Alex McGee-Gentile, Headhunter extraordinaire, and her husband Tony recently welcomed their first child. Congratulations on your new son!

Many wishes for a life time of happiness and a good night sleep,

The Perito Eleven Team

Spring is here and summer is around the corner! Spring is usually the time when we go through our homes and our closets and get rid of the old to make room for new gadgets. Or if you're like me, spring is just a good time to clean. Some of us have pets, kids, and we aren't exactly clean freaks. 

OK, so this blog isn't about your general cleanliness, rather, it's a reminder to not only clean your home but to also clean your computers!!! We rely so much on our trusty PC's and Mac's that many of us take them for granted until it's too late. You know, when you start noticing the fan on a lot louder and more often than ever before. Maybe your laptop seems to be running hotter than usual. Well, our trusted computers need to be cleaned too. There are many ways to do this but this video is a good start. Alright, next time your computer is acting up, ask yourself, is it full of dust gremlins?? 

Check it out!  Spring cleaning for your PC!

This subject was a recent headline on the WSJ.  We are just sharing this headline and do not take a particular opinion on the matter.  

According to a recent report, the Justice Department is stepping up its investigation into hiring practices at some of America's biggest companies, including Google Inc., Intel Corp., International Business Machines Corp., Apple Inc. and IAC/InterActiveCorp.

The inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others' employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies' hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits.

After a probe that began more than a year ago, Justice Department investigators have concluded that such agreements do raise significant competitive concerns.

But the leadership of the antitrust division hasn't yet decided whether—or how—to challenge the hiring practices. About a dozen companies are meeting with top antitrust officials at the Justice Department this week and next, some to defend their practices, others to provide information.

Antitrust experts say the Justice Department could argue that an agreement between competitors that holds down labor costs is as much a violation of antitrust laws as an agreement to fix prices.

Such agreements are "very close to the line," said Melissa Maxman, an antitrust lawyer at the law firm Cozen O'Connor. "They're not agreeing on price, but they're kind of agreeing on costs." Skilled computer scientists with some management responsibilities, for instance, often make base salaries of $180,000 to $210,000. Compensation for the most sought-after workers typically soars far above that and includes bundles of stock options and bonuses.

The Justice Department hasn't confirmed the existence of the investigation, and a spokeswoman declined to comment Friday. But several companies said they have received requests for information on the way they hire employees.

"IBM is one of many companies that have been contacted by government officials in a broad-ranging inquiry of technology and nontechnology companies regarding hiring practices," said company spokesman Edward Barbini. "We are collaborating with the government's inquiry."

Some companies are defending their recruiting practices. "Since investigations of this nature are confidential, we will not comment on what the Department of Justice may or may not be doing," said Intel spokesman Chuck Mulloy. "However," he said, "we believe our hiring practices are lawful and don't harm competition."

Google declined to comment. Apple and IAC didn't immediately respond to requests for comment.

Behind the scenes, technology companies are making the case that agreements among companies are not anticompetitive and don't affect employees' salaries or the availability of jobs. They say such agreements are commonplace, used by companies to maintain good relationships with business partners.

Some tech companies also say the agreements under investigation only stop them from cold calling each other's employees, not from hiring them.

The technology industry makes the case that it would be harder to enter into collaborative ventures with other companies if they fear losing valuable employees.

But Justice Department lawyers could respond that such agreements distort the labor market, theoretically harming the economy by cutting incentives for other people to enter such fields.

"In the long run, this is going to distort and depress the incentives for people to actually develop the talents and skills that are useful in this market," said Salil Mehra, a Temple University law professor who formerly worked in the Justice Department's antitrust division.

Policing the labor markets hasn't been a central focus of antitrust enforcers in recent years. But the Justice Department did act against what it saw as efforts to manipulate the labor market. It brought a civil case against a group of hospitals in Utah in 1994, alleging that they had illegally conspired to hold down nurses' wages by exchanging information about their pay.

A year later, it took action against the American Bar Association for allegedly using its accreditation process to force universities to raise law-school salaries. Both cases were settled.

The current investigation is the latest by antitrust enforcers to take aim at the often close-knit relations between tech companies, particularly in Silicon Valley.

The Federal Trade Commission's ongoing investigation into interlocking boards of tech companies forced Google's CEO, Eric Schmidt, to resign from the board of Apple.

Another casualty of the FTC probe was Genentech CEO Arthur Levinson, who stepped down from Google's board. He had been doing double duty as a director for Apple and Google until the FTC started asking questions.

More recently, the decision by legendary venture-capital investor John Doerr to resign from Amazon.com's board was influenced by the FTC investigation, according to a person familiar with the matter. Mr. Doerr—who recently declined to comment — is also on the board of Google.

I’ve read some reviews about a book by Dr. Kevin Leman, called The Birth Order Book. It’s very interesting and here’s some food for thought. Did you know that approximately 80% of Harvard students are first borns or only children. One can argue that first borns cost so much to send to Harvard that parents run out of money for the rest of the children (:

Why do angel investors exist?

Before answering this question, it’s useful to ask and answer a related question: why are there angels and why have they become more prominent in the last 10 years?  After all, doesn’t the definition of venture capital include all of the activities that angels perform? 

The answer lies in the history of technology companies and the differences between how they were built 30 years ago and how they are built now.  In the early days of technology venture capital, great firms like Arthur Rock and Kleiner Perkins funded companies like Digital Equipment Corporation (DEC) and Tandem.  In those days, building the initial product required a great deal more than a high quality software team. Companies like Tandem had to manufacture their own products.  As a result, getting into market with the first idea, meant, among other things, building a factory.  Beyond that, almost all technology products required a direct sales force, field engineers, and professional services.  A startup might easily employ 50-100 people prior to signing their first customer. 

Based on these challenges, startups developed specific requirements for venture capital partners:

• Access to large amounts of money to fund the many complex activities
• Access to very senior executives such as an experienced head of manufacturing
• Access to early adopter customers
• Intense, hands-on expert help from the very beginning of the company to avoid serious mistakes

In order to both meet these requirements and build profitable businesses themselves, venture capitalists developed an operating model which is still broadly used today:

• Raise a large amount of capital from institutional investors
• Assemble a set of experienced partners who can provide hands-on expertise in building the product and then the company
• Evaluate each deal very carefully with extensive due diligence and broad partner consensus
• Employ strong governance to protect the large amount of capital deployed in each deal.
• This includes requisite board seats and complex deal terms including the ability to control subsequent financings
• Manage own resources effectively by calculating the amount of capital/number of partners/maximum number of board seats per partner to derive the minimum amount of capital that must be invested in each deal 

It turns out that building a company has changed quite a bit since the early days of venture-backed technology companies.  Building a company like Twitter or Facebook is quite different from building Tandem.  Specifically, the risk and cost of building the initial product is dramatically lower.  I emphasize product to distinguish it from building the company.  Building modern companies is not low risk or low cost: Facebook, for example, faced plenty of competitive and market risks and has raised hundreds of millions of dollars to build their business.  But building the initial Facebook product cost well under $1M and did not entail hiring a head of manufacturing or building a factory. 

As a result, for a modern startup, funding the initial product can be incompatible with the traditional venture capital model in the following ways:

• Lengthy diligence process. Venture capitalists take too long to decide whether or not they want to invest because they are set up to take large risks and have complex processes to evaluate those risks. 
• Too much capital. Venture capitalists need to put too much capital to work – often a VC will want to invest a minimum of $3M. If you only need 4 people to build the product and get it into market, this likely won’t make sense for your business.
• Board seat. Venture capitalists often require a board seat and, for that matter, a board of directors be formed. If 100% of the company is building the product and the team knows how to do that, then a board of directors may be overkill. In addition, it may be too early to decide who you want to be on the board. 

As a result of the above, a venture capitalist usually requires a serious commitment from the entrepreneur to pursue an idea that is highly experimental. If the product doesn’t stick, it might make sense for the entrepreneur to pursue a totally different idea or drop the business altogether.  This is much easier to do if you’ve raised $300,000 than if you’ve raised $3,000,000. 

As entrepreneurs needed someone to bridge the gap between building the initial product and building the company, angel investors stepped up. 

Angel investors are typically well-connected, wealthy individuals. They generally use their own money and come with none of the above VC constraints describe above: they don’t go on boards, they don’t need to put in lots of capital (in fact, they usually don’t want to), they prefer dead simple terms (as they often don’t have legal support), they understand the experimental nature of the idea, and they can sometimes decide in a single meeting whether or not to invest. 

On the other hand, angels do not manage huge pools of capital, so entrepreneurs need to find someone else to fund the building of the company (as opposed to the product) and most angels do not plan to spend a great deal of time helping entrepreneurs build the company. 

When should you raise an angel round and when should you raise a VC round?

This question really comes down to the company’s development. If you are a small team building a product with the hope of “seeing if it takes” (with the implication being that you’ll try something else if it doesn’t), then you don’t need a board or a lot of money and an angel round is likely the best option. On the other hand, if you’ve developed a strong belief in your product or your product idea and you are in a race against time to take the market, then a venture round is more appropriate. You will benefit from both the extra capital and extra support that comes with a serious and large commitment from your investors. 

So who is qualified to invest in each?

Obviously angels can invest in angel rounds, but what about VCs? Is it safe to have them participate? The answer turns out to be “if and only if they behave like angels.” What does it mean for a VC to behave like an angel? Well, they must:

• Be able to make an investment decision quickly, e.g. in one or two meetings
• Be able to invest without taking a board seat
• Not require control of subsequent funding rounds
• Not impose complex terms

If the VC wants to be in the angel round, but refuses to behave like an angel, then entrepreneur beware.  Having a VC who behaves like a VC in the angel round can jeopardize subsequent financings.  Angels can be great participants in venture rounds, but it’s generally better to have a VC lead those deals as they have more financial and other resources required to build the company.