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The last decade hasn’t been a very good one for venture capitalists, showing poor returns for their investors. There are many reasons for this including over-expansion, poor management, and a dearth of companies going public. Now to make matters worse Congress is trying to take away the VC’s traditional greatest single source of income, called “carried interest” — their piece of the pie, so to speak. That is if there was any pie. I’m not here to defend carried interest, nor to condemn it. My purpose is to point out that the VC industry will just restructure itself to regain any lost income if carried interest is taken away.

Easy go, easy come.

Venture capitalists raise money from investors like pension funds, university endowments, wealthy individuals and insurance companies — institutions that don’t claim any special expertise in technology investments. The idea is that this money will be invested in a basket of tech startups and more mature private technology companies over a period of 7-10 years after which the fund will be liquidated or refinanced and the money returned to the original investors, hopefully along with a large profit — a capital gain. During that period the money doesn’t actually sit in some VC’s mattress — they have the right to call on their investors to pay as-needed. VC’s make their money by getting a management fee that is usually two percent of the fund total ($20 million per year for a $1 billion fund) and take a 20 percent share of any eventual profit. This share of the fund’s capital gain is called “carried interest.”

Since it is a share of a capital gain, carried interest has always been taxed as a capital gain, which means currently at a maximum 15 percent federal tax rate. But Congress has lately been looking for more revenue and carried interest sure looks like a commission — regular income — taxable at up to 35 percent. The difference between these two tax rates amounts to more than $1 billion per year, even in the current lousy venture economy. It’s that $1 billion they are fighting over.

Only the real amount is much larger, because there is huge pent-up profit to be shared among venture investments as the economy improves. Better times are clearly ahead or the VC firms wouldn’t still be successfully raising money.

Carried interest isn’t peculiar to VC’s, either. The proposed changes also affect hedge funds and private equity funds — both of which are far larger than the $20 billion venture capital industry.

I’m not, nor have I ever been, a VC but I know lots of them and understand the crux of their dilemma: they like their Porsches.

Carried interest clearly is a commission, not a capital gain, since VCs typically have almost none of their own capital at risk. They’ll argue this point, by the way, but 100-to-1 leverage based on borrowed money looks like pretty close to nothing to me.

So Congress will pass a law making carried interest taxable as regular income and the venture funds might, in response, move their incorporations to Bermuda or the Cayman Islands, evading taxation altogether. Or maybe they’ll restructure, creating some derivative security that cleverly sequesters exactly 20 percent of any gain in some unassailable place in the space-money continuum. These are exactly the kind of threats being made right now by lobbyists trying to preserve the status quo.

In this case — since Porsches are at stake — I think they mean it.

That’s no reason not to change the tax treatment of carried interest, but every reason to believe that it won’t lead to a measurable increase in tax revenue.

We need a better idea.  Do you have one?

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I want to make a point here, but I need to make it carefully, gently, so as not to rile people up. I’m not here to start a fight, folks, but it seems to me not nearly as many workers are throwing themselves off the roof of that Foxconn factory in China as I would expect.

Foxconn is the largest contract manufacturer in China and the world, making products notably for Apple and for other American companies, too. The company has been in the news lately because of very public worker suicides by jumping from the factory roof.

Were these people worked to death? Were they worked insane? In one case was the suicide the result of a suspected leak of Apple intellectual property? What kind of sweat shop is Foxconn, anyway?

I don’t know and nether do you. What we do know is the annual suicide rate per 100,000 people in China is about 13.5, with slightly more women than men taking their own lives (the only major country where that is the case, by the way). That means the Foxconn factory, with 300,000 workers, ought to be experiencing almost 40 suicides per year, while the reported numbers are a lot less than that.

This story says more about the press than it does about Foxconn, because I’ve read about it for months and nobody else seems to have done the math, which isn’t hard to do. But doing the math makes the story weaker, so of course it isn’t mentioned.

Foxconn may be Hell for all I know, but it doesn’t appear to be killing people.

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“The step after ubiquity is invisibility,” my old friend from Apple Al Mandel explained to me years ago. And it’s true. Telephone service was once rare but is now universal and anything truly universal eventually become a commodity. No wonder phone companies no longer make money from long-distance calling nor — as Verizon’s sale of its New England landlines business confirms — even make enough money from local phone service. Now it is all about mobile and thank God for texting and ringtones, the telco execs say… for awhile. Well I think the same thing is about to happen to Facebook — privacy issues or no.

Facebook is huge with 350 million members but that’s not the problem. The problem is that my Facebook friends list is too long and so is yours. I have 809 Facebook friends. My wife has friend envy because she thinks my friends are generally more interesting than her friends. I wouldn’t know because I’m only on Facebook once or twice a week for a few minutes. But even that’s enough to know my friend list is too long.

Here’s what happened the other day. I had some news about the Startup Tour so I shared it on Facebook and looked for reaction from my 809 friends.

Nothing happened.

Well not nothing, but not much. I couldn’t immediately see my own post, for example, because in the time it took for me to go from writing it to reading it the post had scrolled off my screen, pushed out by generally inane people saying generally inane things about generally inane stuff I didn’t care about. That’s the downside of having 809 friends.

This didn’t happen when I had 350 Facebook friends. Then I’d write something important to me (I only write important things in Facebook and you should, too) and dozens of people would reply. But now they don’t because my screen is scrolling too fast and their screens are scrolling too fast, too, so the actual opportunity for intercourse (you know what I mean — get your mind out of the gutter) is nothing. It’s gone.

Facebook is useless to me. We’re all too connected to really connect.

Yes, I hide all the Mafia warriors and the Farmers and those people lately who are so thrilled to be breeding weird little animals. I hide as many of my inane friends as I can. I don’t join any groups and I am a fan of nothing, but it still doesn’t matter. There are people whom I’d actually like to know what they are doing and maybe they care about me, too, but we just no longer meet-up.

Facebook is being really stupid lately about making money from its traffic by violating user privacy. If the system goes kerblooey then pundits will point to that and say, “They abused their users, see.” But that won’t be true. Fans are used to being abused. How else do you explain Metallica?

If Facebook goes under it will be because of its own success. If Facebook doesn’t go under it will be because they learned in the nick of time the same lessons as every other successful serial publisher since the dawn of printing — that there is an ideal circulation size to monetize a given advertising base and you can easily get too big to make any money.

In this case there turns out to be a corollary effect that says you can be too big to be useful to your readers, too, which is why Facebook’s demise — if it happens — will be so swift.

If Facebook really wants to get profitable it needs to get smaller by kicking-off users who don’t make it money. Then it has to be be really nice to the ones they keep.

Their alternative is ubiquity, invisibility, then failure.

My bet’s on failure.

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Internet-y as the next blogger, I’d like to point out how wired.com noticed that the Phoenix New Times figured out that LifeLock CEO Todd Davis (you know, Mr. 457-55-5462) who dares criminals to steal his identity has, in fact had his identity stolen at least 13 times. But in a repudiation of the Internet tendency to simply point at the findings of others and say “like he said, ” I’ll now explain how the identity thieves got away with it. Given that, as you know, LifeLock is “guaranteed. ”

What LifeLock does primarily when you subscribe is they put a fraud alert on your file at all three national credit monitoring agencies — Equifax, Experian, and Trans-Union. A fraud alert says “this person’s identity has been stolen, don’t approve any unusual expenditures without proper verification. ” So the cable bill you’ve been paying with a credit card for five years still goes through but any new request for credit or an unusual expenditure gets flagged. The problem with this is that the fraud alert isn’t real; there has been no fraud. You only signed-up with LifeLock, which is now screaming at the credit bureaus that you’ve been ripped-off when, in fact, you haven’t.

Credit bureaus hate LifeLock.

A fraud alert is like putting a chastity belt on your credit file, with the keys held only by three cranky eunuchs.

But wait, Todd Davis (Mr. 457-55-5462) was ripped-off 13 times despite being a member of LifeLock. With an fraud alert on his file, how was this even possible?

Because the frauds didn’t involve his credit file.

Worse still, Mr. 457-55-5462, didn’t even know his identity had been stolen 13 times, despite his LifeLock membership, until the bill collectors started calling. Maybe he should have applied for that $1 million insurance pay-off.

Oops. “Certain conditions apply.”

What happened to Mr. 457-44-5462 had nothing to do with the three national credit monitoring agencies and everything to do with the National Consumer Telecom & Utilities Exchange (NCTUE), a service managed by Equifax but completely separate from that company’s credit operation. The NCTUE is a sort of in-house credit-monitoring operation aimed solely at telephone, cable TV, gas, and electric customers. NCTUE came about because utilities and telcos have different needs than do banks or mortgage companies. Utilities specifically have lots of cash customers, their greatest exposure is to lost payment for a month or two of service, so they don’t really give a damn whether you are an illegal alien or not. All the NCTUE and its members’ care about is that you have an ID and a social security number, even if that number is borrowed. And, of course, they’d like you to pay your bill on time, please.

The NCTUE does a far superior job of monitoring creditworthiness than the bureaus if credit information is available given that it allows any of us to have multiple identities and thousands of people to share the same Social Security Number as long as they pay their bills.

LifeLock doesn’t have access to the NCTUE database so Mr. 457-44-5462 had no way of knowing that his identity had been used or is currently being used. The violations mainly involved Telco and utility accounts and none were for more than $1000. Furthermore often NCTUE is used as a stepping stone for creating false IDs in your actual credit file – but that can wait for another blog.

It turns out there are hundreds of such alternative databases, with the NCTUE being just the largest, and LifeLock doesn’t have access to any of them.

NCTUE is interesting not just because it is invisible to LifeLock but also because it isn’t (nor is it required to be) compliant with the Fair Credit Reporting Act (FCRA) which allows you to, for example, see your credit report for free if you’ve had a denial of credit and to contest any information you think is in error on the report.

Actually NCTUE is voluntarily FCRA compliant as far as it can be given the apples-and-oranges difference between what it does and what the credit bureaus do. If you work hard enough you can obtain a copy of your current file history and they will address and resolve issues.

NCTUE is currently in the middle of multi-year expansion that may actually eclipse the number of consumers in the credit file. Remember everyone has a cell phone even if they do not have a credit file or legal status to be in the USA.

Bummer for Lifelock, which has no access to this information.

Your NCTUE file today contains only negative information, by the way, because it isn’t a true credit rating. But it can still be used to steal your identity.

Just ask Mr. 457-55-5462.

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YouTube made two fascinating announcements recently: 1) viewers are now downloading an average of two billion videos per day on the service, and; 2) YouTube is almost showing a profit for Google, its owner.  Think about the glorious inefficiency embodied in that latter statement:  two billion downloads per day just to break even.  And this is supposed to be the future of television?  Hardly.

I think the future of television is Veetle.

Veetle, if you haven’t heard of it, is a Palo Alto-based startup that isn’t nominated for this summer’s Startup Tour.  Veetle appears from my vantage point to be a peer-to-peer video distribution system that most closely parallels the current cable TV model except applied to the Internet.  Veetle video channels can be viewed in a browser (32-bit plug-in required) and present — just like CNN — a continuous stream of programming that can’t be interrupted, paused, or changed and can’t be very easily recorded, either.

In fact a Veetle channel very well could be CNN, because almost anyone can become a Veetle broadcaster by just grabbing a video feed from their DVD player or cable box and throwing it up on the web in glorious H.264.  Veetle is an adolescent cesspool of intellectual property confusion but that’s part of what makes it so much fun.

Now here is why I think Veetle is the future of television.  I have been writing about this particular topic (the future of television) since 1997 and while a lot has changed much has not.  Sure, bandwidth is a thousand times cheaper than it was.  Sure, codecs are better as are PCs.  But the two core issues of: 1) how to maintain intellectual property rights for web video, and; 2) how to make money with web video, are no more answered today than they were back in the days of broadcast.com when Mark Cuban suckered Yahoo into thinking he had all the answers when of course he did not.

But in my view Veetle actually does have many of the answers.

Here’s why.  YouTube has those two billion downloads per day yet just manages to break even.  Commercial TV has less than two billion viewers per day, yet manages to be a very profitable industry with at least $20 billion in annual sales.  The question to ask is not why YouTube is so popular by why it is so unprofitable?  It is unprofitable because most of the content is crap.  It is unprofitable because distribution costs are still too high.  It is unprofitable because the ad model isn’t clear.  It is unprofitable because the average video is still less than four minutes long so this is not a medium for story telling in any strict sense.  Oh, and did I mention that the content is crap?

Commercial or even non-commercial TV, in contrast, may be too dumb, too simple, and too obvious for the most part, but not all of it is crap.  Find a way to reach the non-crap while preserving the best of traditional TV and you’ll have something.  You’ll have Veetle.

Pre-Veetle, the video distribution models were buying or renting from iTunes, watching with commercials on Hulu or TV.com in a system subsidized by the writers and actors unions, watching with some ads on YouTube, or just plain watching (crap) on many different sites.  None of those models, however, have Veetle’s key feature of being easy to watch but hard to hack, easy to attend but hard to ignore.  You can’t pause it, you can’t record it, you just have to watch it, like broadcast or cable TV pre-TiVO.  And that makes it an ideal commercial medium and one very good for preserving intellectual property rights, unlike all those others.

The aha! moment with Veetle is when you realize it is just like having a cable TV system with a million channels.  Along with the bad porn (Veetle really needs parental controls, guys) and European football on Veetle is a loop from some user running every episode of The Big Bang Theory, which of course I love.  There are something like 66 episodes, but it could be just as easy with Veetle to have 66 channels each one episode deep.

And of course there is the p2p aspect of the service, which lowers Veetle’s bandwidth to around 700 kbps-per-continuous channel.  Compare that to YouTube with two billion 350 kbps downloads at 3:30 each for the calculated equivalent of 2.4 MILLION Veetle channels.  No wonder YouTube barely makes a profit even with zero content cost.

I could throw my 13 old episodes of NerdTV up on Veetle in full resolution, running  them in a loop with a couple of commercials in each episode, and not only would I entertain people, I’d put my three kids through private schools on the proceeds. There is no way — no way– I could do that on YouTube.

That’s where Veetle gets it and YouTube doesn’t, because this particular option isn’t really available on YouTube, which remains an expensive distribution system in search of a viable programming model.

I can see how Veetle would grow to be a $20 billion replacement for traditional TV, but I can’t see how YouTube could ever do it.

Update — Startup questionnaires go out this evening (Monday, May 17th).  If you don’t receive one and think that you should have, please contact ma@cringely.com or courtney@cringely.com to that effect.  The list of MIA nominees below is current as of Monday afternoon. — Bob

Nominations for the Cringely (NOT in Silicon Valley) Startup Tour are officially closed.

The next step is distributing to a designated founder or executive at each nominated company our festive questionnaire.

Despite the hard work of Mary Alyce Cringely and Miss Courtney, we still have more than 100 nominated companies for which no official contact e-mail address yet exists.  We have written to all these companies and called all of them but for some reason we don’t yet have the proper information to distribute to them our very enlightening questionnaire.

If you recognize one of these companies listed below or have a friend there, please let them know that unless we can get a proper e-mail address by the end of day Monday, their company will be dropped from the competition, losing its chance to shine on TV.

E-mail addresses can still be submitted to ma@cringely.com or courtney@cringely.com until the end of the day Monday.  DO NOT submit e-mail addresses in the comments for this column.  That space is reserved for clever and taunting remarks, primarily about Miss Courtney’s search for true love.

Still MIA Startup Companies (as of  Monday afternoon)

Bio Tech

Allylix, Inc.
BioSignia, Inc
Geologix, Inc.
J & J Solutions
New Wave Surgical

Energy

Axion Power
Electronic Vehicle Technologies
Ever Cat Fuels
Ix-Neox
Maglev Wind Turbine Technologies
Sapphire Energy
Semprius
Southwest Windpower
Sturman Industries

Entertainment

451 Degrees
Learn Vest

Materials

Bandals Footwear
ExfoliationgMinerals.com
Nanorex
Ron’s Restoration
TZ Limited
The Shepherd’s Mill
WSI

Transportation

AFS Trinity
Aptera Motors Inc
Coomes Trucking Inc
Crowning Touch Senior Moving Services
Sky Vantage
SynkroMotive
Tripit

Information Technology

Achorix
Brinex
ChaCha
CircleBuilder
City Gates
Clarion Care
Cleversafe
CollegeNoteShare.com
Comvigo, Inc.
Critical Signal Technologies
DartFiles
Dwolla
E Space Communications
Fit Technology
Fizpro
FlexRadio
Fordela Corporation
GWai
GraphLogic, Inc.
Grubhub
InZero Systems
Inexo
Invite Media, Inc.
Khan Academy
KnowledgeTree, Inc.
Life360
M-Via, Inc.
Mathmaster.org
Matrix Solutions Corporation
MoneyDesktop
New Relic
PRIVY
PTY, Inc.
Pedigree Technologies, Inc.
Perfect Search Corporation
Qik
QuietAgent
Quojax
sixis
The Mudoc Corporation
TownFlier
Tynt
Validus
VoIP Spear
Volunteer Spot
Wave Integrated Marketing Solutions
WePay
WebGreek

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Miss Courtney and her assistant, Cole

We have less than a week to go for nominations to the Cringely (Not in Silicon Valley) Startup Tour.  Mrs. Cringely (Mary Alyce) and Miss Courtney are contacting all 400 companies so we can distribute our festive company questionnaire to the right person. This is a harder task than we had guessed.

We need this questionnaire for two purposes: 1) it gives us standardized data with which to most fairly select the final 24 companies, and; 2) companies that don’t bother to return the questionnaire will be eliminated from the competition, saving us some work.

The questionnaire goes to the CEO or CFO or whomever in the company is supposed to be providing adult supervision.

What we are discovering, however, is that:

1)  Many nominated startups don’t have a designated CEO or CFO;

2)  Many nominated startups that did have a CEO or CFO lost him/her last week;

3)  Many nominated startups don’t have a phone number;

4)  Many nominated startups are no longer in business;

5)  Many nominated startups are actually based in Edmonton, AB, Canada (and only in Edmonton — not anywhere else in Canada — it’s weird) ;

6)  Many nominated startups didn’t know they were nominated — until we told them;

7)  Many startups think we want money from them (we don’t).

So here is what I want you to do. If your company has been nominated or if you nominated a company for the Startup Tour, quick-like-a-bunny go find the name and e-mail address of the person who purports to provide adult supervision for that company. Send that name and e-mail address to Mary Alyce Cringely (ma@cringely.com) or to Miss Courtney (courtney@cringely.com).

If you have received an e-mail or call from Mary Alyce or Miss Courtney, please get back to them promptly because they are the real deal.  If they call you tomorrow please take the call because it could be important to your company’s success.

If anyone calls or writes to your startup claiming to be Mary Alyce, Miss Courtney, or me and they ask for money, tell them to go to Hell. We won’t ask for money. Heck, when we arrive we’ll bring muffins.

That’s how you will know us, by our muffins.

We really need these questionnaires if this process is going to work, so please contact Mary Alyce or Miss Courtney if they haven’t already contacted you.

And if you are single, handsome but maybe a little scruffy, no older than 30, and very very smart, be sure to tell Miss Courtney that, too, because we are trying to find her true love.

The ball is in your court.

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It’s time for me to weigh-in again on the beef between Apple and Adobe over Flash versus HTML5. Why is this such a big deal that it seems to be verging on a blood feud? What turned these two companies so ruthlessly against each other that Apple CEO Steve Jobs is writing anti-Flash essays on the Apple web page while Adobe is giving all of its employees free Google Android phones that run Flash?

eBooks.

Forget all the BS spewing right now from the Apple camp. What’s really at the basis of this fight is the future of electronic books.

This idea, by the way, is not new with me but came originally from reader Michael L. Jones with whom I agree completely.

Some of Apple’s stated technical concerns are legit. Flash is antiquated in some respects, and isn’t nearly as cool as the HTML5 technology that Apple is using instead in its iPads, iPhones, and iPods. But since Flash is everywhere it will probably remain popular for years to come.

A decade from now Steve Jobs is convinced that paper books will be rare and electronic books will be the standard. He wants to be sure those eBooks come from Apple.

Yes, this is the same Steve Jobs who said people no longer even read books, but that was just a magician’s technique to redirect us until he could pull an iPad out of his hat.

There are two vying eBook technical standards — one clearly owned by Adobe and the other not owned by Apple but Apple’s version is the most developed. Apple doesn’t feel the need to own the eBook standard, but they don’t want Adobe to own it, either.

And so they fight.

Ironically, Microsoft last week made a statement largely supporting Apple in this “ain’t Flash terrible” campaign. Yet Microsoft’s Internet Explorer browser in its current version doesn’t support HTML5 and the company of Bill Gates would appear to have as much to lose here as Adobe.

Here’s where it gets really interesting. There are two major standards for e-book formatting and display — Adobe and WebKit. Think what this means for Flash versus Apple as well as Mozilla, Internet Explorer and Chrome. Flash is the only multimedia method supported in ePub except for Apple with H.264. So the Flash brouhaha involves more than just the web. It goes to the heart of digital media itself.

WebKit is the preferred engine on iPhone, iPad, BlackBerry, WebOS, Chrome, Safari and some Linux browsers. This could be the beginning of the end for major parts of Inernet Explorer and even Mozilla, for that matter, with their Gecko engine.

Digitizing the trusty old book could be the next killer app with the victims of that killer being both Adobe and Microsoft.

Sometime soon they’ll settle this technical argument, I’m sure. They always do. And the settlement will probably put just enough HTML5 inside Flash to allow Apple-standard eBooks to play anywhere. Because in the end it isn’t the player that really counts. What counts are the electronic book files, which are the razor blades in this story that purports to be about technology but is really about business.

Apple intends to sell more eBook files than any other company and will do whatever it takes to win yet another $20 billion content market.

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There are approximately two weeks to go for nominations to the Cringely (NOT in Silicon Valley) Startup Tour.  With just under 400 companies nominated so far, both in the open and in stealth mode, my goal for the next two weeks is to break 400, making it that much harder to decide on a final 24.

Our model for the tour is evolving slightly.  I have venture capitalists and angel investors now asking to tag along, guessing that what I find worth writing about they may find worth investing in. This is small but serious money, by which I mean that while I can’t lay direct claim to the zillions these participating outfits manage, if the right opportunity presents itself — if your company has everything other than money for a great success –  I have a good chance of putting you together with an amount in the range of $10K-$10M.

Yes, $10M.

Mind-boggling, isn’t it?  And to think all Mrs. Cringely wanted was a new-er (not even new) RV.

Startups run on good ideas, hard work, luck, and money, with often too much emphasis on the latter.  Founders seem to be always raising money or trying to find ways to not spend it.  This latter aspect of startups was obscured, I think, by the dot-com shenanigans of the late 1990s, when companies with half an idea and no business model could adorn themselves with foosball tables and Herman Miller desk chairs.  Those days are past, I’m afraid.  Today’s startups tend to be pretty lean and mean, with an emphasis on the mean.

The point is conserving cash, keeping what VCs sometimes refer to as “dry powder.” The historical basis of the term refers to gunpowder that was dry enough to explode.  Don’t have enough dry power (run out of cash) and when something comes along worth shooting at or buying, well you are out of luck or maybe dead.

So the careful startup CEO goes without as much as possible, conserving cash.  He/she doesn’t take a salary, that’s a given, but often the penury extends to the rest of the company and even to suppliers.  Sometimes it gets nasty.

Understnad that I have worked for and with a lot of startups, even managing one of them into the ground all by myself. so I have seen a broad range of behaviors.  I once worked for a startup CEO, for example, who pretty much wouldn’t spend company money on anything.  No computers (workers were supposed to provide their own notebooks); no employees (almost everyone was working for stock and of course there were no benefits); even outside suppliers were shafted.  This latter trend was especially galling because the CEO would get us to use our friends for some purpose or other at a special low price, then simply refuse to pay the bill… ever.  He’d claim not to have authorized the purchase or he’d claim that the quality was unacceptable (though they’d still use the work, of course).  It was all BS and bad news, but succeeded in maintaining enough dry powder, in this case, for the company to survive long enough to be acquired.  Did that make it worth the pain?  For some, though not for me.

This breaking of one’s word that seems unusual when you think about companies that have to function in the real world isn’t unusual at all.  Just look at the millions of people preparing to walk away from their homes, handing them back to the banks. Look at commercial real estate owners doing the same.  Everything is calculated, not obligated.

My good friend Ira Hata from Japan has suffered through this sort of experience with startups more than once.  A few years ago, for example, he was working for a company called Microvision from Bothell, WA, helping them with business development in Asia.  Microvision makes head-mounted displays and just introduced a cute little battery-powered laser projector that’s gettng great reviews.  Ira had a contract with the company but one day they simply stopped paying him, failed to reimburse him for some business expenses, and refused to pay him anything more including commissions due on deals in progress with major Japanese companies.  According to Ira his losses were at least $30,000 and were probably substantially higher dependent on those lost commissions.

From my experience this happens all the time.  Some companies feel it is cheaper to walk away and risk litigation than to comply with their legal agreements.

I asked Microvision to comment on this situation.  Here’s what Microvision spokesman Matt Nichols said last night: “Regarding Mr. Hata’s broad claims, we can confirm that Mr. Hata’s services were terminated sometime before 2006.  His contract and services were reviewed and it was determined that all compensation due to Mr. Hata was paid.  Mr. Willey was one the people at Microvision who assisted in making this determination.”

That’s a pretty arms-length response, but not surprising for a company where much of the management has changed since Ira was let go.  Though it appears that the current CFO was then the controller and should have known the score when it comes to what was owed and what wasn’t.

Mr. Willey, mentioned in the Microvision statement, was the guy who originally recruited Ira to Microvision.  They came to Ira. He, too, is no longer with the company, but recently asked to connect with Ira through LinkedIn, which led to this column:

“Just came across your contact info on LinkedIn. Seems you are as active as ever! It has been many years since we spoke. Sorry our relationship through Microvision met a fairly abrupt ending. Part of the risk with under-funded and early stage efforts. I was sorry to see the relationship end as I very much respected your abilities…”

Who do you think is telling the truth?