Technology

While many of the issues involved in various transactions are similar, every single transaction that we get involved in is nuanced and different in some way from other similar transactions. Pattern matching is important, but each successful enterprise is successful in a unique way. Building an enterprise requires a balancing of the economic interests of the various parties. The founders may want to control their destiny or be captains of industry, in addition to making outsized returns. Investors will be laser focused on those returns but may also be interested in promoting activities that involve sustainability or technical breakthroughs. Employees will be hoping for financial rewards but may also want to be involved in cutting-edge technologies and a flexible workplace. Finally, the board of directors needs to monitor the enterprise and provide relevant advisory insights. Getting this right is so much more than processing a form; it requires deep domain knowledge of the industry sector and a good sense of the people involved. It is similar to why the best doctors examine a patient before prescribing medication. Knowing the context of the situation truly matters and one size never fits all.

Platforms such as Instagram, Snapchat, and Twitter have created celebrities with huge loyal followings – in some cases, millions or even tens of millions of followers – who have never appeared in a Hollywood movie or TV show. These influencers instead generate content – videos, photos, tweets, and the like – on the social media networks, and that content is shaping popular culture among younger consumers and attracting significant advertising dollars.

In this issue we focus on a number of basics for building growth enterprises. We lead off with a terrific podcast on the importance of assembling a strong board of directors. We follow with an article on a new securities law that permits the aggregation of up to 250 investors in a single investment vehicle so long as the entity has no more than $10 million in capital contributions. This new law will be particularly useful to online platforms that aggregate angel and seed investors to invest in start-ups. We then discuss the importance of stock options and creating a culture of ownership, another basic in creating a valuable company. We conclude this issue with two innovator profiles: BioLabs@NYULangone, a new shared wet lab space located in New York’s SoHo neighborhood, and RainFocus, which provides a software platform for delivering insights and marketing messages at large-scale conferences and events.

Manufacturers of wireless devices used for Internet of Things (IoT) applications should take heed of new Trump Administration proposals aimed at reducing the cybersecurity threats from botnets and other automated and distributed attacks.

Blockchains, best known as the technology behind digital currencies such as Bitcoin and Ethereum, are beginning to be implemented in a variety of commercial applications. The technology is attracting not only financial institutions and stock exchanges, but fields as disparate as the music, diamond, healthcare, insurance, and shipping industries.

Led by Michael Renaud, Jim Wodarski, Mike McNamara, Bill Meunier, Aarti Shah, and Adam Rizk, the Mintz team secured an important victory for its client Advanced Micro Devices (AMD) at the U.S. International Trade Commission (ITC). The case was filed against LG, VIZIO, MediaTek, and Sigma Designs, and it involved complex graphics circuit technology.

Data centers are the twenty-first century nexus between the commercial real estate and telecommunication business sectors. Owners, operators and developers of data centers face the difficult task of continually adapting to the rapidly evolving priorities of their ever expanding clientele in order to remain competitive and appealing to the largest number of actual and potential consumers.

This edition of TechConnect shows the depth and breadth of our coverage of Tech issues. We have included a podcast interview of Cliff Boro, a long-time friend and serial entrepreneur, who skillfully provides pointers to those seeking out capital from Angels and VCs. We also have two great articles in this issue: the first is about AI from the perspective of our patent professionals; the second is about privacy and how your company’s privacy policies can actually be a competitive advantage. Finally, we highlight Aphelion Path, a consulting shop based in Brooklyn that is helping emerging companies to accelerate growth and succeed.

Taking a start-up from idea to growth is the crucial step that can cause many founders to stumble and ultimately doom businesses to mediocrity. That’s why former operators at MakerBot, Zazzle, and Autonomous turned advisors to create the Aphelion Path Consulting Group.

In two recent no action letters, the Securities and Exchange Commission (the “SEC”) granted no action relief for two venture capital online funding platforms, the FundersClub, Inc. (“FundersClub”) and AngelList, LLC (“AngelList”), allowing them to avoid registering as broker-dealers under the Securities Exchange Act of 1934 (the “Exchange Act”) even though their affiliates will receive some compensation in the form of a carried interest.

Companies in many industries are integrating artificial intelligence into their products despite a decline in US AI patent filings driven by uncertainty about the patentability of software. Advances in machine learning are spurring the increased interest in AI.

For all the publicity generated by the recent increase in value of Bitcoin, as well as the generally increasing awareness of the existence of blockchain technology, Greentech Media’s recent Blockchain in Energy Forum 2018 held in New York City demonstrated that the technology is incredibly young and all stakeholders—utilities, regulators, entrepreneurs, consumers and investors—are still struggling with the ultimate impact of distributed ledger systems.

The Supreme Court on Tuesday will hear arguments in United States v. Microsoft Corp., in which the court will decide whether a US technology service provider, Microsoft, must obey a search warrant for data stored in a foreign country.

Simplexity Services is a San Diego, CA-based company offering back-office services for start-up entrepreneurs and for those who have closed seed or Series A financings. Simplexity helps de-risk and accelerate startups by applying systems science and solutions as building blocks for essential founder infrastructure, resulting in the business insights and deliverables which allow founders and their investors to sleep better at night.

In this edition of MintzTech Connect, we discuss the benefits of a Series LLC; we highlight Simplexity, a wonderful back-office company based in San Diego; and we have included a fascinating article on cryptocurrencies which explains this new asset class that enables decentralized applications. Additionally, we highlight our new series of podcasts called From The Edge, which provides useful information for and about entrepreneurs.

MintzTech Guest Article: Letter to Jamie Dimon and Anyone Still Struggling to Understand Cryptocurrencies

Mintz Levin is excited to announce From the Edge, a podcast for and about entrepreneurs. In this series, Mintz attorneys who specialize in emerging companies speak with investors and entrepreneurs in the technology, biotech, and finance fields to explore the key strategies they used to build successful ventures. Featured industry leaders explain how they raised capital, built great management teams, achieved successful liquidity events, and more.

After being in the insurance industry for several decades in a variety of roles, I frequently get asked which insurtechs I think are going to be successful.

Since its beginnings in early 2015, quip, the Brooklyn-based dental start-up co-founded by former industrial product designers Simon Enever and Bill May, has swiftly reinvented the archaic dental healthcare industry. From its superbly designed electric toothbrushes to its subscription toothbrush-head and toothpaste replacement service, and its “dental connect” digital platform for customers and dental professionals, quip has made it easier, more enjoyable, and more affordable for customers to keep their smiles bright and healthy. For these achievements, quip has received unprecedented dental industry and press coverage, including recognition as one of TIME Magazine’s 25 Best Inventions of 2016, a place on the O, The Oprah Magazine “O-List,” and a 2016 GQ Grooming Award. With such accolades and its robust social media following, quip is revolutionizing the way people around the world approach oral healthcare.

Words are very powerful and the language we use often frames a discussion. For example, the term “shareholder activist” sounds like a consumer friendly person who has everyone’s best interests at heart, when in fact the term “shareholder activist” is a phrase invented to cast corporate raiders in a better light. Such semantic gamesmanship often masks the reality of a particular situation.