AppFolio SecureDocs is excited to announce that our own Dr. Klaus Schauser will keynote the World Financial Symposiums New York City Growth & Exit Strategies Conference.

Klaus’s presentation, “Start With the End in Mind,” will examine key components of launching a successful software company, including listening to the customer and performing market validation, and show how to build a foundation for a long-term multi-billion dollar company.

In addition, Klaus will share his experience of selling Expertcity (GoToMyPC and GoToMeeting) to Citrix for $230M and his experience in growing successful software companies in the current environment. He will discuss how he has been able to bring consumer-level experiences and usability to enterprise software and how these ideas and concepts have been applied to the SecureDocs product.

The WFS Growth & Exit Strategies for Software & IT Conference is an ideal networking and educational opportunity for CEOs, CFOs, corporate investors and other deal participants in the software and IT sector. The conference is sponsored by the Corum Group, Dentons, SecureDocs, and LISTnet.

The conference is taking place in New York City on June 5, 2013 at Dentons US LLP.

Register now for early bird pricing of $295- available until May 22, 2013.

Forecasting for 2013 on M&A action within the Technology market varies depending on the source.

Some experts are predicting recovery and others are predicting more of the uncertainty seen in 2012. However, all seem to agree that there are several primary drivers behind technology M&A deals over the last few years that will continue to serve as catalysts for deals in 2013 and beyond.

In particular, a number of studies, including the latest PricewaterhouseCoopers (PwC) “US Technology M&A Insights” report, are predicting a continued focus on cloud, mobile, social, analytics and security technology.

Driving Deal Decisions: Acquire Or Recreate?

The PwC report attributes the M&A success of the technology sector last year (relative to overall M&A activity) on the acquisitions made by enterprise software companies. These companies have frequently chosen to take on start-ups who have intellectual property it would otherwise take years for the acquirers to recreate.

Traditional software companies may purchase cloud-based services, for example. They would do this to disrupt data networking and other hardware-based solutions, gaining a competitive edge.

As our world becomes increasingly technology-focused, having these cloud-based technologies may simply become a cost of doing business. It is likely we will continue to see these kinds of purchases moving forward.

It’s worth noting, however, that this type of M&A technology deal isn’t limited to tech companies. In our increasingly technological world, acquiring a tech company can offer a non-technology company entirely new revenue stream possibilities with high growth potential. These acquisitions, which span a broad variety of tech categories, allow these companies to offer specialized new services.

An increasing number of non-tech companies are realizing that and are acquiring start-ups in the tech market. As an example, consider the continued innovation in retail and consumer industries. Businesses in these fields have been a key driver behind social and local M&A technology deals. Social discovery applications and mobile payment options are catching on in a big way; that makes it likely we’ll see continued interest in this arena.

To put it simply, companies are discovering that they can either adapt to the world of cloud-based technology or they can lose out on business to those that do.

Driving Deal Decisions: The Rise of Big Data Analytics

Technology has unveiled an ever-growing ability to collect data. And companies are using that data to analyze customers in ways that can be extremely profitable.

To look at one specific use: in the retail sector stores are now beginning to drill down to data on individuals, offering them deals uniquely tailored for their specific preferences, purchase behavior, and needs. Consider the news story that made waves early last year when Target figured out a teenager was pregnant before her father did.

That requires a massive amount of data collection with sophisticated analytics to parse information, note trends and capitalize on them in a way that will drive additional sales. And big data analytics are on their way to becoming simply another cost of doing business, which makes companies who offer these services increasingly valuable targets for technology M&A deals.

Driving Deal Decisions: Additional Security Concerns

The continued mobile proliferation, increasing adoption of cloud services and social networks and the intermingling of enterprise and personal data have made consumers and businesses alike concerned about the safety of all that data.

Recent security breaches, which have affected everyone from the Sony to Coca-Cola, only raise additional red flags. Companies need to make sure they take the appropriate security measures to protect both their own intellectual property and the information they’ve collected on their customers.

They are faced with a decision: should they outsource their security, acquire a company to manage it in-house, or attempt to build a team internally to handle potential risks? This is leading to a number of acquisitions in the security technology space.

What other drivers do you feel have led to the success of the Technology M&A market? 

Life science companies have always walked a delicate balance. Their purpose is often to research and develop products for the greater good, yet they also need to protect their intellectual property so that the company can be profitable enough to continue its work.

That means understanding the need for both collaboration and security. A secure virtual data room can be a helpful tool to more efficiently accomplish both goals.

Collaboration With an R&D Data Room

Sometimes it’s difficult to get all the best minds in one room—and even those minds sometimes have their best ideas outside the lab. Then there’s the ever-growing amount of data that companies have to sort through and the number of people involved in that process.

A secure virtual data room allows remote access to sensitive information without compromising its security. It allows multiple users to find and share information from multiple locations. User-based permissions make it easy to share specific documents with designated colleagues and to rescind that permission when its no longer needed.

An R&D data room can simplify internal quality reviews and laboratory audits by offering a central location for all critical information at a life sciences company, increasing efficiency and saving time and money.

And it can aid in meeting stringent regulatory compliance requirements, which tend to lengthen R&D approval times, by making it easy and efficient for reviewers to access the data they need.

All without compromising security.

Security With an R&D Data Room

Secure virtual data rooms offer a high level of security against unauthorized access with 256-bit encryption—the same level of encryption used by The National Security Agency (NSA). This is critical for protecting the type of highly confidential information and intellectual property at life science companies.

Multiple factor verification and permission-based access to R&D data rooms ensure only those who are meant to access files ever see them. Account administers can set permission levels for each individual user per document, controlling not only which files they see but what they can do with them. Users can be allowed to see but not download or print a file, download but not upload or replace a file, or they can be given full permission, based on their role within the company.

And audit logs track who actually accesses data, when they do so, and how long they spend reviewing it, providing peace of mind and regulatory compliance confirmation that no one is reviewing information without permission.

Together, the collaborative aspects and the security features of a secure virtual data room make it easier than ever for a life sciences firm to enable secure collaboration among internal staff and external partners when necessary while protecting proprietary intellectual property.

Other Uses For An R&D Data Room

An R&D data room isn’t actually limited to research and development. A secure virtual data room can be useful for many other purposes within a life sciences company, some of which include:

-Fundraising
-Sharing Information with Investors
-Licensing
-Financial Audits

What other uses can you think of for a safe yet collaborative file storage system for your life sciences company? Let us know in the comments. 

Christina S. Loza is the Managing Partner of Loza & Loza, LLP and acts as Intellectual Property Of Counsel for Manhattan Advertising & Media Law and Buynak & Fauver, LLP. Tina has experience in all areas of intellectual property law including trademarks, patents, copyrights, trade secrets, domain name disputes, internet law, eBay dispute resolution, as well as, IP licensing, counseling, and litigation. Tina is currently the President-Elect of NAWBO California.

SecureDocs had the pleasure of interviewing Loza, and hearing her thoughts on various aspects of IP portfolios. Our interview is as follows:

Please tell us about your law firm, Loza & Loza.

Loza & Loza is a boutique intellectual property firm that specializes in patents, trademarks, copyrights, and domain name disputes. We work closely with our clients to develop strong intellectual property portfolios, protect their ideas, trademarks, and slogans, and provide logical, straightforward solutions for all intellectual property issues. We support clients that range from solo inventors, to start-up businesses, to Fortune 500 companies. We are structured in such a way that we are able to provide our clients with high quality work for an extremely good value.

When I started the firm 8 years ago, the goal was to provide great service and rectify what we thought were some issues with how IP portfolios were handled at other IP firms. I think we have successfully done that. All my attorneys love what they do and it shows in their enthusiasm with clients and their work product. If you want to see more about Loza & Loza, check us out here.

What are some of the keys to building a strong intellectual property portfolio?

Wouldn’t it be convenient for me to say “have a wonderful IP attorney”? Really, I think that the key is to be aware that your ideas and goodwill have a value. In order to protect that value and make it a source of profit for you or your company, it is essential to invest in taking early, proactive steps to innovate, develop, and protect.

What are typical mistakes that a company should avoid in building its IP portfolio?

I think that some companies wait too long to take appropriate steps to protect their ideas. The America Invents Act was passed in 2011, but the “first inventor to file” provisions became effective on March 16, 2013. The United States used to be a “first inventor to invent” country and so this is a major change in the law and inventors can no longer rest on the laurels. It has become more important to file thorough provisional applications quickly and prior to disclosing the invention to others.

I think it is also extremely important to be educated about the process. Businesses need to have a plan, research the market, research attorneys, and understand why they are obtaining protection and what it will do for them. Obtaining a trademark or a patent is not about the beautiful certificate you can now display – are you prepared to use your patent monopoly as a sword? Are you treating your IP as a (valuable) asset of your corporation?

How can a company most effectively pursue innovation while protecting the value of its ideas? What are the smartest IP strategies that you’ve seen companies take?

I think these answers are very related. Bottom line:  File provisional applications as early as possible to secure early rights. File provisional patents early and often to avoid being scooped by a competitor.

California ranks number one for the number of women-owned businesses and the revenue they generate. As President-Elect of NAWBO California, what are your goals for the organization?

I joined the National Organization of Women Business Owners (NAWBO) shortly after I opened the doors of Loza & Loza. It has been a source of so many amazing things in my business and in my life. I have made so many connections in my own community and state wide, and I have learned that being involved in public policy is integral to the success of small businesses. It has also been so inspiring to me to know so many women who manage to juggle their personal lives and business lives and manage to have successful growing businesses.

With that said, my goals when I start my term of President in the summer will focus on growing the membership in California so that there is a wider net of women to support, mentor, and refer business to one another. I also want to try to increase opportunities to network between the nine chapters in California so that we can not only grow our businesses but band together to affect policy at a State level. To get more information about NAWBO, please go here.

Tell us about the internet law book that you are authoring.

Internet law is always changing and it touches so many areas of the law – trademark, copyright, contract, consumer protection, child abuse, bullying, fraud, etc. The list goes on and on. So, many experts need to be involved in a book about Internet law. Last year, my publisher had an internet law textbook that was out of date and needed some sprucing up. They brought in me and two other experts to update the book and make it accessible and full of good, new information to support professionals who work in these fields. You can check it out here.

Employers are often reluctant to allow their workforce out into the world, despite the undeniable rise in telecommuting. Many cite security concerns. After all, with the number of recent security breaches, security is on every executive’s mind.

Other top concerns include:

-Having employees together in the office may allow for better sharing of ideas and idea generation.

-Employees may not be as productive when they’re not in the office—and managers want the option of overseeing their employees’ work.

But a bit of research shows these objections simply don’t hold up.

First, the use of a secure virtual data room can keep information secure, while also allowing for remote access. With audit logs and permission-based access, a secure virtual data room not only keeps information safe remotely, it allows companies to control who has access to what information and to track who accesses that information, when and how often.

Second, with the right tools, idea sharing and idea generation do not suffer. High-tech company Cisco not only found telecommuters are effective at communicating and collaborating, it also improved employee retention and saved $277 million by allowing its employees to telecommute.

And finally, a recent Workshifting study found as much as a 27 percent rise in productivity among telecommuting employees, with most employees who are allowed to telecommute working an average of 2.4 days outside the office.

Adapting to A Remote Workforce

Telecommuting does present companies with certain challenges; but with a few easy-to-implement policies and management strategies, companies can recognize the benefits of telecommuting without risking secure documents or a loss in productivity.

The 5 Rules of Managing Remote Employees:

1. Utilize Modern Technology. The best option for allowing secure documents to be accessible without compromising security is a secure virtual data room. It will allow employees to share sensitive documents without compromising the data they contain.

2. Set Up Clear (and measurable) Performance Standards. To sort out those employees who simply can’t handle working without a manager looking over their shoulder, employers need to set up clear performance standards with regular check-ins.

3. Keep Team Members in Close Communication. Even when offsite, it’s important to keep the team communicating. Here, again, modern technology comes into play. Instant messaging, intranets, wikis, web conferencing and other emerging technologies provide important tools for keeping in touch without physical proximity.

4. Adapt Coaching Strategies for Distance Management. Coaching employees without direct observation requires evaluating work outputs and deliverables and then providing feedback, just as would occur in an office situation. Things like sales quotas, contributions in team meetings and prepared reports and documents (which can be shared via a secure virtual data room) should be looked at instead of just face-to-face time in the office.

5. Have A Clear and Collaborative Purpose. All teams should understand what they are contributing to the larger company, but this is even more important when the employees aren’t all physically at that company’s location everyday. Understanding their purpose and encouragement to work collaboratively to accomplish it will allow a remote team to make significant contributions to the larger enterprise.

With these strategies, employers can ensure they see all of the benefits of allowing employees to telecommute without potential problems arising. Sensitive information will remain secure, employees will remain productive and the company’s bottom line will continue to climb.

What is your company’s telecommuting policy? Are your employees allowed to work from home? Tell us why or why not in the comments. 

Many businesses start with a dream, but it takes more than just a dream for them to grow into successful businesses—including the tenacity to overcome the many challenges facing startups today. On the topic of challenges, below is a list of five of the most significant challenges with which startups are currently grappling:

1. Funding

Funding is a major concern for startups and small businesses. When the economy tanked, it made it harder to convince investors and banks alike to part with the cash that’s essential for growth in the early days of a business. Credit today is tight, and it’s not clear precisely when it will become more readily available.

Plus, there’s a growing trend of smaller initial investments in early stage startups, as exemplified by organizations such as Y Combinator and TechStars.

Intensifying the challenge of raising funds, major leaps in technology have led investors to raise the bar in terms of how much legwork entrepreneurs are expected to do before even pitching their companies, according to venture capitalist Jeffrey Bussgang in Inc.com.

2. Misunderstanding the Market

Apps are flooding the marketplace, new ecommerce sites pop up every day, and everyone, it seems, has a new business idea these days. And despite the challenges facing startups, in many ways it’s easier than ever to start one—serial entrepreneur and investor David Troy writes in the Huffington Post, “We run the risk of creating the cult of the McStartup.”

Yet not every idea has a market—or, more importantly, a market that’s willing to pay for that idea.

Many new business owners have a good idea, but greatly overestimate the size of their potential market. Or perhaps they misunderstand what that market truly wants. Either way, without a product for which consumers are willing to part with cash to own, entrepreneurs will be going nowhere fast.

3. Cash Flow Problems

New business owners often make bad assumptions about cash. Whether it’s assuming instant profitability, mispricing their product or getting too purchase happy and spending money on things the business doesn’t really need, cash flow problems are common.

And new lending regulations mean that this is an even bigger issue than it was a decade ago. Increases in regulation have made financial institutions less willing to lend money to small businesses—unless the business is doing well enough not to need it.

4. Creating the Right Culture

According to a Mercer Culture Integration Snapshot Survey, almost 75 percent of acquisitive organizations regard culture as a key component in creating deal value. That’s because a company’s culture is ultimately what will allow that company to find and establish itself as a unique company in a niche market.

A company’s culture influences things like customer service and product development. And, as Brock Blake, CEO of Lendio, recent wrote on Forbes.com, it’s a deciding factor in a startup’s ability to recruit and keep rock star talent.

5. Patient Protection and Affordable Care Act (PPACA)

One of the major signs a startup has taken off is when it has the ability to bring on additional staff. With the new healthcare legislation just starting to kick in, there is now an entirely new set of regulations they need to figure out and compliance requirements to meet when they hit the magic number of 50 employees.

Many business owners will either need to devote a significant amount of time to understanding the new law or hire someone to do it for them; either way, it’s certain to be a hurdle for some startup businesses in the days ahead.

What challenges has your startup faced? Share your experiences in the comments.

Appfolio SecureDocs is excited to announce that it is co-sponsoring the World Financial Symposiums Conference “Growth and Exit Strategies for Software and IT Companies.”

Taking place in New York City on June 5, 2013 at Dentons US LLP, this conference provides an opportunity for executives and investors in software, IT, Internet, and mobile companies to come together to interact, as well as learn from buyers, private equity investors, venture capitalists, angels, CEOs, and others who have recently sold.  It is guaranteed to be a great conference featuring some of the major players in New York’s tech and finance communities.

Other conference sponsors include the Corum Group, LISTnet, and Dentons US LLP.

 About World Financial Symposiums

World Financial Symposiums is an international organization dedicated to educating technology leaders. Renowned as the pre-eminent networking facilitator, WFS organizes and promotes forums, seminars and conferences for CEOs, CFOs, corporate investors and other deal participants for software and IT industries worldwide, with the intent to educate and encourage deal flow among industry colleagues.

 About AppFolio SecureDocs

AppFolio SecureDocs is a virtual data room for sharing and storing sensitive documents both within company walls and with outside parties. The solution is used for audits, business valuations, fund raising, M&A, accounting, legal events, and more. When specific events aren’t taking place, the data room is used as an extremely secure corporate repository for finance, HR, legal, and other critical documents of record.

We hosted a fantastic webinar yesterday on “Cybersecurity: Understanding Malware and How to Protect Your Business.” Our speaker, Giovanni Vigna, is the CTO/Founder of Lastline, Inc. and a faculty member of the Computer Science Department at the University of California, Santa Barbara.

During this presentation, Giovanni covered advanced malware, how computers and users are targeted and attacked, and what solutions do (and do not) work to protect from advanced malware. Excellent information for anybody interested in understanding how to keep their company’s information secure online.

This educational event was hosted by AppFolio SecureDocs, a secure virtual data room for storing and sharing sensitive business documents.

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In our employee interview series, we introduce you to the people responsible for making AppFolio a wonderful, intellectually challenging, and dynamic place to work. Today we feature Laura Fagundes, who is Marketing Campaign Manager for SecureDocs. Laura spends her days collaborating across internal departments and educating prospective customers on the benefits of the SecureDocs virtual data room. The following is our interview with Laura:

Tell us about your background. How did you come to AppFolio?

I moved to Santa Barbara in 2008 for graduate school. When I finished, I was fortunate enough to find a job as marketing manager for a local software company. After being there for three years, I heard about the opening at AppFolio through a friend. AppFolio has an excellent reputation in Santa Barbara, and I had friends that worked there and loved it- so I applied and got the job. I am really happy to be on the SecureDocs product. I find it interesting and love the team that I work with. Everybody is passionate, driven, and thinks outside of the box.

What’s your role at the company?

My title is Marketing Campaign Manger, SecureDocs. Basically, I handle all-things-marketing for SecureDocs. I am fortunate enough to spend a lot of time collaborating across departments- I spend time brainstorming with sales, our founders, our product people, etc. It’s a great job, and I learn so much every day.

Walk us through a typical day for you.

My days really vary based on what is coming up. In the marketing department, we focus on creating content that is of value to our prospective customers and finding new and interesting ways to engage with people. You can find me planning webinars, reaching out to companies for sponsorships and co-marketing initiatives, brainstorming with the SecureDocs team about new ideas, working with design to create new pages on the site, and other typical marketing activities- blogging, PPC, email campaigns, writing whitepapers, etc. No two days look the same, but I like that. I enjoy diversity and a fast-paced environment, so it works really well with my personality and workstyle.

What are some of the things you like best about AppFolio?

The people and the products. I have a lot of respect for my coworkers and for AppFolio as a company. Everybody is hardworking and really committed to doing their best work. And as a company, AppFolio is truly committed to serving its customers- top notch service is a mantra around here, and I think that’s the right way to do business- it makes me feel good about being part of the team. The products that AppFolio builds are intentionally user-friendly, intuitive, and cutting-edge. As more and more people embrace SaaS products, I think user experience becomes increasingly important.

What are some of the things you like best about the SecureDocs virtual data room product?

SecureDocs just makes so much sense to me. Online security is a huge issue these days. In any given day, you hear about security breaches, and the problem is becoming more and more prevalent. SecureDocs has come into the market and built a simple, effective product at a great price- which was not the case with virtual data rooms a few years ago.

I also love how our customers respond when they first use the product. Many are used to using other virtual data rooms that are more clunky or cumbersome, and not as intuitive. Many folks come to us quite stressed. We’ve actually heard them let out a sigh of relief when using SecureDocs, and that’s a great feeling.

Please share your future goals for SecureDocs

I think the possibilities are endless. We do everything online these days- why would handling paperwork be any different? Admittedly, before I started working at SecureDocs, I didn’t fully understand the security risks of using email, as an example, for storing and organizing my transactions- and I consider myself fairly tech-savvy. I pretty much used email, Dropbox, and Google Docs for everything I did at work, and a lot of stuff outside of work. Now that I know of the risks involved, it seems absurd to not use a virtual data room for anything you wouldn’t want to get out. I think as more and more businesses become aware of the security risks of not only external threats, but also of unintentional internal threats- like those caused by employees who handle sensitive information in a less-than-secure way, we’ll see SecureDocs being used more and more for everyday business documentation. It’s a virtual data room, but really, it could also be a virtual filing cabinet.

What are your favorite things to do outside of work?

On a good day, I’m a runner. I also get out and listen to live music whenever possible- we have a great spot here in Santa Barbara, the Santa Barbara Bowl, which is outdoors and totally awesome. That’s my happy spot. I also get outside and try to enjoy what this town has to offer- ride my bike to the beach, go for a hike, anything in the sunshine.

There are many reasons one company acquires another, but at their core, all of these reasons typically have one thing in common: a desire to gain knowledge or information—be it customer data, intellectual property, patented processes or specific team members. That means ensuring that information makes it through the acquisition process intact is paramount.

How to Avoid Information Loss

From Loss of Human Capital
There are two situations where loss of human capital becomes a top priority during an acquisition:

1. The company is being acquired because of the specialized knowledge key team members have.

2. The company is being acquired because the acquirer believes existing management has the knowledge necessary to make the company more successful with additional incentives, capital or oversight.

Yet taking two companies and making them into one is a difficult proposition. Employees often have to sort through competing priorities and demands, and acquisitions often cause a lack of job security that may cause essential team members to begin polishing their resumes.

The best way to avoid loss of essential human capital is to communicate early and often. Employees tend to begin looking at their other options when uncertainty about the company’s future takes root.

However, when employees understand the acquiring company’s intent—whether it’s industry consolidation, vertical integration, entrance into an adjacent market, or even an “acqui-hire”—and whether they plan to accomplish that goal by absorbing the company into the acquirer or simply attaching it and allowing it to function independently, they are far more likely to stick around.

From Loss of Company Data
No one wants to spend large amounts of capital without thoroughly understanding what risks they are taking and what they get for it. That’s why companies go through a through due diligence process.

Yet it is sometimes impossible to share certain company data during the due diligence process and maintain regulatory compliance—and what if key intellectual property, customer data or processes were shared and the deal fell through?

One solution to this problem is hiring a “clean team,” also sometimes called a “clean room.” Regardless of which name is used, it is a third-party who can objectively evaluate information from both companies and begin the integration planning process before the deal is finalized.

Hiring a clean team is particularly important in situations that might otherwise trigger potential civil or criminal antitrust enforcement from The Department of Justice or the Federal Trade Commission. Examples of premature integration activities that might be included in due diligence but that could place a company at risk of legal action include coordinating on prices, contractual terms and assigning customer relationships, writes Howard Samuels, managing director of the Mercator Group, a mergers and acquisitions consulting group.

How A Secure Virtual Data Room Can Help

A secure virtual data room can be a key tool for facilitating use of a clean team and then, later, helping smoothly transfer important data to the acquirer once the deal is done.

Because it allows for remote access, a secure virtual data room provides a safe way to share sensitive data with members of the clean team, allowing them access to information from both companies without the cost of traveling from business to business, lodging and meals—all of which adds up quickly.

Further, since they typically come with permission-based user roles, using a secure virtual data room makes it easy to release that key information to the acquiring company when the time is right; the necessary personnel can simply be granted access without any need to mail, email or fax sensitive data back and forth.

A secure virtual data room can also be used to help keep the lines of communication open with employees. Documents that break down integration plans not only shouldn’t be shared via email due to their sensitive nature, they often can’t be due to their size.

Using a secure virtual data room will help secure that information, ensure that everyone is referencing the same version of documents and the same actual content during meetings and planning sessions. And with a secure virtual data room file size is not an issue.