New Way to Invest in Startups and Grow Entrepreneurship with the JOBS Act

By Joanna Kulesa

Entrepreneurship is everything in the US. It’s what sets us apart. Schoolchildren are raised on stories about inventors like Benjamin Franklin and Thomas Edison, and entrepreneurs like Andrew Carnegie and Henry Ford. Here in Silicon Valley, we tend to take it for granted that the entrepreneurial spirit literally fuels the economy.

It’s easy to forget the rest of the world isn’t like Silicon Valley.

We’re here in this booming hub where creative startups are everyday clients. We work with the world’s top VCs who fund our clients in the tens of millions. Of course this isn’t the case everywhere. In order to help small businesses thrive on a larger scale, we need to get creative and loosen up national business practices. The new Jumpstart Our Business Startups (JOBS) Act could be just the sort of help US startups need.

In signing the JOBS Act in the beginning of April, President Obama acknowledged the need for what he called “game changing” practices in the business world. An article in Mashable defined the JOBS Act as “a bipartisan bill which aims to make it easier for startups to grow, hire employees and contribute to the United States’ sluggish economic recovery.”

The bill classifies startups as “emerging growth companies,” and says companies under this description may now turn to online investors to raise their startup capital. The idea behind the JOBS Act is based on "crowd funding." Investments would come from online investors, and be implemented in a way similar to websites like Kickstarter or Indygogo, which allow users to raise money for creative projects via online donations.

However, the JOBS Act isn’t for everyone. There are many complexities and responsibilities inherent in taking on investors. As another Mashable article points out, the crowd funding feature of the bill will impact investors as well as startups because the law allows almost anyone to invest. Mashable points out that in the amended bill, the Senate gave the U.S. Securities and Exchange Commission 270 days to interpret and issue rules for the public. So, it may not be legal to make an investment through the JOBS Act until 2013.

In the meantime, it’s important for startups to hash out a communications plan for investors. You’re now answering to “many bosses” and they’re going to want to be over communicated to. How is the business executing on its plan? What is the customer adoption rate? Is the product delivering on its promise? Are partners happy? Are revenues growing?

I think it’s great that the newest generation of entrepreneurs will have access to an alternative to the traditional IPO, bank borrowing and VC investing. However, as with any new model, all parties should approach the JOBS Act well educated and with eyes wide open. 

Joanna Kulesa is principal of Kulesa Faul, in San Mateo, CA. Kulesa Faul focuses on public relations, social media and communications strategies for enterprise software and consumer technologies companies.—www.kulesafaul.com

Facebook Draws the Line to Protect Employees’ Online Privacy

By Joanna Kulesa
For many employers, it is standard practice to peruse potential applicants' Facebook profiles, but in some cases employers are taking it a step too far: A number of potential employers have demanded that applicants hand over their Facebook login information so that they can view potential employees’ restricted profiles. In an article I came across recently, Facebook stood up for the rights of applicants. They responded publicly by stating that users should not be required to give up their Facebook passwords or any other private logon information and warned employers that accessing a job seeker's account under such conditions violates the network's policies, infringes on the privacy of the user's friends, and could expose the employer to legal risks.

Now, if you’re in the business of national security you should expect different requests from your potential employer. If you go to work at Lockheed Martin, you should expect and accept that full disclosure will be necessary for gaining security clearance at any level—even if you’re just applying for a maintenance position. This includes more than just handing over a Facebook password. When my sister applied to a big government contractor, personnel physically visited the neighborhood she grew up in and interviewed neighbors who knew her as a child. People now have "digital public personas,” and it’s assumed companies of this type will inspect your public life online just as closely as offline.

However, unless a company is in the business of national security, I don’t feel they have any right to this kind of information. If you’re Proctor & Gamble, for example, you have no business requiring full access to a person's Facebook account. In fact, if an applicant sets up their account to allow access only to approved friends, this serves as notice that they want their privacy maintained in the online world. In this case, potential employers should respect the privacy of applicants. Of course, anyone with a fully open account is notifying the world of the inverse. A company certainly should take a look at a prospective employee's behavior online as long as that information is publicly available.

That said, as the online social world matures, things that seem shocking or career ending today aren't going to raise eyebrows tomorrow. I don't think ten years from now an indiscrete photo of a person found online by a company manager is going to decide whether she gets hired or fired. Rewind 12 years and I required employees to cover their tattoos at all client meetings. Now? No bid deal. The young people out there today doing stupid things online are the future managers who will handle hiring and firing at corporations, so chances are they'll be more compassionate and understanding of youth's virtual follies.

Joanna Kulesa is principal of Kulesa Faul, in San Mateo, CA. Kulesa Faul focuses on public relations, social media and communications strategies for enterprise software and consumer technologies companies.—www.kulesafaul.com