- My NYPL
Tools and Services
- Using the Library
I am a...
- Classes & Events
- Support the Library
She was a disruptive employee--going around my back and angling to move up the ranks. Even so--here's how not to handle the situation.
Some lessons in business cause you personal pain. Others cause pain only to those around you. And, a few cause pain to pretty much everyone.
This is one of those cause-everyone-pain stories.
In my former life as a corporate manager, there was one particular decision I made that sent ripples through my team for at least a year. In some ways, my management career never quite rebounded and I remained gun-shy about personnel decisions for quite a while. It taught me more about how to handle problems than any of the good decisions I made during that time.
The Problem Employee
It all started with one particularly disruptive employee. She had aspirations to move up in the ranks, but I questioned her abilities. She started taking on work from other department heads without my knowledge. She would try to redirect things that other employees were working on. Worse, she would chastise me at every turn, usually in front of the entire team. This went on for several months.
What would you do? I'm not an attorney, but at the time I knew I had to follow a rigid process to fire her that involved written and verbal warnings, which I did. In the end it came down to one simple fact: she was not listening to me anymore and she was causing disruption.
At the time, when there was a conflict in the workplace, my tendency was to withdraw. This is not the best plan of action. Years later, I can look back and say the situation was quite unique and, in many ways, proved to be an invaluable learning experience. What I actually felt at the time was more like a vicegrip on my brain: keeping the employee around would cause more conflict but firing her would create even more problems. My "fire" would likely backfire.
Most people do not run toward conflict. Instead, it's natural to run away from it. As a kid, you learn when you touch a hot stove it is best to back your hand away quickly. In my situation, I figured ignoring the inevitable was the best option. "Time heals all wounds" I told myself at the time, not realizing that this was not about a wound at all.
Disruptive employees cause the wound--and they rarely self-heal. I've seen a few cases where an openly hostile employee makes a turnaround. I also know there are medical issues and emotional upheavals that can arise. But with this employee, the issue was obvious: she wanted my job. After the warnings, there was no option left but to fire her. On the spot. Immediately.
I told my immediate boss, who said I should make it happen that afternoon. I emailed the HR department to let them know what was going on. (I didn't ask for their permission.)
"Well, I have some bad news," I told her. "I have to let you go."
That did not go over too well. She stormed out of my office--and right over to HR. She met with one of the other department heads. Strangely, both of those meetings led to her being allowed to keep working. She eventually pressed the issue in court and won. In fact, she started working as a middle manager at my own level of responsibility.
You can imagine what it was like to meet her in the hallways.
So--short of making this all seem like a riddle, because these events really did happen, how do you think this should have been handled? What's a better way to fire someone?
Since that experience, I've come up with a few ideas. One is that I should have met with HR and explained what was going on. I should have given HR the time they needed to investigate and to communicate with everyone else on the HR team about what was going on. I should have met with the department head that had given her some work on the side. And, most importantly, I should have talked to the legal counsel for the company about potential repercussions.
As a manager, I was more interested in wielding power at times than communicating. Good leadership is about covering your bases. I only covered a few. My team witnessed how poorly I handled the situation and, as a result, started wondering if I had the chops to lead them after botching this situation. Because the employee stayed on, she also kept causing disruption for me for another year--removing her from the team didn't help at all.
But the real killer? I was wrong about her. She excelled in her new job, proved her ability as a middle manager, and continued working there long after I was out the door.
There was a lesson, though. I found that leadership is sometimes about keeping your hand on the stove. It's painful, but that's what makes leadership hard. I was taking the pain for the team. I found that conflict comes up at times in the workplace that requires constant, intentional, and complete attention. I learned that communication is hard but has to be holistic. I learned that leaders can't run from conflict. By focusing on the problem and resolving it, leaders prove why they are in charge in the first place.
Part of his legacy is knowing the difference between assertiveness and leadership.
In his autobiography, Long Walk to Freedom, Nelson Mandela likens leadership to shepherding, of all things: "He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind."
Harvard Business School professor Linda Hill has spoken and written about this concept of leading from behind for years. In her view, leading from behind is an essential skill for great leaders. Here are two key components to leading from behind:
1. View leadership as a collective activity. An ideal leader knows how to cultivate a setting in which others can step up and lead, Hill tells Harvard Business Review.
"This image of the shepherd behind his flock is an acknowledgment that leadership is a collective activity in which different people at different times--depending on their strengths, or 'nimbleness'--come forward to move the group in the direction it needs to go. The metaphor also hints at the agility of a group that doesn't have to wait for and then respond to a command from the front. That kind of agility is more likely to be developed by a group when a leader conceives of her role as creating the opportunity for collective leadership, as opposed to merely setting direction."
2. Don't confuse displays of assertiveness with leadership. If you do, you might overlook some great potential leaders in your organization, just because they happen to be less vocal or showy in the way they get things done. "Because they don't exhibit the take-charge, direction-setting behavior we often think of as inherent in leadership, they are overlooked when an organization selects the people it believes have leadership potential," Hill says.
As an example, she cites Taran Swan, who worked for Nickelodeon Latin America. When Swan's team made presentations to upper management, Swan calmly sat on the side and let team members do the talking. She'd occasionally speak up to support or claify a point.
One of Swan's supervisors warned her about her inclusive approach. He told her, "'You're making a career mistake. You're not going to get ahead if you do this. It would be better if you came by yourself and made the presentations,'" Hill recounts. In the supervisor's view, Swan's behavior wasn't leader-like. But her results were: Amidst highly unstable market conditions, her team managed to build Nickelodeon's presence in Latin America and to meet its overall budget.
In short, there are times when great leadership means letting go of whether others, including your supervisors, perceive your actions as leadership-worthy.
Certainly, this is one trait to remember about Mandela, and to keep in mind when considering leadership development in your own organization. "All too often, little things--taking the lead in a presentation, appearing to know more than you do--are still seen as markers of leadership potential," Hill concludes. "When in fact they may represent traits that are the opposite of what we need in a leader today."
A new report from analysts at the bank suggest the digital cryptocurrency is on its way to becoming a major player in electronic payments.
For the first time since the mysterious Satoshi Nakamoto created Bitcoin in 2009, a major Wall Street bank has issued an opinion on the cryptocurrency--Bank of America is betting on Bitcoin's legitimacy, according to a report released today.
Bank of America Merrill Lynch claims Bitcoin may "emerge as a serious competitor" to cash in e-commerce and digital money transfers.
The decentralized, peer-to-peer network, does not require a central clearinghouse or financial institution to clear transactions. All Bitcoin users need is an Internet connection and Bitcoin software to make payments to another public account.
But will it become an internationally-recognized currency? In order to so, Bank of America says Bitcoin needs to become a "major player" in both e-commerce transactions and money transfers, and maintain an exchange value "close to silver." Bank of America says their analysis estimates Bitcoin's worth to be a maximum of $1,300.
But, considering it flew up to $1,242 the day after Thanksgiving (passing the value of an ounce of gold and hitting a peak of 9,000 percent gain for the year), it is at a risk of "running ahead of its fundamentals," Bank of America reports.
Below, read the report's findings on Bitcoin's advantages and disadvantages.
Low transaction costs.
As Bitcoin is a peer-to-peer network, where transactions are verified by independent "miners" (who are rewarded with newly minted Bitcoins for their work), there is no need for a central clearinghouse or financial institution to act as a third-party to financial transactions. This means Bitcoin carries a very low transaction cost. By bypassing financial institutions, Bitcoin offers users a new and theoretically cheaper electronic payment method.
Transparency and security.
Although Bitcoin has a close anonymity to cash, every transaction is recorded on a public ledger. This makes Bitcoin easier to track than cash, the report says, since each digital coin contains an electronic record of every transaction it has gone through since it was mined. The public ledger and each Bitcoin activity record offers "a level of transparency that is not available with cash," the report says. "Having a full history publicly available guarantees that a buyer actually owns the number of Bitcoins he or she wants to spend, preventing fraud," the report says.
Bitcoin supply mimics gold.
Bitcoin was designed to have a finite supply in the world, like that of gold. This protects its value from governments and banks. As it was designed, the smallest unit of Bitcoin--1 Bitcoin--contains 100 million Satoshi. As of right now, the current supply is 12 million Bitcoins. The market cap for Bitcoin is 21 million Bitcoins--which Bank of America measures as just 57 percent of its eventual total. As more people "mine" Bitcoins, or solve the mathematical equations, more will become unlocked and flow into the market.
Limited anonymity in the black market.
Although sites like Silk Road--which sells anything from heroin to guns on an eBay-like platform that only accepts Bitcoin--have helped tarnish its already murky reputation, BOA says it is not a perfect currency for criminals. "[The] fact that all Bitcoin transactions are publicly available and that every Bitcoin has a unique transaction history that cannot be altered may ultimately limit its use in the black market/underworld," the report states.
Bitcoin's volatility is one of its main disadvantages--making people believe it's just another Tulip Mania of technological proportions. "Bitcoin's role as a store of value can compromise its viability as a medium of exchange. Its high volatility, a result of speculative activities, is hindering its general acceptance as a means of payments for online commerce," the report says.
A big downside for businesses is the fact that its value fluctuates every day, which means your business is "effectively internalizing the costs of its volatility" if you do not give change in Bitcoin, the report says. In August, it was at $100. Today it is just above $900. If your business accepts Bitcoin, you can lose or gain money depending on the day. When online illicit drug marketplace Silk Road's first version was shut down by the FBI in October 2013, Bitcoin's price plummeted 15 percent. But after the positive Senate hearing, it rose 50 percent. But, Bank of America says it should get more stable after it is more widely accepted.
Hackers steal Bitcoins.
Bitcoin exchanges, like BTC China, OkCoin, and Mt. Gox are required for converting traditional money into Bitcoin. This does pose a risk, for users are transferring their money from their bank accounts to third-party accounts, which are not protected by the FDIC. Users' Bitcoin wallets are in "start-up exchanges" in China and elsewhere, which are often targeted by hackers, Bank of America says. There is also risk of the exchanges just stealing the money before it is converted into Bitcoin. The risks are great, especially if your business is heavily involved in the trading of Bitcoins. Your wallet could get hacked, or even worse the exchange you use. The Bitcoinica exchange's and BIPS exchange's systems were both hacked recently and lost $16,230,000 and $1,135,000, respectively.
Bitcoin is not a legal tender.
Another big obstacle to Bitcoin's international acceptance is the fact that it is not a legal tender. "Unlike fiat money, nobody is under any obligation to accept Bitcoins as a means of payment," Bank of America says. "Therefore, its value is only as good as the perception of its worth by its users." Just like in the 1600s, when all of a sudden the price of tulips crashed, Bitcoin could suffer the same scenario. Concurrent with repeated cyber attacks and volatility that make users lose money, a perception that Bitcoin is worthless could pop the bubble.
The risk of government regulation.
Bank of America says it is unlikely that the government will promote a new currency, especially one as suspect as Bitcoin. As the U.S. government is trying to figure out where Bitcoin fits into its tax and payment system, regulation of any kind would increase its transaction costs--offsetting one of its major benefits.
Landing an angel is a huge boon to a new company. But you ought to know what to expect.
Nothing makes startup founders salivate quite like the thought of a cash infusion. Especially if you utter the phrase "angel investor." But what exactly can angels, who invest their own funds directly into early-stage businesses, do to help?
Plenty, says Dave Berkus, former chairman of Tech Coast Angels (and two-time Inc. 500 alum), as long as their pockets allow it. Here is a list of what angel investors can do for entrepreneurs, and what they can't.What Angels Can Do
This point is obvious, but crucial nonetheless, as angels typically provide anywhere from $100,000 to $1 million, with the average being about half a million dollars, says Berkus. Individual investors tend to average a little less than what angel investing groups like to see, which is $50,000 a year. Regardless, "no entrepreneur should just take money,” warns Berkus. “There are too many groups of angels that can offer much more.”
Help With Time Management
As important as managing your money is managing time, says Berkus, before adding, "the faster to market and more efficient a company is, the less money is going to get spent.” An angel can step in to help a product get to market on time, train employees, and figure out what (and who) should receive resources.
Angels are known for opening up doors, be it to salespeople, mentors, or potential board advisers, says Troy Knauss, president of the Angel Resource Institute. Adds Berkus: "I have 1,500 contacts, most of whom I know personally. A young entrepreneur can't even begin to have that number." Connections are integral when creating a board of advisers to help steer the company, just as they're key when finding the right manufacturer to make your product at a lower cost. "If you have a biotech company, the angel investor might have connections that can help you figure out the path to get you to an earlier exit," says Knauss. Perhaps he'll also know how to get past regulatory red tape.
Sure, it's cheaper to get products to market than it was 10 or even five years ago, but most entrepeneurs are inexperienced at running a business. They're going to make mistakes, and each one is bound to cost money, says Berkus. An experienced angel brings expertise to the table that can make the company that much more successful. Some may even help draft a business plan, as Knauss did for one startup he worked with. "They were trying to raise $5 million in venture capital, but their plan showed they couldn't be profitable," he says. "So we looked at a different plan that let them retain much more and grow the company into something successful."What Angels Can't Do
Supply Enough Money
"Angels will work with a company, sometimes in a sleeves-rolled-up manner that exceeds even that of a venture capitalist," says Berkus. "But most angels invest and expect that to be the last time." Although it takes a lot of money to become a private investor in the first place, they "can't supply enough money to get startups beyond the usual issue of breaking even and into the marketplace if the product or service requires a heavy investment," says Berkus. "They can only the prime the pump, and that puts the investor at risk, just like the entrepreneur."
Those requests for more due diligence might just be a VC's polite way of saying, "Thanks, but no thanks." Here's how to read between the lines.
When we pitched VCs for my first company, FlightCaster, we received 52 rejections before we got our first term sheet. Every time I got a rejection, I asked for feedback.
Some VCs said our market was too small. But I found that odd, because travel is a global $500 billion market. Plus, lots of other travel startups were receiving VC backing, and presumably those VCs cared about market size.
Some VCs told us they weren't experts in the travel sector, and so they wouldn’t be a good match for us. But I found that odd, because they were invested in all sorts of esoteric industries, and they didn’t seem to be experts in those either. Plus, I later saw those same VCs invest in other travel startups.
Some VCs said, “We like you, but we need to do some more due diligence on the space.” Then they asked us for a bunch of hard-to-get stuff--market research, traction metrics, and better proof of growth. But even when we got them this information, they still didn’t say yes.
What's Really Going On?
Over the course of 52 rejections, I got tons of feedback on our startup. I spent incredible amounts of time responding to that feedback. I’d like to think that all this work responding to feedback and improving on our pitch made us better, but the VC firm that we ended up getting our first term sheet from didn’t care about any of that. In fact, they didn’t even request it. As we were proceeding past the third meeting, I asked them if they wanted our due diligence pack that was filled with juicy market research data, growth metrics, and industry overviews. One of the VCs, Sunil Bhargava, responded quite easily, “I don’t need any of that. I’m betting on you.” We signed the term sheet, and he became our lead investor.
I’ve been thinking about that recently. The big difference between Sunil and those other investors wasn’t that I magically found a VC that was willing to take a bet on me instead of getting preoccupied with all these other due diligence items. The real insight is that the single biggest reason those other VCs didn’t invest in me was that they didn’t believe in me.
Reading Between the Lines
All of the concrete feedback about market size and traction and metrics, that was just their polite way of saying they weren't interested. In fact, several of those investors who rejected me for FlightCaster are now investors in 42floors. And now that I have talked to them about this, they’re willing to be frank with me.
We can both acknowledge the fact that I am a different founder now than I was then. Several of these investors put money into 42floors when we hadn’t figured out our vision for the product or done any market research. Several of them don’t even know that much about commercial real estate. But they had seen me grow as a founder, and they were willing to bet on me. I do wish they had been more frank when they rejected me at FlightCaster, because I wouldn’t have gone off on so many wild goose chases. But I can give them a pass on that, because it’s incredibly hard to tell someone that you have no faith in him or her.
Here are a few tips to help figure out whether you’re getting honest feedback from potential investors:
1. Get a great advisor. This person should be a peer of yours, who is 12 to 18 months ahead of you. This is not an industry veteran. It’s not someone who sold their company for hundreds of millions of dollars. This should be someone who is good at playing the game that you’re playing, and they’re just a little bit ahead of you. This person is most likely to tell you frankly what’s going on.
2. Listen for repeating criticisms. If you truly have some problems, whether with the product or the market size, smart VCs will continue to see them. However, if the feedback you receive feels contradictory, then it may just be noise.
3. Find a good back channel. If you’ve done your networking right, you hopefully know people in common with the investors you’re pitching. Ideally, one of them gave you your initial introduction. That’s the person you want to go to, to try and figure out what went wrong. Most investors will chat with your reference, and the real story will come out. You still may fall victim to getting sugar-coated feedback if your friend feels bad for you, but at least you have a better shot of getting it than trying to get it from the investor directly.
In an Inc. Live Chat on Thursday, the co-founder and CEO of HubSpot sat down with Inc. and shared his experience raising venture capital and what he learned in the process.
Don’t worry, raising venture capital is hard for everyone--even those with a distinct advantage and knowledge-base like Brian Halligan, the co-founder and CEO of HubSpot.
Halligan, who has also authored two books, Inbound Marketing and Marketing Lessons From the Grateful Dead, worked in venture capital before he co-founded the inbound marketing company HubSpot in 2006. On Thursday, Halligan joined an Inc. Live Chat with Inc.com Deputy Editor Allison Fass and shared his genesis as an entrepreneur, his experience raising venture capital and what he learned from the process.Starting Again
“I was an entrepreneur in residence at a venture fund and that’s a really interesting gig… I got to see how the sausage is made inside a venture fund,” said Halligan in the live chat. “It was actually a lot different than I thought, so it was very useful.”
It was while he was working in venture capital that Halligan came up with the idea to start HubSpot. During the ten months Halligan worked at the fund, it was his directive to work with small companies to help them grow. He quickly learned that the traditional marketing model was broken.
“They all had that same marketing playbook. This sort of tried and true 1990’s old school playbook and the more I watched the playbook; the more I came to the conclusion that the plays didn’t work anymore,” Halligan said. “People were sick and tired of being marketed to and sold to.”
So Halligan and Dharmesh Shah founded HubSpot with the intention of rewriting the marketing playbook. This meant the duo needed money to fund the startup and set out to get it from VCs as so many startups do. Today, HubSpot has a reported $131 million in funding--of which $100 million is from high profile VCs. But, according to Halligan, raising capital wasn’t easy for the startup.Look, It's Just Hard
Halligan stressed that raising capital was difficult for him even with his background in the VC space and that movies and television make it look a lot easier than it actually is. He specifically referenced the Social Network as being one instance where Hollywood got raising capital wrong.
“In reality, it’s a bear to raise capital,” said Halligan. “Even I was a total insider in the game and I had a heck of a time raising our Series A.”
Halligan walked through the process of raising capital from VCs, starting with the first meeting. He said this meeting is always with a principal--never a top dog in the firm.
“You have about a 50/50 chance of convincing that principal that you have a good idea, a good market and a good team,” he added.
If you do catch the principal’s attention, next comes a meeting with a partner. Which if you are lucky doesn’t lead to a meeting with other partners typically according to Halligan, but will get you an introduction to one of the partner’s colleagues that runs one of his companies before you are finally accepted into the fold and meet the other partners. In other words--it is an uphill climb.
“By the time you are through with all of the meetings, the [chance of getting funded] it’s like one-over-two to the tenth power,” said Halligan. “It takes a lot of time.”
So what are Halligan’s pointers for raising capital?
Get the geography right
He stressed that you need to approach the right firms--firms that actually care about investing in a startup in your area.
“Let’s say you’re in Baltimore, it is pretty unlikely that a Silicon Valley venture capitalist would fund--at least a series A--round in Baltimore,” said Halligan. “It is very unlikely, so you have to get your geography right.”
Get the firm right
According to Halligan, it is vital that you are approach the right type of VC firm. If you want an early stage investment, be sure you don’t ask a firm that typically does late stage investments, and vice versa.
But he also added that securing top tier investors in the early stages is important. If you get investments from top tier firms--he brought up Sequoia as an example--other investors will follow.
“If you go with a second tier investor, the top tier guys tend to turn their nose up at you. They shouldn’t but they do,” Halligan continued.
Get the partner right
Even once you have the other two in place, you need to make sure that within the VC firm you pick the right partner to make your case to. The partner you approach should have a background compatible with you company and experience in the area.
“Say that that partner has a background in biotech, hat partner in biotech is not going to invest in a marketing software company," said Halligan. “At the end of the day, if that partner is going to stand up to his partners and tell them that they are doing this deal and convince them, he has to have some domain expertise and background. You need to find the partners that really get your space.”
Click here to watch a playback of the Live Chat.
At a recent TED conference, Facebook's Sheryl Sandberg recently discussed the importance of greater workplace equality.
Facebook's Sheryl Sandberg proposed that the business community strikes a word from its vocabulary.
"We need to get rid of the word 'bossy' and bring back the word 'feminist,'" Sandberg said Thursday on stage at TEDWomen, which took place in San Francisco. She was referring to the difference in attitudes toward men and women who assert themselves in the workplace, according to a TED blog post.
Men who speak up are generally viewed as good leaders, while women are often called "bossy," for doing the same. "That little girl's not bossy. That little girl has executive leadership skills," Sandberg said.
Sandberg is well known within the TED community and beyond for a presentation she gave in 2010 called "Why We Have Too Few Women Leaders." The talk has more than 3 million views. During TEDWomen, Sandberg shared a little bit about what was going through her head when she wrote it.
"The subject matter wasn't her first choice; in fact, Sandberg recalls that she'd had absolutely no intention of talking about anything so personal," according to the blog post. But she changed her mind, rationalizing that for things to improve for women in business, it's necessary acknowledge how hard change can be.
So what's changed since 2010? In terms of pay and gender equality, not that much. At best, women are paid 77 cents to a man's dollar, a number that hasn't changed since 2002, according to the blog post.
But Sandberg believes that she and other women have managed to make small gains through their message. "Everywhere I go, CEOs, mostly men, say to me, 'You’re costing me so much money,'" Sandberg said, referring to the fact that many women are asking for more pay. "To them I say, I’m not sorry at all."
Think you're smarter than a VC? Village Capital lets the entrepreneurs decide who gets funding. It's a plan so crazy, it just might work.
Ross Baird has a problem with the status quo in Silicon Valley.
"Silicon Valley is supposed to be so innovative, but people spend a ton of time making apps just so we don't have to call to make dinner reservations," he says. "It makes yuppies' lives more convenient, but it's not actually solving world problems."
It's because of this beef with business as usual that Baird launched Village Capital. It's a new type of incubator and investment fund that not only backs companies that do aim to solve world problems, but it also chooses which companies it funds in an entirely different way. That is, it doesn't actually choose the companies, at all. Entrepreneurs do.
How It Works
Since it was founded in 2009, Atlanta-based Village Capital has pioneered a unique peer investing model that puts entrepreneurs in charge. The firm has sponsored 23 programs in seven countries worldwide, where founders come together for three months to develop their business ideas, much like a traditional incubator. The difference is, at the end of those three months, it's the other entrepreneurs in the cohort who decide which business gets the final investment.
Baird conceived of this unique approach while working at the impact investment firm Gray Ghost Ventures. He was frustrated by the fact that the venture capital model, as it exists today, favors companies that can promise investors a quick exit.
"The companies people fund look more like Facebook and LinkedIn than the kinds of companies that may take a longer time to build, but would have disproportionately positive benefits for the world," he says. "The problem we think we've diagnosed is the way people support entrepreneurs today in the capital markets."
Because the other entrepreneurs in the cohort don't stand to make a return, their decisions are based less on planning a quick exit and more on the potential impact that start-up could have. Of course, that doesn't mean they overlook financial viability altogether. Three times a session, every startup in the cohort grades every other startup on 24 different metrics, ranging from potential for profitability to ability of the product or service to create change. (Companies aren't allowed to grade themselves.) The two startups ranked highest on the last assessment are the ones who get funded.
The peer investing model has yielded some interesting data points not found in traditional venture capital investing. For instance, women-run companies are far more likely to get funding through peer investing than through traditional funds. That, Baird says, should get investors' attention, since women-run companies, recent research suggests, deliver higher returns to investors.
"The market is undervaluing a specific asset which is women co-founded businesses," Baird says. "Women, we find, tend to under-promise and over-deliver. Men tend to over-promise and under-deliver. In the entrepreneurship world when you have two minutes, over-promising helps." When women get to pitch over three months to a room of their peers instead of two minutes to a panel of investors, in other words, they get a fairer shake.
To date, 350 entrepreneurs have participated in Village Capital's international programs, and 32 have received investments. Among them are companies like MobileWorks, which works with corporate clients to outsource clerical and administrative work to low-income virtual workers. Kickboard, formerly called Drop the Chalk, is another star Village Capital alum and Inc. 30 under 30 finalist, which makes software to help teachers better track student performance. Another promising recent company, SevaMob, offers healthcare and insurance to people living in poverty in India and Africa, but its health workers also collect anonymous data on the people they treat, which SevaMob can sell to major corporations interested in developing world markets.
Obviously, these are companies that not only have a social impact, but could have a financial one, too. After all, Village Capital isn't a wholly altruistic endeavor; it's seeking investment from both high net-worth individuals and impact investing firms that are willing to be a bit more patient about returns. Village Capital's stake in the companies is usually somewhere between 5 and 10 percent. As for just how long the firm is willing to wait for an exit, Baird says they're flexible--they'll even do a revenue-share agreement that pays the firm back slowly.
"We're trying to build different kinds of structures that make fiduciaries comfortable with backing companies that could create the world we live in," Baird says.
If it's true that what happens in New York City could ripple out to the rest of the country, you might want to pay attention to the Big Apple's next mayor, Bill de Blasio.
On the campaign trail, the sitting public advocate of NYC ran on a platform of stamping out inequality--offering to help bolster the middle class and end policies that crowded out this constituency in recent years. In the campaign address that would serve as the defining moment of his candidacy, de Blasio referred to NYC over the past few decades as a tale of two cities--where the gap between the rich and the poor is vast and becoming more so.
While surely this talk is welcome news for more than a few business owners, others fear that he would rain on their parade--an outcome that could still come to pass but isn't as likely as people think.
First, a bit of background: For the past 12 years, Michael R. Bloomberg, a billionaire businessman with a passion for numbers, has served as NYC's mayor. During that time, many entrepreneurs have chosen the Big Apple to base their businesses while giant companies like Google have expanded their footprints. The city itself has not only blossomed as a prominent tech and startup hub, it's also become what Bloomberg himself touts as "the safest big city in America" and tourism has skyrocketed.
Naturally, Bloomberg had his misses in the eyes of the business community--among others, the letter grades for restaurant hygiene and citywide bike lanes confounded some owners. But mostly, business under Bloomberg was humming.
"New York was notorious for insider deals and being closed to innovation. So, Mike rewrote the book," says Jigar Shah, founder of SunEdison and partner at Inerjys, a clean-tech investment firm in NYC. "From car sharing to solar and energy efficiency, to bike sharing, New York is a more innovative, friendly place to entrepreneurs."
The combination of seeing Bloomberg's departure and the arrival of de Blasio, a far more populist politician who has called for raising taxes on the wealthiest New Yorkers, has frayed nerves.
Notwithstanding his more flamboyant stump speeches, de Blasio does have some solid business-friendly ideas. Among other proposals, he has promised to crack down on "nuisance fines" for minor infractions, offer technical assistance to immigrant entrepreneurs and establish economic development groups in every neighborhood
Contrary to what some entrepreneurs and business owners think, the end is not near for NYC's thriving tech and business communities. In a recent article in the New York Times magazine, Adam Davidson spoke with Benjamin Barber, a political theorist and author of If Mayors Ruled the World.
As it turns out, Barber believes that political leanings don't matter much when actual governance comes into play, as mayors tend to be far less dogmatic once they take office than their counterparts in Congress. "The distance between Bloomberg and de Blasio is not as great as the media--and the two men--have made out," he says. "Being a mayor is about solving problems and not about striking ideological poses."
Wall Street and business owners may be quaking in their boots, but de Blasio's policies likely won’t be as severe as people think.
Just consider his proposed tax hike on the wealthy. To make way for the introduction of universal pre-K and after-school programs, de Blasio is proposing to raise income-tax rates on those earning more than $500,000 by one half of one percent to 4.4 percent from 3.9 percent. That would amount to an enhanced tax on just 40,000 New Yorkers--not exactly fanning the flames of a nascent socialist revolution.
To be sure, these are still early days, as de Blasio hasn't even taken office yet. And though it's certainly possible that he will alter the landscape of what it means to be a business owner and entrepreneur in New York City, it might also be a good idea to reserve judgment until a later date.
Like many of his predecessors in NYC and elsewhere, de Blasio is pragmatic. He's not likely to gift-wrap the city's tax base and ship it off to Connecticut any time soon, for instance. Nor would he go out of his way to crush the city's burgeoning startup scene.
The Big Apple's future mayor may be as ideological as they come, but he's also a politician with deep roots in NYC and a vested interest in keeping it healthy. This isn't to say that you stand idly by if you don't like something City Hall wants to push through--especially when newfangled startups are concerned. (Think, Airbnb's recent brush with a New York regulator.) But writing off this mayor--and the next few years under his watch--may be premature.
If what happens in New York City does in fact harbinger what's to come elsewhere, it's probably safe to say that startups and the business community in general will remain on solid ground.