Monday, December 10, 2012

A New Resource For Startups- LiquidSpace

You’re a startup company about to schedule an important meeting and a local coffee shop just won’t cut it. Or you’re doing business in a strange city, and need a temporary space to set up shop.  We’ve recently been introduced to a compelling new service that just might be the solution - Liquidspace.
Liquidspace will direct you to an array of nearby work spaces custom fit to your needs. Search criteria includes location, time, specific date, cost, and “how I work”.  Space can be reserved with a click of the button  both online, or through a mobile app. 

Visit LiquidSpace here

Tuesday, July 24, 2012


We are fortunate to work with a number of startups and small companies throughout the Northern California area. One of the benefits of working with a diverse number of firms is that we are able to see what third-party tools our clients are using, how those tools increase productivity, and whether we should recommend those tools to our other clients, friends, and associates.

The tools that follow are some of our current “favorites” for conceiving, launching, and operating a small business. These tools span the range of tasks from helping you develop your business plan, minimize the effort associated with expense reports, simplify collaboration, and help you find co-working or office space for your expanding business.

We have no professional affiliation with the firms that produce these tools, nor do we receive any financial benefit from recommending them. We are merely highlighting these products as tools we like and we would welcome your thoughts on your list of “favorites” that you use in your business. Feel free to comment at the end of this blog or drop us a line at

Launching Your Business

Creating the technology for a new idea is a difficult and challenging task. Thinking through all of the nuances of how that technology will be marketed, the resources that you need to acquire, and the legal structure of the organization you’re going to create can be even more daunting. To help reduce these challenges, follows are a few of our favorite tools that we believe can help entrepreneurs and small business launch.

Business Model Canvas

The Business Model Canvas is a strategic management template for thinking through the primary elements of your new, or existing, business model. The template is a visual chart with sections that describe an organization’s:image
  • Value proposition
  • Infrastructure
  • Target Customers
  • Retail Channels
  • Cost Structure
  • Revenue Stream
It is a favorite of ours as it requires the user to think through and describe the fundamental elements of their business model in a single page. The template serves as a foundation to foster the resources required to launch a new business or to give thought to pivoting an existing one.  Each of the attributes of the business model are identified and in turn, allow for those elements to be organized and described in a logical fashion.

The tool serves as a starting point to envision your current business model and think through the attributes needed to design, launch, and market your product or service. More importantly, once the key elements are identified, the template provides the framework to adjust one or more attributes of the business model in order to address potential changes in market conditions.

We also like this tool as it raises financial awareness of topics that may not be considered by a burgeoning company until well after they have started development of their product or service. For example, the tool raises questions such as:
  1. Value - will the product or service strive to minimize cost and offer limited frills (Cost-Driven such as CityShare) or be less concerned with cost and focused on creating brand value (Value Driven such as Louis Vuitton)?
  2. Cost Structure – what will be the primary components of fixed and variable costs of the business model? How will economies of scale or economies of scope change this cost structure?
  3. Revenues Stream(s) - What are the ways that the company will make income from each customer segment? Will it be the sale of physical goods, a usage fee, subscription fees, licensing, advertising fees, or some other method?
The Business Model Canvas is offered free of charge and can be downloaded from the Business Model Foundry here.

Orrick, Herrington & Sutcliffe LLP

The Emerging Companies team at the law firm of Orrick, Herrington, & Sutcliffe has made available (for free) an extensive collection of legal templates for use by startup and small companies. While these templates are not a substitute for legal counsel, they do provide an excellent foundation for entrepreneurs and small business owners imageto become aware of and to understand the multitude of agreements that are typically associated with forming a company, offering employment, establishing equity plans, assigning inventions, or issuing debt or equity to outside investors.

The library is broken down into:
  • Company Formation
  • Founders’ Stock Purchase Agreements
  • Director and Officer Related Documents
  • Employment & Consulting Documents
  • Technology Related Documents
  • Equity Compensation Documents
In addition to the template library, Orrick also offers an interactive Term Sheet Creator that allows users to create drafts of start-up and venture financing documents based on responses to a series of interactive questions. It offers a step by step, “fill-in-the-blank” process that helps users create an initial draft of documents while simultaneously providing explanatory text for the legal tradeoff of each topic. The documents offered on the Orrick library are free and the templates may be accessed here and the term sheet creator accessed here.

Collaboration Tools

As employees become more mobile and teams are spread across time zones, working efficiently together online has become increasingly important to both small and large businesses alike. Following are three of our favorite tools that we use on a regular basis to communicate with clients, service providers, and our internal team: & Screenleap

For many years the market for broadcasting your desktop and screen sharing has been dominated by providers such as WebEx and GoToMeeting. Both of these products are excellent but their pricing plan and feature list are geared more toward large corporates and multi-nationals rather than to startup companies and small businesses.

image and Screenleap offer two excellent alternatives to Web-ex and GoToMeeting. Both services integrate screen sharing, voice over IP, multi-monitor support, online chat and the capability to send files back and forth between recipients during a screen sharing session.

While and Screenleap are both intuitive and extremely easy to use, Screenleap offers the added capability of one-click sharing of the desktop – i.e. it does not require the download and installation of additional software to use its service. Any internet device with an internet browser will work and the sharing of your desktop can be achieved in less than 30 seconds. In addition, Screenleap has recently added the capability to launch their service directly within your Gmail account – allowing users to instantly share their screen with their contacts or email addresses.

Screenleap presently provides its services for free and offers both a free and premium service level.


Insightly is a one-stop application that integrates CRM (Customer Relationship Management) with task and project management imagecapabilities in an easy to use, intuitive interface. The service offers users the ability to easily link contacts to individual tasks, projects and opportunities in a single location while offering the portability and accessibility of a cloud-based program.  It organizes data in an extremely intuitive fashion – utilizing domain names to assign messages to organizations and individual email addresses to link information to specific people.
Some of the features that we like the most are:

Automatic Address Book – as emails are saved, Insightly adds new contacts and organizations automatically to your online address book. One of the nicer features is the program’s ability to search the Internet for additional information about that contact or organization and pre-populating the address book with that information. For example, when a new organization is input or captured, the service automatically scans the Company’s web page for its logo and background description and adds those items to the address book. Furthermore the service constantly scans for current news items on the company so that users are alerted of new events relating to that contact.  In addition, the address book has a variety of sharing options – allowing users to share contacts with specific co-workers or their entire company depending on the settings that are selected.

Mobile Web App - Another great feature of the service is its mobile web app that allows users the ability to access all of the information related to a contact, task, or project while on the go. The native phone app is very useful – particularly when travelling without a laptop.

Insightly is offered free of charge for up to three users and then offers tiered monthly pricing plans that peak at $5 / user.

Accounting for Your Business

Ensuring that the financial records of your business are accurate is a cornerstone of any successful company. However, many of the financial record keeping tools available to small business owners are often difficult to use or challenging for those who don’t work with numbers every day. Two tools that we suggest that you consider to make accounting easier include:


Expensify describes itself with the tagline “Expense Reports That Don’t Suck” and true to their description, their product substantially improves on the standard expense workflow of most small businesses.

Expensify is a business expense management app that streamlines reporting by centralizing all activities from expense recording to reimbursement. Users are able to import expenses from their credit card or mobile payment apps, create expense reports with one click, forward their reports for approval electronically, and receive reimbursement through electronic payments such as Direct Deposit or PayPal.

The system offers a variety of tools tied to a user’s mobile phone including:
  • the ability to scan receipts and create an expense report with one-click;
  • automatically capture business mileage via GPS tracking, and
  • automatic synching of expense activities between the mobile phone and online storage.
Most importantly however is that Expensify offers a “Guaranteed eReceipt” solution that removes the countless sorting of paper receipts that creates the most cumbersome, time-intensive, and generally worst aspect of preparing an expense report. This “Guaranteed eReceipt” system allows the ability to import expenses directly from your credit card account in order to create full digital replacements of paper receipts for purchases under $75. These eReceipts are fully compliant with IRS regulations pertaining to expense recordkeeping.

The Expensify service integrates with a variety of accounting packages, Google Apps, Evernote, Freshbooks, and Salesforce. The Company presently counts more than 90,000 organizations and 650,000 individuals users who the service to process 10,000 receipts and $2 million in expenses every day. The service is offered free of charge for personal use and charges $5 / expense reporter / month for Company plans. In addition, the pricing plan only charges users in a given month if they submit an expense report – so there is no need to turn on or off users during periods when they may not be incurring expenses.

Wave Accounting

Wave Accounting is a cloud based accounting system that is geared specifically toward small businesses and solo entrepreneurs.

The single greatest distinction of Wave from other online accounting systems is all of the features of the service are available to the user free of charge. Wave accomplishes this “no price pricing model” by selling small portions of their screen space to advertisers who are specifically targeting small businesses. These advertisers include corporations such as American Express, Dell, HP, Microsoft as well as smaller businesses in the user’s regional area.

From an accounting standpoint, the service is a fully integrated financial system that features double-entry accounting, a wide array of financial statements and reports, full general ledger access, unlimited invoicing and expense tracking, accounts receivable and payables tracking, an ability to track sales tax, gains / losses on foreign exchange transactions, as well as the ability to integrate online banking and credit card accounts.

For business owners that may have more than one business, Wave also allows users to have multiple companies under a single user account – allowing the ability switch between financial records without requiring separate logins, passwords, and email addresses.

A downside of Wave Accounting is that it presently does not offer full payroll integration for customers in the United States. This is a feature that is presently under development and is anticipated to be available at the end of 2012.

For any organization that this just starting up and is in need of an easy to use and intuitive accounting system, we suggest that you give Wave a try. The advertisements are un-intrusive, the accounting system works well, and the service is offered completely free of charge.

Office Space

Whether your company is just beginning or up and running and growing quickly, finding optimal office space is always a challenge. In markets such as San Francisco and Palo Alto, finding office space is even more difficult as companies compete for, and drive up the cost of, available offices. The following include a couple of tools that we like that help small businesses quickly find (and price) available real estate and as well as perform design planning for their space.

42 Floors

imageFor companies in the San Francisco Bay Area, 42 Floors offers a free service that allows users to “discover their dream office”. Using a map interface, 42 Floors displays available office space by city, square footage, price per square foot, or by zip code or neighborhood. Once the user has made their selection, 42 Floors displays a variety of real estate alternatives ranging from traditional leased space, sub-lease options, or for small organizations, co-working offices. Users can easily sort results by the size of space, cost, or those listings with pictures of the physical space. Users are then able to click through each particular listing to see the specific lease details, contact information, and the visual media associated with the office space.

T3 Advisors

T3 Advisors offers a similar oimagenline service as 42 Floors, but their Launchspace tool focuses exclusively on “flexible space” options for entrepreneurs who are seeking short term office solutions. In addition to being able to filter by the office location, the T3 tool provides the capability to sort by distance from BART or Caltrain stations – a convenient tool given the commuting patterns of those in the Bay Area.

Turnstone Space Planning App

Turnstone (a division of Steelcaseimage) offers furniture specifically designed for increasing collaboration and tech-enabled mobility. As part of their overall product strategy, Turnstone has released an IPad app that allows users to take photos of physical space and overlay three dimensional models of furniture to create “virtual staging” of a particular location. Furniture can be combined, rotated, and viewed from a variety of angles to see how pieces will best fit in a given physical space.
In addition, the tool provides a traditional overhead view that can be used in space planning – very useful when comparing the layout of one office alternative to another.
The Turnstone app is offered free of charge and is available in the iTunes store as well as on Turnstone’s website.

We hope that you find the tools in this article useful and would greatly enjoy hearing your thoughts. Please feel free to drop us a note to

Burkland Associates

Small, growing companies are often the most in need of expert financial guidance, but struggle to find it cost-effective to hire a seasoned, full time CFO. Burkland Associates offers these companies part-time CFO services, enabling senior management to meet or exceed goals by utilizing our expert strategic planning, financial administration, operations development and fundraising assistance while keeping the budget in check.

If you would like more information about these tools, or need help preparing your business for strategic growth or fundraising, please contact us at 415-944-8215 or at

Wednesday, May 16, 2012

Finance Advisory: 2012 JOBS Act Becomes Law



As you may have seen in the press last month, the Jumpstart Our Business Startups Act (“JOBS Act”) was signed into law.  This is the first piece of legislation in recent history to specifically improve access to capital for startups, small, and medium sized businesses.
The JOBS Act is targeted toward “emerging growth companies” - those firms with less than $1 billion in annual revenues - to allow them to raise capital more freely while concurrently reducing the compliance requirements of disclosure and accounting regulations.   The Act features substantial changes to Pre and Post IPO funding activities that will help emerging companies gain access to, and comply with, the various procedures of raising capital.

Pre-IPO Funding Opportunities


One of the JOBS Act’s most intriguing features includes a new exemption from securities registration for private companies raising capital via “crowdfunding” - or private financing through the aggregation of a number of small investors.  While prior regulations restricted the offering of un-registered securities to accredited investors only, private companies may now issue up to $1 million of non-registered securities to the general public during any twelve month period.  

Further enabling investment by the general public, investors no longer need to meet the standard of being an accredited investor.  Instead, the JOBS Act simplified guidelines to allow individuals to make investments during any 12 month period equal to the greater of:
  • $2,000 or
  • 5% of annual income or net worth if annual income or net worth is less than $100,000 or
  • 10% of annual income or net worth, up to $100,000, if annual income or net worth exceeds $100,000
In addition to expanding the pool of potential investors, the disclosure requirements for these types of investments has been reduced to:
  • The names of directors, officers and stockholders with a greater than 20% equity share
  • A business plan
  • The target offering amount
  • Financial statements
  • A description of the use of proceeds
  • The final offering price
  • Description of current ownership and capital structure
Of particular note is the relaxation of the requirement that companies have audited financial statements.  A company that is issuing less than $100,000 of securities will only need to have its financial statements certified by its Chief Executive Officer.  For security offerings greater than $100,000, financial statements will need to be either reviewed, or audited by, an external accounting firm:

Funding Amount
Certification Required
Up to $100,000
CEO Certified Financial Statements
$100,000 - $500,000
Reviewed Financial Statements
Audited Financial Statements

Crowdfunding Portals

In order to provide some structure to the investment process, the JOBS Act requires that all crowdfunding offerings be conducted via a broker or funding website specifically designed to handle these types of offerings.   These third-party intermediaries – who themselves will be required to be registered with the Securities and Exchange Commission – will be required to implement “know your investor” procedures to ensure that potential investors are sufficiently knowledgeable to participate in a crowdfunding offering.   
Postponing the Requirement to Go Public – another pre-IPO attribute of the JOBS Act is a reprieve from the requirement that companies must go public if they take on more than 500 investors (which under the old standard included employees who owned company stock).  Under the new Act, organizations may hold off on going public until they have 2,000 investors - and employee owners are specifically excluded from the definition of investors. 
As a result of this change, companies will be allowed to stay private for longer periods provided that they have access to capital other than public equity.  This delay should provide companies with more flexibility to choose when and how they enter public markets as well as improving the quality of companies that eventually go public.       

Post IPO Relief

For companies that choose to go public, the JOBS Act modified a number previously restricted activities related to the pre and post IPO process:

Lifting of the General Solicitation Ban

Following the passing of the JOBS Act, organizations are no longer required to follow the “general solicitation” ban for investments – meaning they can advertise that they are raising funds during the very early stages of their formation, even before having a product.  This advertising can help to establish brand awareness for the company, build interest for an investment, and when ready, use that enthusiasm to help raise investment funds.  

As a firm readies its formal registration statement, the company will be able to measure investor sentiment by communicating with qualified institutional buyers and accredited investors before the registration statement is filed with the SEC.  This “pre-listing” feedback can greatly strengthen the success of the company’s IPO by allowing the firm to adjust the terms of its offering in accordance with the sentiment received by would-be investors.  

Lifting of Research Restrictions

The JOBS Act also lifted restrictions on the publication of equity research and now provides for reports to be released before, during and immediately after an IPO.  Research analysts will also be able to participate in meetings with an emerging growth company alongside investment banking personnel – a practice that was prohibited following legislation enacted in 2003. 

Reduction of Sarbanes Oxley Paperwork

One of the most anticipated aspects of the JOBS Act is the creation of an IPO “on-ramp” that allows companies with less than $1 billion in revenues to gradually come up to speed with Sarbanes Oxley (SOX) compliance and disclosure requirements.   For the first five years following its IPO, an emerging growth company will not have to comply with many of the SOX requirements including: 
  • obtaining an auditor’s certification on internal control over financial reporting required by section 404(b) of the Sarbanes-Oxley Act of 2002
  • disclosing details of executive compensation
  • complying with requirements to rotate audit firms
  • disclosing sensitive information or trade secrets
This post-IPO “on-ramp” period should help emerging growth companies prepare for SOX requirements while postponing the expense and administrative burden required to become SOX compliant.    

Pitfalls of the JOBS ACT

While the JOBS Act will increase the opportunity for small companies to raise capital and decrease compliance effort and expense, there are potential pitfalls that companies and investors should be aware of.   Specifically:

·        Corporate Officers Could Be Exposed to Personal Liability - Companies that accept crowdfunding expose their officers to personal liability and those officers may be sued for their personal assets.  As a result, many of the protections afforded to entrepreneurs by the corporate veil will be lost – thereby significantly reducing the attractiveness of crowdfunding as a source of new capital.  

·        An inability to rank funding opportunities – Crowdfunding websites are prohibited from providing investors with recommendations on potential investments.  As a result, it may be difficult for would-be investors to assess and rank individual opportunities without some form of professional investment advice.   

·        People will lose money – the JOBS Act expands the pool of would-be investors by lowering the income and net worth thresholds to provide for a larger investing audience.  Unfortunately, many of these new investors have no experience investing in small businesses and are unlikely to be fully cognizant that many startups fail.  As a result, these investors will likely lose money and could, over time, deter other would-be investors in participating in crowdfunding opportunities.    

·        The JOBS Act is a work in process – following the passage of the JOBS Act, the Securities and Exchange Commission was provided 270 days to draft the regulations that will govern the implementation of the new law.  As a result, the practical use of the JOBS Act is still a work in process and the implementation of the law may be more restrictive than originally anticipated.  Furthermore, due to the compressed time frame in which to enact the regulations, it may be impossible to foresee all of the pitfalls that are created by this new funding opportunity.   

Download a hardcopy of this entry here

About Burkland Associates

Small, growing companies are often the most in need of expert financial guidance, but struggle to find it cost-effective to hire a seasoned, full time CFO. Burkland Associates offers these companies part-time CFO services, enabling senior management to meet or exceed goals by utilizing our expert strategic planning, financial administration, operations development and fundraising assistance while keeping the budget in check.

If you would like more information about the 2012 JOBS Act, or need help preparing your business for strategic growth or fundraising, please contact us at 415-944-8215 or at

Thursday, January 19, 2012

Six Steps to a Successful Series B

A successful fundraising is never an accident.  As any entrepreneur will tell you, fundraising can be maddening – explaining your business model over and over again, providing endless references, projections and legal documents – but it is also essential.  It’s the fuel that drives your engine, and empowers you to deliver a top-notch offering to more and more customers.  

So, how can you be more efficient, and increase the likelihood of success in the Series B fundraising process?  First, understand that a Series B is different than your earlier fundraises: Before, you may have gotten the checks simply with an awesome team and compelling vision.  Perhaps you even had a beta offering, with some initial customer interest.  But, by the time you’re looking for a Series B, you better be ready to show something more.  

Here are six basic steps to expediting the Series B process:

1.       Plan for Success.  At least a year before you need the money, think about what level of company performance you need to be evidencing to investors.   What milestones will show that your company is resonating with customers, and is well on its way to dominating its market?  How many customers, what key customers, how much revenue, and what key metrics – churn, acquisition cost, margins – are going to “wow” those investors?  These should drive activities through the year.
2.       Show Traction / Proof Points.  For one Burkland Associates SaaS client, the most-important metrics included Contracted Monthly Recurring Revenue (CMRR), churn, and Customer Acquisition Cost (CAC): for this client, these were the Series B “proof points in the pudding”, evidencing that our client had a product that more and more customers needed to have, that the sales team was finding its sweet spot, that our customer service and account management were keeping the customers happy, and that we were doing it in a way that showed a path to profitability. 
3.       Develop a Sales Plan for Series B Investors.  Just like any other sales process, make a rank-order list of your top twenty to thirty potential investors.  (By the time you’re at your Series B, your success rate through the funnel should be higher, so twenty to thirty should suffice.)  Go even further, and identify the specific partners within each firm with whom you would like to partner.  Then, tap all of your networks to figure-out how to get meetings with those partners. 
4.       Cultivate Investor Interest.  Time to warm-up your audience.  Generate free press with media interviews, and get these posted (and re-posted) throughout social media.  Take informal, “checkin’-in” conversations with investors, including ones not on your list.  You want people talking about you, before you’re talking to them about investing. 
5.       Execute the Process.  Clearly communicate the timeline to potential investors.  If you want to be credible, and to avoid lapsing into an open-ended process, be prepared to accept an on-time offer, especially if from an investor that’s high on your list, even if that means possibly sacrificing a potentially higher valuation from another investor.  Also, be prepared for surprises during detailed diligence, even if the timeframe is constrained: you will hit road bumps.  
6.       Commit the Time.  For the four months before initiating the process, the company’s key principals should expect to commit at least one extra hour per week to plan, meet with investors and media, and to start reviewing due diligence materials, over and above the regular company performance reviews.  Once the process begins, those principals should expect to commit 75% of their time just to the funding process.  

Is this really possible?  Absolutely!  We recently helped a SaaS client raise a $12 million Series B in ten weeks.  Going into the process, they had the right stuff: with 100+ paying customers, they not only had a vision and compelling product, their sales force was also proving the offering’s value proposition outside of their initial customer vertical, and they had been tracking the right metrics to evidence their company’s performance.  

And this was no accident.  At least a year beforehand, we were planning for success, identifying the proof points that would be necessary to swiftly convince investors to get behind our growth trajectory.  Focus early on what you need to close the investment “sale”, and you will empower yourself to make the Series B fundraise as painless as possible. 

Ted Rebholz                                                           Jeff Burkland