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?