Can we?  As a technology start-up company with a start-up company's bootstrapped budget, can we ask an intern to work for us for free?  After all, they're just doing it for the experience, right?  They'll get to add working at our cool start-up to their résumés, no prob. That's great for them - and legal, too, right?

I Googled that question.  I'm not alone in asking it.  The New York Times currently is covering the topic in The Unpaid Intern, Legal or Not and Unpaid Interns, Complicit Colleges. Yikes.

For legal questions, I've learned to turn first to Google for background, then to Ken Maready, the entrepreneur's entrepreneur, and attorney with Hutchison Law Group. 

Ken replied:

Here is the U.S. Department of Labor's fact sheet on internships (.pdf), and the tests that apply to determine whether wage and hour laws apply (i.e., whether you have to pay them).
 
The main criterion that typically provides the biggest hurdle for start-ups is number 4:  "The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded."
 
So, for interns working at start-ups, it is typically the case that the start-up does actually expect some advantage from their work, and the better route is to pay them minimum wage, either as an employee or, if possible, as a consultant.

Yes, from an intern I expect the advantage of their cutting-edge, state-of-the-art knowledge from a top university to be at work for the advantage of my company.

The U.S. Department of Labor also offers a guide to Minimum Wage Laws in the States.  I'll be familiarizing myself with that.  Thanks, Ken.

Ken Maready will do a talk on the "Basics of University Start-Ups" on Tuesday, April 26, 2011 at the Virginia Tech Corporate Research Center, in Blacksburg, Virginia, USA. Please click here for more information. 

 
Ken Maready, attorney with Hutchison Law Group, and Anne Giles Clelland, founder of Handshake Media, are contributing authors to the just-released two-volume Enterprise 2.0.

You're invited to read more about Enterprise 2.0: How Technology, eCommerce, and Web 2.0 Are Transforming Business Virtually on Amazon.com.

Photo credit: Catherine "Kate" L. deGastyne

I want to be an angel investor.  At least I want to know how an angel investor thinks, given that I'll be pitching to a group of angel investors at the VT KnowledgeWorks Entrepreneurship Summit on April 7, 2010, and given the culture of entrepreneurship and angel investor funding developing in our region.

Many angel investment groups require their members to be accredited investors.

I started my research on accredited investors with the U.S. Securities and Exchange Commission:

An "accredited investor" is:

• a bank, insurance company, registered investment company, business development company, or small business investment company;
• an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
• a charitable organization, corporation or partnership with assets exceeding $5 million;
• a director, executive officer, or general partner of the company selling the securities;
• a business in which all the equity owners are accredited investors;
• a natural person with a net worth of at least $1 million;
• a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
• a trust with assets of at least $5 million, not formed to acquire the securities offered, and whose purchases are directed by a sophisticated person.

Expecting an online application similar to that for an Employer Identification Number (EIN), I looked for the button to click to view the online application.  No button.

Sometimes Google won't do, but one still needs a Google-like source.  When searching for answers about all things legal, I ask Ken Maready of Hutchison Law Group.

I asked, "How does one become an accredited investor? How does a company founder know he/she is talking with one?"

Because he is, as I term him, an entrepreneur's entrepreneur, Ken replied right away:

Although the term "accredited investor" makes it sound like there's some kind of registration process or certification with some third party, it's really much more simple than that - they just have to meet one of the tests below, and there's no filing or other process for them to become "accredited."

The most common accredited investors you'd be speaking with (outside of venture funds) would be individuals who meet either the net worth test ($1,000,000) or the annual income test ($200,000 per year - or $300,00 per year combined with spouse - for the last 2 years with an expectation of earning that again this year).

Net worth of a $1 million or $200K per year, eh? Not for this start-up's founder.  Not yet.

Especially given this caution from Tracy Wilkins, quoted in the Blue Ridge Business Journal:

"A lot of us are entrepreneurs who have made it ourselves and love the game, like to help and we love building companies," said Tracy Wilkins, an angel investor and president of TechLab, a medical diagnostics firm in Blacksburg. "Angel investing is very hard to make money out of, to be honest with you. Unless you can afford to lose it, you shouldn't do it. It's gambling."

Good to know a little more about with whom I may be dealing, though. Thanks, Ken.

The NewVa Corridor Technology Council (NCTC) announced the nominees for the 2010 TechNite Awards.   The nominees will be recognized and the winners announced in five categories - Rising Star, Entrepreneur, NewVa Leadership, Innovation, and Educator - at the 11th annual TechNite Awards Banquet on April 7, 2010 at The Inn at Virginia Tech in Blacksburg, Virginia.

Each year, the NCTC membership honors technology and industry leaders from the NewVa region - the New River and Roanoke Valley regions of Virginia - through an annual awards banquet. Members of the community may nominate the individuals and companies they feel have achieved noteworthy milestones or have made significant contributions through leadership and innovation.

The 2010 TechNite Nominees

Rising Star Award
This award recognizes a local technology company whose "star is rising." It may not be a household name yet, but it could soon be another local success story in the NewVa Region.

2D Array
ABS Technology Architects
AC&E, Inc.
Handshake 2.0
Interactive Achievement, Inc.
InteractiveGIS, Inc.
JPI
Keraderm, LLC
Knowledge NoteBook
MiserWare, Inc.
Modea
NetVentures Corporation
Nicus Software, Inc.
Smart College Visit, Inc.
TORC Technologies, LLC

Entrepreneur Award
Entrepreneurs are a different breed. Sometimes it takes nerves of steel to blaze a new path. This award recognizes someone in our community who exemplifies what it means to be a risk-taker in the technology field.

David Catalano & Aaron Herrington, Modea
Dr. Vinod Chachra, VTLS, Inc.
Anne Giles Clelland, Handshake 2.0
Dr. Richmond Dugger, III, UXB International, Inc.
Jonathan Hagmaier, Interactive Achievement, Inc.
Brett Malone, Top Gear Consulting
Ken Maready, Hutchison Law Group
Pat Matthews, Rackspace
Marty Muscatello, CCS-Inc.
Tracy Wilkins, TechLab, Inc.

NewVa Leadership Award
This award recognizes one of our own who not only succeeds in the workplace, but also leads by example by contributing significantly to the community in which we live.

Advance Auto Parts
David Ayares, PhD, Revivicor, Inc.
Henry Bass, Automation Creations, Inc.
David Danco, Delta Dental of Virginia
Sam English, CIE Partners
Jay Foster, SoftSolutions, Inc.
Doug Juanarena, GenTek Ventures
Allan Tsang, 88owls, Inc.
Gordie Zeigler, SyCom Technologies, Inc.

Innovation Award

This award recognizes an individual, a group of individuals, company, or other organization that sets the standard for thought leadership and innovation in their respective fields. By definition, they are doing something new or different, and they are doing it well. Their innovation represents a significant technological breakthrough or addresses a great market opportunity or both.

Abokia, Inc.
Advance Auto Parts
Aegisound, LLC/Adaptive Technologies Inc.
Breakell, Inc.
The Coaches Console
Delta Dental of Virginia
Design Nine, Inc.
DevelopEase, LLC
Flypaper, Inc.
InteractiveGIS, Inc.
Maxtena, Inc.
NewCity
Rackspace
Revivicor Inc.
TMEIC-GE(TM GE Automation Systems, LLC)
Trane, Inc.
TranSecurity, LLC
UXB International, Inc.
VTLS, Inc.
Whitman, Requardt and Associates, LLP

Educator Award
This award recognizes a K-12 educator in the NewVa Region that promotes math, science and/or use of technology in creative ways to transfer knowledge and help develop future technology leaders.

Michael A. Beamer, Roanoke County Schools
Burton Center for Engineering
Karen Busher, Colonial Elementary School
Angela Charboneau, Roanoke City Public Schools
Delta Dental of Virginia
Steve Franco, Glenvar High School
James Irby, Montgomery County Public Schools
Ferri Lockhart, Roanoke City Public Schools
Kelly Viars Ratliff, Salem City Schools
Matthew Rezac, Shawsville Middle School
James Struzinsky, Roanoke County Schools
Dale Vipperman, Christiansburg High School
Virtual Virginia

TechNite is an annual celebration of the NewVa Region’s technology community, providing an opportunity to network with more than 300 leaders in business and innovation. This year’s Master of Ceremonies will be John May, Managing Partner, New Vantage Group.

TechNite will be held in conjunction with the 2nd annual VT KnowledgeWorks Entrepreneurship Summit, April 7-8, 2010. The two-day workshop includes educational seminars, two business concept competitions, and an Open Angel Forum live funding session. Registration for both days is open to the public.

TechNite event information

Wednesday, April 7, 2010
5:30 p.m. Reception
7:00 p.m. Dinner & Awards Ceremony
The Inn at Virginia Tech
Business attire.
Seating is limited.
Please register by March 19, 2010

For more information, please visit the NewVa Corridor Technology Council (NCTC) site or call 540-443-9232.

In The World's First "Authenticity Policy"?, Mark Schaefer wrote with regard to Handshake 2.0's social media authenticity policy, "As far as I know, this is the first published, legally-validated 'authenticity policy.'"

As far as we know, Handshake Media, the parent company of Handshake 2.0, launched the world's first GIS auction on eBay for InteractiveGIS.

The legal work for these "world's firsts" was done by Ken Maready.

That's good work.

I wasn't able to attend the reception opening the new Hutchison Law Group office in Blacksburg, Virginia on February 18, 2010, but asked for a report from the founder of Rural System, Bob Giles.

Giles was the first to arrive, was instantly greeted by all the principals, and introduced to each one by Ken Maready.  As more people arrived, Giles was again included in introductions.  Needing to leave early, he found Maready and thanked him.

Ken Maready left his own party, his own colleagues, all those guests, and walked Bob Giles to the door.

That's better work.

Ken Maready, Hutchison Law Group, Bob Giles, Rural System, Scott Merrill, Hutchison Law Group

Photo credit:  Valley Business FRONT

***

Bob Giles, founder of Rural System, is the father of Anne Giles Clelland, founder of Handshake 2.0.

An attorney for technology entrepreneurs who’s entrepreneurial enough to launch his own law firm?  Unheard of.  For that attorney to offer outstanding, expert legal services at a fair price so technology start-ups can start up?  Unheard of.  An entrepreneurial attorney joining his law firm with another entrepreneurial law firm so he can expand the services he offers his clients?  No way.  For that attorney to ANSWER THE PHONE when a company founder calls with a question of mission-critical urgency? Never going to happen.
 
But it did happen. Ken Maready opened up shop in Blacksburg, Virginia.

Ken Maready:  An entrepreneur’s entrepreneur. 

***

We're delighted - and not at all surprised - to learn that Ken Maready of Hutchison Law Group has been nominated for a NewVA Corridor Technology Council’s Entrepreneur Award, recognizing an individual in the New River Valley and Roanoke Valley regions of Virginia who exemplifies what it means to be a risk-taker in the technology field.

Final winners of the awards in several categories will be announced at the NewVA Corridor Technology Council (NCTC) TechNite Awards Banquet. A sell-out crowd of 500 technology leaders is expected to attend. This year’s event will be held the evening of April 7, 2010 at The Inn at Virginia Tech.  The registration deadline is Friday, March 19, 2010.

Remember when Mark Schaefer, author of the blog {grow}, wrote in The World's First "Authenticity Policy"? with regard to Handshake 2.0's social media authenticity policy, "As far as I know, this is the first published, legally-validated 'authenticity policy'"?

That "legally-validated" was done by Ken Maready.

An entrepreneur himself as the founder of his own law firm, Venture Counsel, Ken has joined Hutchison Law Group and will head its new office in Blacksburg, Virginia. 

I was introduced to Ken Maready by Allan Tsang of 88owls, a fellow member of VT KnowledgeWorks. I met Helga Leftwich at VT KnowledgeWorks when she served on a panel to help member company founders practice their pitches to potential investors.  When I saw Helga Leftwich quoted in the Hutchison Law news release on Ken Maready joining the firm, I had to find out more about the these "It's who you know" connections.

I emailed Helga Leftwich questions and she kindly replied.

When did you first meet Ken Maready - was it at VT KnowledgeWorks? - and what about him and/or his expertise gave you the idea that he might be a good colleague?

We were fortunate to have Ken work with us at Hutchison Law Group for several years before he served as General Counsel at venture-backed Integrian, Inc. and then later moved to Blacksburg.  Ken's practice has always focused on representing entrepreneurial and growth companies and he has developed special expertise in working with venture capital transactions and venture-backed companies.  As we made the decision to open an office in Virginia, Ken was an ideal and natural choice to once again join us and oversee our office in Blacksburg. We are delighted to have him as a colleague and as part of the HLG team.  
 
What characteristics do you think might be distinctive and necessary for an attorney for technology-based start-ups?

Working with technology-based start-ups requires a special knowledge of the unique issues that start-ups face, so it's important to work with an attorney who has significant experience in this area. An understanding of the company's technology and/or industry is also useful.  Equally valuable in my view is that your attorney be someone who has a strong network of connections that are relevant to the needs of a start-up - for example, someone who can help connect you with potential advisors or investors, or additions to your company's management team or board of directors.  In my experience, entrepreneurs are also looking for someone who can combine sound legal knowledge with common sense advice and practical problem-solving. Ken epitomizes these qualities, and perhaps most importantly, he shares with all of us at Hutchison Law Group a love and passion for what we do and a desire to help not only our clients but also our entrepreneurial communities as a whole. 

***

Ah, that "strong network of connections" explains "It's who you know."  Online, "It's still who you know," and Ken Maready knows plenty about the online legal concerns of start-ups, entrepreneurs and technology companies.  In fact, Ken Maready's "Legal Concerns for the Web 2.0 Business" is forthcoming in volume one of the new series, Enterprise 2.0: How Technology, E-Commerce, and Web 2.0 Are Transforming Business Virtually, edited by Tracy Tuten, Ph.D.  The Enterprise 2.0 series is scheduled for publication by Praeger Publishers, an imprint of Houghton Mifflin Company.

VT KnowledgeWorks is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0. 

From Ken Maready:

As an attorney working with technology startups, I find it is best if I can meet with founders during the early conceptual stages, long before they organize their companies, as there are some early legal and business issues that can potentially cause missteps, even failures.  Although typically simple to address early, they can be very costly, if not impossible, to fix later on.  One of the earliest concerns is corralling and protecting a new venture’s core intellectual property.

When a group of founders first incorporate a company, it is common for them to assume that the ideas, concepts and technology (the "intellectual property") they’ve discussed among themselves will automatically belong to the company.  But it is helpful to remember that the company is its own separate entity apart from the founders and the company doesn’t own anything until someone assigns or licenses to it, usually by written contract.
 
It is important to get each founder to sign an assignment of intellectual property to the company as early as possible, typically in connection with the initial issuance of their stock.  This assignment will state that the company owns the ideas the founders have previously conceived or developed which are related to the technology or business practices on which the company is based.  This is in addition to any in-licenses from a university or other institution in which technology has been developed. 

And remember that the founders might not own everything they believe they own – IP developed, even in part, during the course of employment for someone else (or using their previous employer’s equipment or facilities) might give the previous employer a claim to a company's IP, something that needs to be planned around.

Not only will these steps help ensure that the company owns the technology the founders think that it owns, it will also help prevent a co-founder from "taking his or her ideas elsewhere" – at least as far as this technology is concerned.  

***

Ken Maready heads Venture Counsel, a law firm for entrepreneurs.  Venture Counsel is located at the Virginia Tech Corporate Research Center in Blacksburg, Virginia.  He writes the Venture Counsel blog and can be followed on Twitter, @venturecounsel. 

Ken Maready's chapter, "Legal Concerns for the Web 2.0 Business," was accepted for inclusion in volume one of the new series, Enterprise 2.0: How Technology, E-Commerce, and Web 2.0 Are Transforming Business Virtually, by Tracy Tuten, Ph.D.  The Enterprise 2.0 series is scheduled for publication by Praeger Publishers, an imprint of Houghton Mifflin Company.

Added 3/22/10:  Ken Maready has joined Hutchison Law Group.