Tag Archives: Tech-Rx

Celebrating America’s Work Ethic

Thanksgiving is a celebration, but sometimes we forget that the first Thanksgiving was the result of overcoming hardship and collaborating with others toward a similar goal.

The reason the Pilgrims and Native Americans had such a large feast was due to the celebration of the end of preparation for the harsh New England winter to come. Similar for companies, celebration comes AFTER the hard work. Successful businesses combine grit and preparation in order to survive, the same qualities the Pilgrims needed to prepare for winter.

Celebration of Ants

Preparing for winter is a fitting metaphor for growing companies. You may remember an old Aesop’s tale called The Ant and the Grasshopper. While the grasshopper spent the entire summer singing and frolicking about, the ants worked hard to prepare for the bitter winter to come. Much like the Thanksgiving originators, the ants were able to celebrate before winter began as it meant survival. Meanwhile, the end of November meant death for the once happy grasshopper. A outcome sure to meet young companies who fail to put in the hard work.

Collaborating with Native Americans

The Pilgrims could not survive without the help of Native Americans. Being survival experts who knew the scope of the land, the Native Americans taught the Pilgrims everything they knew and provided them with invaluable capital. Today, companies need leadership experts, technology whizzes, sales savants, operations gurus and marketing specialists in order to survive. With a solid team in place, young companies have a shot at survival as they weather through the bounty of obstacles ahead.

I share these two anecdotes to stress the timing of celebration. Celebration should be saved for the success and success takes perseverance and determination. More and more, we see companies celebrating at the deposit of the first investor, but the true celebration shouldn’t come until profit is made. Like the Pilgrims and the ants, it is wise to work hard now to reap the benefits later.

-Steve Hogan, Managing Partner, Tech-Rx

Zombies On the Rise!

Halloween is here and the zombies are afoot! In fact, zombie companies are more common than you would ever imagine. Contrary to what you may believe, zombie companies aren’t just dead, non-producing leeches that suck the life out of their investors. They are very often simply challenged companies with a lot of potential. In fact, zombie companies usually have a compelling product and qualified team members.

So what makes them zombies? Zombie companies simply cannot grow without outside investment.  They are probably missing some essential talent and are unable to hire without investment. It is very typical in this situation that the investor makes the decision not to supply additional funding, thus pulling the plug on the company. While technically still “living” while they are able to function, they are unable to grow – in the business world, this is the equivalent of the living dead

What are symptoms of a zombie company?

Compelling product: Most of the time, zombie companies have a compelling product. It is what is keeping them alive! If not, they would most likely be a dead company.

Effective management team members: If the product is compelling, the team has to be somewhat effective. However, chances are the team is lacking in some way. Otherwise, they would have never become a zombie company in the first place.

Lack of momentum: If a company is lacking in momentum, chances are they are a zombie. Any signs of stagnation and you should consult with a zombie whisperer to prevent a disaster.

So now you know what a zombie company looks like, but what can be done to save these zombie companies? (Hint: it takes a little more than an injection of capital.) In our next blog, we will talk about the approaches we have taken to bring the dead back to life.

Stay tuned!

-Steve Hogan, Managing Partner, Tech-Rx

 

New and Improved Investor Network Membership Services

Going online has never felt better! Our Investor Network Membership Services have migrated to an online platform for the convenience of our Investor Network members.

Through the new site, Tech-Rx Investor Network members can view companies under evaluation, companies open for investment, opportunities declined, and other opportunities

Companies Open for Investment

Especially interesting is the  section of companies open for investment. These companies have been fully evaluated and are currently offering securities for sale. We include the company’s Private Offering Memorandum, our opinion of the company and other information that you may find valuable and make it available to you here on a confidential basis.

Investor Network Sign-Up

Interested in joining the Tech-Rx Investor Network? Well now you easily can because the sign-up and authentification process is online. New members can view investment opportunities shortly after they sign up.

Other Investment Opportunities

Oftentimes we come across interesting investment opportunities but are just not candidates for Tech-Rx. Here is where you will find these companies! Of course, if you are interested in investing in any of these companies, you must contact them directly. We would also like to note that Tech-Rx does not perform any type of due diligence on these companies and does not endorse them.

As the exclusive section of our website continues to grow, we look forward to enabling you to better make better investments.

-Steve Hogan, Managing Partner, Tech-Rx

15% is Bigger than Zero

We are big fans of bootstrapping here at Tech-Rx! Not only does it allow you to maintain direction for your company and focus on the product, but it delays the need for outside investors as long as possible. Every time you trade cash for company equity, you are decreasing your amount of ownership in the company you built from the ground up. But at one point you are going to need outside funding if you are planning to grow (unless you have a hefty inheritance in your back pocket). Continue reading

No on General Solicitation

Eight days ago, the fundraising scene was changed when the ban on general solicitation was lifted. For the first time in eighty years, small businesses can now raise funds publicly. Under the new 506c rule, companies who file Form D with the SEC can solicit to the general public. However, no one is restricted to filing Form D if they want to raise money. There is the option of doing it the old fashion way!

Here at Tech-Rx, we are sticking to our time-tested and trusted 506b. There are several reasons we are not jumping the boat, the chief reason being that the alternative is quite onerous. Our first turn-off with Title II of the JOBS Act is that companies are required to take dramatic steps to verify investor accreditation. Investors in 506c deals will need to provide private documents such as tax returns or broker forms to companies they are interested in supporting in order to prove their accredited investor status. I don’t know about you but I try not to make it a habit to release such private information, especially with no guarantee of privacy.  (Does anyone else smell unwarranted government intrusion into personal matters?)

Our second turnoff is from the standpoint of the company. Companies are required to submit details to the SEC 15 days prior to general solicitation. Do you know anyone who has their presentation materials ready two weeks in advance? It is unheard of!

Lastly, failure to follow strict protocol will result in a one year ban from fundraising. In other words, certain death. A year is a long time in the early stages of a company and a year without funding is even longer.

Amidst all of the craziness of the new rules of engagement, we want to assure you that Tech-Rx is sticking to the traditional methods of fundraising through our accredited investor network.

What are your thoughts on general solicitation? Have you ran across any issues with the new rules?

-Steve Hogan, Managing Partner, Tech-Rx

 

Where’s the Next Silicon Valley?

Israel, Copenhagen, New York — the list goes on and on! While forecasting the location of the next Silicon Valley is becoming quite the fad, we argue it is a fruitless endeavor to make such forecasts. What Makes Silicon Valley Unique The ingredients that make Silicon Valley so unique to Silicon Valley are impossible to replicate. Most notoriously is the culture. Silicon Valley’s culture is most known for it’s eternal optimism, innovative vision, relentless drive and a flair to risk it all. Without a complementary ecosystem to support this unparalleled culture, none of the technological innovations that hailed from the area would have been possible. Silicon Valley’s Replacement is Online As our convergence with the Internet continues, it is becoming easier and easier to create communities online. While it may be difficult to replicate Silicon Valley in physical locations around the world, it may be more successful to do so online. With the emergence of complex and easy to use collaboration tools and the ability to create and find community online, it is more feasible to for like-minded individuals to find each and work together on creating something new. 10 High-Tech Hot Spots If you don’t care about the unique characteristics that make Silicon Valley irreplaceable and you’d just like to know where you will find the next hubbub of tech, we understand. In fact, it makes more sense to pontificate where are the strongest tech hotspots will be situated. Below is the list you are looking for:
  • Washington, D.C.
  • Riverside, CA
  • San Antonio, TX
  • Baltimore, MD
  • Raleigh, NC
  • Las Vegas, NV
  • Salt Lake City, UT
  • Houston, TX
  • Seattle, WA
  • Jacksonville, FL
We even found this neat infographic here for additional high-tech hot spots. Note that we stayed domestic in our list, but would love to hear your thoughts on international high-tech hot spots — Israel, London, Bangalore, etc. What are your thoughts on the “Next Silicon Valley”? Any other high-tech hot spots that you see on the horizon? -Nikki Griggs, Business and Marketing Associate, Tech-Rx

The Price of Success

“Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty…”

Theodore Roosevelt

If you were to read nothing past this first sentence, at least walk away with this: success takes hard work, sacrifice and dedication.

While pain may not be a requirement to doing certain things, we do agree that success should be difficult to achieve and should require some effort. This extends to building a company. In fact, it is amplified by building a company! Yet, for some unknown reason, people sometimes forget this.

Consider this blog post as a reminder. Building a company is not easy; otherwise everyone would be doing it. If your company is struggling, you should be too. You should be doing everything in your power to achieve success. Whether that means eating ramen for a whole month, downsizing the size of your staff or clocking in extra hours. We want to see you work!

Success takes sacrifices. While we aren’t advocating throwing away your personal life for the sake of business, we recommend seriously evaluating your priorities.

 -Steve Hogan, Managing Partner, Tech-Rx

AngelList Fires Back On SEC

You may have noticed AngelList’s call to action against the latest SEC JOBS Act ruling. AngelList agrees with our initial assessment of the ruling but read on for their deeper analysis of how the law will affect startups. AngelList proposes that the JOBS Act will defeat their original goal of public fundraising for startups. Reason being that the new rules will be so difficult to follow that startups will solely raise money privately. And with so many startups fundraising privately, they are lowering their chances of raising any money at all. Or they could always find the cash somewhere that is not tracked by the SEC, but does it really need to get to that point? We agree with AngelList that the JOBS Act will result in unintended consequence such as spelling out the failure of thousands of startups – as a result, further stunting American job growth. We agree that what is called for in the JOBS Act is simply unfeasible. We agree with AngelList’s proposed ideas on how to go about investment tracking. The SEC is looking for feedback on potential consequences of their proposed rules. Share your opinion now as there are only 9 days left to comment! What do you think could be possible negative consequences as a result of the JOBS Act? Share your comments here. -Nikki Griggs, Business and Marketing Associate, Tech-Rx

Pivot Du Jour

Unless you are perfect, or a psychic, a pivot is a necessity of business. Let’s face it. Things happen. Whether it be marketing to the wrong customer base, adjusting the revenue model or reacting to a new competitor; businesses need to pivot. While it is essential to pivot from time to time; it is hazardous for companies to fall into the rookie mistake of the Pivot Du Jour. The Pivot Du Jour, which translates to the Pivot of the Day, can kill your business. There is a certain art to a pivot. Most of the time, it is not accomplished easily. Pivoting solves one issue but tends to open a Pandora’s box of new problems. Now if a company were to continue on this path of pivoting every time they ran into a problem, not only would they have new issue after new issue, but they would never get anything done! In fact, when a company is turning to the pivot as a solution too often, it may bring to question the execution abilities of the team. At the end of the day, it is about accomplishments to move the company forward. While a pivot is movement, it is horizontal rather than forward. Success takes time and perseverance. While we think it is necessary to change direction when plans are not panning out, we recommend staying grounded in experience and vision. Effective pivoting is a shift in strategy, not a change of vision. In essence, learn from the past while looking toward the future. What do you think about the impact and necessity of the pivot? Even better, do you know anyone suffering from Pivot Du Jour? – Nikki Griggs, Business and Marketing Associate, Tech-Rx