License Agreement Review Checklist

It is not effective to read the agreements straight through from start to finish.  My eyes usually start to glaze over after about page 3, and after page 6 almost anything else within reach seems more interesting than the line I am on at the time.

A better way to read is to take it apart into sections.  Figure out the important points you need to know and go find those first, then go back and see how all the other words come together around the important elements.

I made a checklist to help me do this well.  When I get a new agreement I print out the checklist, then comb the agreement looking for all of these parts.  With that basic information in hand I can go back to the whole thing and pay attention to all the picky details.  As a bonus, once I force myself to find and write down the key terms I tend to understand them much more deeply.

Note that my checklist has lots of extra blank lines.  It is a work in progress and should ideally be modified every time to cover the special attributes of each deal.  Try it out and let me know what other essential terms should be included as “standard”.

It comes as no surprise, then, that the SEC has told crowdsourced lender Prosper.com that it needs to stop matching lenders with buyers on its site.  Borrowers on Prosper submit loan requests, lenders bid for them, then Prosper packages the loans and manages the borrower-lender relationships.  Borrowers and lenders never know one another’s identities.

The SEC reviewed the facts and applicable law and decided that the operation was really a sale of securities that needed to be registered, esp. based on the facts that the lenders put money in explicitly looking for a return and have essentially no ability to affect transactions- the loans are passive investments intended to make money.

Again, no great surprise here.  There is (still) a lot of capital available in retail-level amounts and it would be great to see Prosper go through the SEC registration process and come out the other side with a vehicle people can use to borrow money and to make some additional income in a novel way.

My guess is that Prosper has known this was coming for some time and was simply building enough business to make the registration process worth the expense.  The SEC reports that it has facilitated $174M in loans, so it could well be there.  I look forward to seeing them register, come back with an SEC-compliant and take a big step forward for crowdsourced securities everywhere.  Fittingly, the SEC registration documents are all public records, so maybe the next company can use Prosper’s process and SEC feedback to make the process a little smoother the next time around.

I have made a couple of loans in that period, all of which were paid back quietly and timely.  I got updates on the borrower’s businesses and it seemed like the loans had helped the borrowers a lot.  So far so good.

I got an email this evening regarding my most recent loan, which was partially repaid several months ago, but has been quiet for a long time.  The message said:

After detailed investigation by Kiva representatives, our team has determined that further repayments on your loan are highly unlikely.

The message goes on to say that 95% of Kiva loans are repaid.  Default on this loan doesn’t bother me much and I will continue to lend through Kiva.

What I liked about the message was it simple directness.  It didn’t try to sugarcoat the message.  It just came out and said “it didn’t work”.

At the same time, I had to click a link in the email to get all the facts.  In this case it was not that the entrepreneur I lent money to went out of business, but that the field partner they worked with in the country had systematically over-requested loans and kept some of the cash for itself.

This is a more serious problem for Kiva.  I really appreciate their candor in telling me I am not likely to get my money back, but if I hadn’t clicked through I would have gotten a completely different view of the problem.

I don’t mean to bash Kiva here.  They do fantastic work.  Still, the way to deal with setbacks in my book is to acknowledge them and let people know how you are going to avoid them happening again (note- this applies to multinational banking companies as well as microlenders).  I have definitely had my share of errors and setbacks, and I have found that the best way to deal with them by far has always been to address them promptly, fully and with a solution in hand.

After two months on the network we have 20 members and I have posted 153 times.  The next-most frequent members have posted 60, 30 and 6 times, respectively.  It is fair to say that the idea of network was well received, but the network itself has not been overwhelmingly popular to date.  This is a data point for me rather than a success/fail metric.

We are a completely virtual business, and also a brand new, rapidly growing organization. We are going to try a lot of different communication methods before we find ones that work best, and we will probably find that different people have different favorites.  The NY Times has these quotes that for me encapsulate the appeal of microblogging- it can be pithy and valuable for both business and social matters:

“I’m personally learning about things I wouldn’t normally hear about until we’re getting ready for a monthly board meeting,” he said. His company, with offices on both coasts and soon in London, uses Yammer. “I’m constantly sending messages about what I’m doing,” he said. “The rest of the company gets excited, and they’re using that info to communicate with customers and partners.”

Companies with many employees who work from home or in far-flung offices may get the most out of internal microblogging, which can help fill the inherent social gaps among remote workers. Even simple updates like, “Going to the dentist” or “Mopping coffee off the keyboard” can make co-workers feel more connected to one another.

It isn’t for everyone, though, and never will be.  We have a host of other online tools to communicate intra-firm: IM, discussion board, internal blogs, phones(!) and a nascent social network.  I can’t wait to see how people use all these tools.  They each have their own set of benefits and drawbacks.  We are in the throw-things-at-the-wall-and-see-what sticks-phase. I bet that over time we will start using things in ways no one ever expected.

As a social web nerd, I really enjoy watching the process unfold.  VLP is a brand-new firm with a plan to do something no one else has done before in any industry: build a major business with no offices at all.  Communication is even more critical for us than for many other businesses.  I am really looking forward to seeing what works and what doesn’t over the next year or two.

US Oil Doesn’t Come From Where You Think it Does | FlowingData

First is that most US oil comes not from the Middle East but from Canada.  Did you know that?  It may not be a geopolitical bombshell but it’s a fascinating tidbit nonetheless.

The second point is how easy it can be to find data, chart it and publish it on the web.  The post says the map came from Department of Energy data that one person dropped into an online database and cranked out into a map.  Good stuff- go web!

FreeTrademarksForStartups.com: Free Trademarks For Startups » @ErikJHeels

If your company is a bona fide startup, Erik will help you file a trademark application for free.  He is up front about the fact that he is doing this to get your future paying business as well, which sounds entirely reasonable to me. 

If you have a startup and need help evaluating your preferred trademarks and filing an application, go check Erik out.

“We found that people working in very challenging professions or settings who were technically excellent might find their work difficult unless it was also important to their mission in life,” Mr. Gardner said. An unexpected finding was that joy was a crucial ingredient of good work. Mr. Gardner said: “Take teachers in American inner cities. They may be good technically and feel deeply about their responsibility to their students. But if they don’t find joy in their work, they burn out; it’s just too hard. You have to build into hard jobs like that supports and rewards, so that what was initially meaningful and engaging will continue to be so.”

——

There are, Mr. Gardner said, three questions people can ask about their jobs to evaluate their good-work level: Does it fit your values? Does it evoke excellence; are you highly competent and effective at what you do? Does it bring you that subjective barometer of engagement, joy?

Preoccupations - Steps in the Search for Rewarding Work - NYTimes.com

Startup Salary Data from Private Company Compensation Survey

The comments on Dharmesh’s post are full of interesting data as well.

Dune - Fear is the Mindkiller (the complete Litany Against Fear is here)

Image courtesy jamesbelieves.blogspot.com

Hitchhiker’s Guide - Don’t Panic

Image courtesy of Wikipedia

I have been repeating these phrases to myself a lot recently.  Unstable economies are scary times, but energy spent being anxious and stressed is just wasted energy.  Some days I can’t get on top of the stress and end up completely exhausted, but unless I managed to do something productive in spite of my stress I am no better off.

In that vein, here is an article about strategies for getting past the anxiety and focusing on things you can control.

In the Hunt - Recession Advice for Entrepreneurs - Stay Calm - NYTimes.com

Acknowledge the anxiety, then focus past it on steps you can take to make yourself feel like you are moving toward your goals every day.  Good advice.