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How many stock options should executives at a startup company be granted? November 28, 2010

Posted by HubTechInsider in Acquisitions, Boston Executive Moves, Investing, IPOs, Staffing & Recruiting, Startups, Venture Capital.
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A typical North American office

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How many stock options should executives at a startup company be granted?

The Going Rates for Senior Executives’ Stock Options in the Boston area, 2011:

A President or CEO of a startup may typically receive anywhere from 6% to 10% of the company’s stock. The actual percentage of stock granted to the CEO will depend upon such factors as the company’s life stage and financial stability and revenue outlook when the new CEO signs on for employment. The earlier in the company’s formationary period the new CEO signs on, the higher the percentage of stock granted to him may be.

A Senior Vice President of a startup may typically receive anywhere from 1% to 3% of the startup’s stock. In general, and this is across many industries that startups participate in in the Boston area, those with a marketing and sales pedigree are rewarded toward the higher range and those with a financial orientation toward the lower range. This is often due to the fact that very top-notch marketing and sales executives are sinmply harder to find because of intense competition in the Boston area, and when they succeed, they add signigficantly to the bottom line of a startup company’s revenue outlook. In contrast, consider that senior Financial executives are essential to reassure skitish venture, angel and other early stage startup capital funding institutional and individual investors, but they can’t usually stake a claim to having increased sales.

A Vice President or a Key Manager of a startup company in the Boston area may expect to receive (or in the Boston area, may expect to have had to have negociated strongly for) .5% to 2% of a startup company’s stock. A Vice President of sales or a manager of technolgy would be liklier to command toward the higher end of this range of stock percentages, while a Vice President of finance or manufacturing would probably be at the lower end. As I outlined above with Senior Vice Presidents, those with marketing and sales expertise have the greatest amount of leverage. Executives and managers below these senior levels usually receive something less than .5% of the startup’s stock in the Boston area.

I should point out with some stridency that the above stock percentages that I have outlined can be misleading, and I advise starup senior management teams, hr directors, boards of directors, investors, and job seekers to take the above guidelines with care. In the Boston area, a great deal of savvy negociations by knowledgable parties, all armed with a great deal of stock option terminology and business experience, would have to be conducted to arrive at stock option structures like the ones above.

The actual percentage of a startup company that an employee receives in options is much less important than its potential value. Having 10% of a company that’s unlikely to exceed $1 million in value is much less desirable than having 1% of a company that has a good chance of being worth $100 million.

Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies,software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. I have been working in the software engineering and ecommerce industries for over fifteen years. My interests include electronics, robotics and programmable microcontrollers, and I am an avid outdoorsman and guitar player. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool.

I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.



What’s the difference between incentive stock options (ISOs), nonqualified stock options (NSOs), and Restricted Stock? May 27, 2010

Posted by HubTechInsider in Boston Executive Moves, Definitions, Investing, IPOs, Management, Staffing & Recruiting, Startups, Venture Capital.
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What is the difference between the types of stock options? How many different kinds of stock options are there?

I am often asked questions about negociating stock options as part of a Boston high tech or IT job compensation package for an executive or management position. I am a successful entrepreneur and businessman who has handed out and received stock options. I have found to my surprise that prospective employees that I have spoken with regarding this topic leave me with the distinct impression that they have sat through job interviews listening to a company executive or recruiter talk about subjects such as “incentive and nonqualified stock options”, “vesting periods”, “strike price”, and “dilution”, nodding their heads in mute agreement, as if they understood everything.

First off, if you are serious about assessing equity incentives, and stock options in particular, you need to familiarize yourself with the lingo. I have included the Hub Tech Insider’s Glossary of Stock Options Terminology below, at the conclusion of this article. If you want to know the difference between incentive stock options (ISOs), nonqualified stock options (NSOs), and Restricted Stock, then I will attempt to shed some light on the confusion by writing about the different types of stock options.

Incentive Stock Options qualify for preferential tax treatment – the key preference being that the recipient can delay paying taxes on stock acquired by excercising the option until the stock is actually sold. If the recipient sells the stock right away, any gain is treated as ordinary income, which gets taxed at the same rate as your salary; but if the stock is held for a year, any gain qualifies as a capital gain, which is taxed at a maximum of 20%.

It is important to note that incentive stock options can only be granted to employees (as opposed to consultants or other contractors). Nonqualified options can be handed out to consultants, contractors, outside directors, and anyone else the company wants, but the recipient pays taxes on the difference between the excercise price of the option and the value of the shares as ordinary income as soon as the shares are acquired, rather than when the shares are sold. That means the recipient may wind up paying taxes before receiving any money.

Restricted stock can best be thought of as a mirror image of incentive stock options. Instead of being made available for purchase over a period of time, as incentive stock options are, restricted stock is given out all at once when an individual joins a company, usually with the restriction that it be sold or given back to the company if the employee leaves the company before a certain period of time has gone by. The reason more companies are making restricted stock available to certain senior executives is that it offers a potential tax advantage: because executives get their hands on the stock as soon as they join the company, they have a god shot at fulfilling the one-year holding period necessary to qualify for capital gains treatment on any profits from the eventual sale of the stock. Given how fast some companies are going public or are acquired, the capital gains treatment can result in significant tax savings.

The Hub Tech Insider Glossary of Stock Option Terminology:

Above Water – Options allowing the purchase of shares of stock for less than the market price are said to be “above water”.

Authorized Shares – The number of shares of stock available for a company to issue.

Bearish – Having a negative opinion about the future of the stock market.

Bullish – Having a positive opinion about the future of the stock market.

Capital Gains – The profit gained from the sale of an investment, such as stock, which is taxed at lower rates than ordinary income.

Cashless Exercise – Allows an individual to temporarily borrow the money needed to excercise options by selling some of his/her stock in order to cover the cost of the remaining shares.

Cliff Vesting – Allows option holders to excercise some or all of their options at once, such as after the first year of employment, instead of incrementally over a period of several quarters or years. (See Vesting Period)

Equity – Common stock in a company.

Exercise – The act of acquiring stock promised by an option.

Exercise Price – The price at which an option holder may buy shares of stock. Often referred to as the strike price.

Expire – Options are typically granted for a definite period of time. If individuals do not excercise the options before a specified date, they expire (meaning they are forfeited).

Forfeit – Employees forfeit or forego their right to exercise their options by leaving a company before all the options have vested – or by not exercising them before their date of expiration because they are “under water”.

Founders Stock – Shares in a company held by the initial founders, usually subject to certain restrictions as to their disposition.

Fully Diluted Capitalization – The total number of shares outstanding or set aside for issuance (such as shares in a stock option plan).

Immediate Vesting – When one company has been bought by another, all options that have been issued by the acquired company are automatically available for immediate excercising, or vesting.

Incentive Stock Options (ISOs) – ISOs can only be granted to employees, as opposed to outside consultants or contractors. Their advantage is in allowing holders to acquire stock without paying taxes on their gain in value until they sell the stock.

Incremental Vesting – Period of time during which options become vested gradually, such as quarterly, which is specified in an option agreement. Such vesting is also referred to as vesting on an incremental basis.

Initial Public Offering (IPO) – An IPO is a company’s first sale of stock to the public.

Insider – An insider is any officer, director, advisor, or investor of a company that is public or about to go public. Because of his or her inside knowledge of a company’s financial plans, an insider is restricted in trading the company’s stock based on information not disclosed to the public.

Liquidity – How easily an investment holding can be converted into cash. Shares of stock are liquid if there is a ready market for those shares, meaning that the shares are available to be bought and sold. If a company is privately held, the stock is sai to be illiquid.

Lockup Period – A period of time that insiders of a company are required by an underwriter to hold onto shares of stock gained from exercising options before being allowed to sell. Once individuals exercise options, they may not sell these shares for the entire lockup period, often one year.

Long-term capital gains – Profits from an investment held longer than one year. These gains are subject to tax rates that can be as high as 20%.

Nonqualified Stock Options (NSOs) – NSOs can be granted to anyone (employees, outside consultants, contractors, directors, and others). However, the receipient pays taxes on the difference between the price of the options and the value of the shares as soon as the shares are acquired, rather than when the shares are sold.

Offering Statement – A statement prepared by the underwriters and distributed to potential investors before a company goes public.

Option Agreement Letter – Document given by a company to an employee to legally grant options.

Option Grants – The number of shares a recipient can acquire via options.

Ordinary Income – Income subject to regular income tax rates, such as salary.

Par Value – The monetary value shown on a security.

Phantom Stock – Can be converted into real stock at some point in the future when certain predetermined events occur. Often referred to in the context of executive bonus plans tied to increases in a public company’s share price.

Preferred Stock – A class of stock that has advantages over common stock in the event of a sale or liquidation of the company.

Privately Held – A company that is owned by one or several individuals or institutions but not by the “public”. Shares of privately-held companies are said to be illiquid.

Publicly Held – A company is considered publicly held – or owned by the public – if its shares are traded on a public stock exchange (like the New York Stock Exchange or NASDAQ). A company can be publicly held even if the majority of its shares are still owned by the company’s original founders and investors.

Registration Statement – A statement required by the SEC in order for a company to conduct an IPO.

Repricing Options – When companies, usually publicly held, adjust the prices on stock options lower in consideration of a decline in their share prices that may place their employees’ stock options ‘under water’. Companies shy away from this practice because it means incurring an accounting charge against profits.

Restricted Stock – Stock available for purchase immediately upon joining a company, but subject to vesting and other conditions.

Securities and Exchange Commission (SEC) – The federal agency charged with ensuring that the investing public has access to all of the relevant and materail information about every public company traded on a US market.

Shares – Ownership in a company.  Usually referred to as shares of stock.

Shares Authorized – The number of shares of stock that a company is allowed to issue, whether they are outstanding or are held in treasury by the company.

Shares Outstanding – Stock held by investors, as opposed to shares held in the company treasury.

Short-term Capital Gains – Profits from an investment held less than one year. These gains are subject to taxes at regular income tax rates, which often exceed 20%.

Spread – When options are “above water”, the spread is the difference between the grant price and the stock’s market value.

Stock – Equity or ownership ina company commonly referred to as common
stock.

Stock Option Plan – An employee incentive plan that allows employees of a company the option to buy shares of stock in the company at a specified price at some point in the future.

Stock Options – These grant the right, but not the obligation, to buy shares of stock at a specified price within a particular time interval, and with a specific expiration date.

Stock Purchase Plan – A plan to encourage employees to take a personal financial stake in the company by offering shares of stock for purchase at a discount – usually in the range of 10-15% – over their “open market” purchase price.

Stock Split – Companies will often declare a split, often a 2-for-1 split, which will reduce by half the price per share and double the amount of shares outstanding.

Strike Price – The price at which an option holder may buy shares of stock. Often referred to as the exercise price.

Under Water – If an option does not allow the purchase of shares of stock for less than the market price of those shares, the option is said to be “under water”.

Underwriters – Investment bankers who in effect buy a stake in the company and then sell this stake to the public. The underwriter guarantees a minimum price for the sale of the company in return for a premium on the shares sold to the public if demand outstrips supply.

Venture Capital Firms – Investment vehicles funded by wealthy individuals looking to take risky stakes in promising new companies and technologies in return for both control and a share of future profits.

Vesting Period – Period of time during which the option holder is allowed to exercise incrementally more options that have already been granted. Vesting typically occurs over periods of three to five years in corresponding increments of 20% to 30% vested per year.

Warrants – An investment vehicle similar to options, allowing for purchase of stock at a specific price before a particular date or in the future.





Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Senior Technical Project Manager at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

How to use LinkedIn in your job search April 4, 2010

Posted by HubTechInsider in Social Media, Staffing & Recruiting.
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I have written on these pages before about the power of expanding your professional network on LinkedIn. Now I have some new statistics and information that I feel really bore out my earlier comments about the professional social business networking site.


Visitors to the site in 2010 have jumped 31% from 2009 to 17.6 million visitors in February 2010. Your customers, your colleagues, your competitors and your boss are all on LinkedIn. The average memeber is a college-educated 43-year-old making $107,000. More than one quarter of the members on LinkedIn are senior executives, and every Fortune 100 company is represented. Recently, Oracle found their CFO, Jeff Epstein, through a LinkedIn search.


One of the big reasons that LinkedIn works so well for professional matchmaking is that most of the people on LinkedIn already have jobs. But why is that good for job seekers? Well, for one thing, a legion of employed LinkedIn users are using it to research clients before sales calls, ask their connections for advice, and read up on where former colleagues are landing gigs. In this kind of a business-oriented social network, job seekers can do their networking without looking as if they are shopping themselves around. THis population is more valuable to recruiters as well.


In contrast to online job boards, which focus on showcasing active job hunters, very often the most talented and sought-after recruits are those currently employed. Headhunters have a name for people like these: passive candidates. The $8 Billion recruiting industry is built on the fact that they are hard to find, but LinkedIn changes that. It gives the recruiting industry the digital equivalent of a little black book, one that is public ands detailed.


For a generation of professionals, the baby boomers, trained to cloak their contacts at all costs, this transparency is counterintuitive. So far most of the online advice columns have been filled with advice on what *not* to do: don’t post drunken pictures of yourself online, etc. But as more and more companies have turned to the web for recruitment of candidates, it is no longer an advantage for job candidates and job seekers to refrain from broadcasting personal information.


Instead, your new professional imperative should be to present your professional skills as attratively as possible, packing your profile with keywords (logistics engineer, marketing manager, global sourcing specialist) that will send your name to the top of recruiter’s searches. You are also now able to connect your online professional interactions in one place, joining groups on LinkedIn, (LinkedIn has more than 500,000 of them, ranging from groups based on companies, schools, and other professional affinities), offering advice, and linking your blog posts and twitter updates to your linkedin profile.


Look at it this way: you Google other people, so don’t you think they’re Googling you? Part of a networked world is that people will be looking you up, and when they do, you want to be able to control what they find. Helping you present yourself well online is just the start of what you can do using LinkedIn, and with 60 million active users, you should think hard about making it an active and indispensable tool for your career path.


People are in a different context and mindset when they are in and using a professional network. In this networked, interconnected workplace, everyone will have their professional identity online so they can be discoverable for the things that will be important to them. The most obvious thing would be jobs, but it’s not just jobs. It’s also clients, consulting gigs and services.


This new source for recruitment has a complicated relationship with the more traditional staffing and executive recruitment and placement industry. Although LinkedIn is a welcome tool for recruiters, as the LinkedIn software allows recruiters to search its database without access to photographs, thus keeping in compliance with antidiscrimination laws, and to contact anybody in the LinkedIn network. But the Great Recession has forced companies to cut back on their budgets for outside firms. One of the largest corporate recruiters, Heidrick & Struggles, saw their revenues fall 36% in 2009.


LinkedIn’s primary membership is comprised of corporate professionals. Many recruiters spend time daily on the site, reading up on potential candidates, chatting with them in groups and on message boards, and responding to inquires. This approach has been working for many companies: they have been able to use LinkedIn to bring down the time it takes to fill open positions, an important metric among recruiters, by nearly half.


Make sure you always write a personal note when you send a request to connect on LinkedIn. It is very important to complete your profile as much as possible. Get recommendations from former co-workers. Use keywords to bring out the skills you want to highlight. Join groups: recruiters often scour professional groups to round up potential candidates. Answer questions from colleagues that showcase your professional expertise.


Although the prospect of spending all this time online may seem daunting initially, I still recommend placing LinkedIn at the center of your job searching activities. You should be spending a concentrated amount of time on LinkedIn, around 30 minutes a day. I also recommend using a professional picture on your LinkedIn profile page. I recommend against using dogs, cats, horses or cows in the background of your LinkedIn profile picture. I find that many older job seekers are worried that their grey hair or aging appearance will trigger age discrimination. They see that there could be drawbacks to so much transparency, and they fret that using LinkedIn will ensure that employers will potentially know more about them than they should.


These are questions that I have considered from the start of my writings about LinkedIn. Let me tell you what I think about these topics regarding LinkedIn: for all the benefit that LinkedIn brings to a job hunt, it cannot erase the fundamental challenges that exist in the job market. A reality is that many baby boomers are out of work as the industries they have worked in for decades have changes irrevocably. The millenial generation is more affected by joblessness then any generation in American history. These job hunters will need to reinvent themselves in new types of careers. The thing about social networking profiles is that they don’t lie, at least not successfully. You can’t fudge your experience or hide your age, because your connection sknow you in real life. You should post your photo to your LinkedIn profile, as your profile lets you represent yourself as strong as you can, so leverage that to your advantage.


LinkedIn can definitely help you get a job. It can help you expand your professional network, it can help you connect with corporate recruiters and independent staffing firms, land consulting gigs, connect with former colleagues and find out about jobs you never would have known about if you weren’t on LinkedIn. In the end, social networking is just a more efficient way of reaching out to people you know – and people they know. You need to work your professional network, build it before you need it, and use it to help you get an edge in an appropriate way at the appropriate juncture.


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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications. You can subscribe to Hub Tech Insider’s RSS feed.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can subscribe to Hub Tech Insider’s RSS feed in your RSS feed reader. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

Marlborough, MA based Unidesk, virtual desktop management software maker, names Dell veteran Ron Oglesby Chief Solutions Architect November 29, 2009

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Marlborough, MA based Unidesk, a virtual desktop management software maker, has named Dell veteran Ron Oglesby Chief Solutions Architect. Ron was formerly Dell Computer’s Practice Executive for Virtualization Services.

What is Theory X? How is it used as a management style? November 27, 2009

Posted by HubTechInsider in Agile Software Development, Definitions, Management, Project Management, Staffing & Recruiting.
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I needed to write a few short pieces on some of the different management styles I have encountered in my corporate and professional travels. I want to define each of these management styles so that I can compare and contrast them, as well as serving as reference points for the longer articles on this topic which I am in the process of drafting.

I will begin with some of the “Letter Management Styles”, of which there are several. The purpose of this litany of alphabetic management styles is not to promote one over another; in fact, I don’t recommend adopting any of these naively. But nevertheless, many individual team members and managers will exhibit some behaviors from one of the above styles, and it is helpful to know what makes them tick. Finally, certain individuals may prefer to be managed as a Theory X or Theory Y type (Theory Z, which I will write about at a future date, is less likely in this case), and it is good to be able to recognize the signs. Moreover, some companies might be implicitly based on one style or another.

The first management style about which I will write is one which will be recognizable to every person, regardless of professional or personal background: “Theory X”.

Theory X is perhaps the oldest management style and is very closely related to the hierarchical, command-and-control model used by military organizations (of which I am intimately familiar).

One thing I can personnally attest to in regards to the Theory X management style is that it maintains the military organizations’ faith in the fact of the necessity of this approach, as (in the view of Theory X proponents) most people inherently dislike work and will avoid it if they can. Hence, in the Theory X management style, managers should coerce, control, direct, and threaten their workers in order to get the most out of them.

A statement that I recall from a conversation with a prototypical Theory X manager with whom I worked (in a prototypical Theory X organization) with was “people only do what you audit”.

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Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

2009 Dice Technology & Engineering Career Fair in Boston Thursday, December 10: 11am-3pm Marriott Burlington November 24, 2009

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2009 Dice Technology & Engineering Career Fair Boston: Event at Marriott Burlington, Burlington, MA

Thursday, December 10

11 a.m. to 3 p.m.

Marriott Boston Burlington • Rt 128 & 3A (One Mall Road) • Burlington, MA 01803

Admission is FREE

Meet recruiters and hiring managers from these companies: Cambridge Interactive Development Corp., e-Dialog, •Raytheon, Research In Motion, Tufts Health Plan.

Register for this event online by clicking here!

Burlington based Nuxeo names Open Text veteran Cheryl McKinnon Chief Marketing Officer November 24, 2009

Posted by HubTechInsider in Software, Staffing & Recruiting, Venture Capital.
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Burlington based Nuxeo, a developer of open source enterprise content management software, has named Cheryl McKinnon Chief Marketing Officer. Cheryl was formerly Director of Program Management at Enterprise 2.0 – Open Text

Lowell based Kadient, on demand sales apps maker, names Authoria Inc. veteran Elizabeth Ricci Senior VP of Products November 23, 2009

Posted by HubTechInsider in Cloud Computing, Software, Staffing & Recruiting.
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Lowell, MA -based Kadient, a maker of on demand sales enablement applications, has named Authoria Inc. veteran Elizabeth Ricci Senior VP of Products. Elizabeth was formerly Senior Vice President of Products at Authoria.

Entrepreneurship and Innovation in 2009 and Beyond: Massachusetts vs. Silicon Valley (MP3) November 20, 2009

Posted by HubTechInsider in events, Staffing & Recruiting, Technology, Venture Capital.
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This is a Stereo MP3 audio transcription of the excellent presentation that was given this morning by Ronald Croen, Founder, former CEO and Chairman of Nuance Communications, who is now Tufts University’s Entrepreneur-in-Residence for 2009-2010. The talk was given at IBM’s Waltham Innovation Center, in Waltham, Massachusetts.

Ronald Croen, a co-founder of Nuance, has served as Chairman of the Board of Nuance Communications. Croen held the positions of President and CEO of Nuance from July 1994 – March 2003. Previously, he served as a consultant to SRI International, an independent research, technology development and consulting organization, for the commercialization of its speech recognition capability. From 1987 to 1989, Croen served as Managing Director of European Operations, and from 1983 to 1987 as Vice President and General Counsel of The Ultimate Corp. Croen holds a J.D. degree from the University of Pennsylvania Law School and a B.A. from Tufts University.

The topic of the presentation was:

Entrepreneurship and Innovation in 2009 and Beyond: Massachusetts vs. Silicon Valley

091120_004 [mp3 raw file – click to listen on most computers]

091120_004 – Ronald A. Croen [Imeem Hosted Stream]

(This mp3 Stereo Audio Recording is a large file, and you may want to save it directly to your computer’s hard disk drive for listening – you can do so by right-clicking on the filename, above, and using the ‘save link as…’ option)

I had a wonderful opportunity to meet and speak with Bobbie Carlton, the founder of Massachusetts Innovation Nights at the Charles River Museum of Industry in Waltham, and I want to take the opportunity here to thank her for her efforts in arranging this new breakfast Massachusetts Innovation gathering. I think some thanks also go to the gracious corporate host, IBM, whose Waltham Innovation Center is truly an impressive facility; I enjoyed their tour of the facility after Mr. Croen’s presentation.

There was a terrific question-and-answer session with the attendees at the conclusion of the presentation which featured a lively debate and brought up some fascinating points; I recommend you listen to this towards the end of the mp3 audio transcription.

There are some great videos of Ron Croen’s presentation available here.

Needham MA based Chargify, recurring billing tools provider, has named Lance Walley CEO November 17, 2009

Posted by HubTechInsider in Cloud Computing, Software, Staffing & Recruiting.
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Needham MA based Chargify, recurring billing tools provider, has named Lance Walley CEO. Lance was formerly CEO of Engine Yard, which he co-founded. Engine Yard provides Ruby-on-Rails applications hosting “In the cloud”.

LinkedIn workshop hosted by local search firm November 24th in Wellesley November 11, 2009

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LinkedIn has emerged as one of the largest professional social networking sites ever. Are you on it? Do you use it to its full potential? On November 24, TreeTop Technologies will be holding a LinkedIn workshop. Hafiz Greigre, TreeTop’s “Human Hub” (don’t ask me what that means — I’m not entirely certain [chuckles] ), will share his insights and expert advice on the do’s and dont’s of this powerful tool, and what you should be doing with your account and why. This event will be held at The Commonwealth Financial Group, Wellesley Office Park, 60 William Street, Suite 200, Wellesley, Mass. 02481. Space is limited. Please call (617) 795-2550, ext. 100 or email jpierre-louis@TreeTopT.com for more details on the event and to RSVP.

Five tips for recruiters on contacting potential job candidates in a tough job market June 15, 2009

Posted by HubTechInsider in Staffing & Recruiting, Uncategorized.
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I have been on both sides of the fence when it comes to job interviews — for the two ecommerce software companies I started back in the 1990’s, I hired hundreds of people, so I talked to alot of staffing firms and recruiters. In my current life as an IT Project Manager / Business Analyst / Program Manager, I have not only taken on a few contract roles in the Boston area myself, but I have also been tasked at various times with hiring other contractors to work on large software development projects. In all these roles, I have been in contact with staffing firms, agencies, and corporate recruiters that are not very good at their job. Many of the recruiters out there are great, but the majority are not great. After reading yet another drivel and platitude filled article about recruiters and “how to get a job” from the Boston Globe today, I thought it was high time for an article with some real-world tips and practical advice for recruiters on how to contact candidates out there in the midst of a tough job market. I found after writing these five tips for recruiters, however, that they are applicable in any economy. These five tips are fundamental imperatives for all recruiters to read, know and internalize so that they do not destroy their professional reputations and ruin the reputations of their staffing firms and employment agencies.

1. Do your homework on candidates before picking up the telephone – If you don’t have any jobs for a candidate, don’t call them up on the telephone. If a candidate is not a good fit for your particular search, then they are not going to be interested in hearing from you: think about it. Just because someone is a candidate and is out there looking for work, doesn’t mean they are going to be thrilled to talk to a recruiter on the telephone. They will really be perturbed at you when they realize that after an initial contact, you didn’t look at their resume or their Linkedin profile or really perform any homework on them until you get them on the telephone – only to tell them they aren’t a good fit, not what you’re looking for or you don’t have any jobs for them. You should have never called them on the telephone in the first place. Lazy recruiters are all too common these days, and nobody wants to hear whining about time constraints, number of candidates, or the rest of it. Get on LinkedIn, read the profiles of your candidates, and carefully read their resume. In this way, you can be ready to ask purposeful leading questions such as “So I read about your experiences with the Executive Dashboard application at Metatech; I know you wrote on your resume that it was an Oracle project, but I’m wondering if that was a .net or a J2EE environment. Can you tell me a little more about it?”… this is a great way to get the information you need from a candidate and it prevents you from looking like a brainless recruitron. If you are a recruiter and you are not on Linkedin yourself, the message you are sending out is that you are not a veteran, serious, professional recruiter, and you are, in fact, recruiter that has something to hide and should not be trusted. When you do get a potential candidate on the telephone, announce yourself with politeness: “Hi, this is Wendy Sprague from Recruit-Tech, and I’d like to speak with Susan Holmes if she is there please” is a great way to reach Susan about a potential job opportunity. “Hi, is this Susan?” is an example of a bad way to begin such a sourcing call. Be polite on the telephone! Do your homework on the candidates!

2. Don’t be rude on the telephone with potential candidates – The internet is a two-way street. In other words, people can write about you and your company / staffing agency / firm online. And they will. I started a few ecommerce companies in college. I used to tell my employees: “If someone has a great ordering or retail experience with us, they will tell two of their best friends – if they have a bad experience they will tell ten or fifteen people right away”. Not doing your homework on candidates before getting them on the telephone, wasting their time on the telephone, rudeness, insulting people’s backgrounds or resumes because they aren’t the pink unicorn you are currently searching for, cutting people off, telling them they “aren’t the right fit” when you should have been able to tell that before calling them up, etc. is going to work out badly for you in the long run. A candidate is just one person. A company is exposed to the public and a corporate reputation for rudeness and incompetence is alot harder to overcome than a single, individual’s reputation. In essence, a staffing firm is a very visible public entity and word gets around. Don’t forget: contractors talk to each other and to the clients once they are in the client company. Many are eventually hired permanently and even ones who remain contractors are often tasked with hiring other contractors. Remember this the next time you are speaking on the telephone with a candidate, because they will surely remember you.

3. Your candidates’ professional references are not marketing contacts – A typical ploy in the tough current Boston IT contract market is to call in job candidates for an in-person interview on the pretext of some nonexistent job or some vaguely-defined future contract. Then, in this challenging market for staffing firms, the account managers are tasked with getting the candidates to “Drop the cheese” and the candidate is then grilled for marketing information for the staffing agency or firm. Manager’s names at former employers, managers at the current employer, etc. are all gathered. Then, a bogus in-person “reference check” is set up. The staffing firm then essentially “calls in” the favor of an in-person reference check using the candidate’s name – to try and drum up new business for the staffing firm at the candidate’s former or current employer. Your candidate’s professional references are not marketing material for your staffing firm. What is likely to happen is the manager will call up or email the candidate and tell them about this marketing meeting, and that staffing firm will never get any future business from the candidate’s former employer. Again, people talk in this new age of social media and online blog posts. So don’t do it. Your candidate’s professional references and work history is not an opportunity for your staffing firm to “get in the door”. If you use these disingenuous methods, it will be exposed in public and also behind closed doors at the offices of your potential clients – not to mention all the contractors and potential candidates that will turn up their noses in disgust at the infinite re-telling of the story. Staffing firms have alot of competition, and there are so many other firms to go with — don’t accept this high level of business risk.

4. Don’t wear out your candidates’ professional references – Get the candidates professional references and then ask the permission of the candidate to call them. Don’t call them before you have a definite REQ for the candidate and they are indeed a primary candidate for the job. The reason for this is simple: professional references are usually busy people and it is not their job to give detailed references for former employees. It is a difficult and tense thing for managers to do even for people and former employees who were superstars and well liked. Most managers will give a candidate one or two really good references, but by the time they are called for a third or fourth reference, they are either not giving them or not giving good ones anymore. So don’t wear out the professional references of your candidates! Again, this is another point of which I must emphasize that word gets around – quickly in this world of blogs, twitter, and such.

5. Have integrity and follow-through – If you only have one job REQ (or no REQ) for a candidate, if you tell them your firm has lots of potential jobs for their title and role, which you don’t follow up on with the candidate, they will tell everyone they know that you and your staffing agency / firm lied to them. Eventually, they will get hired, but they won’t ever forget that you lied to them – why place an enemy in so many potential client firms? In matters of personal livelihood, people in general have long memories. So don’t think they forgot about all the jobs for them you told them about. To come and meet with you in your office, most candidates will have to use up a sick day or miss a day of work. So you better get down to business with your candidates quickly. To lie about these types of matters is not harmless to the job candidate, and it’s not harmless to the business of the staffing firm or agency, let alone your personal professional reputation. Again, don’t do it.

A good article I found online that makes some great points about hiring in a down economy is available here, and I recommend it highly.

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