Bruce Kendall, CEO and President ~ Board of Economic Development for Tacoma/Pierce County

It has always intrigued me when I look out the windows of the Link Light Rail, how much of Tacoma seems frozen in time and forgotten. It seems to me as comparable to the cities that had sprung up along Route 66, feeding on the traffic that the thoroughfare provided them with, only to be left in decay when the Interstate Highway System came about in the late fifties; mere shadows of their pasts.

Tacoma was much the same up until recently, with its fifties and sixties-style architecture in much of the older parts of the city, a stark reminder of its past, perhaps the best example being Bandstand Music, along Pacific Avenue. For whatever reason, Tacoma as a city stopped growing, and while I still don't exactly know the reason why this was the case, Bruce Kendall our guest speaker did an excellent job at explaining why it has been revitalized in recent times.

He explained to me that the University of Washington, Tacoma and the Link Light Rail were were two very large factors that fostered this urban development in downtown Tacoma. That made sense to me, for having a source of future employees in your own backyard, along with the transportation needed get them to work would be enticing to any company. However, I couldn't help but wonder why Tacoma wasn't another Bellevue; business seems to flock there, and the city has an iron-clad grasp on the high tech industry. Why could Tacoma do that? What is missing in order to attract that businesses like those present in Bellevue?

Beyond my inquires about Tacoma in general, the class discussed a lot about the aerospace industry, which managed to get me very involved, as I'm a huge fan of the aircraft that come out of that industry. He also discussed DaVita, which houses their Central Business Office (however, not their headquarters, which resides in Lakewood, CO), in Tacoma. I of course found that to be an especially interesting considering the fact that both my mother and stepfather work in their Tacoma business office. All things considered, Bruce did an admirable job at explaining my myriad of questions regarding all of these topics.

Not to discredit the speeches of our previous guest speakers, whose contributions to my education were received with much gratitude, but this had to have been my favorite guest speaker to date. Bruce talked about all the things that I was interested about Tacoma, but never had asked up to this date. The next guest speaker will certainly have a lot to look up to.

Growing My Business

Planning for the growth of my business is something that I've been slightly uneasy about due to my inherent lack of knowledge and experience in business. From what I have experienced from my talks with Tim Hoover, the founder of Auto Claim Solutions, it is best to start small with minimal staffing, and then work your way up in size and hire more people. I still don't understand how some people are able to start a business with 60 people on their payroll, and not go belly-up. Tim has told me that in his business, he has himself and only three other employees. He has yet to elaborate on what the roles of each of his employees are, but I can make an educated guess that he farms out a majority of the work to other firms.

Knowing this, I think that my staffing would be minimal to begin with, and that I would have to hire a multitude of different firms to do a majority of the development and marketing work, so that I could concentrate on growing my business. Once my business has reached a reasonable size and I have been able to obtain a positive cash flow (probably within three years), I would begin to increase my staffing. I would however probably hire a few information technology guys to maintain the website and the software.

When I did this start increasing my staffing, I would likely start by hiring four salesmen and then strategically place them around the country. This way, I would be able to start increasing the expansion of my business across the country. I could see a large amount of my business coming from referrals between auto repair shops. If you have a good idea, and it works for people, it will spread like wildfire.

John Dimmer/The Term Sheet Article

After reading the article "How to Negotiate a Term Sheet," given to us by our guest speaker, John Dimmer, I must say that the term sheet is a document that I could see it confusing a great many people with complex legal jargon, however I felt that the article did a decent job dialing down the rhetoric. If I was an entrepreneur, this document would make me extremely nervous, while it was in its negotiating phase. I can certainly see the benefit of legal consultation in this case.

I must say that I didn't quite care for the concept of reverse vesting. The entrepreneur puts a lot of his or her time into the development of the business, just as the VC has put a lot of money into it, and should have the same ownership rights as the VC, albeit at a somewhat different scale. The founder's shares should not have to earned back.

One of the terms that I had a problem in understanding was that of anti-dilution. It should have made since to me if I had seriously taken the time to consider the term itself, but the way the article explained it made it more confusing, forcing me to look to outside sources that did a better job of explaining it. After I understood what anti-dilution meant, I can certainly see why someone would want that protection. Why should someone's originally negotiated ownership in the company be decrease because of a decision made by management to sell more shares of stock in the company?

After all is said and done, the term sheet is not a document that should be taken lightly, as it can seriously impact the rights that you have to control your business. It is not something that the individual investor should negotiate themselves, without an attorney.