Category Archives: dave felman

What Should Entrepreneurs Look For in Company Counsel?

faqfriday

During a talk today with Dave Felman at UF’s Law School (Professor Danny Sokol‘s class), a student asked what I look for in venture capital counsel.  It was a good question, and the answer for me is similar to what I’d recommend for entrepreneurs vetting company counsel.

dave felman
Although good lawyers come in many packages, there are really four main things I look for:
1) Experience doing venture capital deals: There is no substitute for firms who have done venture captial deals before.  Don’t let them spin “corporate law” into “venture or startup law” because the issues involved can be quite different — not to mention entrepreneurs are unique customers that take getting used to.
2) Business-minded, not legal theory: The best venture lawyers operate like business partners, not lawyers.  They identify and highlight risk, but they know when to trade-off corner-case risk for getting a deal done.  The best I’ve used lay out what can happen and how likely it is to happen, and put it into context against other deal points being negotiated.  Counsel that argues small, corner-case points will cost you more money and possibly cost you closing a deal — with little ultimate risk-reduction upside.
3) Experience on both sides of the table: This isn’t critical, but I like counsel who have done company-side work and fund-side work.  It brings an understanding and an ability to communicate to the other side why particular points are important.
4) Overall style/persuasiveness: This relates to being business-minded, but the best lawyers speak in terms of partnering and win-win; rather than creating conflict by digging their heels in.  The win-win lawyer can still be tough on the important points, but the tone of discussion makes a big difference.

2006 Predictions


What would a new year be without some wacky predictions? After twisting the arms of some of Florida’s top entrepreneurial minds, I got a number of bold (and not so bold) bets on what’s in store this year. Before sharing some of them, I’d like to thank all contributors for putting their mind and keyboard to the task.

For fun, I’m going to spread the predictions across this week — with the venture ecosystem (topic for another post?) folks first and the entrepreneurs later. That should give me enough fodder for venture predictions of my own next week…

First up, David Day, Director of UF’s Office of Technology Licensing and the Sid Martin Biotechnology Incubator. There’s a saying about age before beauty but I’ve got to stay on David’s good side.

1) Florida’s spin-offs will lead the Southeast in new investments.
2) Florida will lead the Southeast in the opening of new offices by
established Northeast and West Coast VCs.
3) The Southeast’s venture investments in 2006 will double those in
2005.
4) The venture investment landscape nationwide will faintly start to
resemble the feeding frenzy of the late 1990s.

Next up, David Felman, tech counsel extraordinaire (he does our deals) from Hill, Ward & Henderson. Although not promising the moon, 2006 looks good to David with the following thoughts:

We were pleased to have been involved in over 15 closed venture transactions for companies and investors in 2005. We expect the strong market for venture financings in Florida to continue. We are also assisting fund clients exit portfolio companies through acquisition transactions at strong valuations, which further strengthens our market.

Here are a few predictions for 2006:
1) The market continues to be one of “haves” and “have nots” for companies raising money. Established companies with track records and strong management are funded at strong valuations and on favorable terms, but investors continue to be selective, a legacy from past experience.
2) Florida gains more capital for investment. Several existing funds raise more capital after completing exit transactions and establishing a track record. This reinforces a recent trend of sponsors raising new funds in the more difficult market of 2003, including Banyan Mezzanine, Ballast Point, and Inflexion.
3) Sponsors complete fund-raising for a few new institutional funds, one of which (HealthEdge) was already mentioned on FloridaVentureBlog.
4) Venture and mezzanine funds in North Carolina, Georgia, and Tennessee continue to increase their emphasis on the Florida market, often joining with Florida firms to provide funding for local companies.

These are my thoughts — not bold or striking, but pretty optimistic for the new year.

Booker Schmidt, Executive Director of the GTEC Incubator, was likewise bullish on 2006 with the following hometown visions:

1) A Florida startup company will receive $35+ million in a round of venture capital funding.
2) A significant biotech or technology company will make plans to locate its headquarters or one of its facilities to the Gainesville area.
3) The number of daily flights to and from the Gainesville Regional Airport will increase by 20%.
4) Disney will acquire Pixar Animation Studios.

And, yet another master of avoiding legal disaster, Carl Roston, from Akerman Senterfitt had these thoughts for the new year:

1) Florida Venture Conference will set an all-time record for attendance.
2) Venture investing will continue to grow incrementally from last year.

Bold, bold man…

Last, as a taste of the entrepreneur predictions still to come, Rich Swier, Partner at angel fund StartupFlorida and CEO of Highwall Technologies, took off his many hats and donned the one of oracle to predict:

1) Skype and Vonage will suffer major hurdles — Major cable and telecom companies will begin to launch VOIP services and meter bandwidth so that other “free” services will begin to suffer.
2) Google will have first lawsuit placed against them for alleged fraud related to the “lack of transparency” in their AdWords system.
3) FCC will begin a drastic move toward redefining how spectrum will be managed in the future — opening new wireless opportunities (similar to Wi-Fi).
4) Microsoft will make a major move into the internet property business, through an acquisition of eBay, Amazon or equivalent company.
5) One of the major cable/communication companies will acquire a Satellite radio company.

and more from Rich and other entrepreneurs later…

What do you think 2006 holds — add a comment below??