|
DragonVenture's Edwin R. Yeh Interviewed by Channel 26; Provides
Advice on Intellectual Property Issues for Aspiring Entrepreneurs
Still Working in Large Companies
San Jose, USA, May 23, 2001 - Edwin
R. Yeh, Vice President of Technology for DragonVenture, Inc. was
interviewed live today by Jo Wan, a reporter from a local popular
Mandarin television news program on KTSF Channel 26. The news was
broadcast by Channel 26 on both its 7:30 p.m. Mandarin Chinese
Newscast and 8:00 p.m. Cantonese Newscast. Jo Wan, a well-known
reporter/anchor, was the reporter on the story.
|
"Because DragonVenture is in the business of coaching entrepreneurs
and investing in startups, we have accumulated substantial
experience both personally from our previous startup experiences and
through our portfolio companies," said Yeh. "If you think you will
start up a company in the future, there are three things you should
pay attention while you work for your previous companies." Following
are the guidelines Yeh suggested:
- Before you join the company you should disclose with as many
details as possible any inventions, trademark, or intellectual
properties that you might have invented, are in the processing
of inventing, or that you will invent. This is a typical part of
the proprietary information or invention disclosure. This will
establish that you had those ideas and rights prior to joining
the company and provide some supporting documentation that some
of your ideas existed prior to your employment with your company
and therefore was not stolen from the company.
- During your time at the company. It is advised that you keep
detailed logs of any research or development that you are making
that will potentially become a new startup business.
Specifically, you should indicate the time and the location of
your efforts. It is extremely important that the entrepreneurs
do not utilize company time, proprietary information, and
company equipment (including computers and network equipment) to
perform any of the research and development activities.
- Right before you leave the company there's nothing more
important than to part on good terms and not burn any bridges.
You should also be very careful in signing away any non-compete
type of agreements. If necessary, you may want to sign such
documents with certain explanations (citing your prior
disclosures, etc.).

Edwin R Yeh, Vice President of Technology being
interviewed by reporter Jo Wan.
Although these three precautions are fundamental to protecting
your intellectual property, Yeh mentioned that these are still
defensive and passive methods. He elaborated on the importance of
changing the mindset from "merely protecting your own interest" and
expanding it to a newer mindset of "winning together ".
Many engineers of Asian-American origin focus and excel in their
technical fields. However, one of the pitfalls often seen is the
neglect in maintaining and expanding relationships with other
colleagues in different departments of the company and upper
management. Often they part from the company because they think they
can do better than their boss (and often they do). But The point is
that they may part without the blessing from their previous company
and colleagues, thereby seeding and fueling future troubles.
By adjusting the mindset a bit using the concept of "winning
together", Yeh encourages aspiring entrepreneurs to network, to
build bridges instead of burning bridges, and to part with your
employer's blessing and give back.
Yeh suggested four methods aspiring entrepreneurs may wish to
take. Once again, instead of watching out selfishly for one's own
interest, DragonVenture encourages entrepreneurs to share. Instead
of doing everything by oneself, many successful entrepreneurs
succeed by partnering and sharing.
- Recommendation -- The simplest
and most easily accomplished one is to ask for recommendation
letters. Just as recommendation letters are used for
applications to graduate schools, recommendations serve as an
endorsement of your ability and contribution to your previous
company, and also may be used as evidence that your previous
company is already familiar with what you intend to do.
- Board of Advisors -- You may
wish to invite your boss or other mentors in your previous
company to be a member of your startup's board of advisors by
giving them a seat to influence the direction of the company and
a few thousand shares of stock. Again, this way you have someone
entrenched to watch out for you while at the same time
disclosing what you are doing.
- In-Kind or Goodwill -- If what
you are doing is very tightly coupled with your previous
employment and you can anticipate potential lawsuits if you
become successful, you may want to begin by parting the company
on good terms and be open minded about "giving" some shares back
to the company. This is called "in-kind investment" or
"goodwill" giving them a percentage of your future company
in-kind without getting any investment from them.
- Investment -- This is the best
scenario but requires clearly very good relationships with upper
management which you could have accumulated if you emphasized
that while working at your previous company. In this case, you
actually have your previous company invest in your new venture.
The point of these last two methods is to give your previous
company an incentive to see you succeed. Secondarily, you are
effectively disclosing to them prior to your success that you are
working on certain areas which they now have knowledge of.
In fact, at least two of DragonVenture's portfolio company
adopted these methods. One of its companies in the wireless space
had shareholders of their previous company invested in the newly
formed startup - utilizing the fourth method mentioned above.
Another company had a group of founders from Intel. Whenever you
have a group of people leaving a company to form another company in
similar space, special caution must be taken. In this case, they
utilized the third method. The result was not only that they
preempted any future law suits from their previous employer but they
were able to continue to maintain close ties and get early access to
the future roadmap in addition to get introductions to customers and
get revenues.
The bottom line is that this adjustment of mindset from
protecting yourself to winning together. From keeping the biggest
piece of the pie, we encourage that entrepreneurs to be open, to
partner, to share. Share with your investors, your incubators, and
even your competition. Partner with your previous companies - they
may become your strategic partners, companies to vouch for you, or
even become your customers. The focus should on seeing whether the
company is steadily increasing overall values rather than what
percentage of the company you own.
|