Hiring employees for a new entrepreneurial venture is different than for a large company or small retail store. Why is this? Because at the beginning stages of a growing business things are frenzied! You can be successful and frenzied or struggling and frenzied – but the bottom line is that things are going to be hectic. So you need to find employees who are not only extremely competent at their jobs but also willing to enjoy the crazy ride that is a growing company.
One interview alone is usually not enough to tell you whether this person will be a good fit. Conducting two or three interviews is an important step in the hiring process because it gives you time to delve deeper into the candidate’s resume along with their personality. Are you a macromanager seeking employees who can take charge or do you prefer to be in full control? Remember, in order to find the right hires, you must be honest with yourself! You’re trying to build a family here, not just a group of strangers who happen to work together.
Also, remember to be as straightforward as possible. Ask them what their long term plan is and give the candidate the good, the bad, and the ugly about the position. Hopefully the good will outweigh the bad and the ugly, and the prospective employee will be excited to join you in your venture.
There are all kinds of fascinating legal cases for sure. Apparently, one Brittany Lahm, now 24, back in 2009 got into a car accident in upstate NY. Her front seat passenger sadly was killed and others in the car injured. All the folks in the car were 19 at the time and were heading home from a trip to the Jersey shore.
Lahm was sued by the others for negligence. The cause of the accident: the now deceased front seat passenger untied Ms. Lahm’s bikini top, as the court described, “thereby causing the top to fall and her breasts to be exposed.” The court ruling, now upheld by the NY appeals court: a jury could rule that the falling bikini top was an “emergency not of her own making” which excused her from being liable for the passengers’ injuries and death.
A dissenting judge said she was partially at fault because she was “disruptive” earlier in their ride, according to the ABA Journal, and therefore the prank was “foreseeable.” My commentary on this case: no comment!
As the stock market continues its strong surge another milestone today as the Nasdaq Composite Index closed above 4000 for the first time since 2000. The Nasdaq is up 33% this year, more than the other key market indeces. The tech stocks in particular have done well. But we’re still not near the Nasdaq’s 5048 record high reached on March 10, 2000. Boy I remember that month, do you? Shortly thereafter the dot-com boom went rapidly bust. Sadly the Nasdaq still has not fully recovered from that period, but a terrific rally capped by the big close today.
The Dow Jones Industrial Average has continued hitting record highs the last four sessions. The markets went up today mostly because of a better than expected housing report. So what’s going to happen in the months ahead? Will there be a correction? Is this another round of “irrational exuberance” without strong enough economic data to justify the heights in prices? Is it time to sell? Time to buy?
I have no clue. And anyone who says they do, unless they have the billions to show for it, probably don’t really know either. What I do know: it is better for the capital markets and the fund-raising environment for smaller companies when the markets are doing well. So go Nasdaq!
Many intermediaries and consultants who assist companies in the going public process offer a “turnkey” solution that includes helping bring you the entire team necessary to complete the steps to a public trading stock. When interviewing potential advisors, ask whether they do recommend other professionals such as attorneys, accountants, transfer agents, market makers, investor relations experts and the like. Presumably all have appropriate Wall Street experience; of course confirm this.
Find out if these professionals will have any issue with your obtaining routine background checks on all who will be assisting in the process of taking you public and building trading volume. A fairly comprehensive check on a US individual or company can be done for around $500 these days.
And as with the consulting firm itself, ask each professional you may hire for client as well as general business references. Then call them! And do your best to make sure that the financial arrangements with each of these team members reflects a market rate that is reasonable.
We head into Thanksgiving week here in the US tomorrow. College kids are heading home with their duffel bags and schoolbooks. Families are hitting the road to meet other family. Friends are gathering with friends. Millions of turkeys sacrificed to the special day. The holiday season officially kicked off. Whatever you do this Thursday, I hope you will focus on both aspects of the often underappreciated compound word Thanksgiving.
First, of course, give thanks. Every human faces challenges and strife at times. But we all hopefully can point to wonderful and positive things in our lives. People who matter. A job or career that is appreciated. Family, whether immediate, extended or acquired. I have found that those who focus on negativity tend to find more of it.
And giving. In both my life and business I have worked hard to give back to others. Whether with time or financially, I have tried to do what I am able. Whether mentoring, helping a friend in trouble, contributing to a worthwhile charity, or just giving up a seat in the subway, it’s the little things that matter. And as too many pithy posters on Instagram intone, your true test as a giver is what you do when no one will find out.
This week I hope we will all focus on both giving thanks and being givers to provide some meaning to our existence on this tiny orb.
I spent yesterday in Washington attending the SEC’s annual symposium on small business capital formation. Congress mandated about 25 years ago that the SEC hold this conference annually. There are panels in the AM and breakout groups in the afternoon that develop recommendations for the SEC staff and commissioners to consider.
The hot topic of the day: the Jumpstart Our Business Startups (JOBS) Act and its many implications in crowdfunding, eliminating the ban on general solicitation in private offerings and the like. It was also not lost on the participants that a number of bills are starting to work their way through Congress that may ultimately coalesce into a JOBS Act 2.0. A few highlights from the day:
1. Although all 5 SEC commissioners appeared and spoke at last year’s conference, only one appeared and did not speak. SEC Chair Mary Jo White was scheduled to appear to open the event but canceled at the last minute. Not sure what, if anything, any of that means.
2. Over 300 offerings have taken place since September 23 under the new rule allowing a company to use general solicitation in certain private offerings. These offerings have raised over $2.2 billion so far. So lots of folks are using the new rule for sure.
3. The SEC has proposed some rules that would add restrictions on private offerings, especially those involving general solicitation under the new rules. There have already been 450 comments filed, mostly negative, in response to the proposal.
4. When reform to Regulation A, mandated by JOBS, is finalized by the SEC, the states, to the extent they will be reviewing Regulation A public offering documents, are going to appoint one or two lead examiners to represent a large group of states to reduce the state by state review that can be incredibly burdensome.
5. Crowdfunding is coming together as a real alternative with rule proposals passed by the SEC. The JOBS Act limits its use but many are optimistic as to widespread benefit to be seen.
6. Many were pushing to expand “short form” registration to all SEC reporting companies as long as they are current and timely in their filings.
Overall a well organized and substantively meaningful conference. Well done SEC staff, especially Tony Barone who leads the staff’s efforts to put the event together.
The House Financial Services Committee has been busy for sure! Last week they unanimously (57-0) approved and sent to the full House HR 3448, known as The Small Cap Liquidity Act of 2013. The key sponsor: Rep. Sean Duffy (R-WI). The bill is seen by many as another part of what may turn into the 2.0 version of the Jumpstart Our Business Startups (JOBS) Act.
The bill would address an issue some feel has dramatically hurt the IPO market over the years: the decimalization of spreads between “bid” and “ask” in stock trading. When spreads had to be larger before 2001, analysts, brokers and market makers shared in the spread and had more interest in smaller stocks. Now spreads can be as low as one cent, with less to go around. Arguably better for investors, but it had a negative impact on the smallcap IPO market and after market trading.
In general, the bill would create a five year pilot program in which there will be a minimum $0.05 spread for smaller companies (under $750 million in revenues) who can also elect to increase the spread to $0.10. This only applies to companies whose shares are trading above $1.00 a share. Companies will have the choice to opt out of the program and go back to penny spreads. The SEC and exchanges have to report to Congress on the progress every six months. We are impressed by the bipartisanship and are following this good stuff!!