And the rest of the conversation explained why they would not be doing that. My stomach dropped. I knew they were our best shot of getting the money, and some of the angels who had previously invested were interested in coming in but only if I could get a VC to lead it, probably for some oversight. We now had very little cash left, and very little time to find someone else.
We have bittersweet news to share. The changes in policies announced by several major airlines at the end of last year—the banning of smart luggage with non-removable batteries—put our company in an irreversibly difficult financial and business situation. After exploring all the possible options for pivoting and moving forward, the company was finally forced to wind down its operations and explore disposition options, unable to continue operating as an independent entity.
However, you may currently deduct the costs of repairs or maintenance that do not improve a unit of property. This generally includes the costs of routine repairs and maintenance to your property that result from your use of the property and that keep your properly in an ordinary efficient operating condition. For example, deductible repairs include costs such as painting exteriors or interiors of business buildings, repairing broken window panes, replacing worn-out minor parts, sealing cracks and leaks, and changing oil or other fluids to maintain business equipment.
I learned something valuable from that. It's worth trying very, very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking's editor told him that every equation he included in his book would cut sales in half. When you work on making technology easier to use, you're riding that curve up instead of down. A 10% improvement in ease of use doesn't just increase your sales 10%. It's more likely to double your sales.
The other reason to spend money slowly is to encourage a culture of cheapness. That's something Yahoo did understand. David Filo's title was "Chief Yahoo," but he was proud that his unofficial title was "Cheap Yahoo." Soon after we arrived at Yahoo, we got an email from Filo, who had been crawling around our directory hierarchy, asking if it was really necessary to store so much of our data on expensive RAID drives. I was impressed by that. Yahoo's market cap then was already in the billions, and they were still worrying about wasting a few gigs of disk space.
A different way of distributing ownership-options are the right to buy shares based on a set of conditions. When an option is “exercised,” the option to buy stock is used and the result is issued shares. They're typically used as part of a compensation package in the form of an incentive to employees, directors, advisors, and other people key to the company's success.
Amortized start-up expenses would include the cost of items such as the following: an analysis of the need for a landscaping company in a particular area, securing prospective seed and plant suppliers, locating land for the nursery (but not any fees incurred in acquiring the land), advertisements announcing the opening of the business, business licenses, certain professional services (for example, an accountant’s fees for setting up a bookkeeping system). However, you would not be able to amortize expenses incurred in acquiring equipment such as tools and lawn mowers because expenses incurred for a particular asset generally are recovered through depreciation deductions.
“We placed our bets on the extensive collaboration with the television giant NBC. One could say that we placed too many eggs in the NBC basket. We have spent a lot of time and energy on developing the show. When I received the message from NBC that they were canceling the production of the show, it became clear that the conditions for further operation, without substantial changes, were gone,” [CEO Þorsteinn B. Friðriksson] stated.
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Taxes and tips relating to a meal or entertainment activity you reimburse to your employee under an accountable plan are included in the amount subject to the 50% limit. Reimbursements you make for expenses, such as cover charges for admission to a nightclub, rent paid for a room to hold a dinner or cocktail party, or the amount you pay for parking at a sports arena, are all subject to the 50% limit. However, the cost of transportation to and from an otherwise allowable business meal or a business-related entertainment activity isn’t subject to the 50% limit.
In Tarighi, the Tax Court concluded the taxpayer wasn’t engaged in a business during 2009 and 2010, because CES didn’t have any income or clients and didn’t bid on any jobs during those years. Though the taxpayer did engage in promotional activities, he didn’t intend to earn a profit in those years, because he didn’t pursue contracts or bid on jobs. 
Olena treats the $800 used for personal purposes as made from the $500 proceeds of Loan A and $300 of the proceeds of Loan B. She treats the $700 used for a passive activity as made from the remaining $200 proceeds of Loan B and $500 of unborrowed funds. She treats the $800 used for an investment as made entirely from the proceeds of Loan C. She treats the $600 used for personal purposes as made from the remaining $200 proceeds of Loan C and $400 of unborrowed funds.
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Many creators with millions of subscribers on YouTube and Facebook were initially attracted to Vidme’s model, but faced difficulty transitioning audiences from their home platforms. Convincing people to use (and keep using) a new platform is hard, leaving many creators locked in. Both Facebook and YouTube also actively deprecate content shared from competing platforms (Vidme’s social traffic dropped markedly once Facebook began to prioritize its native player).
Keep in mind that not all products follow a bell-shaped life cycle pattern as shown in the diagram above. Researchers have identified over a dozen different Product Life Cycle patterns. For example, a fashion fad becomes popular quickly, peak early, and decline very fast. Fads don't usually last long because most of them don't satisfy a strong need.
You generally cannot deduct expenses in advance, even if you pay them in advance. This applies to prepaid interest, prepaid insurance premiums, and any other prepaid expense that creates an intangible asset. If you pay an amount that creates an intangible asset, then you must capitalize the amounts paid and begin to amortize the payment over the appropriate period.
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“I lost $9 million in a day. I was on the set of one of my favorite TV shows. Then I got a text message: ‘Board call in 15 minutes.’ I went on the call. Right away the CEO said, ‘I have some bad news.’ The largest shareholder owed $90 million in back taxes and he had not disclosed this to the company. The bank that loaned the company money claimed that this withholding of information broke the agreement of the loan. So they wanted their money back instantly. Within a day the bank took every division of the company and just handed it over almost for free to other clients of the bank that were in the same industry. I got off the call and I was in shock. I was out in the middle of nowhere on this TV show and no way to get home. No way to even cry. I felt sick. I felt worse than sick. I was basically going to go broke. Again. Or at least it felt that way.”

For contracts issued before June 9, 1997, you can’t deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business.


Perhaps it's because society still holds to the Industrial-era thinking that business life and personal life should be kept separate that books such as these are rare. Most business books fail to deal at all with the personal, the emotional, the human side of business. However, these are the aspects of startup life where we confront real challenges--often alone and without guidance or help. This is beginning to change. And, folks like Brad and Amy, and the others who shared their stories, are helping to make it happen.
“A disagreement between the four [cofounders] turned into a nasty power struggle that put me and Alex [Cavoulacos], my current Muse cofounder, at the receiving end of screaming threats, and I woke up one morning to find my website access, as well as that of Alex and our entire team, shut off. I felt completely humiliated, like I had failed them and myself. I also ended up losing the entire life savings I’d put in the company–about $20,000. We could have sued, or we could have started over. We chose the latter.”
In my first start-up, when we got the celebrities on board for the TV show, we hit the roof. They actually talked to nobodies like us. After we found out that HBO had thrown MILLIONS of dollars behind a very similar show that we were pitching to them at the same time (unbeknownst to us), we cried in our soup. The project ended. In my second start-up, when we were working on bringing a fuel additive to market, we lost a huge investment and our hearts sank. It was stolen from us (literally) by a man falsifying research reports. I twisted and turned in my sheets, damning God and cursing the world, but one day, I realized something: it doesn't matter. The money wasn't mine. The investors who gave it to us knew the risks, despite our best efforts to manage them. I also realized I didn't die, my wife didn't hate me, my family didn't think I was (that much) of a lunatic. I landed on my feet and into an officer role (#2 spot) in a 3rd start-up (of someone else's creation). #3 failed because the product was terrible. I took the job because the pay was good and I thought if I got my hands on a team, they and I could re-vamp the image and make it sellable. Only problem: the CEO's head was as hard as a bag of rocks. He wouldn't listen to any suggestions. It was his way or the highway, which never works. The #4 start-up was a computer translation program. I raised about $5k in investment capital for design, but it wasn't enough. I had to give the money back, so nothing happened. #5 was my present start-up, Blaine & Gonzalez, which is no longer a start-up. This one is the success story. With over 20 recurring clients, 15 members, and service to major corporations like Amazon, the US Federal Government, JD Sports, and more, we are proud to be where we are today. The company's revenue has grown 900% over the past six years. We are preferred vendors in 6 states and are completing our Federal preferred vendor application by the end of 2017 and will be on the Federal schedule in 2018 and eligible to bid on huge government contracts. So, what's it all mean? It means that you have to never give up, no matter what. If you are truly in this game we all love playing, then you have to put your heart, your time, and your money on the line over and over again until your business succeeds. One of my favorite quotes is: "97% of the people work for the 3% who never give up." It took me a decade to make it into that 3%. Washing dishes, working at grocery stores, and even at a VIDEO store. (Remember those?) I drove a limo as well, which for those of you who don't know is like a long, black Uber, but the driver wears a suit ;) The point is - we ALL have it is us to be great. I love reading the stories of other co-founders on this site. Such inspiring stuff. Keep up the good work. Signed: an old guy who failed a million times and finally succeeded.
Take-away: After a setback, recalibrate. Entrepreneurs find it difficult to get away from their businesses, but breaks are vital. "You're coming up with ideas in your sleep and waking up with them," Kramer says, "but sometimes you have to stand back and not think about it. Allow your mind to rest in a different environment until you're ready again."
Remember, while having a successful business model behind you is undoubtedly an advantage, it is not a guarantee that it will work elsewhere within other markets, or that new offerings will result in the same success. The business graveyard is littered with organizations that took on too much and failed. Your task is indeed to take on new challenges as you look to constantly expand, but measure your risk and do your best to secure the company for all eventualities.
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