Emerging Enterprise Center Blog - Commentary and Analysis For Entrepreneurs and Startups

I did not attend the conference, but here is an informative post  that I just ran across together with, I think, accurate observations on the current and future state of cloud computing. One take away is that adoption is here now (but perhaps there is still some resistance from IT excecs.  As the post says:

It is, however, unlikely they’ll be able to stop the cloud from coming into their companies. Just as PCs, wireless networks, and smartphones have come into the enterprise, and most importantly latched onto corporate networks behind firewalls, cloud services are coming into business as non-IT personnel pay for services on their credit cards and hook them into their workflows.

We recently sent out a client alert on a recent court decision in a case involving salary deferral. The gist of the case was that two founders of a new company agreed to a salary deferral until the company could afford to pay them. This agreement was, apparently, set forth in a written agreement. The two founders came to a parting of the ways, and one of them, the CEO, later sued both the company and the cofounder for back pay under the Massachusetts Payment of Wages Statute. This may sound bizarre, but even though there was a written agreement to defer salary and even though the plaintiff was the CEO and a co-founder, the court found that the contract was void under the statute and found that both the company and the cofounder were liable for unpaid wages. One way out of this box is noted in our client alert: pay the minimum wage and make anything in excess a bonus contingent on the company’s financial condition.

This decision should be a lesson for companies trying to conserve cash. Seek advice before just deferring salary.

I attended the very successful Cloud Computing event sponsored by MIT on Wednesday, which Sim Simeonov and others organized. At this point the event itself may be yesterday’s news, but a few of things came out of it that seemed noteworthy to me. Some are “micro” things about the cloud itself, how it drives innovations, pricing etc., but perhaps the most compelling is that the cloud it here and people are building great profitable companies around it today compared to energy and cleantech, which get all the mindshare, but who knows when economic conditions will reach a point where these technologies will actually be profitable.

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So here is a question that does not often arise: If a company shuts its doors and just ceases doing business what happens to the employee obligations not to compete? The short answer is that if a company just shuts down and stops doing business without a successor (and that is the key), then it is not in a business against which one can compete so in all probability you can go forth and don’t worry. But, that almost never happens even when it happens. Think about the following:

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To state the obvious: exits are affected by the state of the market. The state of the market is affected by investor confidence. Investor confidence is affected by fraud in the market. The SEC is charged with overseeing the public markets for securities. As a result their activities have a profound effect on our industry. I have written about this sort of thing before, but sometimes you have to wonder what the SEC thinks it is doing. I recently witnessed a colloquy between two SEC attorneys, a hazard of my end of the profession, and I thought it worthy of reproducing because of the evident frustration of the lawyers.

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On Friday I participated in a panel on general topic of funding at a conference entitled New England & The Broadband Recovery Act. Under the broadband portion of the stimulus package approximately $7.2 billion has been allocated to various broadband and related activities. As with the stimulus package as a whole, the main goal is to create jobs, but there are other aims as well. Others have questioned the wisdom of brining 100 megabit per second connectivity to remote places, but that’s the goal – like it or not. There are other aspects of this act that are terrifying and there are some hidden opportunities

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When confronted with an optimistic point of view on the economy, one entrepreneur had this to say:

One of the other silver linings is the insane amount of work that an entrepreneur can get done with very little money today. I have 6 unpaid interns …One is a PhD student …. and four are computer science majors that could have gotten great paying summer jobs 2 years ago. I also have a CFO that put together professional financial documents for us on deferred cash, and over $XXX,XXX in programming being done on deferred cash. None of that would have happened two years ago.

Entrepreneurs are finding a way to get their businesses off the ground without angels or VCs.