I haven’t blogged much about entrepreneurship lately but I got the “itch” to do so as I was reading a thread of emails on the nextNY list about an entrepreneur who was thinking about hiring a lawyer for an employment contract.

There are a few times that a startup should seek counsel when putting together documentation:

1. Founders Agreement
2. Corporate Entity Setup (LLC, C-Corp, etc)
3. Employment Agreements
4. Term Sheets (when negotiating, etc)
5. Notice I’m not saying patents here, as there are always ways around them. If you DO file a patent, then seek legal help as well.

One thing my father always taught me was if you are going to do something, you might as well do it right the first time. I can’t tell you how many entrepreneurs I meet with try and cut corners around legal. If you are putting together ANY agreement, please seek counsel. Yes, it costs a bit of money, but in the end, it will be well worth it. You can read any book you want from Borders or read as many blogs you want too about negotiating term-sheets, but there are many reasons why lawyers have jobs and they are great at what they do.

I’ll admit that as an entrepreneur, I hate seeing legal fees build up, but over time, they are well worth them (if you select a good lawyer of course)

In terms of employment law, also seek out legal counsel. When you’re negotiating your stock options, salary, non-compete, etc - legal certainly helps. Remember, counsel does not have to be in the “front” - meaning, they can act as advisors and be silent. If it makes sense for them to emerge, then they will at the right time.

If you are starting up a venture and cannot afford legal fees for the above agreements, then I’d seriously question the future of the venture. Do things right the first time. Legal mistakes upfront can ruin a business (investors won’t invest) or they will cost a multiple to straighten out down the road.

I'm having a lot of thoughts about twitter.  There are plenty of good primers on twitter, and lots of discussion of how the API traffic far exceeds site traffic.  There's plenty of discussion about web metrics that suggests that such a service really can't be accurately measured by panel based or site-side analytics services.  What this post is about, though, are the twitter use cases, the experiences of using the service.

One thing that I have observed from a conversation about a rash of new twitter followers coming out (apparently a couple of days ago the twitter mail queue held its breath and then burped out a whole bunch of notification e-mails) that in many cases these followers had a kind of artificial quality- particularly in cases where they are following dozens and being followed by far fewer.   That irks a lot of people, because it suggests that you are not contributing as much as listening, or dare I say, stalking. 

Twitter, to my mind, will lose value if it moves toward to the 90/10 rule participation - Twitter is no fun if you never send anything, as many people have pointed out to me.  What twitter really does is force you to think about the balance...unless you're a bot.

When is it best used?  When  you send a lot and listen a lot.  Charlie and Nate's video about Jamba Juice and Twitter or Michael Arrington's Comcast Outage or HR Block experiences are perfect examples of this.  There is of course the infamous @jasoncalacanis passport debacle. 

The twitter audience is kind of fickle..and the twitsphere really centers around tech right now, with @jasoncalacanis kind of the king of twitter self promotion.  He can cause weird stuff like this to happen:

One mention by @jasoncalacanis and I get a torrent of new friend requests. Howdy folks!

I probably  err on the side of being too human, in that I follow too few people who are following me.  I try to exercise judgment about how much information I can reasonably consume- I am noticing that if you follow enough high volume twitter users, you can miss a lot of stuff, even @ messages from real-life friends. I try to make my tweets a mixture of the immediate, the insightful, the random and the humorous.

I've never met @mikedoe in person but I really enjoy his tweets. Most of thew original people I followed on twitter were NextNY people like @innonate @ceonyc and @quirk.   Jason Calacanis sent a whole bunch of people to follow @alanataylor- I'm sure she's gonna go far.

So, if you got here from twitter, say hi here in the comments or D msg me- er, do they have bots that do that?

Fahad Khan, founder and CEO of Social Shore, explains why he began the Silicon Alley company, which provides technology, services, and solutions to small, large, and startup businesses. Ideal clients are cost-effective companies that are in search of a solution for their social media problems.

• Provides services and solutions to new media companies in order to help them in their social media problems
• Looking to raise money in the future to hire experienced executives or when looking around to expand to a global scale
• One major challenge is figuring out a fair pricing model for social media applications

NY-based wine social networking service Snooth will announce today their expansion into 40 countries. This makes the site more comprehensive than only covering wine in the U.S. and should bring a new userbase to the network. Snooth has added a worldwide price and merchant database and connects users with local merchants in their area. 

Snooth CEO Philip James tells me that their goal is to “establish a truly global wine resource, complete with social elements, detailed recommendations, editorial content, and seamless merchant connections.”

We initially reviewed Snooth back in November when they presented at a meetup in NYC. Snooth is a social shopping site and offers suggestions on which wines you might like based on your reviews and ratings. Revenue is generated on a clickthru/purchase from a wine merchant. Back in November I noted that affiliate commissions alone might not be enough to sustain the company in the long-term. I still believe they are best to look at diversifying their income stream.

Buddy Media announced today that they have raised a Series B round of funding to the tune of $6.5 million. The round was led by Softbank Capital with 14 Series A investors participating in the Series B. Ron Conway, GreyCroft Partners and the European Founders Fund also participated in the round.

The other major announcement coming out of Buddy Media HQ is the launch of a "social advertising network." The idea is to bring together advertisers and social media applications. The new network uses a self-service platform and allows for flexibility in the creative formats and in the pricing models. The network is invitation-only allowing Buddy Media to only rep the apps that they believe are the best. The company claims Priceline.com, Microsoft, Anheuser Busch as a partial client list.

This news comes after the news today that Lookery served a billion ads so far this month. Check out Buddy Media's demo at the NY Web 2.0 meetup late last year.

NY-based semantic search engine Hakia has announced the launch of what they are calling the, "Credible online health search." It appears to be a competitor to iMedix. Instead of showing the most popular results first, they are showing the ones that are the most credible. Hakia has published a list of the sources they deem credible. This is a step away from machine powered search and closer to human-based search.

Hakia describes the updates as, "To ensure credibility, hakia is providing results from sources that have met the quality criteria set forth by the Medical Library Association. hakia’s users can now trust what they find, because experts have vetted the sources."

I've said before that I think Hakia does a better job than Mahalo as it brings together human and machine search into a smarter page. Hakia needs to spend more time and effort on marketing now. They are competing with Google on the machine side, Mahalo on the human side, and now iMedix on the health side. All three competitors have serious money and some level of famous executives.

Tonight I attended a workshop named "Angel Investing 101" which I've renamed to "The Secrets of Angel Investing." It was held at the brand new, not even open yet 92nd Street Y (Hudson). The workshop was run by David Rose, CEO of Angelsoft and Chairman of The New York Angels. I wanted to film the sessions for ya'all but was politely asked not to. I am going to try to sit down for a video interview with David in the coming weeks.

Let me start by noting that this easily could have been a paid event. I'd venture it was worth about $199-299 for the hour and was one of the best educational sessions I've attended in a long time.

Here are some of the takeaways:

• 600,000 companies started each year that are looking for financing
• 350,000 get funding from the founders
• 200,000 get funding from friends and family
• 1,200 get funding from a VC 50,000 get funding from an angel(s)

Angels mostly invest in early stage companies. The typical Angel investor is 57, has a masters, 15 years as an entrepreneur and 2.7 ventures funded. Angels must be "accredited investors" which is a designation by the SEC and means that the person has $1 million in assets and makes at least $200k/year in income. The typical Angel investor has 9 years investing, has closed 10 investments with 2 exits and an average of 10% in Angel investments.

David stressed over and over that if you can bootstrap, you should.

An Angel Group is a way to combine deal flow, pool capital, share expenses, bring a variety of experience, make better investments and create an enjoyable social environment.

Some stats on the U.S. Angel Group market for 2007

• Average investments per group: 7.3
• New investments per group per year: 4.5
• Total amount invested: $1.9 million
• Amount invested per round: $265k
• Amount invested per Angel per deal: $33k

What are Angels looking for?

• Great entrepreneurs
• Scalable business model
• Low investment required
• "Unfair advantage" - basically what's special about this company that will help it stand apart
• External validation
• Reasonable valuation

Angel Economics

Rather than explain this - just look at the chart below. Basically what it comes down to is for the Angel to actually walk away with the return they are looking for, one out of ten deals must return 30 times the investment. The math might be a bit overwhelming but just review the numbers. Out of 10 deals:

• 5 will go out of business
• 2 will return what the Angel put in
• 2 will return 3x
• 1 must return 30x

Angel Groups - What's the process look like?

Part I - the application

1. Have a business plan
2. Research Angel Groups - know which ones are suitable for you
3. Apply Online - David stressed the importance of a video pitch

Part II - the review and deal

1. Meet the screening panel
2. Make the cut
3. Work with a coach - NY Angels provides one free and it's mandatory
4. Present to entire group
5. If selected, attend a due diligence meeting
6. Negotiate the term sheet

David left us with information and an overview of Angelsoft. I've decided to make that a separate post over the weekend. Thanks to David, nextNY and all of the great sponsors for the event tonight.

Howard Greenstein has a review from the event as well.

David S. Rose, the Gabriel of the New York Angels, last night unveiled ‘the secret economics of angels’ at an event at the very cool, brand new 92nd Y Tribeca Music Club and Cafe on Hudson Street.

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Meebo is announcing this morning the hire of Carter Brokaw has joined the company as Chief Revenue Officer today. Brokaw most recently was with Warner Music Group and also worked for CNET for over 10 years in a variety of sales positions. Brokaw will be based in NYC!

"Meebo is a highly-promising company with an incredible team and defendable technology," said Carter Brokaw, Chief Revenue Officer, Meebo. "From a monetization perspective, I’m looking forward to helping leverage Meebo’s core strength by bringing brands into the conversation in ways that are engaging, integrated and measurable."

There were reports yesterday that Meebo wasn't able to sell themselves so they are now pursuing raising another round of funding.

Check out our interview with Meebo founder Seth Sternberg.

Update: Marshall at RWW has additional information on Meebo's advertising plans.

The always wonderful Dina Kaplan, Co-Founder and COO of New York City based video sharing network blip.tv, is also the host of a little show called Blip on Blip and episode #20 features the recent Break a Leg video, "Triple". Thank you Dina for the shout out! Now what makes this video even cooler is this episode of Blip on Blip was produced and edited by the uber experienced New York City video editor, Bill Cammack. You might remember Bill from The Shirtless Apprentice episode, Color Correcting White Balance in Final Cut Pro. And just recently, YouTube sensation, xgobobeanx did an episode with The Shirtless Apprentice and the New York City based star of that show, Jill, is friends with Bill and the whole crew of New York City based online media company For Your Imagination who are also the executive producers of Break a Leg. What a small online video world it is....