Is the grass always… Oranger?: A DAY IN THE SYRACUSE STARTUP SCENE

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By Matthew K. Pelkey

Upstate’s startup ecosystem is booming. Our office is based in Buffalo, NY, but I recently had the pleasure of touring Syracuse’s startup scene and met with Nasir Ali from Upstate Venture Connect and Seed Capital Fund of CNY. I started the day with lunch in the beautiful and historic Armory Square, followed by tours of co-working spaces, stopped in to chat with the folks at Genius NY, had coffee with some finance professionals, and ate dinner at the newly renovated Syracuse Hotel—a renovation which rivals that of one of Buffalo’s most symbolic retreats, the Hotel Lafayette. Suffice it to say, it was a busy day, with so much to see in Syracuse, much of which mirrors similar developments being made in Buffalo and throughout Upstate.

Lobby of the Hotel Syracuse

Syracuse has its challenges, and in many ways, cities like Buffalo are far better-positioned to ensure sustainable growth for our future generations. I firmly believe that every community in Upstate New York can—and should—learn from one another to create a thriving, regional ecosystem. After all, while each community is unique, we all face similar challenges and legacies, from a thriving manufacturing past, now relegated to memories and inspiration. Here are a few takeaways that we can all learn from across Upstate New York’s startup ecosystem.

UberPITCH

Written by Colligan Law on . Posted in Articles, News

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By Rob Townsley

I work in a firm that usually provides legal services for startups and entrepreneurs, but pitching my own business idea in the UberPITCH startup competition last month was something I couldn’t pass up. UberPITCH, was a hybrid of the shows Shark Tank and CashCab. Call an Uber, and instead of a driver, a venture capitalist (VC) is delivered to your doorstep, and I had seven minutes to pitch my startup. The grand prize was five thousand dollars cash! And it was the first time Uber was in Buffalo, through a partnership with 43North.

After practicing my pitch in the morning and running it by a few colleagues at Colligan Law, I was ready to request my Uber and try to win $5,000! I opened the app and discovered that all the UberPITCH vehicles were in use and I would have to wait a while for my ride to arrive. It was a testament to the popularity of the mini startup competition, and also made me look forward to the day when the Uber is operating and available in Buffalo, with minimal wait times.

Critical Path Life Sciences Accelerator Program

Written by Colligan Law on . Posted in Articles, News

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By David J. Colligan

The First Annual Critical Path Life Sciences Accelerator Program sponsored concluded Thursday, January 12, 2017.  As part of the final preparation of the eight startup companies who participated until the end of the program, a panel of investors was assembled to present their experiences as investors in various roles.  David Colligan of the Colligan Law Firm was selected to present his experiences as a lawyer for investors, both Angel and Venture Capital, as well as a lawyer for many startups.  Kevin Centofanti, president of Brooks Houghton Investment Bank, was selected based on his ability to assemble large pools of capital to finance rapidly growing startup companies.  Theresa Mazullo of Excell Partners was selected as Excell Partners runs several different venture capital funds that have many startup companies in their portfolios.  Lindsay Stencel of Launch NY was selected as she is a general partner of a venture fund in Columbus, Ohio and serves part-time as the seed fund manager for Launch NY here in Buffalo, New York.  Sharon Weinberg was on the panel representing Empire State Development’s new $10,000,000 fund to support entrepreneurs with actual funding.  Alex Zapesochny was on the panel because of his successful co-founding of Icardiac and other successful startups before that which had a successful run from startup to exit.

Court Ruling Ensures There’s No Turning Back on Scajaquada Traffic-Calming Measures

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By Matthew K. Pelkey

On Wednesday, the New York State Department of Transportation will hold what is likely its final public meeting on design changes to the Scajaquada Expressway – a project that has no doubt garnered controversy and heated discussions between officials and community stakeholders. But those pushing for further traffic calming measures may have just gotten a little help from the New York State Court of Appeals.

Turturro v. City of New York (December 2016) is a case involving a 12-year-old boy who was seriously injured when he was struck by a speeding car while riding his bicycle on Gerritsen Avenue in Brooklyn. Gerritsen was a 30-mph, four-lane roadway bordered by parkland. New York City officials had received many complaints about speeding but recommended additional police enforcement instead of traffic calming – a decision that ultimately resulted in New York City being held liable for the child’s injuries.

What is important about this case is the shift from simply relying on police enforcement to curb traffic and speeding problems, to now placing an affirmative duty on municipalities to study and implement traffic calming. If a government agency is aware of a dangerous condition and fails to study or implement traffic-calming measures, it may now be liable for resulting damages and injuries. Whether our state’s highest court realizes it or not, it may have just ushered in a new era of transportation design and put an end to prioritizing automobiles over people.

This shift in duty has the potential to fundamentally alter the DOT’s current design plans for the Scajaquada. It also likely ensures that the speed limit remains at 30 mph.

Increased Salary for Exempt Employees in New York

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New York State employers must pay an increased minimum salary for exempt employees effective December 31, 2016. The NYS Labor Department on December 28 adopted a rule increasing the minimum salary for exempt executive and administrative employees in upstate New York from $675.00 weekly to $727.50 weekly ($37,830 annually). The minimum exempt employee salary for New York City and Long Island is higher.

The proposed U.S. Department of Labor regulations which would have increased the minimum salary for exempt employees to $913.00 weekly are still on hold because of the injunction issued by a Federal Judge in Texas. The Labor Department has appealed this ruling, but it is questionable whether this challenge to the injunction will continue after Donald Trump takes office.

Also, on December 31, 2016 the minimum wage for upstate New York will increase to $9.70 per hour, and the upstate fast food minimum wage will increase to $10.75 per hour.

New York Wage Law Changes 12/31/16

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The proposed U.S. Department of Labor regulations which would have increased the minimum salary for exempt employees to $913.00 weekly are still on hold because of the injunction issued by a Federal Judge in Texas. The Labor Department has appealed this ruling, but it is questionable whether this challenge to the injunction will continue after Donald Trump takes office.

However, New York employers will most likely face an increase in the minimum salary for exempt employees in New York on December 31, 2016. If the increase proposed by the NYS Labor Department is adopted the minimum salary for exempt executive and administrative employees in upstate New York will increase from $675.00 weekly to 727.50 weekly ($37,830 annually). The minimum exempt employee salary for New York City and Long Island is higher.

The public comment period for the proposed exempt salary increase expired on December 3, so we should know soon if this increase is finalized. It appears likely that it will be adopted.

Also, on December 31, 2016 the minimum wage for upstate New York will increase to $9.70 per hour, and the upstate fast food minimum wage will increase to $10.75 per hour.

Why Do Cap Tables Kill Startup Companies?

Written by Colligan Law on . Posted in Articles, News

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By  John A. Moscati, Jr. and David J. Colligan

As lawyers practicing in the startup space, our clients often come to us with less than perfect cap tables.  Some don’t even know what a cap table is.  A cap table is a spread sheet that shows the ownership of the company by class of owner, timing of investment and various rights held by owners of the capital stock of the company.  To an experienced investor, a cap table tells the story of the company.  Like all stories, it has a beginning, middle and end.  By reading a cap table and asking questions based on its content, an investor can see when the company started, who the founders were, when significant pivots occurred, how much capital has been raised, and when.  Unfortunately for many entrepreneurs, they have written the story of their companies by issuing equity and granting various rights to founders, friends, family, and early investors, without an appreciation of how potential future investors will “read” this story.

If a startup wants to create a cap table spreadsheet, we advise them to identify shareholder groups by class (i.e., founders, angel investors, friends and family, etc.); and to include number and class of shareholders or shares or units issued followed by percent of outstanding, and if applicable, percentage of ownership fully diluted.  Where applicable, footnotes should disclose any conversion right or other preferences and any options, warrants, option pools or other rights to acquire equity should be disclosed (and included in the “fully diluted” calculations).