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Chris Borland, NFL Top Rookie, Retires amid Concussions Controversy

NFL retiree Chris Borland tackles Taylor Martinez.
NFL retiree Chris Borland tackles Taylor Martinez.

ESPN reported that Chris Borland is retiring after one year, giving up over $500,000 in salary, citing head injuries as the primary concern.

The NFL may be a non-profit, but its member teams are all businesses. It makes me think of one of the shortcomings of business. Normally I would argue that business is the principal framework for societal good. A business like the NFL provides entertainment. NFL team employees earn a living delivering this entertainment. NFL customers pay to participate in football through tickets, apparel, and consumption of ads. Two independent parties looking out for their own best interest are achieving something wonderful. That’s business at its best.

But what would happen if the NFL realized it needed to stop? What if they couldn’t get ahead of chronic traumatic encephalopathy and decided, for the health of their players, as a moral decision, just to stop what they were doing? They couldn’t. Every bit of value tied to the NFL has been based on the assumption of an infinite time horizon. “The NFL will continue indefinitely.” The values of all the teams and all the players and all the marketing are all inflated beyond what any finite business is worth. This is the case for most businesses. Livelihoods and standards of living are at stake for everyone who touches the NFL. The push-back on any decision to stop or drastically alter the course will be extreme.

There is no way to invest in a business knowing that it will someday end. Everyone assumes it will continue forever. If you don’t, you’re priced out of the market.

There is no mechanism for a business to return value to investors from an idea that has run its course. The only thing the business can do is let the investors sell their interests piecemeal, at ever declining values.

Could we be witnessing the start of a long, gradual sell-off into NFL bankruptcy? Will medical science make it possible to bang our heads against one another without lasting injury? Or will the NFL reinvent itself and the game to continue operating indefinitely, as everyone assumes it will, with no complaints?

The pace of business reinvention is proportional to the pressure applied by thinkers like Borland. Right now, there is no change. Will it start? Will it be fast enough? Time will tell.

How Twitter Became an Alternative to Small Claims Court

In July I did some freelance consulting work for a client who shall remain nameless.  If you’ve been following my posts, you will remember who this was.  You can imagine my dismay in October when, after many attempts to contact the client for payment, I filed a small claim in Worcester District Court.

The money was as good as gone.  The clerk at the backed-up small claims court said that it would be at least a year before the client would even be served.  Past that, there’s the hearing, then the judgment, then the execution.  It was a long, hopeless road.


Enter Trevor Chang, an old friend and, as it turns out, a wise one.  He read my previous post and casually suggested over Facebook that I tweet to the client.  Twitter is, at its core, a public forum.  Maybe a modern day scarlet letter would get the client’s attention.  It seemed a good alternative to small claims court and a years-long wait.


I proceeded timidly.  At first I tweeted directly @{insert client name here}, and only that I had sent an updated invoice.  I did this in October.  Then, on Thursday, November 14, I tweeted the following:

I wrote this blog article about @{insert client name here} a while ago.  Still no response. {link}

Friday afternoon, November 15, my inbox contained an email from the client.  This was his first communication with me since August 13, 2013.

The email was angry.  Vituperative can be your “word of the day.”  It was vituperative.  “How dare you break non-disclosure and defame my good name” etc. etc.  It ended with, “I’ll pay your invoice if you take down that blog article.”

I replied, in effect, “I’m sorry it took a blog article to get your attention. Deal.”

Within an hour money had changed hands — righteously, I might add — and the blog article, which never had done more than pose the question of malfeasance, had been taken down.

So, incidentally, have my tweets.

The blog article was search-engine optimized for effect.  I’m proud to say it was on the front page of Google search results for the client’s name and business name.  But that, combined with my dozen increasingly stern communications, had no effect whatsoever on the client.  Not even when I threatened small claims and then actually did file in small claims court was there so much as a peep from the client.  None of my growling had any effect.  What broke the logjam was the merest tweet.  “Hey, @{this guy} owes me money, take a look {link}.”


I find Twitter incredible.  I look at my Twitter feed and I feel washed over in garbage.  But sometimes certain tweets pack a relevancy and a punch that makes me feel like I’ve found a diamond in a coal mine.

And because it’s one of basically three(ish) digital channels (website and Facebook being the other two), companies attach enormous importance to what others will see on Twitter.  Take the JP Morgan Tweetup Disaster as case in point.  Call it a “microblog” if you will.  It’s also a 17th century scaffold.

What’s the most memorable tweet you’ve ever written?  Did it accomplish something good? Let me know in the comments below.

Are Startup Stock Options a Form of Fraud?


Wikipedia’s page on securities fraud says, “Offers of risky investment opportunities to unsophisticated investors who are unable to evaluate risk adequately and cannot afford loss of capital is a central problem.”

Let’s go down the line:

Are Stock Options Risky?

Imagine you were given options with a strike price at 25 cents per share, and then suddenly, due to circumstances beyond your control, the company stumbles badly.  Have your options lost value?  Yes.  If the company goes bankrupt, they’re worthless.  If the company raises another round at anything less than 25 cents per share, your options are temporarily worthless, possibly for as long again as it took you to get to this point, possibly indefinitely.

Are Options an Investment Opportunity?

Not in dollars directly, but in time, yes they are.  Most folks take options in lieu of full market salary. This means there’s a very real opportunity cost associated with working at a startup.  If you’re an MBA at half market salary, we might be talking $50,000/yr plus interest.

Are Startup Employees Unsophisticated?

You don’t have to be accredited, which has a very specific legal definition, but you do need to be able to “evaluate the risks and merits of an investment” before you can be called “sophisticated.”  So, how many skilled technicians can perform a discounted cash flow analysis?  How many gifted programmers think in probabilities?  How many of the potentially dozens of super-star employees who get stock options are also successful value investors, small business owners, accountants, or other money-savvy people?

Are They Unable to Evaluate the Risk?

Here comes my main point.

I was at a networking event recently where an attorney said, speaking to startup founders, “You want to have a lot of shares authorized and a big option pool so you can give eye-popping numbers of options to your employees.”

Someone said, “But it only matters what percent of the company they could get.”

To which the attorney said, “But most folks don’t think to ask.”

That’s terrible.

The standard form “employee incentive stock option agreement,” of which I’ve now seen a couple, doesn’t offer a cap table, doesn’t offer a fully diluted number of shares, and doesn’t offer anything that a sophisticated investor would need to properly value the incentive.  So how can an unsophisticated investor value it?

It’s completely dishonest to withhold the relevant financial information from a would-be optionee.  

You shouldn’t even have to ask.  All this should come standard on the agreement with a link to somewhere that explains how to value it.

Finally, Can the Employee Afford a Loss?

According to CNN Money, a lot of folks are going to retire with too little cash.  Nine out of ten startups fail to hit it big.  Odds are good that your options package is going to fail to materialize, and then your years of hard work at that startup are going to impact your retirement plans.

So what do you think?  Fraud or not?  Use the comments below and let me know!

And follow me here on RSS or WordPress to watch for a future article on how to value options step-by-step.