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Interjú egy Legendával / Interview with a Legend

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Gil-Penchina-Cover vc startup[column col=”1/2″]Az egyik legjobb dolog a hiper-sebességű startup iparágban, hogy a legendák közöttünk járnak. A tech csillagokkal néha egészen hétköznapi szituációkban lehet találkozni Palo Alto kávézóiban, éttermeiben, de kis szerencsével nagyobb konferenciákon is el lehet velük beszélgetni – egy-két percnél persze nem többet, mert ebben a világban mindenkinek az ideje a legdrágább. Olyan viszont felettébb ritkán történik, hogy egy igazi Legenda eljön ide Magyarországra. Gerő Viktor meghívására és a Conor Fund-nak (a Central befektetői csoport része) köszönhetően azonban hamarosan Magyarországra érkezik Gil Penchina,  aki üzleti angyalként olyan cégeknek írta meg az első csekkeket, mint a LinkedIn,  a PayPal, az IndieGoGo vagy a Couchsurfing, és aki közel 2 évig irányította az eBay európai terjeszkedését. Gil jelenleg is több mázlis startup befektetője, és május 2-án a Budapest Barcamp-en élőben is találkozhattok vele, sőt, egy pár pitch-et is meghallgat, ha már itt van. Igyekeztem mindenki másnál előbb feltenni néhány olyan villámkérdést Gil-nek, amit a magyar startup sajtó szerintem nemigen fog. Ezúton is hálásan köszönöm neki, hogy kötélnek állt az interjúhoz és mindössze pár órán belül válaszolt. Hölgyeim és Uraim, következzen Gil Penchina, a Legendás Angel Investor a megszokott egyből-a-lényegre stílusban:[/column]

[column col=”2/2″]One of the best things in the hyper-speed startup industry is that legends are among us. You can meet tech stars in fairly common situations in coffees and restaurants of Palo Alto, and also, with a bit of luck you might get hold of not more than a minute or two talking with them, since time is the scarcest resource in this world. However, it happens extremely rarely when a Legend happens to visit Hungary. Invited by Viktor Gerő and sponsored by Conor Fund (Part of the Central Investment Group) the man who have written the first checks as an angel investor to companies like LinkedIn, PayPal,  IndieGoGo and Couchsurfing and worked as a VP and General Manager of eBay for almost two years, Gil Penchina is visiting Hungary soon. Gil is currectly active as an angel investor of some fluker startups and you can personally meet him live on 2nd of May at Budapest Barcamp, moreover, being already here, he’s going to listen to some pitches as well. I intended being faster than anybody else asking a couple of quick questions to Gil, that the rest of the Hungarian Startup press will probably wouldn’t. Hereby I’d like to  express my gratefulness to him, for fulfilling my request, and answering in just a couple of hours. Ladies and Gentleman, here comes the Legendary Angel Investor, Gil Penchina, in the usual get-down-to-business style:[/column]

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[column col=”1/2″]Mi izgatott legjobban a LinkedIn-ben és a Yelp-ben, amiért befektettél?

GP: A LinkedIn-ben üzleti angyal voltam. Lényegében sokkal inkább Reid Hoffman-ba fektettem, mint a közösségi hálózatba és a célpiacot (szakemberek) egy jelentős értékkel bíró közönségnek éreztem. Nem hiszem, hogy bárki is gondolta volna, hogy olyna nagyra nő, mint amilyen ma. Ez Reid érdeme. A Yelp esetében az európai verzióba, a qype.de oldalba fektettem be, amit a Yelp felvásárolt. Amikor a qype.de-be invesztáltam, akkor már világosan látszott, hogy a Yelp nagy üzlet.

Mark Suster híres blog posztja szerint az üzleti angyalok és a kockázati tőkések vonalakba fektetnek, nem pontokba. Mennyi ideig kell egy startupnak a radarod képernyőjén lennie ahhoz, hogy dönteni tudj a befektetésről?

GP:A mai AWS világban (Amazon Web Services) sokkal inkább az adatba (vagyis felhasználói trendekbe) fektetek, mint sztorikba. Ezért elég gyorsan tudok dönteni ha az adat imponzáns számomra (napok, vagy hetek alatt).

Mit keresel elsősorban a csapatokban? A Hacker-t vagy a Hustlert?

GP:Ideális esetben egyet-egyet mindegyikből. Vagy még inkább 5 Hacker-t…

Mik lennének a legkomolyabb kétségeid, ha találnál egy nem amerikai rocksztár startupot, amelyiket befektetésre érdemesnek találnál?

GP:Hajlandóak az Egyesült Államokba költözni? Globális piacot céloznak? Elég kockázatvállalás van bennük?

Az üzleti angyalok még mindig convertible debt formájában fektetnek be, vagy hajlamosan korán felértékelni a cégeket és olyasmi term sheet-eket használnak, mint a Series Seed Documents? (Mivel ugye  convertible debt cap nélkül rossz a befektetőnek, convertible debt cappel rossz az alapítóknak.)

GP:Számomra a convertible debt cap-pel lényegében ugyanaz, mint az equity-jellegű finanszírozás. Mindkettő limitálja a befektető számára a hátrányokat, egyúttal korlázozza az előnyöket. Soha nem fektettem be cap nélkül és mindössze néhány ilyen deal-t láttam a 2011-2012 üzleti angyal lufi során is.

A magyar szabályozás szerint a vesting intézményét szinte képtelenség a kokcázati tőkés megállapodásokba implementálni Magyarországon. Fektetnél valaha olyan magyar cégbe, amely már bevont egy seed nagyságú kockázati tőkét, de nincs vesting a term sheet-jében?

GP:Persze – de találnék valami megoldást arra, hogy az alapítóknak legyen valami vesting-hez hasonló. Feltételezem, egy csomó lehetőség áll a befektetők rendelkezésérer a nem magyarországi ernyő-cégtől kezdve a nagyon nagy option pool-ig hogy olyan convertible debt deal-t kössenek, ami bizonyos részben az alapítók visszatartása (cégnél maradása) alapján konvertálódik a különböző cégértékeléseknél.

Mennyi időt vesz igénybe a befektetéseidnél a szóbeli igentől eljutni az aláírásig és az utalásig?

GP:Néha egy nap, néha egy hónap, megint máskor 6 hónap. Az egész a félelemről és a kapzsiságról szól, valamint a “lökdösődés megindulásáról”.

Hogyan éred el egy Startupnál a Hiper-sebességgű növekedést? (feltételezve, hogy értik a “Könyörtelen Sürgősség lényegét? Gil hírhedté vált kifejezése. Van valami titkos recepted erre?

Képzelj el egy 6 fős csapatot – úgy kiegyensúlyozva, hogy egy varrótű hegyén is megállnának. Az egésznek az a titka, hogy fókuszálj egyetlen egy dologra és ne vacakolj olyan dolgokkal, amiről azt mondták neked, hogy fontos, pedig valójában nem az.

Van olyan startup, amelyiknek nemet mondtál és így visszanézve megbántad a döntést?

GP:Hát, elutasítani a lehetőséget mikor állásinterjúra hívtak a facebook egyik igazgatói posztjára még 2006-ban, így utólag elég költséges döntésnek bizonyult, de nem bánom. Általában a jövőre fókuszálok, és gyorsan feledem a múltat…[/column]

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What excited you most on investing in LinkedIn and Yelp? How early have you spotted them?

GP: LinkedIn I was an angel in.  Ultimately I was investing in Reid Hoffman more than social networking and the target ( professionals) felt like a high value audience.  I am not sure anyone thought it could get as big as it has at the time. Reid deserves the credit for that. Yelp- I invested in the European version, qype.de that was bought by yelp.  It was clear yelp was a good business by the time I invested in qype.de

According to Mark Suster’s famous blog post, Angels and VCs usually invest in lines, not dots. How long a startup must be on your radar screen to make an investment decision?

GP:In today’s amazon AWS world I invest more in data (user trends) than story.  So I can make quick decisions if the data is compelling (days or weeks)

What do you look for in a team? Preferably the Hacker or more the Hustler?

GP:Ideally one of each.  Or better yet 5 hackers…

What would be your major concerns if you found a rockstar non-US startup you’d like to invest in?

GP:Will they move to the US ? Are they addressing a global market? Will they take enough risk?

Do angel investors still prefer convertible debt, or they rather tend to value the company early and use term sheets like the Series Seed Documents? (Since convertible debt without a cap is bad for the investor. Convertible debt with a cap is bad for founders.)

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GP:To me convertible debt with a cap and equity – are basically the same thing.  Both limit downside to investors and cap upside.  I’ve never invested in uncapped debt and I only saw a few deals like that during the 2011-2012 angel bubble.

Upon Hungarian regulations, vesting is almost impossible to implement into term sheets in Hungary. Would you ever invest to a Hungarian Company that has raised a seed round but there’s no Vesting in their term sheet at all?

GP:Sure – but I would find a way to make sure the founders have something equivalent to vesting.  I imagine there are lots of options from non-Hungarian shell co’s to a large option pool, to investors getting a debt deal that converts based in part on founder retention at different valuations.

How much time does it usually take from your soft circle to the signature of all the documents and writing the check?

GP:Sometimes a day, sometimes a month, sometimes 6 months.  It’s all about fear and greed and getting a stampede going.

How do you Hyper-scale a startup (given that they understand „Relentless Urgency”)? Is there any secret technique of yours for that?

GP:Imagine a team of 6 people – all balanced on a single sewing needle. It’s about focus on a single thing and ignoring many other things that you are told are important but really aren’t.

Gil-Penchina

Looking back, is there a startup you passed and regretted the decision later on?

GP:Turning down an opportuity to interview for an executive role at Facebook in 2006 was an expensive decision, but I don’t regret it.  I tend to focus on the future and quickly forget the past…

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Gil Penchina hamarosan Magyarországon: BarCamp, 2013. Május 2., Akvárium Klub. Aki bevállal egy pitch-et a LinkedIn angel investorának, az még leadhatja jelentkezését a BarCamp oldalán.

Külön köszönet Molnár Ritának, hogy összehozta ezt az interjút Gil-lel. / Special thanks to Rita Molnár to organize this interview with Gil.

Érdemes követni a Facebook event-et is. És kérek ide is egy lájkot, ha már Gil-t is mertem a Vesting-gel nyaggatni… 🙂

 

Intellectual Property in the United States: Myths and Realities (English version) Part 2/2

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startup, startupdate, pitch, legal, vcThis article is the second part of Intellectual Property (IP) in the United States: Myths and Realities. In the first part Ian Bennett introduced us to the basics of the regulations of Intellectual Property in the United States and busted the first six myths. In this second part Ian will reinstate the remaining three myths of IP and provides some bonus insights as well…and the secret of eternal life, of course. – Peter Kadas

Myth Number Seven:  United States and European Intellectual Property cannot be enforced in China

Reality:  China has a robust system of intellectual property and a system to address infringement of foreign rights.  The real challenge for anyone attempting to establish or enforce IP in China is the crucial need for localized connections who can navigate the legal and business systems on your behalf, and then having the money to engage in such proceedings.

Myth Number Eight:  Having an NDA will provide adequate protection from intellectual property infringement.

Reality:  An NDA is a fantastic start to protecting your IP and generally providing yourself with a good basis for proceeding with product testing, marketing or solicitation of services, joint ventures or investments, but you should never assume that an NDA is the only thing you need to adequately protect your IP.  The reality from a business standpoint is that an NDA only provides you as much protection as the amount of damages you can legally extract from someone who violates it, and unfortunately, more often than not people who violate NDAs don’t always have that much to lose in recoverable damages.  For most startups, it is unlikely that you will ever encounter a situation in which a company will violate a provision of your NDA to the detriment of your intellectual property and that violator will have significant amounts of money for you to recover; the simple truth is that well established companies don’t run these sort of risks, especially when dealing with small players in the market.

The best approach to really safeguarding your intellectual property is to manage your relationships and disclosures carefully and rely on NDA as more of a deterrent.  Do your homework before you give out confidential information to anyone and then if you do, consider from the beginning what resources and information you will realistically need to monitor compliance with an NDA and to enforce it if need be.

Lastly, remember that an NDA can serve other very useful purposes in relation to intellectual property other than as a form of outright protection, for example if you carefully monitor your disclosure of pre-patented inventions and have an NDA signed by any party with whom you share such information, you can successfully avoid unintended publication and the accidental beginning of that critical 1-year time period which we discussed above.  Another example would be utilizing NDAs in regular fashion both internally and with outside parties involved in your business if you have any trade-secrets to protect, because absent such basic confidentiality assurance, your trade-secrets could be ruled by a court to be inadequately protected and thus not enforceable if improperly disclosed.

Myth Number Nine:  If you have intellectual property in Europe, your IP is applicable in the US.

Reality:  If you have intellectual property in Europe you do not necessarily have any of the same rights in the US and you cannot gain such rights by simply “transferring” your IP.  In almost all cases, intellectual property is jurisdiction specific, though in some cases such as patent registrations through the Patent Cooperation Treaty (PCT) or European Community trademark registrations, a single filing can be utilized to establish a very broad jurisdiction in which such rights may be applied, and multiple countries can be included.  However, for most European startups considering establishment in the US, it will be necessary to begin with new registrations that are specific to the United States.  In some cases, such as with international patents, having a registration in Europe can actually prohibit the opportunity for a congruent US filing if that filing is not undertaken within a certain period of time.  On the other hand, having such preexisting filings can also provide for expedited processing of US applications if certain mechanisms like ‘patent prosecution highways’ are available and are used in a timely fashion.  For such reasons, any business which is even remotely considering establishment in the US should consult with experienced intellectual property counsel as early as possible (insert second shameless plug).

Myth Number 10:  A startup must have intellectual property to be successful

Reality:  A startup does not necessarily need to have intellectual property to succeed.  What every startup can and should do is simply consider its potential for intellectual property or how its business may come into contact with the intellectual property of others, and such consideration should be done as early in the process of starting-up as is possible.  However, there are plenty of situations in which having IP may just not create enough justifiable value to pursue it.  For example, if you develop an application in a crowded market space such as social/business networking or item/service resale, your application may simply not be original or novel enough to support a software patent, and you may not even have adequate funds to pursue one or even need one in the first place.  Likewise, maybe the name of your products and/or business is relatively generic or maybe your business and products utilize potential trademarks and/or code materials which are substantially in the public domain or subject to strict licensing requirements upon the basis of open-source platforms.  In all such cases, you still may be able to get intellectual property, but the extent of its enforceability or actual value may be so limited that expending any significant money to obtain it just isn’t worth it.

Now this said; the decision to not pursue intellectual property in any regard should never be made upon an assumption or without careful consideration.  At the end of the day it is just about knowing what your options are and knowing them as quickly as possible so you can make intelligent decisions.  You may not need IP to protect your business adequately or to increase its value in any significant way, but you damn well better be aware if your business may come into conflict with the IP of others and you damn well better be able to explain any lack of intellectual property to any potential investor or strategic partner in an articulate and confident fashion.

 Epilogue

So, for those of you who read this whole thing and have not poked out your own eyes…congratulations on your fortitude!  To the ones without eyes, I am sorry, but I believe Peter offers a comprehensive holistic recovery program…you’ll have to check with him.  To the survivors, here is a short list of bonus myths and realities to keep in mind!

M:  Copyrights and copyright assignments last forever.

R:  Nope, copyrights last in most cases for the life of the author plus 70 years and copyright assignments may be revoked under US law by statute after a certain number of years.  Entities and anonymous authors have slightly different rules.

M:  Patents and other forms of IP inhibit innovation.

R:  No, they don’t really; it’s just that some people use them like assholes.

M:  Google or Apple is going to piss on your IP if you even come close to their business spaces.

R:  Most of you will probably never be important enough to get their attention in a negative or competitive fashion unless you do something to infringe their own IP or significantly detract from their business interests…in which case, yes they can afford to piss on your IP, or buy you out, or do both in no particular order.

M:  Watching out for your intellectual property is like watching out for your children.

R:  You only have to be responsible for your kids for 18 years…patent monopolies last for 20.

For those who reached that far, take my appreciation, since this is not just the usual easy language. If you’re thinking on dealing with patents, I highly recommend  the San Francisco law firm Bounkova&Bennett founded by Ian and his Partner, Boyana Bounkova, because – as maybe it became clear from this article – they’re highly professional and working with flat rates. – Peter Kadas