Profiles in Advocacy: Gregory Kratofil, Jr.
What makes your practice different?
There are not very many people who focus on technology start ups and angel investing like I do. I think the mix of general counsel, with all the resources they need, only a handful of folks do that. Then you add in the extra efforts around capital formation and tax credits.
Our tech practice is modeled after our health care practice. In many respects a doctor’s group is just like running any other business, with leases and employment issues. But then there is HIPPA, industry specific requirements like HIPPA and Anti-Kickback. You have general corporate work and industry specific needs. You don’t always get both together, but our tech practice puts both together, with a general corporate background, but also an industry specific background with IP protection and licensing. That’s what my group does, not many do it.
Every tech company needs capital, so we actively participate with angel investors to help find those resources.
What are you passionate about?
I love what I do actually. I have a 4 year old boy and a 2-and-a-half year old girl, so my family, they keep me busy. We go to spring training for a week for the Royals. I am a fanatical Chiefs fan. I enjoy Panic Barbeque, my American Royal Barbeque team. The Google announcement has been especially exciting. I am meeting with a bunch of different groups throughout KC’s technology scene.
I love what I do. I am very inspired, especially when I have a new client. I get to hear about their new innovation, new idea, their “better mousetrap,” etc. I focus on how I can help them make that a reality. That is exciting, it is so much fun.
Tech law was always an interest area of mine. It has always been fascinated to me. I do a great deal of work with data centers and in the information security space, but tech start up is a good third of my business. The thing about working with the tech entrepreneurs is that you become an angel investor in some, or at least want to become an angel investor. I never would have thought of doing entrepreneurial work myself. I didn’t have the ability to take the risk. I admire it so much though. I admire someone willing to leave their current business and scrape by on credit cards to pursue their dreams. It is the same way I admire good music or a good painting. I can’t draw or play, but I admire good music and art when I see it.
What are your hobbies?
I played baseball at Loyola New Orleans for undergrad. I loved playing baseball and am a huge sports fan.
What life experiences have helped you become a better lawyer?
The one that has helped me become a better lawyer is watching my father. He is an estate planning attorney in KC. I don’t believe anyone works harder than my dad, and he still does a lot of work. I likely get a call a week from someone needing to update their trust, thinking they are calling him. I have no better role model with respect to work-life balance and the value of hard work. He’s a real inspiration. I strive to work as hard as my dad does.
How did you pick your primary area of practice?
I started out as a corporate finance attorney in the pro-tech bubble working on capital formation. I had an interest in early stage tech companies and putting those pieces together, like IP, with general corporate company formation, stock options for employees, IP assignments, mixing that with the capital formation and corporate finance and raising money. It fit an area of interest for me, that was over 14 years ago now.
One thing I’ve been very involved in is using the Kansas Angel Investor Tax Credit Program, to help clients raise capital. It gives an investor a tax credit equal to 50% of your investment in an early stage tech company, lowers the at-risk capital, and takes some of the risk off the table. I would love for Missouri to have a program like that.
Where do you set up a tech company? The answer right now is Kansas. The ability to attract Angel capital using those credits makes it the only place to start a tech business. That may change if Missouri gets them or Kansas eliminates them.
What has been your most interesting case/project?
I am a corporate attorney, so I never see the inside of a courtroom. Fishnet Security was one of my early clients and watching their growth has been fascinating. Their founder, Gary Fish, believed that information security would be a hot space long before anyone else did, so watching his growth as he’s used venture capture money, sales to a private equity group, and as he turned around and invested into other projects is inspiring. We need more people like Gary Fish in the technology community in KC, who turn around and invest back into other tech startups.
Frankly, almost all of the cases I take on are interesting. Each one is a different idea or innovation, which presents a new challenge in itself.
Do you advise clients on their need for capital investment, angel investment?
It is a natural part of the start up process. By seeing the client’s needs, we can help them with their general corporate needs or their industry specific needs. What they really need is business assistance with capital often times. I joined the firm around 1998 during the dot com boom, which did not bring so much of a boom to the Midwest enough to provide more capital assistance for tech firms. My getting involved with those technology aspects like capital formation is a value added to my clients.
What are your thoughts about the future that Google Fiber will bring to KC?
I’m incredibly excited about the Google Fiber project. We are certainly seeing an increase in tech start ups this year. Google Fiber has already done a number of things: number one, KC has got a little bit of swagger. Everyone wanted the project, but they picked KC, which is not just exciting on the national front, but it provided a ton of energy in the KC technology scene, at the government level, and in the investing community. People are excited because it is something that makes the entire tech game different. For Kansas City, the benefits of Google Fiber are a marathon, not a sprint. They have to be.
Several organizations dedicated to promoting entrepreneurial growth are looking at how we can work together more. So we are seeing more coordination among organizations that support tech and entrepreneurs. We are also seeing that energy in government and the community at large.
My view of the world is that innovation and entrepreneurship together are the future for Kansas City and the future for America. We are innovative, risk-taking people. So anything we can do to encourage innovation and entrepreneurship around each other is not just good, but important.
Greg Kratofil, Jr. is a shareholder at Polsinelli Shughart. He provides legal counsel on a wide variety of matters for today’s technology companies, including startup formation and venture capital financing, intellectual property based joint ventures, copyright and trademark protection, software development and licensing, as well as drafting and reviewing various hosting, consulting, procurement, network and systems development contracts. Mr. Kratofil graduated magna cum laude from Saint Louis University School of Law in 1998.
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