Link to Jothy's site: http://jothyrosenberg.com

Link to The Who Says I Can't Foundation (non-profit): https://whosaysicant.org

Link to Podchaser to leave a review: https://www.podchaser.com

This episode of Adventures on the Can Do is about those earliest days of formation when you have a small group of founders who have an idea that you all are certain will change the world. To do that you need to form a company which is a legal entity and there are lots of regulations and legal matters you need to get right without fail. So you really do need an attorney helping you at the start. You don't need to have one as a full-time employee but you need to find one at a law firm who has done this before. Make sure things having to do with founders are carefully buttoned up to avoid animosity or worse later when maybe one decides to leave. To cover all of that Jothy has Gary Christelis as his guest who knows of what he speaks when it comes to what you need a lawyer for at that formation point.

Gary Christelis has over 30 years experience with start-ups in both legal and business capacities. He currently leads the commercial contracts practice as Senior Counsel at Feinberg Hanson, LLP, a Boston, MA based boutique corporate law firm. Previously, he served in CEO, COO, and General Counsel roles with several high tech start-ups and emerging technology companies. He is also active in the Boston start-up community as an angel investor and has advisory roles with several high tech start-ups in New England and New York. Drawing on being on the frontlines with start-ups and high-tech companies, Gary brings a wealth of practical business and legal experience to a wide diversity of commercial and contractual issues confronting both early and later stage companies, particularly in the areas of technology licensing, development, distribution, and sales. 

Gary and Jothy were introduced by a mutual friend who is now his boss. Jothy hired him early on to be in-house counsel for Dover Microsystems.

Like I said, there's going to be plenty of chance for editing, but let me do the introduction. I'm going to read your bio and then we're going to dive right into some fun discussions. So our guest today is Gary Kristellis. Gary is an old friend and Gary currently leads the commercial

Okay.

Okay.

in Boston, Massachusetts. It's a boutique corporate law firm. Prior to joining Feinberg Hansen, Gary was Chief Legal and Operations Officer at Dover Microsystems, a spin out from the Charles Stark Draper Laboratory. And it was launched to commercialize a cybersecurity technology. That was where we worked together.

We were introduced actually by Harry Hansen. He's the Hansen in Feinberg Hansen. Someone we've both known for a long time. Gary started his legal career at Baker McKenzie in New York and then joined Bingham McCutcheon in Boston, which is now part of Morgan Lewis, focused on international commercial transactional work for US and foreign publicly traded and privately held companies. He was ultimately hired by a client.

to become general counsel at a global systems integrator in the secure identity space, later becoming its president and CEO. After leading the company through tremendous growth with projects in over 20 countries, he exited and began a career engaging with multiple startup companies in the materials sciences, consumer security, and cybersecurity industries, often taking senior business and legal leadership roles with some of those companies. Drawing on

Being on the front lines with startups and high-tech companies, Gary brings a wealth of practical business and legal experience to a wide diversity of commercial and contractual issues confronting both early and later stage companies, particularly in the area of technology, licensing, development, distribution, and sales. Gary is admitted to the Massachusetts and New York bars. Okay. So got a lot of, got a lot of experience under your belt and what this

podcast is all about is I call it grit because I think we're talking about kind of parallel tracks of grit that I have personal experience with. One is sort of from my personal experience of dealing with a disability and the other is what we know all startup founders, early stage people need grit to deal with what happens to us at startups.

and the fragility of these startups and how hard we all work at them to try to make them succeed. So let me just launch into a couple of just a question and then we'll just see where it takes us. Okay. All right. So you got involved with us right at the very beginning. And so related to that is this

First question I have, which is what issues or bad things do you think can occur if at formation, the startup does not get critical agreements, especially with respect to founders in place?

That's a great question. You know, I appreciate everything you said about grit because it absolutely takes grit to be in the startup ecosystem. There's this incredible tension between the excitement and the passion and the eagerness to launch and to get into setting up your company and taking off. And the more battle tested,

documents and legal matters that need to be addressed as you launch. And that tension is an uncomfortable one because it, of course, involves lawyers and legal issues and there's a lot of minutiae and detail. And it's viewed a lot of times as a distraction or maybe not immediately necessary, especially when you're so eager to get out of the gate and charge forward. But there are some inherent critical...

agreements that really need to be considered as a company launches, particularly amongst founders. Most important is non-disclosure and assignment of inventions agreement and work product agreements. These agreements really document the assignment and the transfer of inventions, work product, IP, from the founders as they're working on and constituting the company to be property of the company.

That's critically important, as you know, because the IP ends up being in many cases one of the most valuable assets of a company. So without those, if you ignore those agreements, it can be problematic down the road. This gets exacerbated when you're working even with the non-founders, especially maybe interns or consultants or contractors. There have to be agreements in place.

addressing assignment of IP and work product.

Do you think we did that right at Dover?

You did. You absolutely did because you had extraordinary legal counsel, if I may say, advising you in that process. But yeah, absolutely. But it's surprising how many startups I talk to that really don't. They think, oh, we'll take care of this later. The issue is, of course, that in creation of a lot of IP, especially copyright, goes to the date of creation. So

Hehe

Extraordinary, yes.

you need to make sure this is taken care of pretty early. There are other issues too, certainly involving labor laws, wage laws, but specifically with respect to founders, because you mentioned that, I think there has to be a very, very clear articulation of the roles and responsibilities of the founders in going into a startup opportunity.

very realistic expectations around salary and compensation. There's a lot of pressures, you know, Jofie, from investors to reduce burn and to keep expenses as low as possible. Those kinds of pressures sometimes require in the ups and downs of the early life of startup adjustments to compensation or salary. And a lot of times, investors will be looking to founders to take big haircuts on their salaries or maybe even draw a minimal salary.

to get the enterprise off the ground. That can be very difficult.

I have.

I have two related questions to what you just said. So I'm going to ask them both so I don't forget. So one is about your thoughts about at Dover, we had six founders. And so I just want to talk a little bit about that. The other thing is, so we're focused right now on stuff you really got to get right.

pretty much day one. And we're gonna say that to anyone who's founding a company about a lot of things, not just these, you better get this done, you better get this done, you better get this done. So that's why having someone like you on board, which is a little bit unusual, actually most startups don't have a full-time.

in-house counsel at the very beginning. Theoretically, you could get this done by someone that's not in-house.

Absolutely. And I think the Dover situation was a somewhat unique situation, mostly because you recognized from day one that the value of this company was all about IP. It was all about intellectual property rights, the innovations, the patent filings. And that remains the core asset of the company. So...

It is important and you don't need obviously to hire, you know, an inside counsel at launch, but certainly having a lawyer that you can consult with as you set sale is extremely important. And this isn't just for contract and protection of IP, but certainly, as you well know, a lot of the elections you need to make on restricted stock units and documenting and keeping track of your cap table and all those things. You need to get that stuff right from the beginning. I often say it's like...

It's often like having a baby. You have to have planning, you have to have diapers on hand, you have to have formula, you have to have a birth certificate. You just don't wanna set sail without having all your ducks in a row.

Okay, but you don't have nine months ahead of your founding of the company to...

No, you don't. You absolutely don't. And the real problem, I mean, the other problem, you know, that I see with a lot of founders is that they sometimes start their ventures in shared workspace. You know, obviously, it's a little different today than it was, you know, pre-COVID, when, you know, WeWork and all these different shared workspaces were proliferating around every major metropolitan area. That presents, you know,

huge risks for startups. And this usually relates specifically to founders because they're usually the ones, you know, starting to build the ship and hoist the sails. Those situations can be very dangerous because in those situations, you're working in a space where other people are overhearing your confidential information, your ideas, your patent strategies.

and more critically, even trade secrets. And under the law, trade secrets require companies to have in place to treat that information as confidential and valuable. So if there's proof that you've been sending documents to a common printer or discussing things around a cafeteria, you could very potentially lose trade secret treatment of your intellectual property. So...

There are heightened responsibilities with founders when they establish company and address intellectual property issues.

Well, you know, I think of the vast majority of startups are somebody or a couple people have some idea that they're convinced will change the world. And I'm so thankful that a lot of people, you know, think that way. And so, you know, they've got the idea. And then they realize, well,

The only way I can bring this, turn this idea into a solution for a problem, a big, big problem I know exists, is to create this company. And I mean, I remember distinctly.

before I'd even been involved with my first one, I thought this way and I thought, okay, right, I gotta do a startup. How do I do that? And honestly, they're not gonna be thinking in that first month about legal agreements. So I, you know, luckily I knew Harry after, you know, I'd moved to Boston.

and I knew him from the very beginning, and he was able to help with that. And of course then he introduced me to you, who could help with that. Well, let me go back to the founders thing for a second. So, I thought a lot about, you know, how do you decide who's a founder and who's not a founder? That is so full of...

There's a lot of landmines in that whole thing. And we ended up with six, which I consider to be a fairly large number of founders. And you're spreading the founder stock a lot. You've got, chances are founders are people that have distinct ideas.

Absolutely.

and not necessarily all the same ideas. So you're not gonna necessarily have a uniform view on things, there's room for conflict. And one of the things that, and I'm sort of building some questions into here, but one of the things that I thought a lot about was how we were creating a caste system. It's one thing if you got two founders, you're not really gonna have a caste system there.

just sort of chit chat, you know, anywhere. But when you have six people that you got to get together, it looks like everybody sees that happening. It looks like a real meeting, except there's this exclusion. I just want to hear your thoughts on that many founders, how to decide who's in and who's not, and this whole idea of a caste system, which is always worried.

That's a great observation, Jathi, because I think in Dover's situation, again, it was, as you acknowledge, unusual to have so many founders. And absolutely. It did have the propensity to feel like it wasn't us versus them. And especially when the company started and they were more founders than non-founders involved, whether they be consultants or employees.

And it was a little top heavy in that respect. And also, I think it's fair to say they were divergent understandings and expectations amongst those founders as to what level of commitment or sacrifice or contributions they would have to make to the business. And obviously, with the greater number of founders, you have more complex those variables become.

So, but I think in our case in Dover, and I'm not saying this to put too much of a feather in your hat here, but you were such a strong and dominant and fair personality in leading the group of founders. And that culture percolated down very clearly. And there was a lot of transparency. There was a lot of honesty around the arrangement.

But I think that was again unusual because it had the propensity to be a much greater division in terms of a founders versus non-founders. So I really didn't personally perceive that to be too much of an issue at Dover. But I think it's a very fair point because I have seen other situations where the chief founder or CEO leading the pack.

has not been as sympathetic. And you did a lot of things at Dover to kind of bridge that gap between the founders and the non-founders. A lot of team building, a lot of muffin days or Hawaiian shirt days, or the things that you did to really make sure that everybody felt we're all part of the same team here. But there is the propensity with the large group for that cast dynamic to result.

Hehe hehe

All right, listen, I want to talk about in any of your startups, potentially including Dover, when things get tough, right? And I mean, it's not smooth. I mean, it's maybe it is in one out of a hundred thousand. It's smooth sailing always for some startups, but that's got to be so rare.

you're going to hit speed bumps, you're going to have to pivot, something. What are some of the, tell us some of the stories of very challenging situations at some of your startups.

Well, there are many, but I think the most disappointing is when there is real fighting and fighting between founders. I mean, that gets really ugly because now you start to contaminate the culture. It presents sometimes an existential threat to the enterprise. I mean, especially if you have...

In most startups, you have one, two, three, maybe four founders. You get into divisions, people start taking different sides, you know, there's risk to this, there's inherent risk. And of course, that discordance, you know, will be felt by the board, it will be felt by investors, and it'll shake confidence in the opportunity.

Well, obviously I'm not going to ask you the name of any company, but can you, can you say what were they fighting about?

Yeah, so typically it comes down to who's working more, who's doing more, who's sacrificing more, who's more passionate, who's not. I mean, you know, it's really appropriate that we're... It is, well, there's a lot of childishness going on in our world today. And, you know, and at the end of the day, there's always this kind of odd, you know, situation where...

That sounds almost childish though.

people put themselves into a very, I mean, startups are inherently risky. They're inherently risky. And they take grit, as you said, an enormous amount of grit. You have to have a strong stomach to navigate the choppy seas of a startup. That puts a lot of stress on people's personal lives. And there is this kind of strange window that we all have in life when it's maybe a right time or a wrong time to get into a startup. And that could be.

dependent on very personal circumstances. It could be usually you're younger, maybe you're getting married, maybe you're having children, maybe your parent has taken ill. All these things that go on in your personal lives weigh very heavily on your ability to maybe focus and give 110% of yourself to the startup and what it takes. So I think that's a very common situation that happens, is that...

Maybe one founder feels the other founder's not doing as much, or they're not as committed, or they can't make the same sacrifices. It's usually what it involves. There are also situations though that involve a founder wanting to be involved in things outside of the startup. And that maybe relates to the first, which is a lot of...

very smart, I mean, we are so privileged to be in this incredible ecosystem in the Boston area with so many smart people coming out of Northeastern and Harvard and MIT and Boston College and all these incredible young people that want to start companies and solve problems. And it's all very exciting. But it has to be the main focus of what you're doing, because when you have a founder who wants to do this startup and that startup at the same time, you're going to have huge issues around.

how much time they're allocating, where IP is being invented and who owns it. So you really have to be all in.

That was one, you told us about one story, and you've got others, where things were tough. Without knowing what they are, could you tell us another example?

Sure. Yeah, so I mean, just related to the last thing I mentioned, I've seen situations where a extremely smart, bright young person got involved with a startup and signed documents and started working on that startup. And then there was another opportunity, and he wanted to get involved in another startup. And all of a sudden, there was this

very serious conflict around what was being invented, where it was being invented, what company owned the ideas of the inventions this person was creating. That not only created enormous problems between this founder and his co-founders of the first company, but now it caused huge problems between two independent legal entities, two companies that were now arguing over who owned

Where was this invented? What did the agreement say? And some of those agreements were maybe overreaching and led to huge complications. So it's best to stay, stick to your knitting. Pick a startup. I mean, until you get to a point in your life where you have the ability to have the resources, meaning legal counsel that can properly advise you before you get involved and as you get involved in another opportunity.

Have you ever seen a situation where someone joins a company that's two or three years old and then, and you give them a senior role, CTO or maybe even CEO, and then they say, I want to have the founder moniker. That's part of my condition for joining. Two or three years in. Have you seen that?

I haven't, but I have seen some situations where individuals get very emboldened and very maybe a little too confident and arrogant about their role in the company. And that, again, presents a risk, because now you have them saying, well, if you don't give me this, I'm walking. And I'm the superstar.

Arrogance is a very common and very dangerous emotion.

I think that, oh, Jofie, I think that is, if I had like, if I had one, I think the most important thing I have to say about being in a startup is understanding the difference between confidence and arrogance. It's a very fine line, but it is a very, very distasteful and detrimental quality to have as a founder is to be arrogant. And that...

that doesn't extend just to your co-founders or your employees. It extends to your board. It extends to your investors. It extends to the world. And I understand. We were all 20-year-olds and full of energy and thoughts that we were going to change the world. And I celebrate that. But arrogance is very dangerous, especially around huge issues that require.

experience, wisdom, judgment, planning, strategy, it's a big problem.

So let's help our listeners out. You said there's a fine line between confidence and arrogance. Can you use any words that shed light on what the difference is?

Mmm.

I think confidence is having a passionate belief that your idea, your technology is going to change the world and you're willing to, you're able to articulate its value, you're able to persuade people that it is game changing, but you're not shutting down and being dismissive of people who are offering commentary, maybe some constructive criticism, giving you some feedback.

That's where it really comes through is when there is again this dynamic that everybody wants to break the rules. Everybody wants to change the system. But there has to be respect for your peers, your co-founders, your employees, the law, your board. Don't want to fly in the face of those things with complete disrespect.

And arrogance, I mean, and I've seen arrogance kill many startups because founders were unwilling to recognize realities or address critical strategic necessities. It's very, very dangerous. You know, I mean, there was one case even where, and this was fairly recent, where a founder was looking to hire a senior...

I'm with you on that.

senior officer into their startup. And this founder was so confident that they didn't need a non-disclosure agreement. They didn't need it. This was a great candidate. There's no problem. And they pretty much, you know, pulled the curtain back and showed, you know, the technology, showed how it worked, showed what their go-to-market strategy was, what their IP advantages were without an NDA with this candidate.

And the candidate walked away and was like, well, thank you very much. I know everything I need now to, you know, set up my own business. So.

Have you been involved with a startup that either almost or actually did run out of cash?

Yes, yes, I've seen that, fortunately, not too many times that I've personally been involved with, but of course it happens, it happens a lot. And that's usually a result of many, many things, but certainly poor planning is a part of that and not recognizing early on, you have to make hard decisions, which might include scaling back or not growing as quickly as you plan.

So, it's pretty common for, because obviously startups are small and they're going out into a market and you can't go into a market that's full of just other little tiny companies because that obviously isn't a very good market if there's only tiny companies servicing it. So you're going to get into a situation where you've got David against Goliath.

And what have you seen that works in that situation? Because you go out and you say, I've got something that is gonna change this huge market. You know, like, Airbnb went out into a market that was already, I mean, it was a fragmented market, but there were tons and tons of people that were, you know,

Yeah, this is...

renting space in their house, or Fred Smith, who started FedEx, and he had a lot of trouble getting it going at first. But you know, that was a package shipping was already a big thing. And he had an idea that he believed would change it and did. And so you're going to find these David Goliath situations all over the place. And what do you think?

Is there a theme that where you could say, you know, here's what I've seen that seems to work to succeed in that kind of situation.

It is absolutely inevitable. Every startup sees this dynamic, the David and Goliath. And there is this, again, this inherent contradiction that a startup is nimble, it's resourceful, it's quick, it's ambitious, it's motivated, it's all those things. And in many industries, it's quite the opposite.

Some companies, they work at a glacial pace. They have layers of bureaucracy to get agreements signed. And they are completely inflexible in terms of saying, you use our form or we're not doing this deal. And you get all sorts of quirky things too. You're working sometimes with in-house counsel who are on a very different pace and have a very different approach, which is indirect.

conflict to yours. They're not as eager to close the deal. They're used to taking their time. They don't want to change clauses and contracts. I think it was actually in Dover in the early days of Dover. I was actually stunned that we received a non-disclosure agreement from a major fortune. I'm going to say Fortune 100 company and that non-disclosure agreement, which I mean, 90% of the time, they're pretty boilerplate forms.

there was an enormous typographical error in the form where it said, you know, instead of saying company shall not disclose, it said company shall disclose. I mean, it was so egregious and outrageous that I don't think it would have been enforceable because a court would say, this is what we call Scrivener's error. It's a drafting error. But I remember approaching the general counsel of this major company and pointing out this error in their form. And the response was, well,

Yeah.

this isn't something we can easily fix. It has to go to our legal committee, and then it has to go for approval and review by the general counsel. And I'm, to fix, to fix. Yeah. So, you know, those, that, I mean, that, that's just one example of, like, how absolutely ridiculous this, this kind of confrontation can be. And, and it's, and it's very stressful because, you know, as a startup, you're, you're eager to close deals. And, and,

Oh my god, I don't remember this story. Ha ha ha.

I think unfortunately in a lot of industries in the United States now they've become so heavily regulated, especially around obviously patient information, HIPAA compliance in the healthcare space, anything that's in the healthcare space. And a lot of companies now are demanding data protection policies, cyber security and breach. I mean, we all read in the news about all, obviously the tremendous security breaches that go on.

in various industries. And getting a small company, a startup that has maybe $2 or $3 million in funding and a one-year runway and four employees to sign up to some of these indemnification obligations and limitations of liability and requiring insurance of $5 million coverage for a breach, they are extraordinary. The good news, though, is that a lot of big companies...

recognize the value that startups have and the potential for their technology and being game-changing. And a lot of those big companies have teams that are specifically focused on finding and working with startups. And those teams tend to be a little bit more forgiving when it comes to negotiating and the terms of agreements and with the requirements and obligations on the startups. That's the good news.

I have found sometimes the best approach to be, you know, it's a little bullish, but you know, to say, look, you know, you can't get blood out of a stone here. If you're insisting on these obligations, it's going to put this company out of business. So let's find a solution that's more realistic and more reasonable in the context of the arrangement and that's more proportionate to the risk and the company's resources.

Okay, so here's one that's gonna sort of dig down into your feelings about another type of challenging situation. So you're in-house counsel, and almost for sure, you're gonna have a pretty strong relationship with the CEO, because you're supposed to be someone that the CEO,

asks advice and well, that's why you're called counsel, right? But let's say the company gets into a dire situation and you give some strong advice to the CEO and he, let's assume that he really listens and then decides, I'm not going to follow your advice. How do you handle that? What do you do then?

Yeah, well in a startup, you're part of a very small tribe, right? You're part of a very small group of people that's working closely together, that's building something fantastic, that's requiring shared sacrifice. So you are bonding quite intensely on a personal level with the team, the leadership team.

You do have to be, you have a duty of loyalty to the CEO, of course, as your ultimate boss. But you have to always remember that you are counsel to the company. You are not counsel to the CEO as an individual. And that sometimes gets blurred and creates a lot of tension because a lawyer is always supposed to, as you correctly said,

look at situations, analyze risks, present those risks to the CEO. Ultimately, the CEO owns the decision. Now, assuming it's strictly a business decision, the job of the lawyer stops when he or she presents their opinion and their advice to the CEO, unless, of course, there is a...

breach of an agreement or law. So it's, sorry, I had, forgot to turn off my phone. We're gonna have to start that again.

Sorry, Joppy.

No problem. That's easier to cut out.

Okay. So I lost my train of thought, but we'll regroup here.

that unless the CEO, unless this is not strictly a business decision, that if it violates an agreement or something.

Right.

So of course as a lawyer, you need to ensure compliance with laws and compliance with agreements. And if the CEO is taking a course of action that's in violation of a contractual obligation or even more significantly, federal or state law, you obviously have a primary obligation to report that to the CEO. And if the CEO decides to go a different path...

You want to make sure, of course, you fully document the fact that you gave the advice that the advice was rejected. If it's serious enough, there is always, hopefully, the most companies that have in-house councils have outside council. And that can be an enormous resource to an in-house council to seek advice and guidance on how to deal with the situation, how to maybe convince the CEO to take the right path.

If not, there's recourse to the board because again, an in-house lawyer is primarily responsible for ensuring the company itself, the corporate entity is compliant and doing the right thing.

Mm-hmm. Let's end by talking a little bit about some of the fun, quote unquote fun, we had at Dover.

things were phenomenal for part of the time, and then they were tough as could be another part of the time. And, you know, one of the decisions that we made, we so early on had this amazingly fortunate situation where the lighthouse customer found us. It was actually, they found us before we even spun out of Draper Labs.

And, you know, big, huge semiconductor company found us. And then basically it felt like, oh my God, we are home free. They're gonna help us prove what our minimum viable product should be. If they like it, it's gonna prove product market fit because they're in a very competitive market that they all need kind of the same things. And then...

Two things happened. One, things moved really slowly and we're like, you know, two years working with this lighthouse customer. And, you know, it kept feeling like, well, we shouldn't give up because this is going, this is all still moving. You know, it's moving slowly, but it's moving. And we're still on, you know, seed financing.

You can't really raise an A until you actually have proven product market fit and have some customers, right? And then the management changes at that customer at that lighthouse customer and the opportunity basically vaporized

And that's really the story of what I call Dover 1.0 because when that happened, we weren't able to raise the Series A. And I probably should have scaled the company back to almost nothing right then, but I instead tried to raise an end quote inferior Series A with anyone I could find. Thought that was almost.

going to happen. And then when that didn't happen, it was really over. Along the way, we had some, we had, we had a lot of tough conversations. I've never actually asked you what you and we may or may not include this in the podcast, but, but it, you know, I would be remiss if we didn't, you know, actually have some, some really, you know, interesting

Sure.

you know, tough, tough things to kind of bring up. So I'll stop there and just, you know, ask, ask you to sort of your perspective on those, those times and some of those decisions.

Yeah. Well, I think, I think part of it for sure is bad luck, right? I mean, part of it is just simply bad luck. We, and this happens with a lot of companies, they, they set sale, they've got, you know, this, this great anchor client, and then all of a sudden the anchor client goes away.

That's a syndrome resulting from putting obviously all your eggs in one basket or having maybe too much faith and confidence that particular project is going to materialize in the way and in the timeline that you want. And there's obviously a lot of hope and a lot of optimism that's tied up in any opportunity you're engaging in as a startup. I think diversification earlier would have been

would have been something that might have been helpful in terms of not having all of our, I mean, you remember at Dover, we had pretty much the entire engineering team, which at one point in time, I can't remember if it was like 12 people, working almost on that one client opportunity. I think that having earlier on, having been a little bit less committed to that one client, being a little bit less

responsive to jump and not saying how high, we might've said, let's put some resources into cultivating some potential alternatives to that Lighthouse client. That might've satisfied a lot of investors and having confidence that we weren't a one trick pony, that the technology had broader appeal.

buy in from more than one, no matter how impressive company. And this isn't something that I have not seen at other companies. Jaffee, you know, certainly I've seen that and some of the other companies I've worked with where they have one anchor client and everybody gets so excited and all wrapped up in that and then, you know, these tend to be larger companies that move glacially slow that have no problem.

pulling the plug on something a year or two later after investing, you know, hundreds and hundreds of thousands, millions of dollars, you know, a new CEO comes in or a new change in strategy. And, you know, that's okay. It's a loss. We're going to move on to something else. Obviously, that's the death knell for a startup, if that's your only client and that happens, which is why I think having a better finger on the pulse of,

more diverse customers early on is important and would have served us better.

No doubt about it. And we did try, we went after some of their competitors of that one big semiconductor company, two in particular. And we didn't get the same reaction, hey, yeah, I wanna be your lighthouse customer. I mean, I think it's also, it's kind of back to the David and Goliath thing.

Um, swimming around, the little minnow swimming around with all these huge fish is, uh, is tough. And, and you and I got in the middle of, of this business model that's called hardware IP licensing, where you get some money upfront and then you're not going to get the, the big win is when they start shipping you and their product.

and you get royalties for every part they ship. And we never got to that. And I think an alternative business model is also essential as a startup, when you figure out that no one else who's small is succeeding with a business model that you're going out there with, which is one that the huge companies live by.

You've got to find another way. And I did, but too late.

You're right. Yeah, well, and, you know, I mean, that's a good point, right? I mean, we at Dover felt that giving the customer what they wanted in terms of the licensing model was the easiest path to closing a deal. And on paper, it looked fantastic. And of course, it tickled the bones of all the investors to see this potential, you know, hockey stick of revenue once the products, you know, in the market and selling.

But the reality is you lay on top of that this unpredictability of whether this is going to happen or not. And even again, and I say this as a lawyer, you can have the most perfect contract in that situation. And the client says, you know what? We're terminating the contract. Sue us. What are you going to do as a startup? It's like, so I mean, I think that there's

Right.

You know, that's one thing we really didn't talk about. And that's, I think, the importance of relationships. Well, we've kind of been talking about it, but not really saying the word. Nurturing the relationships within a startup. And that goes from the beginning of the conversation to where we're talking now. Between the founders, between the CEO and the founders, between the CEO and all the employees, between the CEO and the board, between.

the CEO and the investors between the staff and the outside world, competitors, partners, relationships are the key to the success of any business, whether you're a startup or whether you're a Fortune 500 company. Investing in those relationships with integrity, with a good degree of transparency and an enormous amount of grit, I think is critical.

You will never be successful in a startup if you lack integrity and if you lack the ability to learn from your mistakes and to be motivated by doing something good and positive. That's how I feel.

Mm-hmm. Well, that's maybe a good message to end on. And we, you know, I'll say this too. And at the, we, you and I had such a good relationship that even if I said, you know what, I'm not listening to, or I'm listening, but I'm not following this advice, but all the, you know, it didn't ever interfere.

Right, well this has been a play.

because our relationship was so strong. And frankly, even with all the difficult things we went through, I look back on it and say, I really had fun. I had fun working with you and with Marco and with Steve. It was mostly fun. And I love to say to people, one of the reasons to do a startup is that it's a joyful experience.

Absolutely. And but, you know, to your point, Jathi, you know, I left the Dover experience with more respect for the people I work with, you included, than when I joined. I mean, and that's just because being in the trenches, seeing how you thought, seeing, you know, how diligent and how measured you were in thinking through everything, that only, you know, increased respect and

and

confidence in you and in the journey. And you're right, I didn't always agree with every decision you made, but I always respected that you went through a very thoughtful process in making your decision. And I would support it. I mean, that's critical too, right? Is to know that startups require, you're building a family and you've said this a lot and a lot of the little things that you did and not just over, but other startups are.

are really focused around building that sense of family, building that sense of trust, those relationships and the confidence to know that you are working with good people doing good things in a good way.

And I'll say this for the record too. And for all the listeners, having someone, a lawyer who's able to look at everything, enables the CEO to feel very relaxed about a whole bunch of potentially worrisome things. One of my favorite things is that if I came in and your hair was like straight out,

It meant you were really working hard on a difficult document. I'm not going to ask you to simulate it for us, but it was, but it was awesome to see that. And then, and I would just, I was going to say, I just would walk out and go, boy, I know I don't have to worry about that thing.

I knew you were going to mention that. No, no, no.

Yeah, well, you know, yeah, it's...

All right. Well, it's our job. Look, lawyers, I mean, this is the pain of being a lawyer is that you're really trained to think about risks and all the things that can go wrong and how do you how to prepare for them. And worst case scenarios. I mean, that's so drilled into us at law school and in practice that it's and it can be unpleasant to a lot of people that lawyers work with because they oh, my gosh, you know, all this lawyer does is point out what's going to go wrong and what's going to go.

how much this is going to cost or what this could result in. But hopefully, we're just one voice in the chorus of people that's talking to you and giving you advice. And you're able to measure that with, obviously, voices that are a little bit more tempered.

All right, well, Gary, this has been phenomenal. Thank you very much for taking an hour to, or more I guess, to talk to me and to all the listeners. It's been fun and I really appreciate it.

Of course, it's a pleasure and I'm thrilled to be part of this and wish you good luck with it.

I'm gonna stop recording. Stop.