Archive for the ‘BuyDirect.com’ tag
I write this blog post today, January 31, 2013, with sadness.
Jody Sherman, a rambunctious, ambitious and complex entrepreneur, husband, investor and mentor, died Monday, January 27, 2013. I learned about Sherman’s passing on Tuesday, the day after, and I had trouble sleeping that night.
Jody Sherman’s death moved me.
I learned about Sherman’s death from my friends on Facebook.
Much has been written about Jody Sherman this week, and I understand why.
Jody Sherman was simply a character — a very memorable and lovable character.
My association with Sherman was brief yet meaningful and intense.
In late 1998 or early 1999, I was gearing up to raise money for Document Automation Systems, LLC, my startup at the time. I later renamed it Hotpaper.com, Inc.
I met Jody Sherman by chance.
Jody Sherman was the seller.
At the time he worked at BuyDirect, an earlier e-commerce pioneer that would later be sold for USD $140M. Sherman’s office was on the waterfront near Pier 39 in San Francisco, California, USA.
My Internet company was tiny, but I had an impressive customer list — Coca Cola, Intel and the US Marine Corps, among dozens of similarly well known organizations. My company’s revenue was tiny, but I had big plans for growth.
I was sitting in Sherman’s office getting ready to hand him the cash for the stylish stereo deck, shown above.
In his office, Sherman appeared to be working at an energetic pace, doing deals for his employer, where he was vice president of business development.
Sherman asked me what I did, and that query prompted me to give my well oiled elevator pitch. At the time, I had no idea who Sherman was — I had not typed his name into Alta Vista, the dominate search engine of the day.
While I was still pitching, Sherman tapped his keyboard and visited my company’s website and drafted a document from a template. Hotpaper was the first LegalZoom or RocketLawyer. Hotpaper created legal documents by asking users questions to then build a custom document on the server, in Microsoft Word format.
Talk about my company quickly dominated the rest of my few minutes with Sherman that day, yet I did pay for and collect the Bang and Olufsen deck for Lin.
Later, Sherman offered to help me raise financing to expand my company. He suggested I raise USD $500,000, which he said he would help me raise by getting ten of his friends to put in $50,000 each.
Sherman drove a BMW Z3 at the time, and I vividly remember him picking me up at my office at The Russ Building in San Francisco so I could introduce him to my lawyer Eric Jensen, in Palo Alto. I had never been in a Z3 and I was impressed — Sherman had a flair about him to be sure.
I concluded that Sherman was likely correct when he confidently said he could round up ten of his friends to allow my company to close a $500K angel round.
I never closed that round, because Sherman asked for a finder’s fee that I found objectionable — he asked for ‘non diluting’ stock among other things. I was shocked when he fell silent for several long seconds, got up and walked out of my office without a word when I asked him about the non diluting stock he was asking for. Sherman was the first and only person to walk out of a meeting with me. It rattled me.
Even though no transaction happened, I am still grateful to have met Jody Sherman, for he spurred me to greater accomplishment.
This agitation I felt in retrospect was fantastic for me.
I was mad Sherman had walked out on my deal.
I wanted to show Sherman that I was a talented entrepreneur. I wanted to show my (now late) friend Stan Pasternak, who rented my company an office in his suite, and who saw Sherman walk out on me, that I was a talented entrepreneur.
In June, 1999, my company closed a $2M round from two venture capital firms and some angels. The only fee I paid was to attend a ‘meet an venture capitalist’ event put on in part by my friend Tom Cervantez, which cost me $75. I met Redleaf Venture Management venture capitalist Robert von Goeben there, and he introduced me to Bob Bozeman, the partner at Angel Investors LP that agreed to put in 5% of the round.
Sherman deserved to profit from his advice and expertise. Had he asked for common stock with standard vesting terms, instead of what he asked for, I probably would have brought him on board as an advisor, since he represented the best chance I had at the time to get my company funded.
I still don’t know why Sherman didn’t negotiate with me instead of walking out, and sadly, now, I will never know.
I should point out that Sherman did well by walking out, because the investors I ultimately raised money from lost most of their money they invested in Hotpaper in the aftermath of the Internet bust in 2000, after I sold Hotpaper.
I wrote this post to give Jody Sherman credit for his small but important role in my life.
I knew him perhaps a month, from start to finish, yet Jody Sherman moved me to write this post a dozen years later.
It has been reported that Jody Sherman took his own life. I feel so bad for Sherman and his wife, family, employees and friends.
Life as a startup CEO is extremely challenging. There are unbelievable highs and lows, far more dramatic than what I experienced as an employee, and I’ve had some interesting experiences as an employee, including getting suspended for insubordination and laid off because my job was eliminated.
Sherman raised millions of dollars for his latest Internet company EcoMom. The pressure must have been intense, particularly because it appears lots of the money came from his wealthy and connected friends. I know nothing of the details of the pressures Sherman was under at work or elsewhere.
Depression is an insidious illness, because it can cripple.
One could argue that I suffer from depression, and that’s why I am not running a company or doing anything substantial in life right now, despite my having days of tremendous enthusiasm to change the world. Overall, I am happy and optimistic, but when I consider my age and that I haven’t started a family yet, I am sad. I worry my time for a family has already irrevocably passed.
Don’t worry though, I am not going to kill myself.
I have been close to people that suffer from depression, and in one case, I had to cut ties so as not to risk substantive harm to myself, the situation got so intense. Sherman’s widow Kerri must be feeling crushing pain, and my heart goes out to her, even though I have never met her.
When I learn of a suicide by someone I knew, even if only in passing, like Ilya Zhitomirskiy, I get emotional and have trouble sleeping. I battle with myself over what, if anything, I should do about the people I know that are depressed. Should I tell their parents? Should I tell their close friends? Should I mind my own business? Should I speak to the people themselves, even those I cut contact with? I have cut contact with many people, especially in the last six months, as I continue to recreate myself into a more vibrant contributing citizen, but by doing so, my burden over what to do increases.
Mark Suster, a partner at the venture capital firm GRP Partners knew Jody Sherman well, and two days ago, on January 29, 2013, Suster wrote on his great blog an amazing goodbye to Sherman. Suster colorfully describes Sherman just how I remember him — as shown here from Suster’s goodby post:
“I remember when we met years ago. I think Michael Kantor introduced us. You were pitching me an online business selling other people’s baby food. I told you what a dumb idea it was.
You came back. You had a new plan. You had renegotiated your way out of that agreement. Now you wanted to merge with a broader-based business and sell all products. You got to keep the name of the new company – ecomom. You were so proud of that name and what it stood for. You wanted good in the world.
And in turn the world wanted good for you. But the world made you fight for it. And I did, too.
I told you to go away again, you crazy, wiry, non-stop pitching fool.
What? You back again? Who let you in here? Oh, you want to tell me about how your business is now scaling? You have repeat orders and high gross margins? Go away, I say! It’s mom stuff. We didn’t do so well in that category in the past.
Review your deck? Ok, Jody. You sure do push the envelope. But I kinda like your chutzpah. Sure, bro. Come on in. But … could you button up the shirt a couple more notches when you come to my office? I think you might have scared a few folks last time. Ha, just kidding. No, seriously. Just one more button.
Wow. Your deck looks great. Are those growth numbers real? Impressive. No. No I can’t meet for breakfast. I don’t think we can fund in that category, Jody.
Ok. I’ll have the egg-white burrito. I have to eat something healthy around you or I’ll feel guilty. Is it true that you have 3% body fat? I know, I know. I shouldn’t eat the carbs. But this is Lemon Moon – at least we know it’s healthy.
Fine. Fine. I’ll write you an angel check, then. As long as you promise to stop pitching me! Yes, Jody. I really believe in you. I always did. But when I got home and I told my wife that I had just committed $25,000 that she should just consider it a mitzvah. I didn’t so much want to see a baby products company make money as I wanted to see you succeed. You had some magic dust.
Ok, Jody. We have to have a heart-to-heart. You gotta stop pitching Sand Hill Road VCs. Look at their entrepreneurs – they are 28, computer programmers and they went to Harvard or Stanford. Now go look in a mirror. You have “weird hair.” Yes. weird hair. My cousin calls it JewFro. And you have it. And instead of hiding it you wear it Kramer style just to scare people. I think you like looking at them looking at you. Don’t you? Focus on raising money from outsiders. From people eschewed by the typical system. Raise money from underdogs like you.
You told me that was some of the most honest and best advice you had ever gotten. That most people were too scared to say that to you. And raise money you did. Millions of it.”
Suster simply brought Jody Sherman to life with this above passage, so much so that tears came to my eyes as I write this.
Jody Sherman was a hustler and a good soul. I can only imagine how many thousands of entrepreneurs he helped over his 47 years of exciting life. I pray that he rests in peace, and that his loved ones find comfort in the outpouring of sweet thoughts that have been expressed since his too early death.
Life is so precious and short.
Please do not take your own life, dear readers.