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March 24, 2011

Tuesday evening, I decided to check out an event called eDate.  eDate is somewhat like speed dating, but pairs up entrepreneurs with potential law firms, marketing gurus, investment specialists, technologists, and more.  You get ten minutes each with two experts of your choice, and also get to mingle with all the attendees in a non-formal setting as well.

I went with a friend of mine and his business partner who are also doing a startup and we all had a fantastic time.  The event was very well organized and had free snacks and drinks, including wine.  I decided to meet with a legal expert and a marketing firm.  I’ve had a lot of questions around setting up a formal corporate entity, how shares work, transferring the KitchenPC intellectual property, and potentially being set up so I can bring in outside funding.  Coincidently, I recognized one of the law firms (Ashbaugh Beal) in attendance and decided to meet with them.  Rick Beal personally helped me out quite a bit several years ago with a rather large insurance claim involving wind, two trees, my house, and gravity.  I figured I could at least go and name drop.

Regarding legal work, it’s something that eventually needs to be done to make any company “official.”  KitchenPC is an LLC in Washington State, but I’ve always filed “No Activity” and not really used it for anything.  What I’ve learned since is there’s quite a bit of controversy in the field around deferring payments for cash-starved startups as well as firms taking equity stakes in these companies.  Traditionally, it would be considered unethical and a conflict of interest for a legal firm to own shares in a startup they represent.  For example, if Ashbaugh Beal owned shares in KitchenPC, and one of their other clients is my biggest competitor, the advice they gave that client might be biased by the fact they have an interest in my success as well.  Other law firms (mostly the big ones in the bay area who are used to dealing with dot-coms) say this is a bunch of bologna and have no problem doing these sorts of arrangement.  Ashbaugh Beal is among the former group, however I’m hoping if I were to still work with them we could work out some sort of deferred payment plan.

I also met with a guy named Adam who works at Odd Dog Media.  I wanted to chat with him about cheap ways to get users on to my site.  So far, my user acquisition strategy has been to “get lucky” by getting blog mentions and other press, which causes random spikes every so often.  Other strategies I’ve found, such as ad campaigns, Facebook marketing, YouTube videos, etc all seem too expensive per user acquisition and perhaps not a very efficient use of money.  I really liked Adam and would love tot meet up with him again.  He had all sorts of great ideas for the site, including developing an embeddable widget that other bloggers can embed in their HTML to show recipes and meal plans for my site.  He says he and his team get together on Fridays for beer and to toss around ideas, and invited me to join in one of these weeks.  I’m hoping he’ll let me take him up on that offer.

I also decided to bring along several full-page glossy print-outs of my website (big thanks to my friend Ken, who will of course never read this, for having those done for me!)  This turned out to be a great idea and everyone loved seeing them.  Describing your website is one thing, but actually being able to show what it looks like really helps you connect people to the idea.  As they say, a picture is worth a thousand words.  I received nothing but positive comments on the design.  I’ll definitely be taking these with me to future meet-ups as well.

Since I got spots one and three (there were eight rounds), I was finished early.  However, due to some of the experts not being fully booked, I was able to grab several openings which provided me with two free dates!  I chatted with a finance guy who talked to me a bit about taxes and how to write-off some of my debt, and also with Perkins Coie, another well-known Seattle law firm.  Perkins is huge in the startup world, and has absolutely no problem with taking shares in a startup in exchange for legal services.  Typically, they charge about $2,500 for setting up a corp in Deleware, and then take between 0.75% and 1.5% of your company in return for around $30,000 in deferred legal services.  The payback is tied in to your first round of funding.  This deal sounded rather typical from what I’ve heard.  Big law firms are also known to help open doors for you.

Even though I stuffed my wallet with a huge stack of KitchenPC business cards before I left, I still managed to run out.  One thing that came as a surprise is several people who I talked to had heard of my site, so apparently I’m getting more well known at least in the entrepreneur community.  Hooray for very slow progress!


From → Business

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