Snyder Asks Court to "Drain Swamp" With Artificial Intelligence [UPDATED with response from adversaries]

New York, NY - October 18 - Trial lawyer John H. Snyder, counsel for the former Trustees of the Healthcare Industry Trust of New York, which collapsed in 2007 as a result of corporate venality and governmental incompetence (see here), has asked Albany Supreme Court Justice Richard M. Platkin to order the Workers Compensation Board and certain "Ringleaders" of the infamous CRM insurance scam to submit their emails for analysis by Artificial Intelligence.

Previously, lawyers for the disgraced CRM Ringleaders Daniel Hickey Jr., Daniel Hickey Sr., Martin Rakoff, and Louis Viglotti argued that discovery would cost $4 million.  Snyder has responded with a plan to accomplish discovery at a cost to CRM of $140K, a 96% savings.  

Snyder's plan involves the use of Artificial Intelligence in lieu of manual review of millions of emails, which is expensive and ineffective. At Snyder's request, Yippy, Inc. has agreed to host the discovery data and provide its world-leading email search functionality for the benefit of the Court, the parties, and the taxpayers, free of charge.

Yippy's offer could save the taxpayers and small businesses of New York more than $100,000 in hosting fees alone.

Snyder has also engaged veteran white-collar prosecutor Robert Seiden, Esq. of Confidential Global Investigations to conduct a thorough search of the assets of the CRM Ringleaders to determine whether they directly or indirectly retained any fruits of the CRM fraud.

The HITNY Trustees' proposal to Justice Platkin is below.

John H. Snyder is a technology lawyer and entrepreneur based in Manhattan.  Snyder has been a senior advisor to Yippy, Inc. for several years and has an equity position in Yippy.  Snyder has used Yippy's technology in his own practice for over a year.

Yippy Sues Magna In Federal Court

October 11, 2017 - New York, NY - Technology juggernaut Yippy, Inc. filed a federal lawsuit against the toxic financier Magna just hours after Magna failed to explain irregularities with respect to certain purported Yippy stock certificates.

Magna is record owner of one (1) certificate for 200,000 shares of Yippy stock.  Yippy had a "call option" to purchase the certificate for $1 per share.  On September 13, 2017, Yippy tendered the full $200,000 purchase price.  Despite the fact that Yippy elected to purchase the illiquid shares for a 50% premium over the market price, Magna failed to deliver the certificate. 

After Yippy's management became aware of serious (and unanswered) questions regarding Magna's involvement in its stock, Yippy asked veteran Manhattan trial attorney and longtime Yippy strategic advisor John H. Snyder to personally coordinate Yippy's response.  Yippy's lawsuit seeks a declaration that Magna is barred from enforcing certain restrictive covenants and may not interfere with Yippy's responsibilities to its shareholders.

Snyder Attacks NY Workers Compensation Board For Conspiring in $220M Insurance Ponzi Scheme – Calls on Albany Judge to “Drain the Swamp”

New York, NY - October 10, 2017 – Manhattan trial lawyer John H. Snyder submitted a letter to the Honorable Richard Platkin, Supreme Court Justice for Albany County, urging the Court to reject a “corrupt bargain” between the New York Workers Compensation Board (WCB) and the sponsors of an insurance Ponzi scheme that has cost employers in New York hundreds of millions of dollars.

According to Snyder’s submissions, WCB aided and abetted Compensation Risk Managers and its principals Daniel Hickey and Martin Rakoff in a decade-long scheme to steal more than $100M in fees that CRM had no right to receive over the course of a decade, starting in the late 1990s.

As stated in sworn testimony, the WCB turned a blind eye to criminal misconduct by CRM and its executives for many years, including falsely certifying various insurance trusts as “fully funded” when in fact they were catastrophically underfunded.  WCB’s misconduct resulted in massive assessments being levied against small businesses across New York.

It has been revealed that the Chairman of WCB during the worst of CRM’s abuses – Robert Snashall – left WCB in 2003 and promptly started working for CRM as a lobbyist.

The parties are scheduled to appear in Albany Supreme Court on Friday morning, October 13, for a hearing on whether the executives at CRM responsible for a $220M fraud on the State of New York will be allowed to avoid any personal accountability.  In advance of the hearing, Snyder wrote to the Court:

On Friday, when WCB spends yet more taxpayer dollars arguing in favor of giving CRM a free pass, it will not be anything new.  As the Smeltzer Affidavit makes clear, WCB has been carrying the water for CRM since the 1990s.  As the Court observes WCB and CRM working hand-in-glove, for the mutual goal of avoiding accountability, perhaps the Court will appreciate the impossible situation the Trustees found themselves in.

We anticipate that WCB and CRM will attempt to pressure the Court into approving the settlement by threatening to dissipate the entire $4 million policy limit in discovery.  If the lawyers for WCB / CRM make this argument, they should be rebuked.

Addressing the point head on:  if the Court is concerned about dissipation of the policy limit, the Court should (1) order CRM to disgorge its emails immediately, subject to clawback, and let the Trustees complete the review; and (2) order every CRM releasee to submit to deposition by February 1, 2018.  An expedited discovery schedule will greatly reduce costs.

More broadly, the Court’s responsibility is not to save $4 million – it is to uphold respect for our institutions, which should have no price.  We live in an era characterized by the collapse of public trust in government, the likes of which we have not seen since the Civil War.  Millions of Americans voted to “Drain the Swamp” because, frankly, the Swamp is real.

If the Court allows WCB and CRM of proceed in their corrupt bargain, it will strike another blow at the public’s trust in government.  It will be a clear signal that in New York, if you are politically connected, you can steal with impunity, and the government will even use taxpayer money to make sure you get away with it.  It will be a slap in the face to honest, hard-working business people who pay some of the highest taxes in the US, only to watch CRM embezzle it and [WCB official] Mr. Papa light it on fire.

We need to get to the truth.  We need accountability.  We need discovery.

John H. Snyder PLLC is a Manhattan-based law firm advising technology companies and their senior executives. Founder John H. Snyder, a graduate of Harvard Law School, is ranked as a “Top 100” commercial litigator in New York State and has been named to SuperLawyers every year since 2013. Snyder was named a “Top 40 Under 40” Litigator in New York State in 2014-15.

Oration Lab

In early 2017, together with Matthew Grossman, I founded a company known as Oration Lab, which applies artificial intelligence to deconstruct speech and analyze the qualities that make the spoken word persuasive.  Here is a short "teaser" video.

 

IT Firm Rescuecom Countersued for “Extortionate” Litigation Practices and “Buffoonish Thuggery”

New York, NY - September 19, 2017 - John H. Snyder PLLC has filed a countersuit against Rescuecom, a Syracuse-based IT consulting firm, on behalf of client Brian Ganey, alleging malicious prosecution and violation of state and Federal debt collection statutes.  

In July 2016, Ganey hired Rescuecom to fix a problem with the router at his home.  When Rescuecom failed to fix the problem, Ganey hired another company – ClickAway – who successfully fixed the router, charging less than $260.

That was when Ganey's nightmare with Rescuecom really began. Rescuecom first attempted to place more than $1,000 in charges on Ganey’s credit card.  When Ganey objected, Rescuecom made up - out of whole cloth - a false accusation that Ganey had “hired away” the same Rescuecom technician who had originally failed to fix Ganey's router.  Based on that falsehood, Rescuecom sued Ganey for $600,000, forcing Ganey to hire lawyers to defend him in a court 3,000 miles from Ganey's home in California.

Ganey provided Rescuecom with proof that Ganey did not hire away anybody - that the $600,000 lawsuit was totally meritless.  Instead of apologizing, Rescuecom (through its counsel, Joseph R. Talarico II) continued its “buffoonish thuggery” against its customer by serving Ganey with an amended complaint, this time asserting a new claim for a paltry $360 – which is equally without merit.

Upon receiving this second frivolous lawsuit, Snyder filed a countersuit on Mr. Ganey’s behalf against Rescuecom and Attorney Talarico for malicious prosecution and violation of state and Federal debt collection laws.  According to Ganey’s pleading:

Rescuecom’s original complaint in this matter, dated April 13, 2017, recklessly and frivolously accused Mr. Ganey of “hiring away” one of Rescuecom’s contractors. Based on this completely false and fictional accusation, Rescuecom – through its counsel, the Talarico Law Firm – terrorized Mr. Ganey with a $600,000 lawsuit. While any good lawyer would have recognized this as a shake-down, Mr. Ganey, who has no legal training, was genuinely and understandably shaken by Mr. Talarico’s very intimidating lawsuit. He was further shaken by the utterly gratuitous and unnecessary conduct of Mr. Talarico in sending his process servers to serve Ganey with the amended complaint. Mr. Talarico knew the undersigned represented Mr. Ganey.  We had spoken on the phone and engaged in correspondence.  Yet, instead of asking the undersigned to simply accept service of an amended complaint (as is the universal practice), Mr. Talarico sent his process servers to personally serve Ganey. Based upon the facts communicated to me, it is the undersigned’s professional opinion based upon 15 years of practice as a rather aggressive litigator that Mr. Talarico intended his process server to “send a message.” Message received.
Rescuecom’s aggressively-served Amended Complaint entirely and abjectly abandoned its $600,000 claim. This is a clear admission that the $600,000 claim never had any substance, and was interposed without even the most cursory diligence, for its in terrorem value alone.  Simply put, Mr. Talarico made up a claim and tried to bully Mr. Ganey into settlement. This is conduct unbecoming a lawyer. Mr. Talarico should be ashamed of himself.

Ganey commented, “I called Rescuecom to fix a router in my home.  Not only did Rescuecom fail to solve my problem, when I disputed the charges, Rescuecom retaliated by filing false court papers.  It’s time people stood up to thuggish companies like Rescuecom and the lawyers that enable them.”

Snyder commented, "In my 15 years as a trial lawyer, I have never seen a service business treat a customer as poorly as Mr. Ganey has been treated by Rescuecom. Nobody should have to put up with the abuse that Rescuecom has inflicted on Mr. Ganey.  We gave Rescuecom and its lawyers every opportunity to back off.  Rescuecom insisted on having this fight.  We relish the opportunity to take this case to trial and look forward to having a jury decide whether Rescuecom's business tactics are acceptable."

John H. Snyder PLLC is a Manhattan-based law firm advising technology companies and their senior executives.  Founder John H. Snyder, a graduate of Harvard Law School, is ranked as a “Top 100” commercial litigator in New York State and has been named to SuperLawyers every year since 2013.  Snyder was named a “Top 40 Under 40” Litigator in New York State in 2014-15.

The Small Business Revolution

The Small Business Revolution is coming to America. 

President Trump's proposal to cut the small business tax to 15% could be the most consequential legislation in a generation. Tax relief for small business will finally allow American entrepreneurs to compete against Corporate America on a level playing field. It will unleash an army of brilliant, talented, motivated entrepreneurs, itching to make their mark on the world. It will strike a blow against cronyism and put a stake in the heart of Too Big To Fail. Nobody epitomizes crony-capitalism more than Goldman Sachs. Perhaps that is why Goldman is attacking Trump's tax plan for being too generous to American small business

I am a small businessman. After toiling for seven years at a major New York law firm, I started my own practice in 2010 and soon became an advocate for getting the hell out of Big Law and setting up your own shop. Since that time, I have been privileged to advise extraordinarily talented entrepreneurs and early-stage companies in technology, finance, law, real estate, and many other fields. I have co-founded two start-up tech companies and served as Chief Strategy Office for a third. I labor in the vineyards of American entrepreneurism. Every day, I see the guts, genius, courage, determination and ruthlessness of America's entrepreneurs. It is the most exciting arena in the world.

If I could have one wish for my country, it would be for millions and millions of Americans to feel the satisfaction and liberation that comes with creating a business. Those who forsake a secure paycheck to bet on themselves are making a profound statement of human dignity. Starting a business is a declaration of personal independence, a defiant assertion that you (not your employer) own your time and talent. When you muster the backbone finally to refuse your corporate overlord’s unquenchable demand for 70% of the fruits of your labor, it is an act of insurrection in our nation’s finest tradition.

The last decade was rough on small business. In most of the U.S., more small businesses closed than opened. America was built by entrepreneurs and self-starters, but in recent years, the business environment has kept talented people on the sidelines. We have a massive, pent-up entrepreneurial energy across America, including within the ranks of Corporate America.

This proposed tax cut will unleash that pent-up energy. Here is how it breaks down: under current law, if you start your own business, your business income is “passed through” to you personally. So, if your company makes $1 million in net income that is attributed to you personally, you pay personal federal income tax on that amount. For a single individual, you’ll pay about $350,000 in federal tax on $1 million – or about 35%. If you count state and local taxes, you're looking at nearly a 50% tax on small business. Big companies play by a completely different set of rules. Under current law, the tax rate for corporations is 35%, but, of course, big companies lobby for tax shelters and loopholes so that in reality, profitable companies pay only about 13% in federal tax. Our current tax law functions as a small business penalty tax. Under the new proposal, all businesses (small and large) pay a flat 15%. Bottom line: by eliminating the small business penalty, your $1 million small business can keep an extra $200,000 to invest in R&D, make capital expenditures, or hire more workers.

It’s hard to exaggerate how huge that is. It means that during the critical early years of a company, you will be able to reinvest an extra 20% of your profits into your business, rather than throwing it into the black hole that is government. It also means that you will qualify for better credit terms because you will have more after-tax income to support the loan. You can raise money on better terms because your business is automatically 20% more profitable. The biggest impediment for small businesses is access to capital. By allowing a small business to reinvest more of its own profits, you will see a great number of $1-5 million per year businesses become $10-50 million businesses. Imagine sprinkling thousands of these stories across the American economy. That’s the start of a major boom.

The proposed tax cuts will prompt an exodus of Corporate America’s top performers. A bit of economic theory is required to explain why that is so. Economists have shown that about half of a company’s productivity is created by the square root of the total number of employees. This rule of thumb holds true across a wide variety of industries and endeavors. It means that in a company of 9 employees, about 3 employees (33%) will be responsible for half of the production; but in a company of 10,000 employees, about 100 (1%) will account for half of the company’s productivity. Inefficiency grows exponentially as a company grows larger. 

Take the banking industry as an example. The 25 largest banks in America employ about 1.2 million workers. But half of the productivity is created by fewer than 5,000 individuals. These are the individuals who control the important business relationships, bring in most of the money, and whose decisions will determine the future of banking.

Some of those 5,000 rainmakers are my clients. I talk to them all the time about starting their own businesses. If they are given the choice between (A) giving 70% of their revenue to the big bank, plus paying 35% in taxes on what remains; or (B) keeping all the revenue and paying 15% in taxes, it's a no brainer. Even for the most risk-averse people, the tax incentive to start a company will be hard to refuse. 

When a significant percentage of high producers stop giving the big banks most of their revenue and start their own competing firms, Too Big To Fail will collapse under its own inefficiency. Out of the ashes will emerge a new banking industry, composed of hundreds of reasonably-sized banks eager to serve the rising tide of small and medium-size businesses. The result will be a trend toward smaller, more service-focused banking. If you've dealt with banks in the last 6 or 7 years, that will be a welcome change. This story is not limited to banking, but will repeat itself in one industry after another.

As the Small Business Revolution reshapes the American economy, it will reshape cultural attitudes toward capitalism and self-reliance as well. A recent survey found that only 42% of young Americans have faith in capitalism. That is the legacy of the 2008 financial crisis that taught a generation of Americans that capitalism means bailouts for bankers and misery for everyone else.

The Small Business Revolution will change hearts and minds. When the economy starts roaring and entrepreneurs are allowed to grow, you're going to start to see a lot of successful businesses and a lot of happy entrepreneurs who came by their success honestly. If your friend starts a business, it is more likely that you will start a business. When young people see that small business is not about oppression, but liberation, they will embrace it. When young people hear they can make more money and never dread going to work, they will embrace it.  When young people understand that good, efficient small businesses can beat the hell of out of the big, corrupt, inefficient players, young people will embrace the Small Business Revolution. That is how you capture imaginations and change the culture.

We are a nation in turmoil. The next few months will shape America for the next 50 years. We have a once-in-a-generation opportunity to revitalize our economy and create a more energetic, self-reliant, innovative culture. Now we need the political will to carry forward the Small Business Revolution.

2017 Grads: Start Your Own Business!

This graduation season got me to thinking:  what advice would I give a young person just starting out today?  To me, the answer is obvious:  Start your own business.

I graduated from college in 1999, a generation ago. The world was far less troubled. I graduated into a world that was mostly peaceful. The US economy was roaring at 5% growth; the stock market was breaking records. People generally trusted our civic institutions and believed most of what they read in the paper. Our national debt was "only" $5 trillion and we had budget surpluses. People actually discussed paying off the debt in full. College graduates had wonderful career choices with large, successful companies, especially on Wall Street. The post-communist world still loved America; people were optimistic; the future looked bright. The book Dow 36,000 predicted the stock market would triple in value in the next few years. People took it seriously.

Today’s college graduates, born in 1995 or 1996, remember none of the 1990s good times. The past two decades have seen a litany of failures by our political, financial, and media elite.  When the country needed unity, Bush v. Gore revealed the Supreme Court to be a nakedly partisan institution.  A year was wasted on Bill Clinton’s sex life while Osama Bin Laden plotted the 9/11 terrorist attacks that changed America forever and for the worse. The disastrous Iraq War followed, adding $3 trillion to the debt in a debacle that continues to haunt us. Reckless regulatory and banking practices led to the 2008 financial crisis, which saw the banks receive huge bailouts while everyone else suffered through nearly a decade of anemic economic recovery. Disgracefully, at least 34 members of Congress cashed in by trading on insider information just days before the crash. Today’s graduates are painfully aware that the last two decades have seen vast increases in college tuition, which is often spent unwisely. Instead of buying a first home and starting a family, debt-strapped grads carry six-figure student loans and move home after college.

Liberals distrust big business and conservatives distrust big government. Two decades of experience have taught me this truth: they're both right.

Don’t trust any of them.

Trust yourself, invest in yourself, depend on yourself.  As a technology lawyer and entrepreneur, I am privileged to work with smart young people striving to make their mark on the world.  My advice?  Commit yourself to starting your own business by the age of 35. Millions have done it and so can you.

Why Start Your Own Business?

What would you say was the most important invention of the last 150 years? 

Whatever your answer, chances are good that an American entrepreneur invented it.  We invented electricity, the automobile, the assembly line, radio, television, carbon dating, the microwave oven, the assembly line, GPS, chemotherapy, the polio vaccine, cell phones, email, the internet, the zipper, chocolate chip cookies and rock & roll.

America’s story is a story of a creative and practical self-starters finding ingenious ways to improve the lives of their fellow man. The average American leads a longer, healthier, more comfortable life than royalty a century ago. That is the legacy of generation after generation of American entrepreneurs. It is a noble and honorable legacy.

Becoming an entrepreneur creates a healthy and productive mentality. The entrepreneur earns his daily bread by creating value for others, which leads the entrepreneur to wake up every morning asking: how can I be most helpful to others? That mindset fosters good mental routines, which lead to good habits, which in turn lead to success and satisfaction. Entrepreneurs tend to become good citizens who are invested in their communities and have the resources and personal qualities to be community leaders.

Entrepreneurs tend to socialize with other entrepreneurs. If you have dinner with a bunch of W-2 employees, the conversation gravitates toward complaints about work (I’m not paid enough; my boss is an idiot; my job is pointless, etc.). It can be a toxic mindset. However, if you have dinner with a group of entrepreneurs, the discussion ends with “how can we work together to create even more value?” I know this to be true because, every month or so, I host an event for my entrepreneur clients. I’ve seen it happen over and over. If you want to get the best out of yourself, adopt the entrepreneur mindset and become friends with entrepreneurs. It is said, “tell me who your friends are, and I will tell you who you are.” You will not find a better, more honest, more industrious segment of America than its innovators and entrepreneurs.

If you can successfully start your own business, you will gain self-confidence that will supercharge your career. Think about it. An employee lives in fear of being fired, passed over or demoted. As an employee, your livelihood depends on factors outside of your control. You are always vulnerable, and so long as you’re an employee, you toil in service of your boss's dream, not your own. By contrast, if you know how to compete in the free market, you quickly develop a sense that if you lost everything, you could get it all back in 2 years. That self-confidence creates a willingness to take risks, which is the only way to succeed. Bet on yourself once and you’ll probably do it again.

Running your own business will force you to become vastly better at your craft, whatever that is. When you start out, you’ll do jobs that are too small for more established businesses. Over time, happy customers will give you more and better business. You will be able to hire a few employees. With hard work, your cash flow will become more reliable. By the age of 35, you will have gained mastery of your craft.  Even in competitive markets, there is plenty of money for those who get the job done right, on time, and on budget. Ask anyone who has ever hired a building contractor or a car mechanic.

Lastly, being an entrepreneur gives you the means and opportunity to pursue non-profit endeavors. A thriving business is a natural platform for other pursuits, and it is a great way to learn to relate to customers from all walks of life. As your business matures, you will gain a clearer understanding of how the world works in reality (not just in theory). You can’t change the world without understanding it. A thriving business is a wonderful platform for charitable or activist projects.

How to Start Your Own Business

If someone told me in 1999 to go start a business, I would have had no clue where to begin. You might as well have told me to build a rocket ship. Unless you have a technology that absolutely cannot wait, I don't suggest starting a business right out of college. It will probably fail and you will get discouraged. 

Instead, I advise that college graduates spend a decade preparing themselves and their skills. That sounds like an eternity. It’s not. What follows is not a goal but a system - a 10-13 year blueprint for a prosperous and satisfying life.

1)  Get a job doing something.

No matter what degree you earned, your first job is likely to involve fetching coffee. Be proud to fetch coffee. Remember, when you’re rich and prosperous, you will wear your lowly beginnings as a badge of honor. It will also help you empathize with your employees when you are the boss.

Remember, 17% of Americans aged 16-29 are neither employed nor in school. Before political correctness took hold, we called these people bums. Don’t be a bum. Your first step is to gain employment. If you have to flip burgers, flip burgers. Everybody starts somewhere.

2)  Get business cards, thank you cards, and stamps.

Invest a little bit of money in business cards and thank you cards. Keep the thank you cards on your desk. Whenever someone does something nice for you, make a point to send a personalized thank you note. It takes 5 minutes, and it engenders more goodwill than you would imagine. Put a dozen business cards in your wallet or bag. Start acting like an entrepreneur.

3)  Collect mentors.

About 15 million Americans are self-employed. Successful entrepreneurs are everywhere. Start meeting them. Ask them to lunch. Here’s a secret: successful entrepreneurs love to tell war stories and share advice. What if you don't know any entrepreneurs? That's okay - go online, find owners of local businesses, and email them.  Attach this essay, tell them you're pursuing the American Dream of starting your own business, and ask if they would let you buy them lunch. They will say yes and probably insist on paying.

For a year, make a goal of having lunch or drinks with one entrepreneur a week. Just one a week. That’s 52 lunches in a year. That’s 52 potential mentors. Keep doing it for 10 years, and you will have a network of 520 potential referral sources. Empires have been built on less.

4)  Share your dream.

If you have committed to starting your own business by 35, tell everyone. There is power in the mere act of saying, "I am going to start a business." If you say it enough, you will start to believe it. Others will believe it. People will then expect it from you, and there are few human urges more powerful than the desire not to disappoint others.

If you create the expectation that you will start a business at 35 among your family and friends, it will be hard to chicken out. At the same time, people will start to think of you when they read articles about entrepreneurism. People will root for you. People will help you.

5)  Keep your overhead low.

If you want to start a business, you will need to save your money. When you finally quit your job and start your business, you’re going to want as long a “runway” as possible. I always recommend enough money so that you can go without revenue for 6 months, covering startup costs, your personal monthly expenses, and business fixed costs.  This is dollars and cents; do some math:  

War Chest = ((M + B) x 6) + S

M = your monthly living expenses; S = your business startup cost; B = your monthly business burn rate.

If your business costs $40,000 to start and $7,000 per month to operate, and your monthly living expense is $3,000 per month, you need $100,000 minimum. You can save that in a decade if you are focused and disciplined.

Suppose you get a job paying $60,000 per year.  If you can put away $500 per month at 4% interest, it will take you 13 years to fill your $100,000 war chest.  However, if you can cut your expenses (or increase your earnings) and save $1,000 per month, your war chest will be full in just 7 years. Think of it. Saving an extra $20 per day buys you freedom six years early.

The lower your personal overhead, the more you can save.  The more you save, the sooner you can stop being an employee and start building your business. 

6)  Marry the right person.

When deciding who to marry, understand that not every potential spouse is going to be comfortable with the risks inherent in being an entrepreneur.  Nor is every spouse willing to accept the hardships that come with running your own business.

This is a hard fact of life, but if you marry someone who does not have the personality to deal with the entrepreneur’s life, you will probably never be an entrepreneur.  If you’re really committed, you’ll do what I did and marry a fellow small business owner!

7)  Move where the action is.

Over time, you will gain a clearer sense of what kind of business you want to start. When you do, you must get into the middle of the action. If you want to start a tech company, you better go to Silicon Valley, New York, Boston, or Seattle.  If you want to make movies, move to Hollywood.  If you want to be in commercial fishing, move to Alaska.  If you want to drill for oil, move to Texas.

Some of these places are very expensive. Be prepared to live like a dog for a while. Pick your favorite flavor of Top Ramen and go to Sam's Club. Remember, these sacrifices are future war stories. Most successful entrepreneurs live on noodles at one point or another. It’s a badge of honor. Find friends who are doing the same thing and it won’t seem so bad.

8)  Educate yourself on business basics.

You probably graduated from college knowing nothing about how to run a business. You can fix that. Spend time mastering Quickbooks. Make a dummy account and start playing with it.  Take a class on bookkeeping. Learn the difference between a balance sheet and a profit and loss statement. Learn what estimated taxes are. Learn the difference between GAAP accounting and tax accounting. Learn the difference between cash basis and accrual basis. Learn the difference between debt and equity. Learn what a SEP IRA is.

9)  Make professional allies.

Before you launch your business, you want some key allies who you can call upon for help. You are going to need a bookkeeper, an accountant, a lawyer, and a banker. Depending on the business, you will need other service providers.

If you know a lawyer who just started her own law firm, or an accountant, or a banker – make friends with her. Do as many favors as you can. I have seen businesses fail because the owner was too cheap to hire a lawyer. Remember, hiring a lawyer to draft documents is cheap. Hiring me to defend a lawsuit because you screwed up your formation documents is very expensive. If you have lawyer friends who you can call upon for help, it can make all the difference.

10)  Keep the faith.

If you pursue the entrepreneur’s life, there will be times you want to quit. You will imagine how nice it must be to just show up to work, leave at 5pm, and never worry about making payroll.  Your friends at big companies may make a lot more money for a while. They will drive expensive cars, and you might be driving a $3,000 used Ford Escort (my first car).

Remind yourself of the price tag.  To get that BMW, your friends, in a very real sense, have forfeited the American Dream and consigned themselves to the employee mindset. Being an entrepreneur means delaying gratification.

Your most productive years will be between the ages of 40 and 60. That's when you get rich. Until then, make career decisions based on what you can learn and who you will meet – not how much you make. Your goal is not a posh apartment. Your goal is not short-term income maximization. Rather, your goal is to have a war chest by age 35 so you can start your business.

11)  Be open to opportunities.

If you are an entrepreneurial recent college grad, don’t get too hung up on exactly what business you will start in 10 or 15 years. The world is changing quickly.  It is entirely possible that the business you will eventually start does not exist yet as an industry. A friend and client of mine, Amit Khera, runs Oak Digital Agency, a great digital marketing firm.  Eighteen years ago, that industry didn't exist. The point is, keep an open mind. Remember, when technology opens a new market, nobody knows anything. That is a great opportunity.

I have personally started four businesses – two technology companies, a real estate company, and a law firm. One of my companies began because I wanted to learn to play guitar. I began studying guitar with Matthew Grossman, who is a genius in addition to being a world-class musician. Now, together, we own a technology company that uses artificial intelligence to analyze speech patterns. Five years ago, I could not have dreamed that I would start such a business.

Remember, you’re not learning how to start a specific business – you’re developing habits and systems that will allow you to thrive in any business you want to pursue. Once you're in the entrepreneur mindset, you start seeing opportunities everywhere.  And then it becomes fun.

12)  Your last job is learning your craft from the best.

Once you know the business you want to start, your next and last job should be with the biggest, most successful company in your industry. If you want to open a restaurant, you should find a job at a five-star restaurant. If you want to open an accounting firm, work at the best accounting firm in your town.

In addition to honing your skills, working at the industry-leading company will teach you what the best customers expect in terms of service. On the other hand, every big company has waste, inefficiency and bloat. You will start to identify ways to run the business more efficiently on a smaller scale. Write those insights down. They are gold.

Pro tip:  before you sign the employment agreement for your last job, make sure your lawyer reviews it. Many employers like to include covenants not to compete. Since your objective is to leave and compete, you need be very careful what you sign.

13)  To partner or not to partner.  

Once your war chest is full and you understand your craft, your industry, and the fundamentals of business, you are ready to go out on your own. Decide if you're going it alone or taking on a partner. It may seem counter-intuitive, but starting with a partner is usually a mistake.

The point of a partner is not to keep you company, to commiserate with you, or to mind the store while you sleep (that's what friends, spouses, and employees are for). Rather, a partner should excel at aspects of the business where you have proven deficient.

When you are starting out, you won't really know what parts of the business will prove most challenging. If you try to guess, you will probably guess wrong. I recommend waiting 6 months or a year and figuring out where your "pain points" are. Then, you can decide whether the solution is to improve your skills, or perhaps you should hire someone to handle that function for you.

Take for example my law firm. Initially, I did everything - marketing, client relations, bookkeeping, banking and, when time permitted, actual lawyering. The part of the job I hated was bookkeeping. So I hired a bookkeeper. The part of the job I was worst at involved drafting settlement agreements, which is tedious and requires patience that I do not possess. So I partnered with Tom Sima, the smartest corporate lawyer I've ever met. 

14)  Plan your launch carefully.

Starting a business takes time. Before you actually quit your job, you should go into overdrive with pre-marketing. Have lunch with everyone in your industry. Work on your mailing list. Buy the software you will need and master it. Do everything you can before actually opening your doors. Once you launch, it is all a blur. 

15)  Mentor others.

Entrepreneurs are the economic engine of our country and the glue that holds together civil society. We invest in our communities and employ a third of the US workforce. We have the hard-earned privilege of forging our own destiny and pursuing goals and objectives that we choose. It is a blessing I wish every American enjoyed. Now more than ever, we need entrepreneurs and risk takers.

If you follow steps 1-14 faithfully, you will succeed. When you do, make sure you pass on your wisdom to the next generation of entrepreneurs. Few things provide as much satisfaction as helping a young person realize the American Dream.

Conclusion

We live in tumultuous times. And yet, through our country's history, when we have run into trouble, the American innovator has always been a big part of the solution. So it is today. To the Class of 2017, we desperately need your energy, your ambition, your creativity and your courage. The American Dream is alive and well. We are living in a technology renaissance. There is no better place on Earth to start a business, and no better time in history to succeed. You can do it!

Snyder Obtains Dismissal of $71 Million Lawsuit Against Actuary

John H. Snyder PLLC won a complete victory on behalf of client Actuarial Risk Consultants LLC (ARC), a New Jersey actuarial firm.

In early 2015, ARC was sued by Leading Insurance Group (LIG), a financially troubled insurance company.  LIG asserted claims against ARC for professional malpractice and unjust enrichment, both claims arising from LIG's contention that ARC failed to detect problems with LIG's own internal actuarial work.  ARC denied all wrongdoing and asserted that LIG, in bringing this lawsuit, was seeking to shift the blame for its own mismanagement.

On March 7, 2016, New York Supreme Court Justice Saliann Scarpulla dismissed all claims against ARC, holding that LIG had failed to allege a viable cause of action.  While ARC is disappointed that LIG chose to assert this meritless action, ARC is pleased to have received complete vindication in the New York courts.

Yippy Launches Into Space With Globalstar Deal

Data technology company Yippy, Inc. (YIPI:OTC) has entered the global data space race by entering into a long-term agreement with Globalstar, Inc. (GSAT).

Historically, satellite internet and data service has been limited by slow download speeds. Yippy, which holds a perpetual license to IBM Watson Explorer technology, has developed its EASE 360 software solution that dramatically increases satellite data performance. In order to leverage this unique capability, Yippy has entered into a 20-year agreement with Globalstar, a leading provider of low earth orbit satellite voice and data communications.

The agreement enables Yippy to bring its customers industry leading satellite internet service, in addition to giving Yippy exclusive rights to sell Yippy’s EASE 360 Platform to Globalstar’s nearly 700,000 subscribers. Yippy also receives colocation rights with respect to 20% of Globalstar’s 26 ground stations worldwide. Yippy will utilize its access to the Globalstar network to provide affordable broadband-like internet access to locations not served by terrestrial internet - which includes more than 4 billion people around the world.

Yippy was advised in this transaction by Thomas C. Sima and John H. Snyder.   We congratulate Rich Granville, John Macartney, and everyone at Yippy on this remarkable deal.  

Snyder Sworn Into the U.S. Supreme Court Bar

It was my privilege to be sworn into the bar of the United States Supreme Court on June 15, 2015.

Together with several of my fellow Harvard Law alumni, we had the opportunity to watch the Court issue three decisions and, later in the morning, visit with Chief Justice John Roberts and Justice Ruth Bader Ginsburg.

As a trial attorney, being sworn into the bar of the U.S. Supreme Court before the full panel of Justices was a profoundly special and memorable experience (and produced child-like excitement rarely felt after age 10).  I thank Chuck Sims and Abaigeal Van Deerlin for graciously sponsoring my admission, and Pete Mumma of the Harvard Law School Alumni Relations Office for organizing this wonderful event.

 

 

Snyder Advises Yippy on Deal With Globalstar

John H. Snyder PLLC client Yippy, Inc. has reached an agreement with Globalstar, Inc. to build out a global ubiquitous network utilizing the Yippy EASE 360 platform. This network will allow Globalstar customers to access online information as well as corporate data silos with enhanced download and upload speeds with a focus on primary content. The EASE 360 platform significantly enhances the customer experience such that web pages and content downloads/uploads are materially faster while maintaining a secure connection.

Based in Fort Myers, Florida, Yippy, Inc. (www.yippyinc.com) is a technology company that specializes in the development of search-based applications, data normalization and aggregation through enterprise application (app) service environments (EASE) for consumer and enterprise markets. Yippy's proprietary appliance based product suites are deployed over a private cloud architecture and provide secure, redundant and maintained data services for individuals, businesses and education markets. The Company also operates several online web properties and educational reference portals. Investors can find current financial disclosure for the Company at http://www.otcmarkets.com/stock/YIPI/filings.

John H. Snyder PLLC advised Yippy in connection with this transaction.  See full press release here.

Appellate Court sides with Snyder client Wear First, enforcing arbitration agreements against factoring agent.

On May 26, 2015, a New York appellate court sided with Wear First Sportswear, Inc. in a dispute with a third-party factoring agent that claimed Wear First owed one of its clients money under a factoring agreement.

Wear First sought dismissal of the case, brought by Plaintiff DS-Concept Trade Invest LLC, on the basis that all of the agreements on which DS-Concept was relying contained broad arbitration clauses requiring the matter to be arbitrated in China.

In response, DS-Concept contended that a 1984 decision of the New York appellate court created a special rule that factoring agents do not have to comply with arbitration clauses contained in contracts that have been assigned to the factoring agent.

The New York Supreme Court, First Department Appellate Division, confirmed the long-standing rule in New York that when a party is assigned a contract, the assignee merely steps into the shoes of the assignor (and gains no greater or different rights). In the case of DS-Concept v. Wear First, the appellate court reversed the lower court, holding that an assignee (DS-Concept) must abide by an arbitration agreement contained in a contract that was allegedly assigned. In so holding, the appellate court rejected its decision from three decades earlier, Rosenthal v. Kunstadt, 106 A.D.2d 277 (1st Dep't 1984)) which previously had been construed as creating a different rule for factoring agents.

Wear First was represented by John H. Snyder and Abaigeal Van Deerlin.

Read the decision here.

Investor Beware: Nine Tips to Avoid Getting Scammed

The world is full of ambitious people with big ideas. Unfortunately, often the big idea is to separate you from your money. Don't get scammed.

If you're considering making a significant investment in a start-up or early stage company, follow these nine tips to avoid becoming a victim:

1.    Understand the business plan.  

You need to understand the business you are investing in. If you don't understand it, don't invest in it.

Before you think about writing a check, ask:

  • What is the company going to do with your money?
  • Does the company have enough money to do what it says it's going to do?
  • What does the company sell?
  • Who is going to buy?
  • Who is competing in this market?
  • How does the company make money?
  • When do you get to see some profits?
  • If the company succeeds, when do you get to sell your equity?

The business plan should make sense to you. If it doesn't make sense, don't assume that you're not smart enough to "get it." Here's a secret - most business plans don't really make sense when you dig into them. That's why most new business ventures fail.

Again, if you don't understand it, don't invest in it. 

2.    Don’t get stampeded into investing before you're ready.  

Show me a guy who is insisting that you've got to invest RIGHT NOW, and I'll show you a scam. Promoters of legitimate ventures will encourage you to take your time, consult your lawyer, and ask questions. They should want to have savvy, sophisticated investors as part of their circle. If a business wants your investment today, it will probably want it in two weeks.

It's your money. Invest it when you're ready and not a moment before.

3.    Talk to other investors.  

Ask the promoter to put you in touch with other investors. Pick up the phone and have a conversation. Here are a few questions to get you started:

  • How do you know the promoter?
  • Can you tell me about the business?
  • When did you invest?
  • Do you have common stock (or membership units)?  Preferred?  If preferred, what are the differences between common and preferred?
  • What about this company convinced you to invest?

If the promoter won't let you talk to other investors, or if the other investors seem sketchy, run away!

4.    Talk with the Company's lawyer.  

If an emerging company is taking money from investors, it should have a lawyer. Ask for the name of the lawyer, and ask permission to call him or her. Then, really call. The purpose is to find out some valuable information:

  • Does the lawyer really exist?
  • Is the lawyer a bona fide experienced attorney with a deep background in business?
  • Do you get a good vibe from the attorney?

Nothing can kill a start-up faster than incompetent legal advice. Even if all of the other fundamentals are good, a company with poorly drafted corporate documents and agreements is a disaster waiting to happen. If the company does not have capable and reputable legal counsel that is a big red flag.

5.    Ask common-sense questions.  

When a promoter tells you about the fabulous returns his venture is going to earn, ask some common-sense questions:

  • Why haven't 100 other companies rushed into this market?
  • Why haven't the big private equity firms snapped up this deal?
  • Why doesn't the promoter simply borrow the needed funds from a bank, so that he only has to pay interest and can keep the fantastic profits for himself?

Scammers tell stories that you want to believe. Sometimes the best question is: "why do I deserve this generosity?"

6.  Don't get shamed into investing.

The scam artist's best trick is often to make you feel insecure. If you ask an uncomfortable question, the scammer will make you feel naive and foolish for asking such a "silly" question. It is human nature to crave the admiration and approval of others. No one wants to be thought a rube. Scam artists prey upon basic human nature. 

Always remember, when someone wants your money, you get to ask any questions you want. If you get the sense that the promoter is trying to make you feel stupid for asking questions, you're probably about to get scammed.

7.  Resist "Fear of Missing Out."

We've all heard the stories (many apocryphal) of the guy who passed on an opportunity to be an early investor with Warren Buffett. Or Sam Walton. Or Bill Gates. And yes, sometimes that probably happens.

Scammers prey upon this fear. They’ll convince you that this is a “once in a lifetime” chance to get rich. They want to create a sense of psychological urgency - that sense of: "Oh my God, this will change my life!" Before long, in your fantasy, you're already spending the profits. 

When you start to feel that sensation in the depths of your soul, CHECK YOURSELF! Most scams, in retrospect, are painfully obvious. (That Nigerian prince who just needed $10,000 to unlock $100 million? Yeah, I guess that did seem a little fishy.) Scams work because they cause your brain to shut off for just long enough to write a check. 

Resist the fear of missing out and you'll probably avoid getting scammed.

8.    Meet the promoter in person.  

For God's sake, don't invest based on a phone call, or worse, an email. Meet the promoter in person. Have lunch or a drink. Talk to him and find out what his story is. Have him tell you about himself. Does the story make sense? Does he know the kinds of things that a person with his background ought to know? Do you get a good vibe? Do you trust him?

This is not 100% fool proof because scammers are quite persuasive. However, in my experience, if you use a meeting to tease out a lot of biographical information, it will put you in a position to go back, do some more diligence, and see if the guy checks out.

9.    Engage a smart business lawyer to kick the tires.

If you're going to invest a meaningful amount of money, paying for a few hours of a lawyer's time can save you from a very expensive mistake. You want a lawyer who has seen a lot of deals, who has the capability to investigate the promoter and make inquiries into his background and reputation, and who knows how to spot a scam. It's amazing the number of successful people who invest without legal counsel. 

Don't be one of them. Follow the above steps and chances are good you can avoid getting taken by a charlatan peddling fools gold.

 

If you're considering making an investment in a private company and want to enlist experienced counsel to help you kick the tires (or if you're worried you've already gotten scammed), call John H. Snyder (212-856-7280) or Thomas C. Sima (212-796-6661).