Kevin Warnock

Entrepreneurship, ideas and more

Archive for January, 2010

A question about Entrepreneurs Exchange Funds

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I was reading a story on TechCrunch.com today, the influential technology blog based in Silicon Valley. The story says First Round Capital has set up an echange fund for their portfolio companies to use to diversify their risk. The idea is founders will put some of their stock in this fund, and if they go out of business, they will share in the results of the companies in the fund that have successful exits.

I think this is a great concept, and it’s particularly great that a venture firm is sponsoring it, since to participate you have to have received an investment from this firm. So participating startups are already going through a tough screening process to get in. I hope more venture firms set up funds like this.

I do have a question: Would it be possible for the entrepreneurs to hold their ‘exhange shares’ of the other companies in the fund within their Roth IRAs? To my knowledge, you can’t have your own Roth IRA buy stock in your own startup. But it is OK to have your Roth IRA buy stock in tiny private startups, provided you don’t work on them at all. So I suspect there is a way to get these exchange shares into your own Roth IRA. Maybe by segregating the shares in your own startup from the shares in all the other member companies.

The beauty of having your Roth IRA hold startup stock is that if there’s a big exit, you pay no capital gains tax, even if there is a Google sized exit. Then you could have your Roth IRA sell the stock and diversify. The downside is if there is a loss, you can’t deduct your losses on your taxes, as far as I know.

I’m not a lawyer, so don’t act on this without consulting with one. I have had my Roth IRA buy private company stock several times, so I know that can be done. Not many financial institutions will handle this transaction. For example, Fidelity won’t. But T Rowe Price will, and their fees are reasonable. I pay $35/year for them to hold private stock in my Roth IRA. I think there was a $100 fee to set everything up in the beginning.

Here’s the link to the TechCrunch story that inspired this post: http://www.techcrunch.com/2010/01/29/first-round-capital-entrepreneur-exchange-fund/

Written by Kevin Warnock

January 29th, 2010 at 6:56 pm

Posted in Ideas,Work

Michael Pollan speaks on In Defense of Food: An Eater’s Manifesto

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Michael Pollan signing books, January 27, 2010, Campbell, California

Michael Pollan signing books, January 27, 2010, Campbell, California

Earlier this evening, my wife, some of my friends and I attended a fascinating interview of Michael Pollan. The event was the annual kick-off of Silicon Valley Reads. Silicon Valley Reads is designed to promote reading and literacy, broaden the exposure to and appreciation of good literature, and build community. So reads the blurb about them from their website at siliconvalleyreads.org.

Columnist Mike Cassidy from the San Jose Mercury News newspaper did a television worthy job of interviewing Michael.

Michael Pollan is the best selling author of a trilogy of books about food and eating. Earlier today I finished reading his 2006 volume The Omnivore’s Dilemma: A Natural History of Four Meals. This 400+ page work changed my eating habits dramatically. I used to seek out the best price for food, and would eagerly buy 100 cans at once of Progresso brand soup when Safeway had it on sale at $1.25 each, and then spend the next year happily consuming them, knowing I paid less than half price. I would load up the shopping cart with 15 gallons of Safeway apple juice if the price was $3.00 or less a gallon. Just a couple of years ago it would routinely sell for $2.00 a gallon on sale. But this juice was imported as concentrate from over 5,000 miles away, according to the origin information printed on the bottles.

Now, after reading Omnivore’s Dilemma, my wife and I shop mostly at three special stores in San Francisco, Rainbow Grocery, Bi Rite Market and Guerra Meats. Rainbow Grocery doesn’t sell any meat or fish. This is a large supermarket, similar in size to a small Safeway. I have never seen a supermarket that sells no meat or fish. This means no meat or fish in cans either, so no chicken noodle soup. But even without the meat, Rainbow is the most magical food market I have ever visited. Bi Rite is much smaller, almost as small as a corner convenience store, but it’s packed with beautiful food. To get an idea of what it’s like, imagine a store smaller, more delightful, compassionate and thoughtful than a Whole Foods, but with the same type of vibe. Guerra Meats is a family owned butcher shop near our house that sells free-range organic poultry and grass fed beef from local farms. We bought our Thanksgiving turkey there last year.

These stores cost a fortune compared to Safeway. But I am happily and even eagerly shopping at my new favorite three stores because of Michael’s book. I plan to start right in on his latest book, which he was plugging tonight, In Defense of Food: An Eater’s Manifesto. What did he write that caused me to make such a big change in my eating and buying? What convinced me most was his belief that eating what he calls ‘industrial food’ causes people to get sick and causes extensive damage to the environment. I am able to afford the better food by cutting the quantity that I eat in about half.  I’ve also cut out about 75% of the meat I used to eat, since my wife is a vegetarian.

I used to snack all day and night. For about a month now, I’ve eaten three moderate meals a day, with no snacks in between. I’ve lost weight and feel better. Yes, I’m sometimes hungry between meals, but I’m getting used to it, and it’s not unpleasant. I find that when I do eat, I enjoy it more because this higher quality food tastes substantially better.

Michael Pollan seated next to my housemate Denise D'Amico and my wife Monika Varga, January 27, 2010

Michael Pollan is a journalist by profession, and according to the liner notes for Omnivore’s Dilemma, he got his start writing books about food when his editor at The New York Times Magazine asked him to write about food for the magazine. Michael is an engaging writer, and he researches his subject like one would expect a journalist to do. The references section of Omnivore’s Dilemma is pages in length. If he read all those books cover to cover, he was a busy man for an extended period. He also rolled up his sleeves and for a week worked on PolyFace Farms in Swoope, Virginia, perhaps the most sustainable farm in operation from the sound of it.

When my wife’s friend Aimee Epstein emailed us about the Pollan talk, I knew I was going to write a long blog post about it, as I’ve been reading his book with surprising relish for a few weeks now. I decided to try to shoot video of the interview, and I’m happy to report I was successful. This event was a free event, and there were no prohibitions posted or announced about recording. Furthermore, the event was broadcast on the radio. The event was held in the Heritage Theatre at 1 West Campbell Avenue, and every one of its 800 seats was occupied, and people had to be turned away at the door. The mayor of Campbell was on hand to welcome Pollan.

I am so happy to be able to share Pollan’s interview with you here by video. I hope this video will open a discussion about the interesting subject of food. To comment, click the comments link above just below the title of this post.

There were some funny moments in the interview. Mike from the Mercury News started things off of a humorous note when he began by saying he was running late and was hungry, so he stopped by the McDonald’s drive through window and picked some items from the dollar menu for himself and Michael. Mike handed Michael a bag of McDonald’s products, and Michael pulled out a cheeseburger wrapped in yellow paper and waved it around, to great effect judging by the audience response. I would guess most everyone there had read Omnivore’s Dilemma based on how they reacted to seeing Michael wave a cheeseburger on stage. I had earlier been joking with my wife Monika that I was going to bring Michael a bouquet of corn dogs and put them on stage like they were flowers. Pollan is particularly hard on corn in Omnivore’s Dilemma, blaming it for many of the ills of the country’s industrial food system, in ways that I found surprising and frankly disgusting. I thought it was funny that the interviewer made much the same joke I had thought would be funny, but would never have done.

Written by Kevin Warnock

January 27th, 2010 at 11:47 pm

Posted in Home

Chinese food recipe I created tonight

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For about two years now I have been learning to cook Chinese food. The cookbook I got to learn from wasn’t helpful, and the recipes were lackluster. As a result, I have just experimented by buying anything that looked interesting at the local Chinese market at 22nd and Irving Streets in San Francisco.

I’ve been planning to make a cooking channel on Vimeo.com, the video hosting community site similar to YouTube. I got a turkey fryer for Christmas two years ago. I asked for it because I hoped to use the burner as a high heat wok burner, not to deep fry a turkey. I have used the turkey burner once, at full heat. It was so hot it burned the dish, so I need to conduct more experiments. I suspect half of the maximum flame will be ideal.

It’s a big project to video tape cooking, and I’m not there yet. But I made a dish tonight that I particularly like, so I thought I would just write up the recipe here. It will be tough for me to lose it once it’s on my blog, an added benefit.

My wife Monika is vegetarian, and is our housemate Denise, so this is a vegetarian dish. But I also made a variation with chicken and cashew nuts that was also good.

So, this is my first published recipe. I did not borrow any of this from a cookbook, so all the blame or credit for how it tastes rests with me.

I call this recipe Zucchini and Pepper with Peanut and Garlic Sauce

Ingredients

1 tablespoon butter, melted
1 medium white onion
3 cm piece whole ginger
1/2 small red bell pepper
1/2 small yellow bell pepper
1 tablespoon minced garlic
1 tablespoon ground bean sauce
1 teaspoon Chinese barbecue sauce
1 teaspoon sea salt
1 ripe Roma tomato
1 green onion
1 teaspoon brown sugar

Instructions

Dice the onion. Fine chop the ginger. Dice the bell peppers. Chop the green onion into 1 cm sections.

1. In a wok over a high flame, add the butter and heat for 30 seconds

2. Add all the ingredients at once except for the tomato. Stir with a spatula until the onions are translucent and the zucchini is still not yet translucent, about 6 minutes.

3. Add the tomato, and stir for 2 more minutes.

Serve immediately over rice.

I went shopping today at Rainbow Grocery, a most amazing grocery store unlike any other I’ve been to. It’s at 1745 Folsom Street in San Francisco. The web address is Rainbow.coop. I had never seen a site with the .coop extension before today. It’s a fitting address as the store is a worker owned cooperative.

This store has more variety than even the largest Safeway or Whole Foods Market, in my estimation. There is a bulk foods section where you bag your own ingredients, and it’s this section I most enjoyed today. They have perhaps 20 kinds of rice for sale. I bought two varieties today: Lotus brand Volcano rice and a different brand of rice called Wehani rice. The Wehani rice was the standout, though both were delicious. The Volcano rice is light brown, and the Wehani rice is dark brown. When the Wehani is cooking in the rice cooker, it sort of looks like melted chocolate cooking.

The prices are higher than Safeway, but lower than Whole Foods, I estimate. There is only one Rainbow, so it’s not a chain. The staff really seems happy to be there, and so do the customers. It’s actually an adventure just walking the isles, as there are few national brands for sale.

I’ll need to return with my video camera to do a short walk through so you can see what an unusual store this is. Highly recommended.

If you try the recipe above, please let me know and provide feedback, as I know nothing about writing recipes. I hope you like it.

Written by Kevin Warnock

January 14th, 2010 at 7:56 pm

Posted in Home

New Years Party 2010 in North Beach

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Bamboo Hut sign

Bamboo Hut sign, San Francisco, California

Mark, a friend of Monika’s friend Aimee organized a private party in North Beach, a San Francisco neighborhood known for its active nightlife. He rented out the entire Bamboo Hut at 479 Broadway. This is a small dive bar, not a million dollar dance club. But Mark was able to sell out the place with about 100 friends in attendance, and it was crowded, but not too crowded. We all had a great time. I even was persuaded to dance on the bar, something I’ve never done before. I had to duck so as not to hit my head on the low ceiling.

Bamboo Hut, San Francisco, California, Dec 31, 2009

Bamboo Hut, 479 Broadway, San Francisco, Dec 31, 2009

Written by Kevin Warnock

January 1st, 2010 at 1:35 pm

Posted in Family