An early decision in the birth of a company is the jurisdiction in which to incorporate or organize.  Actually, I see this as a very easy question.  However, there is no shortage of legal advice (sometimes bad, which usually is free) out there.  For whatever reason, choice of jurisdiction seems to be a popular target and Nevada seems to be the darling (with Wyoming the first-attendant).  I thought it would be worth quick discussion.

As far as I am concerned, an entreprenuer generally should only consider incorporating or organizing her company in one of two jurisdictions: 1) the state of your principal place of business or 2) Delaware.  If you are based in Utah, form a Utah company.  Otherwise form a Delaware company.  The only exception for this (again, in my opinion) is you might consider forming the company in another state if you foresee moving the business in the future to that state.  There are certain reasons to favor Delaware over Utah (e.g., certain investors — typically VCs — might request or require it), but for a number of reasons, Utah is the natural choice for a Utah-based company.

Now you have my position, let me explain.  Incorporating (and for convenience, by “incorporating” I am including forming all non-corporate entities), in a state where you are not principally located comes with certain costs.  These costs can be monetary, time, administrative, risk, etc.  For one, you likely will need to hire a service to act as registered agent in that state.  You may need to use that service (or some other) to make all your state filings for you.  If you don’t, you need to deal remotely with the office of the Secretary of State of the state in which you incorporate.  You will need to qualify (and maintain the qualification) to do business in the state where you actually conduct your business.  You will need to find an attorney who is licensed to practice in the jurisdiction or is at least familiar with the business statutes and laws of that jurisdiction.  It is unusual to find lawyers in Utah who are licensed in and familiar the laws of other states (with the possible exception Delaware, California and to a lesser degree New York).  Finally, some states tend to be more difficult to work with than Utah administratively speaking.

Costs are costs.  They are not bad, per se, but the costs of incorporating in a foreign jurisdiction may not be worth it when compared to its benefits.  Probably the most commonly touted (and usually false) benefits of incorporating in a foreign jurisdiction are tax savings.  If somebody tells you that you can avoid income tax (either from the employee or company perspective) by simply organizing your company in Nevada, Wyoming, Texas or any of the other handful of income tax-free states, you likely are getting bad advice.

Generally speaking, employees are taxed by the state in which they performed the services for which they earned their wages.  The jurisdiction of formation is a separate question from employee income tax.  For instance, if you work in Utah, Utah will levy income tax on your Utah-source wages.  Incorporating or organizing in a income tax free jurisdiction will not get you out of those taxes unless your wages are tied to work performed in that state.  Many of us work for companies incorporated in a foreign jurisdiction (e.g., DE, CA, etc.).  However, none of us are receiving a tax bill from those states unless you perform work there.  The same is true for avoiding taxes. 

The same is also true for corporate income tax.  States generally weigh three items in determining whether an company owes income taxes in a state: location of property, location of sales, location of employees.  Realistically speaking, there is little or no tax benefit for a company based in one state to incorporate in a tax-free jurisdiction unless it has some actual business nexus with that state.

Another benefit touted for states such as Wyoming or Nevada are the company-friendly corporate laws.  While there may be some beneficial aspects of the laws of those states, in my opinion, they are relatively small for the average company compared to the costs of incorporating in those states and probably not worth the costs of doing so.

To be sure, Nevada and Wyoming are fine states and their laws are equally fine.  Indeed, were I an attorney located in Wyoming, I predict I would be saying to incorporate in only in Wyoming of Delaware.  In addition, incorporating in a foreign jurisdiction certainly will not destroy your company, but the costs associated with doing so are real and the benefits largely are immaterial.

Graduation was last Friday. The David Eccles School at the U graduated approximately 1,100 students with bachelor’s, Master’s, and Ph.D. degrees. I love graduation. It is a truly joyous event for everyone involved. Everybody is happy, families and graduates are rightly proud of the accomplishment graduation represents, and we had a huge crowd in the Huntsman Events Center. My guess is around 8,000 family, friends, spouses, in addition to approximately 700 students who attended graduation and approximately 50 faculty who were there to celebrate our graduates accomplishments.

One of the developments this year was a substantial number of graduates who had majored in entrepreneurship. Entrepreneurship as a major is subject to debate in entrepreneurial circles. The basic argument is that “appetite for risk” cannot be taught, and this is what it takes to be an entrepreneur. We can teach people how to get financing, how to put together pro formas, the fundamentals of market entry, and help them develop strategic entry plans and at the end of the day — so the argument goes — they are not entrepreneurs if they cannot make the jump off the cliff and start the firm.

There are others who view this slightly differently. Jon Huntsman spoke at the David Eccles School several years ago, and he strongly endorsed the idea of “getting paid to learn the business.” His point was that no one knows enough about their industry and the fundamentals of running a business coming out of school, so potential entrepreneurs should put in a few years really learning the business and industry they hope to enter. From this perspective, take a job, pay attention, and keep developing your business plan until you have the credibility to launch a firm.

These two perspectives on how potential entrepreneurs should launch their careers both have some validity, and they are probably complementary. I have a different take on the entrepreneur major and why it is becoming popular nationwide. The entrepreneur major is the only major in business where students are trained to think about value creation as their core activity in the world of work. Every other major is about mastering a technical body of knowledge necessary to occupy a professional position working for someone else. Entrepreneurs, on the other hand, are grilled from day one on how they are going to create economic value through their business activities, and they have to develop answers that are about running the business, including serving customers, financing operations, and developing the human resources necessary for the firm to grow and prosper.

Entrepreneur majors learn about business. Few of them will start a business coming out of school because they know what they do not know. Will they eventually start businesses? Some will, some will not. I do not see starting businesses as the most important contribution they can make, although I hope the risk takers have the preparation to avoid the more obvious landmines that tank start-ups in the early phases. For the typical graduate who is more risk adverse, I think the payoff is they look for opportunities to generate value, and these are the kinds of employees we all want working for us. They are also employees who advance into leadership roles in the firms where they work.
I think the growth in students majoring in entrepreneurship is going to make a difference for Utah’s labor force over the long run, and I think the students graduating with this major are going to be the contributors to the growth of firms in Utah for a long time. It is great to see students graduating with a business degree who are interested in business, and this is what the entrepreneur major is all about.

Later.

I was quite proud of my first foray into the blogosphere.  In fact, I had great ambitions to write a whole series of legal related posts for the entreprenuer.  However, the only two comments (the verbal kind) I received on my first post essentially were that it is the most boring thing they have ever read (and one of people saying this is a tax lawyer!).

Accordingly, I am revising my plan (though not giving up on addressing legal issues for the entrepreneur).  The posts hopefully will be less “bookish,” more practical and marginally more interesting.

With that in mind: Entity Formation

There are certain types of businesses that will form as partnerships, S-corporations, etc., but odds are, your decision of the type of entity you want to create likely will be a binary one between an LLC and a traditional “C” corporation.

While LLCs and corporations have many similarities (e.g., limited liability), they also have a number of differences.  The principal one of these is the tax treatment.  Corporations pay their own taxes.  LLCs do not.  Income and losses of an LLC flow through to the owners of the LLC, who pay any taxes directly.  This means that to the extent a corporation makes a dividend of taxable income, that income will be taxed twice (once at the corporate level and once at the shareholder level).  This can be a very significant benefit.  People often focus on this “double taxation” issue and assume LLCs are the superior business vehicle.  All else equal, that is true.  However, not all else is equal.

A number of factors tend to favor corporations over LLCs.  For example:

• due to the flow through nature of LLCs, the admnistrative burden of keeping track of capital accounts, allocations, distributions, etc., in LLCs can be quite high.  This is largely non-existant with corporations.  Quite possibly, the tax savings associated with LLCs may be outweighed by administrative costs.
• the “double tax” only is an issue to the extent (1) a corporation has taxable income AND (2) the corporation issues a dividend.  Most early stage companies are not going to fall in that category.
• VCs rarely invest in LLCs (primarily because they don’t want pass-through income).  If you are going to raise VC money, you need to be a corporation.
• Because LLCs are highly driven by tax issues, legal fees tend to be higher with certain types of LLCs.
• Operating agreements can be very complicated (and costly) documents to create.  By comparison, bylaws (the corporate functional equivalent) generally are very straightforward and inexpensive to create.
• The more an LLC wants to “look like” a corporation (i.e., equity incentive plan, different classes and series of membership interests, etc.), the more expensive they become.  Corporate stock option plans, separate classes and series of stock, etc., while not necessarily “cheap” to create, generally are must less expensive by comparison.
• Although LLCs apparently date back to 1892, they are a relatively new creation in the United States.  The body of law surrounding corporations is better understood, better settled and more predictable than LLC law.

While LLCs have many beneficial characteristics, one should not focus on potential tax benefits to the exclusion of other relavent factors.  While there may be an argument that some corporations would be better off structured as LLCs, there is good reason corporations outnumber LLCs.

I knew the labor shortage was acute when I started seeing signs out on the street advertising for employees. The University’s parking services as signs in all the parking lots describing “great jobs” for students on campus, retail stores are trying to persuade customers to become workers, and companies are using signs out by the road and on the highways hoping someone driving by will decide it is a good day to apply for a new job. The shortage of qualified job applicants is particularly severe in many professional areas. It has gotten to the point that CEOs are approaching me at events and whispering: “Got any accountants you can send me?”

One approach to managing recruiting — and it is the approach most often used in Utah — is to let the market dictate the hiring process and just roll with the situation. This, however, can be a problem. When the business cycle is down and there is a labor surplus, firms can hire outstanding people, often at a bargain. But what about when business is expanding and there is a labor shortage? The difficulty is growth is impeded by an inability to hire qualified employees, and failure to grow in the good times means the company never grows to its full potential. Sure, some companies grow during when the general economy is in a slowdown, but even this growth tends to be during the transition from start-up to mature company, so at some point every firm needs to be poised to take advantage of the “good times.”

There is another hiring strategy that is based on establishing relationships in the job market, and this strategy yields the very best employees in good and bad times. In one sense it is more expensive because it incurs some costs that market-driven firms do not incur, but it is much more effective because it ensures firms have access to top employees when there are labor shortages and they need to take advantage of growth opportunities. Plus, these firms are not putting clowns in sandwich signs on the sidewalk out front trying to hire right now, which I have to believe is not the image you want to project for your business.

Firms that emphasize relationship building in human resources recruiting have a strong presence on university campuses with two types of programs, internships and campus recruiting. Companies with internship program are incurring costs with the pay for interns and some marginal costs for supervision of the interns, but they are saving an enormous amount by not making bad hires that take months to unwind and by hiring individuals who they know will be immediately productive, which can save months of learning investments in a new professional employee who is likely to make a lot more while they are learning than three interns. Plus, interns can be highly productive individuals who can be let loose on lingering problems that need fresh ideas and creative solutions. Finally, the management effort necessary to run an intern program is an excellent management development opportunity for a young manager who needs experience managing complex projects and running professional teams, i.e., every manager who is working up to higher level responsibilities.

In addition to the “preview” an internship provides, the internship program is a point of interaction with an emerging professional labor pool that is going to be working in Utah for the next 40 years. This group is not very experienced at age 22, but they may be just the people a firm hopes to attract when they are 42 and well established in professional careers. Internship and recruiting programs are an opportunity to establish a human resources brand in the labor market, and for some firms this is also an important opportunity to establish their services brand as well. The professional accounting firms “get it,” understanding presentations on campus to potential interns and as part of their recruiting effort are also an opportunity to tell the firm’s story as a service provider to a group who will need to hiring accounting firms in the future.

The second practice that defines excellent hiring is recruiting on campus. I have had several CEOs tell me, “Recruiting on campus is too much trouble. We just put an ad in the newspaper and your students apply.” Forget all the issues around labor shortages and the fact that newspaper ads do not seem to work right now and consider the possibility that “students apply” might just be the individuals who did not successfully interview with the companies that come to campus, i.e., you are getting the lower tail of the distribution. A president of a large national financial institution with a local office was stunned when I shared this comment with him, so he decided to do some “campus screening” to see how recruiting on campus might work. He told me he did not expect to hire, but he thought I had good points about having a campus presence. He ended up hiring two individuals from the first interview pool and is now on campus every year.

In addition to adopting the simple steps of establishing an internship program and recruiting on campus, firms with excellent hiring practices sustain their programs even when they are not hiring a lot of employees. First, most firms need to hire a few replacements for positions that are vacated by retirements and normal turnover every year, and excellent hiring practices are about getting the very best employees every year. Second, “employer of choice” is an investment worth sustaining, and like all investments, it is best made in advance of when the business needs the resources to grow and prosper. In the scheme of the investments most businesses are making every year, excellent hiring practices are a trivial cost with a high return. They just require a commitment to excellence.

And the answer is, “No, I do not have any accountants.” They all had offers in November to start jobs when they graduate in May. About all I can suggest is a clown with a sandwich sign down on State Street.

Later.

I must confess I am much more comfortable writing a contract than a blog.  Being unsure of what topic might be more salient to ConnectBlogs readers has resulted in weeks of not posting.  Much is written in Connect about entrepreneurship.  I work and have worked with a good number of entrepreneurs, their companies and those who invest in them.  There are a number of legal matters that regularly face those in the entrepreneurial world.  I have decided there might be some value in a series of blogs related those legal matters.  My hope is that at least some of you will find this blog worthwhile and useful, if for nothing else, to get you thinking about these issues.  My intent is not to give legal advice and my ramblings should not be construed as such (if you didn’t recognize, that was my CYA disclaimer).  Actually, my hope is that some of you will respond and even challenge me.  I would love this to be a collaborative effort.

I should also note that I plan to keep these posts fairly short.  I am doing this for two reasons: (1) to enable me to post more often and give the impression I am more of a productive blogger than I really am and (2) I don’t like reading long blogs and figure I am not alone.

With that, Topic 1…

Part 1:  Entity Formation - To Form or not to Form?

There is a lot to say here, and I could see this topic turning into several subtopics.  However, I’ll start from the beginning with what I think are some basic considerations.

Suppose you just invented a better mousetrap or perhaps a kit to make a snowman.  You begin having visions of success and decide quit your secure day for your shot at independent wealth.  What are the next steps?  Putting aside the bothersome details of creating and executing on a business plan, you need to determine whether to create a formal entity through which to operate your business, and if so, when (and what type - which I’ll cover on another post).  I can think of few if any good examples where a serious business endeavor (or at least one that has more permanence than, say, a lemonade stand or a yard sale) should not to form a business entity.  I recommend doing this prior to beginning business operations.  Businesses operated without creating a formal legal entity are deemed to be either sole proprietorships (1 owner) or general partnerships (more than 1 owner).  Sole prioprietorships and general partnerships offer little or no protection from personal exposure to the liabilities of the company (including those arising from lawsuits).  Better said, there isn’t a legal distinction between the sole prioprietorship or general partnership and their respective owners.  In other words, you could lose much more than just your investment in the company.  To the extent you begin business operations before you create a legal entity, you are exposing yourself (and most people don’t want that).  If you must conduct business operations before creating an entity, be careful (not to say shouldn’t be careful after you create an entity).

[Next topic: Entity Formation - Choice of Entity]

I presented to a community group Friday evening on technology/innovation and economic development, and during the Q&A someone asked a question that used to come up frequently but has fallen off the radar in the past couple of years: What are business schools doing about the terrible state of business ethics in America? During the Enron/WorldCom years, this question came up every time I addressed an group, and I suppose it is making a comeback now because of the options back dating scandals that are in the news.

While public interest seems to change with the latest news, I see a lot that gives me confidence in the future of American business in today’s students. First, they care. The students who are in business school today have a much greater sense of social responsibility than any group I have seen in my 30 years in higher education. There is a recognition of the public leadership role of business leaders, and our students are interested in programs that prepare them for community service. Our Board Fellows Program, which places students in internships with local non-profits, was created by students interested in getting more community experience and has 25 students placed this year. Our non-profit consulting group serves 5-8 non-profits in our community every year by providing business consulting designed to make these organizations more effective in the delivery of services, and we are currently working on a social ventures fund that will help develop sustainable non-profit organizations in our community through the provision of one-time investment capital. And the service learning programs at all the universities in the area are experiencing record student participation.

Second, I think we know a lot more about preparing students for the ethical challenges they are going to face in the course of their careers. Early ethics courses focused on the “rules,” but knowing the rules did not really prepare individuals for the conformity pressures and incremental “legal” activities that often lead to unethical practices in the real world of business.

Seventeen years ago, the David Eccles School of Business took on the challenge of preparing students for business leadership by starting their training with a course that challenges each student to translate personal values into a credo of business conduct that will define their business career. I did a short piece for an alumni magazine that details this approach, and I think it remains timely. Take a look.

Business news was seldom carried on the front page in the past. This has changed dramatically in recent years with one corporate scandal after another. The amounts involved are staggering, and the resulting impact on stock markets and pension accounts has made most Americans innocent bystanders.

The impact of these crimes on how business is conducted is wide ranging. Recent federal laws demand a much greater level of business accountability in financial reporting, and appropriately so. The change in attitudes towards business was captured in a recent movie mini review in Entertainment Weekly: “The Perfect Score. A movie about high school students trying to steal SAT answers. So they can go to business school and learn how to steal millions.” (pg 16, February 6, 2004)

As a business educator, it is bewildering to see business education included among the presumed rotten apples. Still, we do not want to dodge questions about ethics and business education, they are valid and challenge our assumptions about the effectiveness of what we are doing to prepare our graduates for business careers.

“Ethics” in Business Schools

My experience teaching in a number of business schools has convinced me most are getting business ethics wrong. I think the elite business schools might be even worse at teaching this subject than others. One recruiter recently characterized a visit to a prestigious Ivy League business school as a “walk in the Land of the Velociraptors.” It was not a compliment. Students can walk out of an ethics class and not see a connection their next class, even when the organizational behavior case is about corporate fraud.

The core problem is business schools tend to teach business ethics as a set of rules, typically the law. Students too often conclude it is okay to walk the boundary of the law as long as the do no stumble into illegal behavior. This is the opposite of what we want our students to learn, because the boundary of ethical behavior is typically crossed well before one gets to the boundary of illegal behavior.

There has to be a better way.

David Eccles School of Business faculty started struggling with the problem of teaching business ethics about fourteen years ago. As we better understood the failure of traditional approaches to preparing people for ethical leadership, we started to understand two issues we needed to address:

1. In cases of illegal behavior, individuals cross the boundary of unethical behavior long before they start engaging in illegal acts. The difficulty is ethical dilemmas are subtle shades of gray, and the boundaries are hard to see. What our students seemed to need was a much better grounding of their business behavior in personal values and “gut instincts.” This approach is not about externally defined rules, it is about understanding core personal values and how they relate to business decisions.
2. The second feature of ethical business dilemmas is they occur in complex social systems with concentrated authority, distributed responsibility, and diffuse accountability. In many instances of illegal activity, hundreds of people are involved, yet no one raises an alarm. It is in understanding the complexities of “being ethical” when one lacks authority that we found personal attributes like courage, skills like effective dissent, and the importance of career preparation matter, leading to the quip, “Six months salary in the bank is the key to integrity.” There is no textbook on courage. We do not have easy answers when it comes to teaching our students how to act with integrity, but we are asking the right questions.

The David Eccles School did something extraordinary twelve years ago, replacing introductory business with Foundations of Business Thought, a course examining personal values and business practice. David Eccles School students begin their business studies with questions about the community responsibilities of business, the moral obligations of leadership, and market economy values. More than 2,000 students a year take the class, and just 60% are business majors.

The Foundations of Business Thought course now enrolls over 2,500 students a year and 50% are pursuing majors other than business. We were ten years ahead of everyone else on this, and we will be here with the same focus year after year because we know this is the right kind of education for every student who will eventually work in large organizations with a concentration of economic, social, and political power. And as I said in the beginning, I am confident because today’s students care.

Later.

I am delighted to see Utah Business announce Jim Sorenson, alumnus of the David Eccles School of Business, as their CEO of the Year. I knew he had been selected and was waiting for the official announcement to comment. Many know Jim’s business accomplishments, and he deserves the recognition based on these alone. But Jim is also active as a supporter of higher education, and higher education for every student in Utah has benefited from his many contributions.

Jim was the founding donor who helped us jump start the University Venture Fund (UVF), surely one of the boldest initiatives in business higher education in this decade. It is easy to see the vision now. Things looked different in 2001 when UVF was a vision staffed with five undergraduate students who did not know how they were going to raise the funds, let alone invest them. Jim immediately caught the vision for a sustainable education program that would provide an extraordinary experience for the students involved, and this is exactly what UVF has become. With $18.3 million in the Fund, our students are partnering with over 40 national venture capital funds, doing some of the best due diligence in Utah, which is what keeps our partners coming back, and achieving extraordinary returns for students and investors. Jim serves on the Board of UVF along with several other community members, and he continues in the role of “holder of the vision.” The success of UVF is a challenge in its own right, and all the Board members, including me, look to Jim as the person who keeps us focused on what the purpose of the fund is: to educate students while making money for our investors.

Jim serves on the advisory board for the Lassonde New Venture Development Center, a program at the University of Utah that brings together science, engineering, and business students to work with university researchers on the commercialization of new technologies. This is tough work, because it is technology looking for markets, and it is not easy to find the right markets and understand how new technologies can create commercial value. This is what business innovation is all about, and very few are good at it. The contributions of an astute businessman like Jim Sorenson are hugely valuable to the student teams associated with the Lassonde Center, both in giving them direction and helping them ask the right questions of the technology and the business.

Given the experience with the Lassonde New Venture Development Center, Jim is partnering with the David Eccles School on a new program that will be announced this spring. This is an exciting development for the University and the Utah business community, but what is most exciting is the innovative concept for providing an educational experience that will benefit students across the universities in the entire state. Jim Sorenson understands the value for business that comes from investing in Utah’s most precious natural resource: our children. Once again, he is providing the risk capital to make a vision of what is possible a reality. We will be announcing this program soon, and I hope to provide details in a future blog.

Jim also serves on the David Eccles School of Business National Advisory Board along with about 60 other friends and alumni. The Board’s focus is providing strategic insight and working to ensure the David Eccles School continues to be one of the world’s best business schools. While the School has a record of achievement and recognition that places it consistently in the ranks of the World’s Best Business Schools as evaluated by publications like the Wall Street Journal and Financial Times, it takes constant innovation and attention to delivery to sustain this ranking. The School’s National Advisory Board makes sure we keep our edge and keep striving to improve our programs every day.

Jim Sorenson is a MVP for the David Eccles School of Business and for higher education in Utah. He dedicates a great deal of time to serving Utah’s students and has served as a visionary investor in supporting new programs that are establishing Utah as an innovator in higher education. Does this matter? Think about national centers of excellence in higher education, which include Boston, New York, Chicago, San Francisco Bay Area, LA, and San Diego. Exciting things happening in these economies? The answer is obvious. Jim Sorenson is a MVP in my book because he is investing in Utah’s future, and he understands innovative higher education is the secret to his success and Utah’s success.

Being laid up for the last couple of days provide me with a ton of time to think about whatever I wanted. So I got thinking - what’s the world’s greatest business model? Is it franchising, which provides an almost plug and play solutions? Is it subscriptions? Is it something affiliate based? Is it Wal-Mart providing the world with cheap and desired goods? Is it auctions?

After a couple of days of thinking this over I came to a conclusion. Pay Per Click (Google AdSense to be even more specific) is the greatest business model ever devised. Why? Check out Google’s financials and you’ll see why. PPC is the most efficient, most profitable business model ever created.

That’s just my $.02. What do you think?

Over the past seven years I’ve been a member of just about every business networking group in Utah. An organization would have had to try hard to fly under my radar. I’ve been a member of or have attended Association for Corporate Growth, Utah Technology Council (formerly UITA), Mountain West Capital Network (formerly MWVG), Utah Valley Entrepreneurial Forum, Corporate Alliance, Genus Group (now First Fridays), various chambers of commerce, Fight Club, the BYU Management Society, American Institute of Graphic Artists, The Breakfast Club, Business Partner Meeting, technology@breakfast, and Young Entrepreneur’s Organization, just to name a few. I must admit I have missed out on the National Association of Women Business Owners, but would be happy to attend if invited, pending permission from my wife.

One of my favorite groups to attend has been the Utah Valley Entrepreneurial Forum (UVEF). As the name suggests, the organization is focused on entrepreneurship in Utah Valley. Each month they have a nice luncheon in a hotel banquet room and they have a speaker, generally an established and successful entrepreneur. Once a year they also have an event honoring the 25 fastest growing companies under 5 years old, as opposed to MWCN’s event that honors the 100 fastest growing companies in Utah over 5 years old. What I particularly like about UVEF is that it attracts a decent mix of older and younger entrepreneurs, there aren’t any salespeople (other than the entrepreneurs themselves), and the speakers are generally interesting. It’s a simple organization that doesn’t demand much, doesn’t try to do too much, but which provides a noteworthy service to the business community.

What puzzles me is why there is no such organization in Salt Lake County, or if there is, why I don’t know about it. Perhaps it’s because there are other organizations that overlap. But none of these has an exclusive focus on entrepreneurship. MWCN includes a lot of entrepreneurs, but also focuses on venture capital and fundraising, which leaves out most entrepreneurs. UTC attracts some entrepreneurs, but the focus is on technology. ACG also attracts entrepreneurs, but other business people as well. The only organization I know of that is solely focused on entrepreneurship is YEO, but this is restricted to entrepreneurs whose businesses brought in at least $1M last year, and you have to be under 40.

Personally, I would like to see an organization in Salt Lake County that is similar to UVEF. Members pay dues that cover the cost of the luncheons and simple gifts for the speakers. Perhaps some type of awards ceremony could be organized each year. A website could act as a member directory, event calendar, and informational resource. Like UVEF, the organization would not try to bit off too much, but would serve as a networking group for any and all entrepreneurs, but only entrepreneurs. The question I have is whether there would be enough demand to make such an organization work. In order to get started I would estimate the group would need roughly 50-100 members, at least 40-50 of whom would attend the luncheons on a regular basis.

Let me know your thoughts on the matter. Obviously I wouldn’t want to start such a thing if an organization that serves this same purpose already exists, but to my knowledge it doesn’t.

I’m going in for a little minor surgery tomorrow so please excuse me if I’m slow to respond to any form of communication over the next four or five days.

Wish me luck!