working in a cubicle the rest of my life (despite having had a chance to briefly try it and strongly hating the idea of being in front of a computer all day doing someone else’s work).

After all programming was my talent, so why on earth would I want to be anything other than a programmer graduating with a computer science degree? I had goals too, or so I thought. Surely a Ferrari was a goal? I mean it wasn’t humanly affordable on the salary of a corporate computer drone, and I had no plan to attain it otherwise, but yes that was my “goal”. I completely didn’t understand that where I was letting myself drift in life had nothing to do with what I actually wanted. To make things worst this direction was highly encouraged through high grades in “smart people” courses and congratulations from others on making such a great and rewarding choice.

Luckily the entrepreneurial bone in me activated and... I was exposed... to a strange freedom that was offered nowhere else. I read some extremely positive literature from people that seemed...happy. This was a world that my programming books had never exposed me to. Never before had I seriously read about ideas like goals, personal development, financial planning, and the idea that becoming truly successfully was something other than luck or born talent...

It’s not that I disliked programming - I’m having an absolute blast putting my skills to use with my website development company - it’s that I enjoyed working on projects of my own devising and not some insigificant cog in an obese software application. I took a year and a half off instead of going straight into university during which I awakened consciously further and further.

In the end I chose to enter a business program and because I had the opportunity I chose to go the double degree route and end up with a computer science one as well. My end choice in degrees is not important however, what is important is that for the first time in my life I had honestly been able to step off the beaten path, consciously examine my surroundings, figure out where I actually wanted to go, and then go in the direction that would actually take me there.

It’s possible and relatively easy to get to where you want to be in life if you stop long enough to start moving in the right direction..."

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Ten Score and Eleven Years Ago...

Our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. The Declaration of Independence was ratified on this date 211 years ago. For much more on this document, visit Declaration of Independence, from ushistory.org.

"This site provides a wealth of information about the signers of the Declaration, the history of the Declaration, and an online version of the Declaration for you to read.

"The site also provides links to other Declaration-related biographies and histories and a guestbook where you are invited to add comments and ideas. This site is a good resource for anyone curious about the Declaration and its history, or for the student who needs resources for his or her research paper.

"The original Declaration is now exhibited in the Rotunda for the Charters of Freedom in Washington, DC. It has faded badly, largely because of poor preservation techniques during the 19th century. The document measures 29-3/4 inches by 24-1/2 inches. See picture.

"What's on the Back?
"People who watched the popular movie "National Treasure" want to know. On the back, at the bottom, upside-down is simply written: "Original Declaration of Independence / dated 4th July 1776." Regarding the message on the back, according to the National Archives, "While no one knows for certain who wrote it, it is known that early in its life, the large parchment document was rolled up for storage. So, it is likely that the notation was added simply as a label." There are no hidden messages.

"You will find the following resources on this site:

The Declaration of IndependenceThe text and image of the Declaration.
The Signers of the Declaration of IndependenceThis section gives a profile of every delegate who signed the Declaration in 1776. You will find factual information such as birth-death dates, occupation, education, etc. Each signer also has a short story of their life. A good resource for students.
Related InformationThis section provides a listing of people (George III, Patrick Henry, etc.), Events and Things (Boston Massacre, a Tax Stamp, etc.), and Laws and Resolutions (Sugar Act, Quartering Act, etc.).
Thomas Jefferson's Account of the DeclarationRead the lengthy excerpt from Thomas Jefferson's autobiography that talks about the days leading up to the signing of the Declaration of Independence, the history of the document, and various other factors which involved the authoring of the Declaration.
The Declaration HouseHere is where Thomas Jefferson wrote the Declaration. The house has been reconstructed and is now part of Independence National Historical Park. The Independence Hall Association, host of these web pages, led the efforts to have the Graff House reconstructed in 1975, in time for the Bicentennial.
LinksThis excellent collection of links provides other online resources about the Declaration of Independence. Such sites include analyses of the style of language in the Declaration, the story of the drafting of the document, and the relationship the Declaration has to other historic documents.
TimelineA Chronology of Events, June 7, 1776 to January 18, 1777.

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Legal Issues in Internet Contracting

"Online contracting raises novel legal issues that any business attempting to set up an online contracting site should consider. However, most legal hurdles can readily be overcome by appropriately structuring the web site, entering into an electronic trading agreement, or (in the rare case) performing one or more steps of the transaction off line.

"Clients frequently wonder what legal pitfalls they may encounter in setting up a web page for online contracting. In fact, contract law principles such as offer and acceptance, or the requirement of a signed writing, can generally be accommodated on the Internet.

"In some ways the Internet is the ideal environment for entering into contracts, as many companies are discovering. However, certain practical differences between online and offline contracting should be kept in mind.

Read more in this article from Thelen Reid & Priest, that includes the following subtopics:

Issues Regarding Formation
Requirement of Writing on Paper and Providing a Signature
Legal Requirement of a Writing and Signature
Digital Signature Legislation
Utah's Digital Signature Legislation
California's Digital Signature Legislation
Illinois' Digital Signature Legislation
Other States' Digital Signature Legislation
The Mailbox Rule
Determining the Terms of a Contract
Special Issues Regarding Handling Money Over the Internet

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Tips to Become a Better Writer

"1. Read great writers...Pay close attention to style and mechanics in addition to content...
"2. Write a lot...
"3. Write down ideas, all the time...
"4. Create a writing ritual. Find a certain time of day when you can write without interruptions, and make it a routine...
"5. Just write...
"6. Eliminate distractions...
"7. Plan, then write. This may sound contradictory to the above “just write” tip, but it’s not really...
"8. Experiment...
"9. Revise...
"10. Be concise...
"11. Use powerful sentences. Aim for shorter sentences with strong verbs...
"12. Get feedback...
"13. Put yourself out there. At some point, you’ll need to let others read your writing. Not just the person who you’re allowing to read it, but the general public...
"14. Learn to be conversational...
"15. Start and end strong..."

Read more in this lifehack post.

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Change Ahead of the Curve

"Many companies wait too long to attempt transformations, doing so only when the signs of trouble have become obvious. But that's almost inevitably too late. High performers, by contrast, change before they must, knowing that the best way to transform is from a position of strength."

Read more in this article from accenture

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Employment Confidentiality Provision Unenforceable

"Many schools [and companies] have provisions in their employee handbooks or employment contracts that make clear that an employee's salary and other compensation elements are to be kept confidential...A little known provision of federal law makes such confidentiality statements unlawful."

Read more in this Fisher & Phillips article found via the newsletter of Employment Law Information Network.

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Inc. Magazine Seeks Your Feedback

Inc. magazine is asking for your feedback and vote on your favorite of four startups recently profiled by the Magazine. You can join entrepreneurs--Tim Gill of Quark, Paul Orfalea of Kinko's (NYSE:FDX), Roxanne Quimby of Burt's Bees, and Gordon Segal of Crate and Barrel--to provide the founders (and the rest of us) with your feedback. The four companies:

- A product design start-up (their first hit is a rolling runaway alarm clock) started by Gauri Nanda, our cover subject, a woman from Detroit who just completed her master’s at MIT

- TechShop, a geek’s paradise in Silicon Valley, where you can go to learn how to use welding equipment or a lathe or whatever crazy machinery you want

- Zsweet, a new sugar substitute (forget Splenda) that’s sold through Whole Foods

- A new software company in Oregon called GreenPrint, that cuts down on printer waste

You can find the links to the main feature’s page, as well as individual links to each fresh new founder, below.

How to Launch a Cool, Profitable, Worth-All-The-Risk, Kick-Ass Start-Up (And Live To Brag About It)

Case Study #1: The Reluctant Entrepreneur
Case Study #2: The Inventor's Best Friend
Case Study #3: The Taste Maker
Case Study #4: The Enlightened M.B.A.

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Tips to Encourage Others

Dave Cheong offers the following 8 simple things you can do to encourage others:

Show genuine interest...Let them know you care. Express genuine interest by asking questions. Get them talking...

Acknowledge what’s important to them...affirmation and validation is like nitro for their confidence and self-esteem.

Say “Well done”. ...These magical Words of Encouragement at the right time can make all the difference between “keep going” and “give up”.

Say “Thank you”. Common courtesy. Good manners... A simple thank you lets others know what they have done is worthwhile and meaningful to you.

Reciprocate the favor...Think of this as a pendulum. They do something nice for you. You do something nice for them. They do something nice for you. You do something nice for them. And so on…

Respond with something unexpected...

Ask for advice or confide in them...

Offer to lend a hand...If that person sees that you are willing to commit your own time and energy in their interests, they will be more committed to seeing it through and less likely to give up...

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The VC Method of Startup Valuation

"How should one value a startup? It’s obviously a difficult question because the company typically has no revenues, few assets (apart from people and some IP), and cannot be traded in a market with enough participants (and enough information) to accurately determine a price."

This post from Ryan Junee describes is one of the most widely used (often called the ‘VC method’) using a simple scenario of a company that takes only one round of venture financing, and then show how this method can be expanded to handle multi-stage financing, stating:

"The first thing we need to calculate is a ‘terminal value’ for the company. That is, a value at some point (say 5 years) in the future. This point may be an expected liquidity event (IPO or acquisition), or failing that should be a point where the company is at least earning a profit...

Lets make this clearer with an example. Our company, Infelidoo, is expected to earn a $3M profit in year 5. Comparable companies in Infelidoo’s industry are trading at PE ratios of around 15. This means Infelidoo’s expected terminal value is $3M x 15 = $45M...

The Venture Capitalist’s Required ROI
Lets say our VC is ready to invest in Infelidoo and needs to value the company. The company needs $2M to get started - and in this simplified example will need no more cash over the next 5 years to reach its goal. Given the risk of this project, the VC decides she needs a 50% annual rate of return on her investment (more on determining the rate of return later).

This means in year 5 the VC’s investment must be worth (1 + 0.50)5 x $2M = $15.2M. [That’s just (1 + IRR)years x Investment] So, in year 5 the VC expects the company to be worth $45M. Her share of the company must be worth $15.2M. Thus her ownership stake in the company must be 15.2/45 = 34%.

Note: by taking a 34% stake in the company now, in exchange for $2M, the VC is valuing the company at $6M.

The Discount Rate
Above we used a discount rate (rate of return) of 50%, which may have seemed somewhat arbitrary. The discount rate reflects the level of risk in the company (the higher the chance of failure, the higher the discount rate should be)...Figuring out the exact discount rate to use is more art than science. Some approximate guidelines for discount rates based on the stage of the company are:

Seed stage: 80%+
Startup: 50-70%
First-Stage: 40-60%
Second-Stage: 30-50%
Bridge/Mezzanine: 20-35%
Public Expectations: 15-25%...

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Forms for Solos

Carol Elefant at MyShingle.com, announced the launch of her new feature, SOLOFORMANIA - "a cornucopia of forms for the busy solo - ranging from FREE sample practice guides, fee agreements and retainer letters, to court forms for all 50 states (some free, some fee) to general form files on the Internet."

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Sorry Gotta Go

The Web site SorryGottaGo.com offers a collection of audio clips to help people get off the phone with telemarketers. Hilarious. Thanks to Jim Calloway's Law Practice Tips Blog for the link to the site, which you will find on his blog.

This gives me an idea for how to deal with a perennial question I receive, "Can you spell your last name?" Of course I can. With a click on my computer linking to a recording of the spelling, you will also be able to.

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Venture Capital Alternatives

"If you’re struggling to find success in your quest for venture capital, maybe you’re looking in the wrong place. Venture capital is not for everybody... there are plenty of other options available when it comes to finding capital. From angels to credit cards, here are 25 alternatives to consider when it comes to funding your business.

1. Angels
2. Private Placement
3. Initial Public Offering
4. Bootstrap Financing
5. Fund From Operations
6. Licensing
7. Launch Customers
8. Vendor Financing
9. Sweat Equity
10. Self Funding
11. SBA Loans
12. SBIR and STTR Programs
13. State Funding
14. Home Equity Loans
15. Community Banks
16. Microloans
17. Finance Debt
18. Silent Partner
19. Friends
20. Family
21. Form A Strategic Alliance
22. Sell Some Assets
23. Business Lines of Credit
24. Personal Credit Cards
25. Business Credit Cards..."

Read more in this article from Business Fund.com.

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So You Want to Share the Pie?

"Many private business owners sell (or grant options to sell) minority ownership interests in their business to employees, investors, family members, friends and others. The majority owner selling these minority interests may be motivated by many reasons, such as: the desire to obtain new capital, incentivize, reward or put "golden handcuffs" on employees, strive for family harmony, obtain estate planning goals and reap the emotional feeling of power or largesse.

"The majority owner’s goals, while certainly well intended and understandable, often focus only on these positive aspects, but seldom factor in the countervailing concerns" that are addressed in this article [from Business Law Today]."

The article notes that, "The sensitivity of majority owners to common pitfalls in their relations with their minority partners, together with their taking reasonable precautions prior to and after offering ownership positions to minority owners, can minimize litigation, improve harmonious inter-owner relations and improve the business’ prospects for success."

The article provides the following list of factors to consider when taking on minority investors:

Overall fundamental fairness/exercise of fiduciary duty. A vigilant or persistent minority owner will be entitled to scrutinize carefully every action or inaction by the majority owners. These rights exist, within reasonable limits, whether the minority owner sincerely questions the majority’s conduct or is trying to use its position to frustrate or hinder the majority.

In general, minority owners may assert that the majority breached its fiduciary duty or engaged in bad faith and unfair dealing and other contractual breaches based on various fact patterns. To support those legal conclusions, minority owners will seek to weave a tapestry of facts showing that the majority regularly or systematically, or at least occasionally, favored itself over the best interests of the business or the minority...

Affiliate agreements. Minority owners seeking to challenge a majority owner’s conduct may be entitled to carefully scrutinize all contracts, agreements and other arrangements between the business and suppliers, customers, consultants and other businesses owned or operated by the majority. The fairness of the price, comparative quality of performance and openness of the bidding for the affiliated company’s goods and services are often subject to criticism...

Salaries, bonuses. Similar to issues raised under affiliate agreements, compensation arrangements with key employees, particularly those employees who are majority owners or related to majority owners, will be subject to scrutiny on the same basis...

Distributions of excess cash vs. reinvestment. The different priorities of majority and minority owners are magnified in the area of a privately held business...Majority owners want the untrammeled flexibility to reinvest the free cash in the business, buy additional businesses (whether or not in the same line of business as the existing business) or make distributions to owners...while the minority...often looks to the business as a source of cash...

Sale of business and structure. The minority owner may challenge all aspects, substantive and procedural, of the ultimate sale of the business. Besides the obvious substantive areas for challenge such as the timing (either too soon or too late) and the price and payment terms, minority owners may examine other aspects of the transaction that allegedly favor the majority. Substantive areas often challenged for their alleged mischief include:

• allocations of the sale price to noncompete and consulting and similar arrangements in favor of the majority (thereby reducing the net consideration available to the minority),

• other post-closing arrangements between the buyer and the majority (such as leases or purchase-and-supply contracts) and

• the overall tax structure and financing of the transaction...

Business focus, priorities. A minority owner, whether wanting to make mischief or fervently convinced of its position, will scrutinize and criticize the business priorities and focuses of the majority. Frequent areas of dispute involve new business opportunities, geographic areas of sale, distribution practices, treatment of disappointing product lines, joint ventures or outsourcing and hiring or retaining key personnel...

Dissenters’ rights on sale. While dissenters’ rights are a creature of and will vary with state law, they typically provide grounds for challenges to the fairness of the price of the sale or merger transaction. Absent a showing of fraud or other egregious abuses, dissenter rights statutes will not allow a minority owner to block a transaction, but rather, to seek a higher price for its shares...

Information rights....Two major implications flow from such disclosure of information. First, to the extent that "knowledge is power," a minority owner may be better equipped to ask questions, challenge entity action and cause unwanted delays and confrontation. Second, dissemination of information increases the risk that it will be disclosed to competitors or those who could otherwise use the information to the entity’s detriment...

Participation rights. Minority owners frequently try to expand their rights to participate in the affairs of the business in a manner disproportionate to their minority position. They may seek rights to approve fundamental transactions through super-majority thresholds for any number of matters. These may include the right to approve a sale, major acquisitions, budgets, capital spending, borrowing, compensations, hiring and firing of key personnel and a litany of other areas...

Future opportunity rights. A majority owner may desire to expand the business — or buy a competing or complementary line — by forming a new entity in which the minority does not participate, and thereby exclude the minority from benefiting from this new opportunity. This raises issues such as affiliated entanglements discussed above, the loyalty of the majority to the existing business, breach of fiduciary duty and usurping corporate opportunity...

Co-sale rights. Minority owners...will attempt to assure the right to sell their interests in the business at the same time, and on the same terms, as the majority...These "tag-along" rights...may impinge on the majority’s flexibility if:

• it desires to reap a premium for itself, at the expense of the minority, for possessing control of the business,

• it desires to sell, or the buyers desire to buy, only a portion of its interests and, therefore, the minority’s tag-along rights will reduce the majority’s sale proceeds accordingly or

• certain procedural requirements in the tag-along process are not followed and render the sale susceptible to challenge.

Conversely, if a buyer desires to purchase all ownership interests in a business, the minority’s refusal may result in a blocked sale or reduced price...

Redemption rights....Obligations to repurchase the minority’s interests could affect the business’ free cash flow and divert resources from investment in more productive activities, or distributions to shareholders, to recapitalization...

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Keep Your Corporate Veil from Piercing

This Wikipedia entry explains:

"The corporate law concept of piercing (lifting) the corporate veil describes a legal decision where a shareholder of a corporation is held personally liable for the debts or liabilities of the corporation despite the general principle that those persons are immune from suits in contract or tort that otherwise would hold only the corporation liable. This doctrine is also known as 'disregarding the corporate entity'."

This article, Determining Your Company's Legal Structure, contains a good overview of the options for the legal structure of your business and the following tips for avoiding "veil piercing" claims:

Be sure that you always conduct business through and in the name of your entity rather than in your own name (unless you are a sole proprietor). Failure to follow the rules for the entity allows creditors to try to deny you liability protection because you did not really conduct business as an entity.

Always have the entity adopt resolutions to authorize action, even if there is only a "ratification" after the fact.

Use the proper form of entity signature by always signing documents in representative capacity as an agent of your entity: "XYZ LLC, by John Q. Smith, Managing Member."

Use proper signs, advertisements and business cards showing an entity rather than an individual (e.g., "John Smith, President, ABC, Inc." rather than "John Smith, Owner/Proprietor").

Use proper fictitious name filings.

Avoid commingling your business and personal funds in the same bank account.

Pay business and personal bills from separate accounts.

Maintain separate personal and business bank accounts.

Prepare notes and other documentation of all loans between the business and its owners.

Your entity must have a minimum capitalization reasonably adequate for the business to be conducted. Insurance counts.

Don't sign contracts or make commitments for the business until you have filed the correct papers to organize it, since you will be personally liable. The liability shield of the corporation or LLC does not exist until the entity exists through a filing in the state capital.

Found via this Kauffman eVenturing post.

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Getting Paid for Your Export Sales

Laurel Delaney links to a chapter from her book, Start and Run a Profitable Exporting Business, entitled, "Methods of Payment: Terms, Conditions, and Alternative Financing Sources for Export Sales," [pdf file] explaining how to ensure payment for export sales and the various complicated methods for doing so.

See this post from China Law Blog for active links

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Random Color Splashed Around

"And then I saw this, the random color splashed all around. No one had painted it and still it was so beautiful. I guess the beauty of randomness."

-Soumya Soumata speaking about this photo taken yesterday at the Three Rivers Arts Festival and part of the Pittsburgh Pool on Flickr.

The photo also demonstrates something about living: Open to possibilities - You find what you look for - Look for beauty and you find it - Be ready.

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Thinking About Thinking

"There is nothing more practical than sound thinking. No matter what your circumstance or goals, no matter where you are, or what problems you face, you are better off if your thinking is skilled. As a manager, leader, employee, citizen, lover, friend, parent — in every realm and situation of your life — good thinking pays off. Poor thinking, in turn, inevitably causes problems, wastes time and energy, engenders frustration and pain....

Consider the following key ideas, which, when applied, result in a mind practicing skilled thinking - sticking to the point (thinking with relevance), questioning deeply, and striving to be more reasonable...

1. Clarify Your Thinking

Be on the look-out for vague, fuzzy, formless, blurred thinking. Try to figure out the real meaning of what people are saying...Explain your understanding of an issue to someone else to help clarify it in your own mind. Practice summarizing in your own words what others say. Then ask them if you understood them correctly... When you cannot do this to their satisfaction, you don’t really understand what they said. When they cannot summarize what you have said to your satisfaction, they don’t really understand what you said. Try it. See what happens.

Strategies for Clarifying Your Thinking

-State one point at a time
-Elaborate on what you mean
-Give examples that connect your thoughts to life experiences
-Use analogies and metaphors to help people connect your ideas to a variety of things they already understand...

2. Stick to the Point...

When thinking is relevant, it is focused on the main task at hand. It selects what is germane, pertinent, and related. It is on the alert for everything that connects to the issue. It sets aside what is immaterial, inappropriate, extraneous, and beside the point...

Ask These Questions to Make Sure
Thinking is Focused on What is Relevant

-Am I focused on the main problem or task?
-How is this connected? How is that?
-Does my information directly relate to the problem or task?
-Where do I need to focus my attention?
-Are we being diverted to unrelated matters?
-Am I failing to consider relevant viewpoints?
-How is your point relevant to the issue we are addressing?
-What facts are actually going to help us answer the question? What considerations should be set aside?
-Does this truly bear on the question? How does it connect?

3. Question Questions

Examine the extent to which you are a questioner, or simply one who accepts the definitions of situations given by others...Good thinkers routinely ask questions in order to understand and effectively deal with the world around them. They question the status quo. They know that things are often different from the way they are presented. Their questions penetrate images, masks, fronts, and propaganda. Their questions make real problems explicit and discipline their thinking through those problems. If you become a student of questions, you can learn to ask powerful questions that lead to a deeper and more fulfilling life. Your questions become more basic, essential, and deep...

4. Be Reasonable...

Notice when you are unwilling to listen to the views of others, when you simply see yourself as right and others as wrong. Ask yourself at those moments whether their views might have any merit... One of the hallmarks of a critical thinker is the disposition to change one’s mind when given good reason to change. Good thinkers want to change their thinking when they discover better thinking. They can be moved by reason. Yet, comparatively few people are reasonable. Few are willing to change their minds once set. Few are willing to suspend their beliefs to fully hear the views of those with which they disagree. How would you rate yourself?..."

Read much more in this excellent article from CriticalThinking.org from which the foregoing was quoted.

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Three Rivers Arts Festival Music Lineup

The Three Rivers Arts Festival opens today and kicks off summer in Pittsburgh by filling downtown streets and plazas in the city with art and performance. Here is the evening concert lineup at the Stanwix Triangle Stage

The following evening concerts start at 7:30pm Monday-Saturday, 6:00pm on Sundays, except where noted. All shows are free and open to the public.

Fri, June 1
Robert Randolph & the Family Band
Sat, June 2
Martin Sextonwith special guest
Jon Check at 6pm
Sun, June 3
Ozomatli
Mon, June 4
Black Moth Super Rainbow at 8:30pm
Race the Ghost at 7:30pm
Jack Wilson and Dums at 6:30pm
Tues, June 5
Grace Potter and the Nocturnals
Weds, June 6
Lotus
Thurs, June 7
Roomful of Blues
Fri, June 8
Cowboy Junkiessponsored by Point Park University
Sat, June 9
Koko Taylorwith special guest
Willi Tri Blues Band at 6pm sponsored by Point Park University
Sun, June 10
Los Lonely Boyssponsored by Point Park University
Mon, June 11
Stephen Pellegrino
Tues, June 12
Ike Reilly Assassination at 8pmwith special guest
Earl Greyhound at 7pm
Weds, June 13
The Avett Brothers
Thurs, June 14
Joe Bonamassa
Fri, June 15
Jackie Greene
Sat, June 16
Rickie Lee Joneswith special guest
Lohio at 6pm
Sun, June 17
Spyro Gyrawith special guest
Rodney McCoy at 5pm sponsored by Mellon Financial Corporation

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the Change Management Toolbook

"Change Management is the process, tools and techniques to manage the people-side of change processes, to achieve the required outcomes, and to realize the change effectively within the individual change agent, the inner team, and the wider system.

"There are a multitude of concepts on Change Management and it is very difficult to distil a common denominator from all the sources that are applying the phrase to their mental maps of organizational development. But obviously there is a tight connection with the concept of learning organizations. Only if organizations and individuals within organizations learn, they will able to master a positive change.

"In other words, change is the result from an organizational learning process that centres around the questions: 'In order to sustain and grow as an organization and as individuals within; what are the procedures, what is the know-how we need to maintain and where do we need to change?', and, 'How can we manage a change, that is in harmony with the values we hold as individuals and as organizations?'

"Change Management has also to be seen in the light of the discussion on Knowledge Management, which took several turns during the nineties. When the establishment of an intranet was suddenly feasible to any large organization, IT and management scientists declared the beginning of the 'knowledge society'.

"The immature anticipation of knowledge management was that every member of an organization would be highly motivated to share information through a common platform and a quality improvement process would be enabled more or less by itself. It took only a couple of years to realize that this assumption was false. Up to now, there are no examples of a company in which transformational learning is facilitated by an IT system only, because the early protagonists forgot that information does not equal knowledge and that human knowledge is in the muscles of the persons who make the parts of a larger system.

"Back to square one. How (and whether at all) change can be "managed" or facilitated?..."

Are you personally ready for change? Is your team in serious need of new ways to work together? How can your organization deal with a change project which lacks focus or direction? Do you want to know why change is inevitable but hard to achieve? Do you want to surf on the waves of change?

You will find some of the answers to your questions in the Change Management Toolbook, a collection of more than 120 tools, methods and strategies which you can apply during different stages of personal, team and organizational development, in training, facilitation and consulting. It is divided in three principle sections: Self, Team and Larger System. You may wisht to begin with Introduction to Change Management from which the quoted portions of the foregoing were taken.

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Memorial Day Remembered

"Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation's service. There are many stories as to its actual beginnings, with over two dozen cities and towns laying claim to being the birthplace of Memorial Day. There is also evidence that organized women's groups in the South were decorating graves before the end of the Civil War: a hymn published in 1867, "Kneel Where Our Loves are Sleeping" by Nella L. Sweet carried the dedication "To The Ladies of the South who are Decorating the Graves of the Confederate Dead" (Source: Duke University's Historic American Sheet Music, 1850-1920).

"While Waterloo N.Y. was officially declared the birthplace of Memorial Day by President Lyndon Johnson in May 1966, it's difficult to prove conclusively the origins of the day. It is more likely that it had many separate beginnings; each of those towns and every planned or spontaneous gathering of people to honor the war dead in the 1860's tapped into the general human need to honor our dead, each contributed honorably to the growing movement that culminated in Gen Logan giving his official proclamation in 1868. It is not important who was the very first, what is important is that Memorial Day was established. Memorial Day is not about division. It is about reconciliation; it is about coming together to honor those who gave their all.

"Memorial Day was officially proclaimed on 5 May 1868 by General John Logan, national commander of the Grand Army of the Republic, in his General Order No. 11, and was first observed on 30 May 1868, when flowers were placed on the graves of Union and Confederate soldiers at Arlington National Cemetery..."

From Memorial Day History

"Memorial Day is much more than a three-day weekend that marks the beginning of summer. To many people, especially the nation's thousands of combat veterans, this day, which has a history stretching back all the way to the Civil War, is an important reminder of those who died in the service of their country.

"Uncover the interesting history of the holiday we now call Memorial Day. Discover little-known facts about America's Wars and stop by the Veterans Forum message boards to share your views with veterans, their loved ones and fellow history buffs" at this history.com site.

The picture above right is one I took at the 2007 Memorial Day Parade in Sewickley Pennsylvania.

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Business Proof of Concept Test

The Business Proof of Concept Test from startup venture toolbox is designed to explore whether the entrepreneur has thought through the business concept from a market size, intellectual property, human resources needs, competitive position and financial requirements point of view. The outputs from the test can be used as the basis for a business plan. The test is the equivalent of an investor's short list of important questions for analyzing whether to invest in the concept. By focusing on these questions early, the entrepreneur can resolve issues critical for success early on.

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