Friday, October 16, 2015
Recently, a number of the sports media outlets, including ESPN, the Pac-12 Network, and Fox Sports featured a company called Oculus that makes virtual reality headsets used by Stanford University quarterback Kevin Hogan, among other players, to prepare for games.
In 2012, Oculus raised about $2.4 million from roughly 9,500 people via crowdfunding website Kickstarter. Following this extremely successful crowdfunding campaign, Oculus attracted over $90 million in venture capital investment. In mid-2014, Facebook acquired Oculus for a cool $2 billion.
Oculus is only one example, but it caused me to wonder how many companies are using crowdfunding to attract venture capital, and, if so, whether that strategy is working. This study claims that 9.5% of hardware companies with Kickstarter or Indigogo campaigns that raised over $100,000 went on to attract venture capital. Without a control group, however, it is a bit difficult to tell whether this is a significantly higher percentage than would have been able to attract venture capital money without the big crowdfunding raises.
If I were a venture capitalist (and I was raised by one, so I have some insight), I would see a big crowdfunding raise as potentially useful evidence regarding public support for the company and/or product demand. Crowdfunding, in some cases, might also be a helpful check on venture capitalist groupthink and biases.
As a venture capitalist, however, the type of crowdfunding used would matter to me. In most cases, I imagine I would see a large gift-based or rewards-based crowdfunding raise as a significant positive. Gift-based crowdfunding is essentially free money for the company, and reward-based crowdfunding usually comes with minimal costs or is simply pre-ordered product. Gift-based or rewards-based crowdfunders could create some negative press for the company when the company raises outside money, as the crowdfunders did in the Oculus case (see here and here), but that seems like a relatively small problem in most cases.
In contrast, the costs and risks associated with equity crowdfunding, in the states it is currently allowed, would raise at least a yellow flag for me. Equity crowdfunding comes with so many strings attached to various small shareholders that I could see it scaring off venture capitalists. The administrative headache, plus the risk of multiple lawsuits from uninformed investors seems significant. In addition, owners who have engaged in equity crowdfunding have a smaller percentage of equity in their hands and may have raised the crowdfunded money at an unattractive valuation.
At least two of my co-bloggers have written significant articles on crowdfunding (see, e.g., here and here), so perhaps they will weigh in on whether they have seen companies using crowdfunding as a strategy to attract venture capital, whether it is working, and whether the type of crowdfunding really matters.
Friday, September 18, 2015
For many businesses a good online reputation can significantly increase revenue.
Kashmir Hill, who I know from my time in NYC, has done some interesting reporting on businesses buying a good online reputation.
Earlier this week Kashmir posted the results of her undercover investigation into the problem of fake reviews, followers, and friends. When asking questions as a journalist, those selling online reviews insisted they only did real reviews on products they actually tested.
Kashmir then created a make-believe mobile karaoke business, Freakin’ Awesome Karaoke Express (a/k/a F.A.K.E), and found how easy it was to artificially inflate one's online reputation. She writes:
For $5, I could get 200 Facebook fans, or 6,000 Twitter followers, or I could get @SMExpertsBiz to tweet about the truck to the account’s 26,000 Twitter fans. A Lincoln could get me a Facebook review, a Google review, an Amazon review, or, less easily, a Yelp review.
All of this for a fake business that the reviewers had, obviously, never frequented. Some of the purchased fake reviews were surprisingly specific. In a time when many of us rely on online reviews, at least in part, this was a sobering story. It was somewhat encouraging, however, to see Yelp's recent efforts to combat fake reviews, albeit after a 2015 article by professors from Harvard Business School and Boston University showed roughly 16% of the Yelp reviews to be suspicious or fake.
Go read Kashmir's entire article, it will make you even more skeptical of reviews you read online and small businesses with tens of thousands of friends/followers.
Thursday, July 2, 2015
Bridget Crawford (Pace Law) has posted an extensive list of law school professors on Twitter that is available here.
Previously, I compiled a list of business law professors, in both business schools and law schools, but to avoid overlapping with Bridget's list, I am only including business school legal studies professors in this updated list.
I will update the list from time to time. Updated: August 30, 2018.
Perry Binder (Georgia State) – @Perry_Binder
Jody Blanke (Mercer) – @JodyBlanke
Seletha Butler (Georgia Tech) – @ProfSButler
Kabrina Chang (Boston University) – @ProfessorChang
Peter Conti-Brown (Penn/Wharton) – @PeterContiBrown
Greg Day (Georgia) – @gregrrday
Laura Dove (Troy) – @LauraRDove
Marc Edelman (CUNY/Baruch) – @MarcEdelman
Adam Epstein (Central Michigan) – @AdamEpstein
Kevin Fandl (Temple) – @kfandl
Jason Gordon (Georgia Gwinnett) – @JMGordonLaw
Nathaniel Grow (Indiana) – @NathanielGrow
Enrique Guerra-Pujol (Central Florida) – @lawscholar
Lori Harris-Ransom (Caldwell) – @HarrisRansom
Laura Pincus Hartman (DePaul) – @LauraHartman
Kathryn Kisska-Schulze (Clemson) – @ KKisska13
Mike Koval (Salisbury) – @MikeKoval123
Jeremy Kress (Michigan) – @Jeremy_Kress
Lydie Louis (Hult) – @LydieLouis
Tanya Marcum (Bradley) – @Marcumland
Haskell Murray (Belmont) – @HaskellMurray
David Orozco (Florida State) – @ProfessorOrozco
Eric Orts (Penn/Wharton)– @EricOrts
Jennifer Pacella (CUNY/Baruch) – @ProfPacella
Marisa Pagnattaro (Georgia) – @pagnattaro
Joshua Perry (Indiana) – @ProfJoshPerry
Matthew Phillips (Wake Forest) – @mtppilot
Griffen Pivateau (Oklahoma State) – @pivateau
Angie Raymond (Indiana) – @AngRaymond
Susan Samuelson (Boston University) – @bizlawupdate
Tim Samples (Georgia) – @TimRSamples
Inara Scott (Oregon State) – @NewEnergyProf
Mike Schuster (Oklahoma State) – @Prof_Schuster
Donna Steslow (Kutztown) – @BusLawProf
Adam Sulkowski (UMass-Dartmouth) – @adam_sulkowski
Peter Swire (Georgia Tech) – @peterswire
Jennifer Cordon Thor (Oakland) – @jenthor2000
Gregory Voss (Toulouse) – @wgvoss
Whitney Westrich (Cincinnati) – @WhitneyWestrich
Eric Yordy (No. Arizona) – @EricYordy
Monday, March 30, 2015
Over the past few weeks I have posted extensively on how gambling laws treat commercial NCAA Tournament pools. However, March Madness pools are not the only form of online sports gaming proliferating on the Internet. Indeed, play-for-cash "daily fantasy sports" contests have recently become big business. Even the National Basketball Association is now a shareholder in one of these ventures (FanDuel).
With the legal status of "daily fantasy sports" still relatively unsettled, it is my pleasure to announce the online publication of sections 1-4 of my newest law review article "Navigating the Legal Risks of Daily Fantasy Sports: A Detailed Primer in Federal and State Gambling Law." This article explores the legal status of "daily fantasy sports" in light of both federal and state gambling laws, and explains why the legal status of such contests likely varies based on both contest format and states of operation.
The full version of this article will be published in the January 2016 edition of University of Illinois Law Review. In the interim, I welcome any thoughts or comments.
Thursday, March 12, 2015
This Sunday, the NCAA will announce the 68 basketball teams that are scheduled to participate in this year's men's basketball tournament. Then, the true "madness" begins.
At many schools, one or more professors will likely organize an NCAA Tournament pool. The pool will likely include entry fees and prize money. The pool's rules and standings will often appear on a public website.
All of this may sound like innocuous fun -- especially during the anxiety-ridden days of waiting for ExpressO and Scholastica acceptances to arrive. However, law professors playing in online, pay-to-enter NCAA Tournament pools technically are acting in violation of several federal laws -- albeit, laws that are rarely enforced,
One federal law that seems to prohibit online, pay-to-enter NCAA Tournament pools is the Interstate Wire Act of 1961. This act disallows individuals from “engaging in the business of betting or wagering [through the knowing use of] a wire communication for the transmission in interstate or foreign commerce.” According to various recent court decisions, the Wire Act applies to contests hosted via the Internet, as well as those hosted over the phone. And even though the act was originally passed to crack down on organized crime, even "upstanding" individuals such as law professors, at least in theory, are not immune from prosecution.
A second federal law that seems to prohibit online, pay-to-enter NCAA Tournament pools is the Professional and Amateur Sports Protection Act ("PASPA"). Passed in 1992 at the behest of America’s five premier professional sports leagues (including the NCAA), PAPSA makes it illegal for any private person to operate a wagering scheme based on a competitive game in which “professional or amateur athletes participate." Of course, PASPA includes a grandfather clause that exempts previously authorized government sponsored sports gambling in four states -- Nevada, Delaware, Oregon, and Montana. But it doesn't include any exception whatsoever for private March Madness pools.
Finally, a third federal law that may disallow online, pay-to-enter NCAA Tournament pools is the Uniform Internet Gambling Enforcement Act. This act, which was passed most recently in 2006, makes it illegal for those "engaged in the business of betting or wagering" to “knowingly accept” funds in connection with the participation of another person in unlawful Internet gambling. Although the UIGEA offers a special carve-out provision for “fantasy sports,” this carve-out does not apply to March Madness pools because winning outcomes are based on the final score of actual game results, and not individual player performances.
Of course, the likelihood of anyone going to jail for simply participating in an online NCAA Tournament pool may seem next to nil. But if you are going to play in one of these contests, I have two simple recommendations: (1) let someone else other than you collect the money; and (2) encourage the host to 'grade' the brackets by hand, rather than posting contestant names and picks on an Internet website.
Thursday, February 26, 2015
Startup Stash is a beautifully simple set of curated resources for entrepreneurs. The categories of resources range from Naming to Hosting to Market Research to Marketing to Legal to Human Resources to Finance. And more.
As a law professor, I was obviously most curious about the legal resources. The list has the controversial and well-known Legal Zoom, but also has some relatively unknown resources. For example, UpCounsel ("get high-quality legal services from top business attorneys at reasonable rates") was new to me. You can see the full list of legal resources here.
As previously stated, the Startup Stash list is curated, so there are only 10 legal resources, all of which look interesting, if also potentially dangerous for those without legal training. As I tell my business students, an ounce of prevention is worth a pound of cure and consulting with a knowledgeable attorney early in the start-up process can be invaluable.
Wednesday, January 21, 2015
One week after the SEC levied the largest dark pool trading violation fine against USB, a group of nine banks (including Fidelity, JP Morgan, BlackRock, etc.) introduced a new dark pool platform, an independent venture called Luminex Trading & Analytics. Dark trading pools are linked to the role of high frequency trading and the notion that certain buyers and sellers should not jump the queue and shouldn't be the first to buy or sell in the face of a large order. The financial backers of Luminex were quoted in a Bloomberg article describing it as a platform "where the original purpose of dark pools, letting investors buy and sell shares without showing their hand to others, will go on without interference."
The announcement raises public scrutiny about dark pools, but among financial circles (like those at ZeroHedge, it is being touted as a smart self-regulatory move by the major mutual funds to prevent the money leach to HFT's, which some seeing as the beginning of the end for HFTs.
If you are looking for more resources on dark pools and HFTs-- there are two brand new SSRN postings on the subject:
- Chris Brummer's Disruptive Technology and Securities Regulation
- Andreas M. Fleckner, Regulating Trading Practices
Friday, January 2, 2015
One of my new year's resolutions for 2015 is to fast from e-mail every Saturday. Now that I have posted this, my co-bloggers and readers can keep me accountable. Currently, I probably check my e-mail 20+ times a day, every day -- a habit formed during law firm life.
I thought about fasting from the internet/electronics entirely on Saturdays, and I am still going to try to avoid the internet/electronics on Saturdays as much as possible, but I wanted to set a realistic goal.
An acquaintance of mine in New York City, Paul Miller, went without the internet for an entire year (with less promising results than he had hoped). While I remember a time before the internet -- and a time when the internet was so slow it was almost useless -- it is hard for me to imagine going without the internet for a week, much less for a year. That said, I think it healthy to loosen the electronic leash a bit every once in a while.
I'd also like to cut back the number of times I check e-mail and the amount of time I spend responding to e-mails in general. If any readers, have suggestions on the appropriate amount of time on e-mail (for a professor), I would be interested. Obviously, it may vary a bit from week to week, but I am thinking about moving to checking e-mail twice a day during the week for 15 minutes each. I think this will allow me to continue being "responsive" to students and colleagues, but will also free up a great deal of time. Most of the longer e-mails I write could probably be much shorter or would be better as conference calls or in-person meetings.
What are your 2015 resolutions, or are you among the roughly 55% who do not set new year's resolutions?
Sadly, according to one study, only about 8% of people keep their new year's resolutions. For those of you who have set new year's resolutions, here is Professor Cass Sunstein with advice for keeping resolutions. Also, StickK.com (co-created by Yale University economics professor Dean Karlan) is a website where you can create commitment contracts, appoint a referee, and set the stakes for achieving or failing to reach your goals.
Friday, December 26, 2014
Over the past few months, I have received a number of e-mails from the alumni associations of each of my two former law firms.
In theory, I think these alumni networks are good ideas. They could help us keep in touch and could introduce us to people with common ties to those law firms. They could also help the law firms maintain ties with alums who could become clients.
In practice, however, I rarely use any of the alumni services offered.
One of the main reasons is that my former firms do not have offices where I currently live (in Nashville) and they rarely, if ever, have events here. If I still lived in Atlanta or New York City, I would probably attend some of the offered alumni CLE events, but I am probably never going to travel for them.
As to the online alumni networks on the law firms' websites, I think the contact information for alums probably stays relatively out of date (as people choose to update their information on major social networks, but may forget about the ones at the law firms). LinkedIn law firm alumni groups are probably the most useful thing that the law firms do, but I find the content posted there is generally not that helpful and can be dominated by some desperate group member salesperson. (I also think LinkedIn is the least user friendly of the major social networks, but that is a topic for another post).
What law firm alumni network efforts have you seen be successful? Are they worth the effort that major law firms seem to be putting into them?
Sunday, September 21, 2014
Frank Pasquale on “how masterful manipulation of the law has allowed tech and finance giants to grow incredibly fast”
Like many people I know, I am a huge fan of Frank Pasquale. Thus, I was very excited to read his Balkanization interview (available here) discussing his forthcoming book, “The Black Box Society.” The interview touches on a wide range of topics, so you should go read the whole thing, but here is an excerpt to tempt you in case you’re on the fence:
I think our academic culture is very good at analysis, but oft-adrift when it comes to synthesis. Specialization obscures the big picture. And law can succumb to this as easily [as] any other field. For example, in the case of internet companies, cyberlawyers too often confine themselves to saying: “Google and Facebook should win key copyright cases, and subsequent trademark cases, and antitrust cases, and get certain First Amendment immunities, and not be classified as a ‘consumer reporting agency’ under relevant privacy laws,” etc. They may well be correct in every particular case. But what happens when a critical mass of close cases combines with network effects to give a few firms incredible power over our information about (and even interpretation of) events?
Similarly, old banking laws may fit poorly with the new globalized financial landscape. Finance lawyers churn out position papers dismantling the logic of Dodd-Frank, Basel, Sarbanes-Oxley, etc. But if too-big-to-fail firms keep growing bigger, assured of state support, while everything else the government does is deemed contingent: what kind of social contract is that?
The lawyers of the Progressive Era and the New Deal dealt with similar challenges: massive firms that warped the fabric of economic, political, and even cultural life to their own advantage. They consulted the best of social science to recommend regulation—but they didn’t let some narrow field (like neoclassical economics) act as a straitjacket (as, say, antitrust lawyers of today are all too prone to do).
Monday, September 15, 2014
Crowdfunding site GoFundMe recently removed the funding page for a person looking to crowdfund her abortion. Past crowdfunding campaigns have funded fertility treatments, gender confirmation surgeries, organ transplants, and other medical procedures and treatments. Watsi is an entire crowdfnding platform dedicated to financing medical care for patients through donations. While I usually research and write about crowdfunding business entities and projects, the crowdfunding of medical procedures and treatments has gotten more and more traction with those needing or wanting financial assistance for expensive medical care. It seemed like a good time to say something about it . . . . But what to say?
Friday, August 15, 2014
I have updated our Business Law Professors on Twitter List with some professors I met at the ALSB conference last week.
Tweets from the recent professor additions to the list are below.
Men hold 82% of s&p board seats. Are legal mandates the answer? http://t.co/p6piAY0D2e— Kabrina Chang (@ProfessorChang) August 12, 2014
Out today! Teaching an Old Dog New Tricks: Adapting Public Utility Commissions to Meet Twenty-First Century Climate …http://t.co/wYWFunn94R— Inara Scott (@NewEnergyProf) August 13, 2014
Monday, August 4, 2014
"[P]ushing its students to understand business and technology so that they can advise entrepreneurs in coming fields. The school wants them to think of themselves as potential founders of start-ups as well, and to operate fluidly in a legal environment that is being transformed by technology."
The article also highlights University of Colorado's Tech Lawyer Accelerator.
Fascinating stuff. What is your school doing, if anything, on this front?
Friday, July 11, 2014
I've updated our business law professors on Twitter list here.
Below are tweets from some of the new additions to the list.
Bankruptcy bedtime stories and what's amazing about law school: http://t.co/VFvzHW2Naw— Stephanie Ben-Ishai (@SBIprof) October 17, 2013
Warren Buffett: The Babe Ruth of Good Business Today http://t.co/1g2UYLc81E— Lawrence Cunningham (@CunninghamProf) July 7, 2014
Oman & Meese offer an "epic take down" http://t.co/ndr8ptb5M1— Nathan B. Oman (@nate_oman) June 3, 2014
A New Business Model (and they make a fine deli sandwich too!) "At Zingerman’s, Pastrami and Partnership to Go" http://t.co/WgRiIXshk8— Len Rotman (@ProfessorRotman) July 7, 2014
Thursday, April 10, 2014
Continuing with the theme, I want to highlight a new hybrid resource, JURIFY, which is a mostly-free, online transactional law resource.
“Jurify provides instant access to high-credibility, high-relevance legal content, including forms and precedent in Microsoft Word® format written by the world’s best lawyers, white papers and webinars from top-tier law firms, articles in prestigious law journals, reliable blog posts and current versions of statutory, regulatory and case law, all organized by legal issue.”
Here are the stats: Jurify, launched in 2012, covers 5 broad transactional areas: General Corporate, Governance, Mergers & Acquisitions, Securities and Startup Companies. The 11,000+ sources that the website currently contains have been verified by transactional attorneys and generated from free on-line platforms or submitted by private attorneys who are voluntarily sharing their work. Documents are organized according to 586 tags. Three transactional attorneys started this website (husband/wife duo and their former law-firm colleague); none take compensation from editors, publishers or law firms.
Jurify is a unique transactional law resource for the following reasons:
- FREE (mostly). Website contents including primary law, secondary sources and template agreements and forms. All content is searchable; most is free; some templates/forms, available in Microsoft word version, require either a fee or a paid membership. In the future, Jurify founders hope to generate revenue by providing performance metrics and career services components.
- Emphasis on Primary Sources—collecting the most current and complete versions of governing statutes, and here is the important part—putting relevant sources together. Want to find out registration obligations? A search on Jurify will pull from several different sources to give you a comprehensive look at the governing law.
- Organization. The website resources are organized in a consumer-friendly, vertically integrated platform (like the searching functions on YouTube). If you search for one term of art, (the example used was break-up fees), the search results pull all related terms of art (i.e., termination fees, reverse break-up fees, etc.). The data base has been encoded with 1600 corporate law synonyms in the platform to facilitate more robust natural language searches.
- Multiple search modes (i.e., accessible for the novice). Non-experts can search for information using tags and drop down boxes to sort information by source type (news articles, videos, journals, statutes and regs, etc.). The site also includes a glossary of terms, and those terms serve as searchable categories that have documents associated with them.
- Narrowing the field. You don’t need every document- you just need the right document. Researchers can narrow search results through subcategories, which include definitions on all of the subcategories to assist the non-expert (i.e., students, generalist attorneys like some in-house teams). Within general categories, researchers can also conduct granular searches within a topic and can narrow by specific fields (i.e., M&A).
- Sorting the results. Search results are displayed in order of relevance. Relevance, in Jurify, is determined by the tags assigned by Jurify attorneys reviewing and labeling each document in the database. While a document may have 15 tags, 2 or 3 tags will be the primary tag, and the document will be flagged as “noteworthy” for that particular topic. The idea is that you review the most relevant documents first not just any document that contains any reference to your search fields.
- Networking Component. Some of the documents are voluntarily provided by practicing attorneys and their names remain associated with the document(s). If an attorney wants to establish herself as an expert in an area, she may do so in part, by contributing high-quality documents on that topic. Top contributors are highlighted on the website, using in part, a Credibility Score. In the future, a ranking/review feature will be added so that users can provide feedback on the quality/relevance of a document as well.
Erik Lopez, co-founder of Jurify, contacted the BLPB editors earlier this spring. As a result, I test drove the site with Erik a few weeks ago, which formed the basis of my comments above. Thanks Erik! (Note: Neither BLPB nor I, individually, received any compensation as a result of this post. I am passing it along because I genuinely am intrigued by the platform, business model, and potential for the website to be a valuable transactional resource.)
If anyone currently uses Jurify, or test drives the site after reading this post, please share your experience in the comments.
Thursday, February 20, 2014
Our BLPB group has had a number of email discussions recently about the use of social media including blogs, Facebook, LinkedIn and Twitter for professional purposes. My home institution has discussed the same topic and even held a “training” session on technology in and outside of the classroom. Because I am a heavy user, I volunteered to blog about how I use social media as a lawyer and academic in the hopes of spurring discussion or at least encouraging others to take a dip in the vast pool of social media.
Although I have been on Facebook for years, I don’t use that professionally at all. I also don’t allow my students to friend me, although I do know a number of professors who do. I often see lawyer friends discussing their clients or cases in a way that borders on violations of the rules of professional conduct, and I made sure to discuss those pitfalls when I was teaching PR last year.
I have also used LinkedIn for several years, mainly for professional purposes to see what others in my profession (at the time compliance and privacy work) were thinking about. I still belong to a number of LinkedIn groups and have found that academics from other countries tend to use LinkedIn more than US professors. I have received a number of invitations to collaborate on research just from posts on LinkedIn. I also encourage all of my law students to join LinkedIn not only for networking purposes, but also so that they can attract recruiters, who now use LinkedIn almost as often as they use headhunters. When I blog, I link my posts to LinkedIn, which in turn automatically posts to Twitter.
I admit that I did not like Twitter at first. I now have three Twitter accounts- follow me at @mlnarine. I started using Twitter when I was a deputy general counsel and compliance officer and I followed law firms and every government agency that was online that regulated my industry. The government agencies were very early to the Twitter game and I once learned about a delay in the rollout of a regulation via Twitter a full week before my outside counsel who was working on the project informed me.
I also use the hashtag system (#) to see what others are saying on topics that hold my interest such as #csr (corporate social responsibility and unfortunately also customer service rep), #socent for social enterprise, #corpgov for corporate governance, and #Dodd-Frank and #climatechange (self explanatory).
I make an effort to tweet daily and am now an expert in trying to say something useful in 140 characters or less (being on yearbook staff in high school and counting characters for headlines made this a breeze for me). I re-tweet other tweets that I believe may be of interest to my followers or links to articles, and often gain new followers based on what I have chosen to tweet, largely because of my use of hashtags. In fact, after a marathon tweeting session following the Dodd-Frank conflict minerals oral argument before the DC Circuit Court of Appeals, I received four calls from the press for interviews, a nice, unexpected benefit of trying to educate my followers. Often when I attend conferences, such as last week’s ABA meeting or the UN’s Business and Human Rights Forum, the organizers develop a hashtag so that those who cannot attend in person can follow the proceedings through tweets and the attachments to those tweets.
The best part of twitter is that I met fellow blogger, Haskell Murray because of one his tweets and that led to an invitation to speak at a conference. Haskell has published a useful list of business law professors on Twitter so if you’re not on his list, let us know and we will update it.
Next week I will post about the benefits or perils of blogging, especially for someone new to academia.
February 20, 2014 in Anne Tucker, Business Associations, Conferences, Corporate Governance, Corporations, Current Affairs, Entrepreneurship, Ethics, Haskell Murray, Marcia Narine Weldon, Social Enterprise, Stefan J. Padfield, Teaching, Web/Tech | Permalink | Comments (0)