Liberal and Loving It

The City of Boulder clearly hates small businesses

As I said earlier the City decided to audit the tax payments of my company (because I was slightly critical of them).

My company sells enterprise software worldwide. We have the end of the quarter coming up and that is the busiest time, with the final working day of the quarter generally pulling in substantially more money than any other day.

And we're a small company so we have one accounting person. She is the one that creates quotes, generates invoices, etc. And when we receive a P.O., she's the one that then sends the customer their license keys. In other words, she's essential to finalizing the sale. She's also the one that will have to spend an entire day providing information to the City of Boulder tax people when they come to our office.

Cue the dramatic music… You can see it coming can't you… Of course they are coming on… March 31. This is akin to performing an audit on a retail store the Friday after Thanksgiving. Just one more way (of many) that the City of Boulder does it's best to harm local business.

For those considering locating in Boulder – there are a number of pluses here from the people to how pretty it is. And the Tech Stars program is awesome. But the city government is strongly anti-business. I think this comes from the large number of residents who are either trust fund babies, work at the University, or work in a research labs. To many of them private enterprise is unseemly and they think it degrades Boulder.

Ps – my CEO has told me that I am not to say anything "funny" to the city accountants when they're there. Darn – I was going to put a note on my door that said "Do Not Enter – Shredding Financial Documents".

We may have a lot of local start-ups closing down this year

From The Funded

Well, if 2010 was the Year of the Angel, then 2011 will be the Year of the Startup Default. There has been a convergence of trends where massive amounts of angel debt has been accumulating with no ability to pay it back and no conversion in sight.

I have seen this happen in the past. Companies get funded and move forward where everything depends on raising another round of funding by a certain date. But that next round rarely materializes. Never in the amount and at the time planned for. In the best cases something is worked out, although generally for a lot more equity than planned. But in most cases there isn't another round in time, and the company has to shut down.

Granted, I'm more financially conservative than what is optimal and so have taken no investments of any type. Funding in many cases is the best way forward (sometimes the only way forward). But make sure that the funding will get you to a point where the value of the company has clearly increased substantially. And make sure it's structured so that if the company is not able to raise another round, that the terms don't force the destruction of the company.

And here's hoping it's a minimal number of local start-ups that go under. But I worry that it could be substantial numbers.