Entrepreneurial Thought Leader Speaker Series

Tools

Changes in Stock Options - Gordon Davidson (Fenwick & West)
Date: 5/26/2004
Length: 3 minutes
Speaker(s): Gordon Davidson
Sources: Stanford Technology Ventures Program
Description: The way in which stock options are valued is going to change. Though many companies have generous stock options, they also pay generous salaries because Silicon Valley is an expensive place to live and engineers need cash.
Therefore, there is not a big differential between the salary with stock options and the salary without stock options. The size of stock options is likely to decrease, which means a reduced ownership of the company by employees and therefore a
lowered incentive for creativity and innovation.

Other Videos in Series

Changes in Stock Options - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: The way in which stock options are valued is going to change. Though many companies have generous stock options, they also pay generous salaries because Silicon Valley is an expensive place to live and engineers need cash.
Therefore, there is not a big differential between the salary with stock options and the salary without stock options. The size of stock options is likely to decrease, which means a reduced ownership of the company by employees and therefore a
lowered incentive for creativity and innovation. Watch More
Early Silicon Valley Influences - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Early in his career, Gordon was influenced by some of Silicon Valley's great founders. He started out as a mechanical engineering student at Stanford and developed a strong relationship with a professor who challenged his
assumptions and forced him to not be satisfied with an incomplete answer. Watch More
Elements of Entrepreneurship - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Entrepreneurs are creative and believe that they can change the world. They also must have drive and perseverance and believe the company is going to succeed, no matter how trying the circumstances. The advice of mentors is also
invaluable. Watch More
Entrepreneurs Must Have Drive and Perseverance to Be Successful - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Gordon discusses companies he believes exemplify outstanding drive and perseverance. Apple has tremendous creativity that has paid off with the success of the iPod. Oracle is extremely dedicated to its vision and has surmounted
obstacles in order to achieve it. Intuit has a relentless commitment to the customer that has led the company through tough times. Watch More
How Can First-Time Entrepreneurs Be Successful? - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: A number of great companies including Oracle, Apple and Google were started by first-time entrepreneurs. Even with great mentoring, how were they so successful without experience? Gordon answers that first-time entrepreneurs are
the ones with the passion and drive to build a great company. Watch More
How Fenwick & West, LLP Choose Their Clients - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Fenwick & West selects clients based on interviews, but also recognizes that a wide range of people can be successful. If a client is intriguing and seems to have promise, F&W help to set them up with venture capitalists.
If the project gets funded, F&W invest a number of months' work into the company and they go along for the ride. Watch More
Taking Your Company to a New Level: The IPO - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Google has decided to IPO though the Dutch auction method, which has never been done for such a large-scale offering. In the Dutch auction method, each buyer makes a blind bid for what they are willing to pay. The seller then
finds a clearing price for how many shares they want to sell, and the people with bids above that price are awarded stock. The method is designed to avoid the tremendous first day stock price volatility experienced by newly-public
companies. Watch More
The Decision to Become a Lawyer in Silicon Valley - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Gordon caught the startup bug while working for Measurex, but wondered if there was a way he could work for multiple startups at a time, as an advisor for many companies rather than as an executive at just one. He attended law
school and Apple was one of his first clients. He deeply regrets not accepting Steve Job's request to pay the $500 legal fees in stock instead of cash! Watch More
The Duties of a Lawyer Board Member - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Do people expect unusual services from a board member who is also a lawyer? Gordon himself does not serve on boards for this reason. He wants to keep a clear role for himself and maintain a straightforward attorney-client
relationship. He wants his clients to know that his advice comes from an objective point of view, and not because of an interest from a board seat that he may hold. Watch More
The Impact of Outsourcing on Intellectual Property Protection - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Outsourcing is a common trend in the market right now and has been a topic at every board meeting. The economics for outsourcing are compelling, but it is hard to know what the intellectual property protections are like. Though
copyright and patent protection exists in theory, it is still difficult to ensure protection overseas. Watch More
The Ins and Outs of Financing a Company - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Scott Cook and Tom Proulx of Intuit approached Gordon for advice on what venture capital to accept. Gordon recommended they accept the funding based on the two lowest valuations for the company because the offers came from John
Doerr and Burt McMurty, two of the best venture capitalists in the business. Even at the lower valuation, Gordon predicted that the leadership from these two men would more than make up for the lost profits in the long run. Watch More
The Role of Lawyers in the Startup Ecosystem - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: In addition to handling the legal work, lawyers help companies get off the ground by making introductions for founders of start-ups to potential investors, mentors, and accountants. They also help negotiate licenses, execute
customer contracts, public offerings, and mergers, sit in on board meetings, and give advice. Watch More
Using Creativity to Solve Problems - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Gordon describes the idea of bullet train thinking. You assume you want a train that can travel at ten times the speed of a conventional train and then figure out what would have to be possible in order to make it work. With this
assumed result, you must think of creative solutions that otherwise would not likely be considered. In a startup, when you only have two months left of money, you find a solution in those two months because it is the only option. Watch More
What Should an Engineer Know About Law and Business? - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Gordon recommends that everyone understand the basics of stock, financings, intellectual property protection, and the necessary ecosystem to launch a company. He also suggests having role models and understanding the mentality and
infrastructure that makes Silicon Valley so conducive to startups. Watch More
When is a Dutch Auction Appropriate? - Gordon Davidson (Fenwick & West)
Gordon Davidson
5/26/2004
Summary: Gordon questions whether the Dutch auction system is ever appropriate for stock, since it was developed for tulips, of which there is a finite quantity. He worries that people will artificially inflate their bids if they know that
the company is planning on giving each bidder only a percentage of what they ask. He also speculates that the institutional investors may not bid, but will wait until the market settles. Whatever the case, there is not yet enough data to
convincingly predict when a Dutch auction will be successful. Watch More

comments powered by Disqus

Search e360TV

Stay Connected

Email Newsletter Signup

Want to get connected? Sign up to receive regular news, polls and updates from The Kauffman Foundation.

Kauffman Founders School
A robust online curriculum for entrepreneurs.
Explore Founders School >



Top of Mind Blog providing the latest in entrepreneurial news.
Go to the TOM Blog >


1 Million Cups
A network of U.S. cities facilitating a weekly entrepreneur education program.  Go to 1 Million Cups >


FastTrac
Whether you are starting or growing a company, FastTrac will help you live your dream at each stage.
Go to FastTrac >

Email Newsletters

Want to be up-to-date with the latest news and updates from Entrepreneurship.org? To subscribe, just give us your email address below; you'll choose which e-newsletters you'd like to receive on the next screen.