MDs versus RNs

NOLS: Technology Tax Shelters

Technology Memberships

Aggressive Investing<%0>">From the Mezzanine, <%-2>Aggressive Investing<%0>

Academics Talk Business

">Summer Schools:

Distance Learning

View from AltaVista

Legal Techie Advice

Corrections or additions?

These articles by Peter J. Mladineo and Barbara Fox were published

in U.S. 1 Newspaper on June 10, 1998. All rights reserved.

Survival Guide I

Top Of Page
MDs versus RNs

Individual doctors and nurses work together harmoniously

every day, but when it comes to defining turf — what nurses can

do and what they can’t do — the trade groups that represent them

sometimes clash. Some nurse practitioners can now write some


and they are asking the state legislature to broaden the rules to

include pain control medications.

Mary-Kate Heffern,

chairperson of Forum for Nurses in Advanced

Practice of the New Jersey State Nurses Association, and Kristine


a nurse practitioner in the Capital Health System, will

explain the nurse’s point of view at the Princeton Chamber’s


lunch on Monday, June 15, at noon. For reservations for the $10 deli

lunch at the chamber offices at 216 Rockingham Way in Forrestal


call 609-520-1776.

Advanced practice nurses have advanced training to be nurse


and clinical nurse specialists, among other specialties. They are

prepared, says Heffern, at the master’s level in pharmacology and

have regular continuing education courses. They want to be able to

prescribe "controlled" or addictive painkiller medications,

to include everything from codeine-laced cough syrup to morphine.

The ability to write pain prescriptions would be particularly useful

in home-based hospice care.

New Jersey is lagging behind in this effort; 36 states have already

extended this privilege to nurse practitioners. Two bills, now being

considered by the legislature, would remedy this: Senate bill S-174

and an Assembly bill A-1581.

"Nurses have historically administered controlled substances,

and we are taught to be careful. Prescribing them should not increase

the problems," says Andrea Aughenbaugh,

CEO of the New Jersey

State Nurses Association.

"Doctors are reluctant to extend this authority," says


"When we went for prescriptive authority initially, the docs


want it. So we compromised on `accountable’ (controlled) drugs. But

now the pressure is on us from our members in hospice care who want

the ability to manage their clients honestly," says Heffern.

If nurses call in to get a doctor’s authorization on the weekend,

says Heffern, they may get someone who has never seen the patient.

The nurse who is the on-site case manager may be the better


Heffern hastens to say that nurses are not trying to become


"It is not in the legislation nor is it in the nature of nursing.

Nurses are very willing to collaborate whenever the situation is


or not clear. Nurses are good collaborators."

Heffern, at age 70, is well known in Princeton because she

worked as a staff nurse and nurse practitioner at Princeton

University’s student health service for 27 years. She is still

working, now at Lawrenceville School’s infirmary. She has degrees from

University of North Carolina, University of Pennsylvania, and Rider.

Her husband, until retirement, was a political columnist for the

Asbury Park Press.

Never underestimate the energy of a nurse of whatever age:

"Florence Nightingale basically wasn’t a nurse, she was an

organizer," says Heffern. "She took over the British


Top Of Page
NOLS: Technology Tax Shelters

You may think you are creative in taking deductions

off your income tax, but the newest state tax laws might give your

firm some unusual advantages. "This is a very original program.

I haven’t seen a thing like this in other states, and I practice in

all 50 states," says Frank Schaefer.

Schaefer is tax director of Coopers & Lybrand in New Jersey, and he

speaks at the Biotechnology Council of New Jersey’s panel "The

High Tech Bills: financing and growth via NOLs," on Thursday,

June 11, 8:30 a.m. at the Trenton Club at 497 West State Street.



chief of office audits of the state taxation division, and

Caren Franzini

, executive director of the New Jersey Economic

Development Authority, are also on the panel. For $40 reservations

call 609-890-3185.

Young and poor technology firms will profit from the NOL (Net


Loss) law, but well-established profitable firms can also benefit,

and they don’t even have to be technology-based. The new law could

also give a boost to some energetic accountants and attorneys who

could broker these transactions.

The new law was among four that had bipartisan support in the senate

by senators Robert W. Singer

(Republican) and James E. McGreevey

(Democrat). They include the small New Jersey-based high-technology

business investment tax credit act, the corporation business tax


certificate transfer program, and the "carry forward net operating

loss deduction" or NOL.

Here’s how the NOL tax law works: An emerging company needs immediate

cash more than tax benefits at some future period. Under the new law,

which goes into effect next year, the young penniless firm can sell

those tax benefits to a larger, richer corporation with a high tax

bill. The richer firm can take immediate advantage of those benefits.

Since few of Princeton’s high-tech firms have achieved profit-making

status, most could benefit from selling the benefits. All the other

companies can take advantage of the law by buying the benefits.

"The basic rule is that the selling price has to be at least 75

percent of the amount of the surrendered tax benefit," says


a CPA who went to Florida State, Class of ’76. For instance, a


company with a $10 million net operating loss has a potential tax

benefit, in New Jersey, of $900,000. It can sell the NOL for at least

$675,000 in cash. The profitable corporation pays $675,000 and could

get up to a $900,000 reduction in its New Jersey tax bill.


it would save $225,000 on this transaction, but the actual savings

is lower because federal tax depends on how much state tax is paid.

"It will be interesting to see how the companies with the NOLs

hook up with the profitable firms," says Schaefer. "Smart

accountants and attorneys will be showing this to their more



"Many issues still have to be settled as to what constitutes a

technology company and the application and approval procedure,"

says Schaefer. A similar law applies to research and development


Does the state get gypped? Not really. The young firm’s other option

would be to hold its net operating loss tax credit for when it


make a profit. Most firms in New Jersey can carry over their state

NOLs for seven years, but Schaefer says technology firms can use them

even 15 years later. And anyway, the state is desperately trying to

foster the growth of its high tech firms.

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Technology Memberships

The Princeton Technology Alliance, gearing up, is


new members at $150 per person or corporation. In contrast to


groups such as the New Jersey Technology Council, this nonprofit


supports development and advancement of technology specifically in

the greater Princeton area. Championed by Cathryn Mitchell


Miller & Mitchell, the alliance is planning a technology day in early


On June 15 both the alliance and its host, the Miller & Mitchell law

office, will move from 264 Wall Street in Research Park to 863 State

Road, Princeton 08540, 609-921-3322; fax, 609-921-0459.

The board members have spent this year in the planning phase but are

already getting a benefit from their encounters. "When really

smart people get together they do incredible things," says


The board lineup includes: Gretchen Thiele

and Katherine


of Princeton University, Doron Gorshein

of Voxware,

Robert J. Raffo Jr.

of the Lepus Group, Albert Angrisani

of Princeton Management Co., Pasquale DeAngelis

CPA of DeAngelis

& Higgins, and John Churchill

of Recording for the Blind & Dyslexic.

Also Denise Ratti

of Microsolutions Development Corp., Linda


of Ficomp Systems, Peter Rizza Jr.

of Princeton Center

for Education Services, Lauren Hebert

of Integrated Computer

Management, Barbara Harrington

of Brandesign, Mark M. Feffer

of Tramp Steamer Media, Anne Van Lent

of Sarnoff Corp., and

Andrew Peloso

of MarketSource Corporation.

Top Of Page
From the Mezzanine, Aggressive Investing

Mezzanine capital providers are amphibious, with one

foot safe in the water and one on land, so to speak. Their investments

are halfway between "senior" debt (a traditional bank note

based on cash flow or assets) and equity debt (stock owned by venture

capitalists in a private or public company).

Now, says Ron Kahn

of Mesirow Financial Inc., mezzanine financiers

have been getting more aggressive, and they are invading the venture

capitalists’ turf. He speaks on "David vs. Goliath: Why Mezzanine

Capital is Replacing Private Equity" on Tuesday, June 16, at 11:30

a.m. at the Venture Association of New Jersey in the Governor Morris

Hotel, Morristown. For $45 reservations call 973-631-5680.

Based in Chicago, Mesirow Financial Inc. is a 60-year-old diversified

financial services company involved in securities brokerage,


banking, real estate, private equity, asset management, and insurance


Mezzanine financing is the layer of capital sandwiched between senior

debt and equity, Kahn explains. It usually involves a note plus


to buy stock at a later date, and such deals are more flexible than

those done at a bank. Yet the supervision for these deals is more

flexible than with a venture capitalist’s investment. Unlike the


capitalists, mezzanine financiers do not insist on having a seat on

the young company’s board, although they may link the release of funds

to the company’s achieving a particular target.

Last month’s VANJ speaker, Edward Rosen

, warned that New Jersey

venture capitalists are indeed playing it safe by ignoring the very

young firms and competing with mezzanine investors for deals with

the larger companies. "They are more interested in maximizing

returns than in helping New Jersey become a more fertile ground for

seed-stage entrepreneurs," said Rosen (U.S. 1, May 13).

Kahn looks at the flip side of this trend. He believes more and more

mezzanine providers — hungry for a higher return on their


— are favoring the ownership side of the transaction rather than

the cash payback. Thus they are competing with the venture capitalists

for the same deals:

The Venture Association of New Jersey will let the venture capitalists

respond at its meeting on Tuesday, July 21, when venture capitalist

and investment banker Mark Damon speaks on "How to Buy a Company

Using Little of Your Own Money."

Top Of Page
Academics Talk Business

Get two workshops plus lunch at Mercer Chamber’s


for Business" half-day seminar at the College of New Jersey


center on Thursday, June 18, at 7:45 a.m. Registration costs $45 and

includes two workshops from a lineup offered by faculty members at

the state’s colleges. Call 609-393-4143.

Choose from these workshops by Mercer County College faculty members:

"An Effective Management Training Program, Jeanette Purdy;

"Funding Opportunities for Training Your Employees, Nunzio


both of MCCC; and "Your Web Site is Up, Now What?"

Ronnie Fielding

of Princeton Partners and MCCC. An introduction

to the Small Business Institute at Rider University is offered by

Radha Chaganti

and William Strahl

, also of Rider, teaches

"Organizational Partnerships: a Win-Win Business Strategy."

Other sessions include "Any Time, Any Place Learning," by

Jerry Ice

and "Convert Company Training Programs into College

Credits," by Patricia Sparks,

both of Thomas Edison State.

From College of New Jersey, learn about "Internships, All You

Wanted to Know," by George Cerf

; "Creating a Web Site,"

by David Letcher

; "International Sourcing: Making It There

and Selling Here," by Al Quinton

; "Using the Office

of Career Services for Recruiting," by Gwendolyn Hughes


"What Is Your Company Worth," by Thomas Patrick

; and

"Fraud from Within," by Randall LaSalle

. Also Joseph


, director for business liaison at Princeton University,

will discuss high tech transfer between academic institutions and


Top Of Page
Summer Schools:

A Hot Line-Up

When Response Analysis Corporation surveyed business

executives in central New Jersey, three-fourths of them said that

employee training and development is one of their most pressing needs.

Jim Fouss

, president of Response Analysis, said the survey was

based on phone interviews with 125 companies of varying size, and

that 29 percent of those with 10 or more employees conduct some type

of employee training — about five hours per month.

Three out of ten employers plan to spend more on training this year

than they did last year. The most popular type of training is computer

training, and management training is the next choice. The survey found

that Mercer County Community College — which sponsored the survey

— is the "best known and most utilized" training


in central New Jersey.

This summer, Mercer (

is offering several

sessions of "Introduction to the World Wide Web" as well as

"Surfing the Web" and "Introduction to HTML." Also

available is an A+ Certification Program for specialist training.

Returning to MCCC in September will be the "WebMaster


program, a 91-hour course in website design and server administration.

Prices range from $49 up to $2,250 for the WebMaster Certificate


Call the first week in July for fall dates and registration. For all

continuing education registration call 609-586-9446.

The Middlesex County Chamber of Commerce is teaming up with the


Commerce Resource Center of the University of Scranton to host a


workshop series at the chamber’s facilities, 1 Distribution Way,


Junction. The three-hour workshops include "Business On The


presented June 18 and July 16, and "Internet Marketing and


Operations" on July 8 and August 5. Other topics include EDI


data interchange) and legacy data management. Cost for non-members

is $15. For registration information, call 732-821-1700.

Along with several training courses, including one on JAVA


Middlesex County College’s Edison campus offers computer training

to go. On-line courses via the Internet are available through the

summer in "Introduction To The Internet," "Creating Web

Pages," "Creating Web Graphics With Paint Shop Pro," and

"Advanced Web Pages." $75 and up. Call 732-906-2556 for


and registration.

Specializing in bilingual computer training, Sistematica

Inc., 200 South Warren Street in Trenton, offers half-day, one day,

and two day courses throughout the summer. There are intensive


in specific software programs, like Windows 95, Word 97, and Pagemaker

6.0, along with "Prevention of Computer Related Health


and "Business Research on the Internet." Prices range from

$99 to $199. Check out

, or call


For technical employees and computer users, ExecuTrain presents


training courses in East Brunswick and Parsipanny through July.


offered cover operating systems, word processing, spreadsheets,


management, and desktop publishing, as well as Administering &


MS FrontPage 97 for the Internet. ExecuTrain also presents more than

300 instructor-led, electronically delivered courses. Prices range

from $185 to $340. Call 973-539-2221, extension 131 for a catalog,

or visit

The FCC recently allocated three 100 MHz bands of radio spectrum for

Unlicensed National Information Infrastructure (U-NII). This


release of unlicensed spectrum provides new economic and technical

opportunities for wireless Internet connections. The Wireless


Network Laboratory (WINLAB) of Rutgers University is holding Focus

98, a two-day U-NII seminar and forum, June 22 and 23 at the Ocean

Place Hilton Resort & Spa in Long Branch, $575. Call 732-445-0283

or access the conference website at

Learn about the latest in Adobe and Apple at the G2 Computers


the Media" technology update on Friday, June 12 at 9 a.m. at the

Hyatt. The classes, which meet also at noon, 1 p.m. and 4 p.m.,


Adobe Photoshop 5.0, Adobe ImageReady 1.0, Adobe Premiere 5.0 & After

Effects, Apple Tools & Technologies Update, and Immersive Imaging

with QuickTime VR. These seminars are free. Call 215-321-6542 for

more information.

Through Monday, June 15, G2 is offering specials on its regular


classes. For example, Adobe Photoshop 5.0 Upgrade costs $195, Adobe

Premiere 5.0 is $575.

Top Of Page
Distance Learning

Billed as a "dazzling weekend of creativity and

synergy where new ideas impacting the entire field of higher education

are forged," the National Institute on the Assessment of


Learning’s annual conference will be held Saturday to Tuesday, June

20 to 23, at the Chauncey Conference Center on the grounds of


Testing Service. For conference registration at $1,200 including food

and lodging, call Debra A. Dagavarian

, director of the institute,

at 609-688-8082.

John Bear

, co-author of Bears’ Guide to Earning College Degrees

Nontraditionally, will speak at the opening dinner on Saturday, June

20, at 6 p.m. The conference will also feature sessions on electronic

conferencing, interactive technologies in use at Thomas Edison State

College, how to evaluate learning acquired outside the classroom,

and a hands-on workshop on evaluating prior learning portfolios.

One of the college’s recent "portfolio learning" success


to which it will no doubt refer, is a retired AT&T and Bell Atlantic

communications expert who is now doing radar and surveillance work

for the Federal Aviation Administration. Leonard Leps

, based

in Alexandria, Virginia, completed all 120 credits for his bachelor’s

degree through the portfolio assessment process. To accomplish this

unusual feat he reached back 30 years through a career that took him

to Turkey, Alaska, and Europe to prove that he had a


understanding" of each subject.

Presenters include Morris Keeton

, founder of the international

Council for Adult and Experiential Learning; Harriet W. Cabell

of the University of Alabama; Barry G. Sheckley

of the University

of Connecticut; Alan Mandell

of Empire State College; and Urban


, formerly of San Francisco State University and the Learning


Offering 12 degrees in 120 areas of study, Thomas Edison State College

is a national leader in the assessment of adult learning acquired

through life experiences, and it pioneers in distance learning


For information call 609-984-1150 or visit


Top Of Page
View from AltaVista

Overwhelming is frequently a word associated with


the search engine that’s famous for churning out hits by the millions.

But for many who surf the Web this is a desirable trait. Albert

and Emily Glossbrenner,

the Yardley-based authors of cyberspace

how-tos, called AltaVista "the search engine of choice for most

professional searchers."

Now you can find out about AltaVista from the inside, when the New

Jersey Technology Council hosts Kathleen Greenler,


director of marketing, as the keynote speaker for its New Jersey


Forum ’98 on Friday, June 12, at 7:30 a.m. at the Woodbridge Sheraton

in Iselin. The luncheon speaker is Jim Carlton

, author of "Apple

— The Inside Story of Intrigue, Ego & Business Blunders."

The program also includes several panels. Cost: $130. Call


Launched in December, 1995, and owned by Digital Equipment


the Littleton, Massachusetts-based AltaVista is also known for its

slightly-elongated address,


(Omitting the Digital in the address gets some unrelated computer

firm, but Greenler insists there are no resentments.)

Updated every 24 hours by 3 million new Web pages, AltaVista has made

a major contribution to Web’s transformation from an academic message

board to the popular megamall that it is today. "When we launched

there were some search indexes out there had one million pages,"

says Greenler. "We had 60 million pages. At the time people


the Web was a great idea but you just couldn’t find anything."

The users have since changed, she reports. "When we launched there

were a lot of people who were technically savvy — early adapters

or geeks, you might say. Now my mother uses the Internet."

Still, judging from the rate of the Web’s expansion, it would take

an army of AltaVistas to catalog the entire Web. Recall the NEC report

by Steve Lawrence

and Lee Giles

(U.S. 1, May 27) predicting

that only a third of the Web could be found through a single search

engine. Greenler makes no promises that the Web will ever be indexed

in its entirety. "The one thing that you have to remember that

the size of the Web is infinite," she says. "Currently


has 140 million pages. Our own research thinks that it’s 300 to 350

million pages."

But it’s still too early in the game to predict whether indexing the

whole Web is really that important of a venture. "The great thing

about the Internet is it’s all evolving," she says. "It’s

like the wild, wild west. Telephones first came into being 150 years

ago. And today, still, 50 percent of the world’s population doesn’t

use the phone. The Web only came into being five years ago."

At 36, Greenler is practically a senior citizen in the Web business.

With a background in video production and a degree from Boston College

(Class of 1984), she joined AltaVista when it launched in 1995 and

finds it a suitable workplace for the "Type T" personality

(extreme sports fanatics and bungee jumpers). "If you are an


junkie then the Internet is a great place to work," she says.

"You need to adapt to change as you live it. Your business plans

have to be evolving every week. You’re an old-timer if you’ve been

in this business for several years."

AltaVista gains revenue mainly through its banner advertising. The

basic charge for an AltaVista banner is $25 per thousand page views.

The price goes up as the search becomes more specific, up to $150

per thousand views.

By Thursday, June 11, AltaVista might be weathering its biggest

change yet. That’s the day when Digital’s shareholders will be


a takeover by Compaq. "They understand the mass-market consumer

audience," she says. It will also be the first time that a major

search engine’s address changes. Stay tuned.

Top Of Page
Legal Techie Advice

Robert Frawley

, the Smith Stratton attorney, has

been named president of New Jersey Entrepreneurial Network. He speaks

at the 100 Jersey Avenue Technology Help Desk & Incubator, on


June 11, at noon. Call 732-545-3221.

Here are a few suggestions he offers technology entrepreneurs in need

of capital:

Structure your company correctly.

This is all about taxes. A sub-chapter C corporation pays a tax on any

profit on a corporate

level. A sub-chapter S corp does not pay tax on a corporate level

but pays a small state tax. A limited liability corporation (LLC)

pays no tax whatsoever on the entity level, but is less likely to

attract venture capital.

"Venture funds at least are not interested in taking a piece of

an LLC," says Frawley. "The LLC is taxed like a partnership.

If you’re going to be looking for VC funding, you’re probably better

off starting off as a sub-chapter C corporation. Venture funds are

going to want preferred shares."

Don’t give away too much stock to people without a permanent

connection to the company.

Paying consultants or employees in stock

may be seem attractive to cash-strapped entrepreneurs, says Frawley,

but it can create big problems down the line. "Quite often I’ve

seen situations where people who get stock essentially for nothing

are coming back a couple years down the road and demanding green mail

to be bought out. Have an agreement with these people that you can

buy the shares back at a nominal amount if they are no longer


with the company."

Everyone thinks they are going to be successful and some of

them are, says Frawley, but if you try to save upfront cash by paying

consultants’ fees in stock, you put yourself at risk. The consultant

might come back to demand more money for the stock than the whole

company is worth. Says Frawley: "You have to protect yourself

from the downside."

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