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Archive for the ‘Money’ Category

Facebook founders top list of ultra-wealthy techpreneurs

Wednesday, August 7th, 2013

 Time Mark ZuckerbergMark Zuckerberg and two of his Facebook co-founders, Dustin Moskovitz and Chris Hughes, occupy the top three spots in Wealth-X’s list of ultra wealthy technopreneurs aged 30 and under with a combined net worth of US$22.4 billion.

Zuckerberg’s net worth increased by US$3.7 billion to US$17.3 billion after shares of the world’s No. 1 social network soared on 24 July on mobile advertising revenue that ignited a 20 percent share rally. Co-founder Moskovitz, Zuckerberg’s former roommate and now CEO at Asana, an online shared task list, saw his fortune rise nearly US$1 billion to US$4.2 billion. Hughes, a Facebook spokesman until 2007 and now publisher and editor-in-chief of New Republic, the 98-year-old magazine he bought in 2012 for an undisclosed amount, is in third spot with a net worth of US$950 million, according to Wealth-X, the world’s leading ultra high net worth intelligence provider.

Below are the top 5 ultra wealthy technopreneurs:

Rank Name Net Worth
(US$ million)
Position Company Age
1 Mark Zuckerberg 17,300 Co-founder, chairman and CEO Facebook 29
2 Dustin Moskovitz 4,200 Co-founder Facebook/Asana 29
3 Chris Hughes 950 Co-founder Facebook/Jumo* 29
4 Andrew Houston 610 CEO and Co-founder Dropbox 30
5 Nathan Blecharczyk 500 Chief Technology Officer Airbnb 30

* In 2010, Hughes launched the charity-driven social network Jumo, which subsequently merged with social action publishing firm Good in 2011. Hughes has an advisory role in the company as he focuses on New Republic.

The men in the list have accumulated a massive US$25 billion between them, according to Wealth-X data, through growing their companies, mostly within the last decade. Wealth-X data also shows that eight out of the 10 men are based in California, reaffirming the status of the US West Coast as a hub for technological innovation.

For the full list, visit http://www.wealthx.com/?p=17815

Microsoft’s Balmer lowest paid CEO but still the wealthiest

Wednesday, July 31st, 2013

MicrosoftMicrosoft Corp. may have stumbled with Windows 8 and the Surface tablet, but that didn’t knock CEO Steve Balmer out of the top spot as the wealthiest CEO amongst those heading the 30 largest publicly-listed US firms. This comes despite Ballmer being the lowest paid Dow Jones CEO in 2012, taking home US$1.3 million in total compensation compared to peers who earned up to US$40 million. Balmer’s is worth $17 billion.

Meg Whitman spent a bundle on her political campaign, but the Hewlett-Packard CEO, who earns a salary of only a buck a year, earned $15 million in compensation nonethe less, is second.

The former eBay chief was brought in to help turn the company around and has joined other “dollar-a-year” tech executives such as Facebook’s Mark Zuckerberg, Google’s Larry Page and Oracle’s Larry Ellison, who have agreed to tie their compensations closely to company performance.

Wealth-X, the ultra high net worth (UHNW) intelligence provider, compiled the list from proxy statements filed with the US Securities and Exchange Commission regarding firms listed on the Dow Jones Industrial Average benchmark index.

Ballmer received a 2012 fiscal bonus of US$620,000, less than half the possible maximum bonus of US$1.37 million. Microsoft trimmed pay for its executives last year, citing slower-than-planned growth in its online services division and aUS$732 million fine for failure to comply with European regulators.

Rank Name Company Net Worth

(US$ million)

2012 Total Pay

(US$ million)

2012 Salary

(US$ million)

Salary % of Total Pay
1 Steve Ballmer Microsoft 17,000 1.3 0.685 52.0%
2 Meg Whitman Hewlett-Packard 1,200 15.3 US$1 0.1%
3 Stephen J. Hemsley UnitedHealth Group 480 13.8 1.3 9.4%
4 John T. Chambers Cisco Systems 430 11.6 0.375 3.2 %
5 Louis R. Chênevert United Technologies 430 27.5 1.7 6.2%

Jamie Dimon, JP Morgan Chase CEO, is the only banking executive to make the list with a fortune estimated at US$340 million. His pay packet was halved in 2012 to just under $19 million following the 2011 ‘London whale’ trading debacle that triggered aUS$6 billion loss at America’s largest bank by assets.

For the full top ten list, visit http://www.wealthx.com/articles/2013/microsofts-ballmer-tops-wealthiest-us-ceos-list-despite-reduced-2012-bonus

Angel investment sizes trending upward, Halo report says (infographic)

Thursday, July 18th, 2013

Angel Resource InstituteAngel investment round sizes are trending upward to a median of $680 per deal, according to the Q1 2013 Halo Report from – The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights. Pre-money valuations remain stable at $2.5 million, the report says.

The sectors getting funding remain concentrated in Internet, healthcare and mobile, with 72% of completed Q1 deals in these categories.

While we’ve reported another trend – increasing syndication of angel investment deals across wider geographics to fund larger deals – the report says 81 percent of deals over the last 12 months were done in the angel groups’ home states.

We should also note that the Angel Capital Association warns that if new US Securities and Exchange Commission rules on verifying angel investor status go into effect, it could have a chilling effect on the angel investment community.

US angel investment continues to be dispersed nationwide, and in the first quarter entrepreneurs in the Southwest region of the country received a slightly larger share of dollars than startups in California, for the first time.

Most Active Angel Groups

Based on total deals, the most active angel groups in Q1 are (alphabetic order) Alliance of Angels, Desert Angels, Golden Seeds, New York Angels, Sand Hill Angels and St. Louis Arch Angels.

Geography

Angel group investment deals are more evenly distributed across the US than in years past. Seventy-three percent of angel group deals are now done outside California and New England, although 30% of dollars are invested in these regions.

The Southwest region edged out California for the first time, with 18.1% share of angel group dollars. Year over year, companies in the Great Plains region and New York saw the largest increase in angel group deals. Declines of equal proportion are in New England and the Southeast over the same time period.

Infographic - Halo Report Q1 2013

New angel fund closes on $5.1M for Southeast healthcare tech investments

Monday, July 15th, 2013

By Allan Maurer

Excelerate Health Ventures says it will put together the pieces of healthcare tech investments in an innovative new way.

Excelerate Health Ventures says it will put together the pieces of healthcare tech investments in an innovative new way.

Angel investors are often successful entrepreneurs looking for ways to put the capital they earned from building their own business into other startups with high growth potential. A new angel fund in the Research Triangle Park, NC, Excelerate Health Ventures, not only includes experienced entrepreneurs, but also a network of doctors, dentists, and healthcare executives.

In a press release, the fund, which has secured commitments of $5.1 million for its first closting of the Physician Fund, says it plans to invest in “capital efficient start-ups that can scale rapidly in the healthcare industry,” particularly in software and medical technology.

EHV says it will leverage the domain experience and contacts of their network of providers, payers, and strategic partners to select, validate, mentor and grow their portfolio companies.

A unique opportunity

“EHV has created a unique opportunity for physicians like myself, who are committed to this marketplace, enabling us to collectively bring new technologies to market and to improve the care of our patients,” said Dr. Cam Patterson, M.D. MBA, Associate Dean of UNC Healthcare Entrepreneurship and Chief of Cardiology at UNC Chapel Hill and advisor to the fund.

“The goal is to use the interdisciplinary knowledge and experience of the extended team to identify and create highly valued relevant healthcare companies in a shortened timeframe, while maximizing return for everyone involved.”

Excelerate Health Ventures’ founders, Gary Abrahams and Bobby Bahram, bring unique experience – both have been operational entrepreneurs and angel investors that have led and exited companies in the healthcare industry.

EHV says it will typically invest in early stage companies raising a seed or second round financing. It will focus on the Southeast and NC.

 

Angel groups going beyond backyard investing for better deals

Tuesday, July 9th, 2013

By Allan Maurer

Michael Cain

Michael Cain

Historically, angel investors and angel groups have invested close to where they live, where they have contacts and knowledge of a business. So they looked for businesses they could reach with no more than a two-hour drive. That’s changing.

As we’ve noted in several recent stories on the TechJournal, angel investor groups are moving out of their comfort zone to invest in bigger deals more widely dispersed geographically. “I tell my group and others that I managed, we’re not economic developers,” says Michael Cain, head of the Wilmington Investor Network in the beach city, Wilmington, NC.

While we quoted Cain in earlier stories, we thought what he had to say deserves fuller reporting.

“The two-hour drive doesn’t work for a place like Wilmington or in many others,” he says. “You have to network your deals.” The Wilmington group has done deals in Boston, DC and Raleigh over the last three years.

Beyond backyard deals

“If you only do deals in your backyard, you don’t get good deal flow,” agrees William Podd, founder, president and CEO of Landmark Capital, and the Landmark Angels.“If you don’t see the best deals and don’t invest in the best deals,” you shouldn’t expect much success, he adds.

These larger syndicate deals can help fill the much-discussed early-stage funding gap that grew worse as venture capital firms moved toward later deals with less risk and the venture field itself contracted. “You have half as many VCs now as you did five years ago,” Cain says.

“And they realized that what we used to call the California deal – throw a lot of money at it – didn’t work. What we wound up with is the late-stage VCs and no middle market.”

“There are fewer than 100 active venture capital funds making investments today,” notes Podd, down from 1,100 years ago.

Advantages to investors

Cain says the more widely networked and syndicated angel deals have several advantages for the investors. “The more minds you have around the table, the better to put your money to work and hopefully, get to an exit after a couple of angel and early venture capital rounds.”

Angel investors can do fine if a company exits for $25 to $50 million if the pre-money valuations were right, Cain says. Exits at that level seldom interest the larger venture capital funds.

“Everyone is kind of getting religion in looking for quicker exits,” Cain says. One way of doing that, he suggests, is to focus on ideas that can make it on two rounds of angel investment. You look for the “rifle shot,” he says. “You support something that needs a moderate amount of capital, maybe $3 million or $4 million.”

The deal might involve a medical device that investors know a large company needs so a buyer can be “fluffed up,” and “You work on that as soon as you close,” Cain says.

Podd agrees. “How do you evaluate the likelihood of an exit? A pre-existing relationship with a potential acquirer is significant.”

Cain, who chairs the Angel Capital Foundation, a research and education organization that spun out of the Kauffman Foundation, says it will start tracking angel group syndication deals. It currently produces the quarterly Halo report with Silicon Valley Bank.

Even though a number of regional angel groups are coming around to the idea of investing with other groups outside their normal geographic range, “They’re relatively few,” says Cain. “The active angel groups that will participate outside their area are relatively few.”

That includes, he says, the Atlanta Technology Angels, who recently made their first out-of-Georgia investment in a Texas startup along with a syndicate of other angel groups.

There are other reasons the trend toward larger, more widely dispersed angel syndicates can be a good thing, Cain says. “We’re the engine of growth for early stage businesses and employment. A VC on five to seven boards doesn’t have the bandwidth of an angel on two who knows the vertical.”

 

Are business loans necessary to build a new business?

Thursday, June 27th, 2013

stacks-hundred-dollar-billsGetting your customers to fund your business by buying things is still the best way to get capital. Nevertheless, many businesses seek venture financing or commercial loans to start or expand.

A group of entrepreneurs interviewed by loans.org, however, think it is unwise to borrow money to start a business.

Loans.org interviewed six entrepreneurs to discern just how vital or unnecessary borrowed financing was to launching their start-ups. The interviewed entrepreneurs were clearly divided.

To borrow or not to borrow?

One entrepreneur said that she bootstrapped her business and only dealt in cash. She believes that had she borrowed money, it wouldn’t have helped her become successful faster.

Another entrepreneur, Robert Smith, believes that anyone creative and persistent enough can run a business without borrowing money. He said that business debt creates additional stress in an entrepreneur’s life.

Smith, owner of Champion Media Worldwide, told loans.org, “We are programmed to think that we need financing and no one teaches how to grow organically with very little money.” He found strategic partnerships worked for his firm. “If you are creative and persistent enough, all businesses can run without financing,” said Smith.

On the other hand, others said that borrowing money can be very beneficial for businesses (not surprising from a study by loans.org, although it’s interesting that they include the other side of the coin as well).

Alternative financing choices

One used financing to hire and pay employees — saving him from dipping into his personal savings.

Another entrepreneur borrowed money from the SBA which led to his company growing to over $1 million in sales and creating six additional jobs.

Here at the TechJournal, we think businesses should also take a look at various alternative methods of financing, especially if they have decent revenues. Atlanta-based Kabbage, for instance, offers capital advances to qualifying businesses.

Also, angel investment groups may be a good way to go if your company needs $1 million or less – and now that many are looking a geographically dispersed larger deals, they may even step up to Series A levels of $1 million to $3 million. — Allan Maurer

Investors in SC startups get tax credit – even if they’re not paying SC taxes

Wednesday, June 26th, 2013

By Allan Maurer

SCInvestors in early stage companies in South Carolina don’t need to be South Carolina tax payers to receive the substantial 35 percent tax credit available via the High Growth Small Business Access to Capital Act passed the first week in June.

Matt Dunbar, managing director of the Greenville, SC-based Upstate Carolina Network , an angel investor group, tells the TechJournal that investors who don’t pay SC taxes can sell their credit to a business that does. “It’s transferable,” he says. “Folks from out of state can sell the credits and benefit even if they don’t have an SC tax liability.”

Dunbar says the state is in the process of setting up a marketplace for that and it will be available within weeks.

The SC bill is meant to encourage individual angel investors to put money in early-stage, high growth businesses and increase the number of quality, high-paying jobs in the state.

Annual cap per investor

It’s also intended to support businesses commercializing technology developed in the states colleges and universities.

There is an annual cap of $100,000 per investor and $5 million in aggregate. Investors must meet the U.S. Securities and Exchange Commission’s definition of an accredited investor, and no brokerage fees or commissions are allowed.

For businesses to qualify for investments under the bill, they must be headquartered in the state; started within the last five years; employ fewer than 25 people and accrue annual revenues of less than $2 millio

Similar legislation works in other states

The legislation, which the SC House passed 94-10, is similar to bills in about 25 other states, including Georgia and North Carolina. Data from the similar legislation in other states shows the programs are effective in attracting capital, creating jobs, and producing revenue for the state.

The reason such legislation is needed is a persistent early-stage funding gap that leaves many startups struggling to nab seed or Series A financing. Venture Capital firms increasing want the potential for $100 million plus exits and firms with substantial revenue or profitability before they invest, while many angel investors were subdued by the recession.

Dunbar says the total amount available via the bill, $5 million, “Is a great place to start. We’re going to track the metrics so that we have data to go back and increase that amount if it does what we think it’s going to do.”

We recently interviewed Dunbar about the trend of angel investors to form syndicates and do larger deals with wider geographic spread than the typical backyard deals that angel investors have preferred.

 

 

Angel Investors spreading their wings

Tuesday, June 25th, 2013

By Allan Maurer

Entrepreneurs, listen up: if you’re stuck in that early-stage funding gap and need more than seed money expand, you may want to save some room on your venture dance card for angel investor groups.

Matt Dunbar, managing director of the Greenville, SC-based Upstate Carolina Angel Network and a new board member on the national Angel Capital Association, (ACA) says the trend of geographically dispersed angel groups forming syndicates to do larger deals – often out of their backyards – is emerging and likely to “pick up steam.”

Dunbar is on the ACA’s Collaboration Committee, sees “healthy syndication within regions in Texas and the Northeast and restarting in the Southeast, but also on broader terms.”

While we’ve heard about this trend at TechMedia events such as the Southeast Venture Conference and digital summits – always a good place to tap into the leading edge of technology and venture funding trends – we saw a specific example of it this week as the Atlanta Technology Angels joined a syndicate of other angel groups to fund Austin-based Wisegate.

We talked to ATA member Jamie Lewis about the larger scope that deal portends.

Another deal expected to close in July, for instance, has investors from the Carolinas, Pennsylvania, California and possibly Boston, among other regions, he says. “Groups all over the country are in the final stages of due diligence” on the deal, he notes.

Idea makes sense

“This idea of pulling capital together around a larger geography is an approach that makes sense and is needed,” Dunbar says. It is not without challenges, he adds. Processes for crafting the larger deals are “evolving and maturing,” he says, because every angel investor group has “its own culture and norms.” But, he adds, “The more we do this, the better the processes will be.”

Dunbar says that while many angel groups and angel investors are biased toward local deals and want to support those in their backyard, “They also want the best deals they can find.”

Michael Cain, who heads the Wilimington, North Carolina angel investor network,  says, “I tell my people we are not economic developers. That idea of the two-hour drive doesn’t work in Wilmington and many other places, so you have to network your deals.”

Over the last three years, the Wilmington Investor Network has done deals in Boston, DC and Raleigh, he notes. Cain, who is chair of the Angel Resource Institute, a research and education organization, says the ARI is going to start tracking syndication deals. In cooperation with Silicon Valley Bank, it does the quarterly Halo report that tracks angel investing activity nationally and by region.

Dunbar points out that technology itself is playing a role, since it makes it easier for entrepreneurs anywhere to find angel lists and groups and for angels to find deals.

“The idea of pulling capital together around a dispersed geography is in the air and emerging in the marketplace, and will only continue,” he says, and even increased if crowdfunding legislation ever gets written.

Angel investment groups eye larger deals, national scope

Tuesday, June 25th, 2013

By Allan Maurer

Jamie Lewis

Jamie Lewis

Atlanta Technology Angels (ATA) decision to join other angel groups in financing Austin-based Wisegate, was significant in more ways than one, says ATA and Wisegate board member Jamie Lewis.

Lewis, formerly CEO of  The Burton Group, like Wisegate, an IT research and advisory firm that sold to Gartner for $56 million in 2009, tells the TechJournal the ATA/Wisegate deal “Is largely a reflection of how significantly the capital markets have changed in the last five years or so.”

National, not just regional deals sought

A member of ATA for about a year, Lewis notes there is a move afoot in the Angel investor space to create a national syndication network so deals can happen nationally rather than just regionally.

The ATA itself says the decision to invest in a company outside of Georgia represents its own desire to expand its footprint throughout the Southeast and possibly beyond.

Reasons for the change

“There is a lot of interest in deals occurring as widely as possible, even though it’s natural for most to occur regionally,” Lewis says.

A primary reason for this change in angel investing strategy, says Lewis, is that many venture capital firms have altered their own strategies.

“Back ten or 15 years ago,” says Lewis, “the typical VC was doing lots of early stage deals, including companies with a little seed funding, not a lot, and maybe some revenue, but not profits.”

VCs more like private equity firms

Not so much any more, he says. “Most VCs now act more like private equity firms,” he says. “They like later stage deals, investing in companies that have proven themselves in the markeplace and are well beyond the seed stage.”

That creates a much talked about early stage funding gap.

Why? “It’s by choice,” says Lewis. “They don’t want the risk.” He adds that it also has to do with the risk profile of their limited partners (those who invest in the venture funds). They’re taking money from institutional investors and pension funds. Those have a much different risk profile than the typical angel investors.:

Many angel investors are themselves former or current entrepreneurs who are more accustomed to risk, he notes.

The change opens the field for angel groups to step up. The syndicate that invested $3 million in Wisegate included Texas, New York, and Georgia angel groups. By investing together, the groups can structure larger deals the size of many Series A rounds.

Not your typical IT service firm

“That’s how Wisegate sees this,” says Lewis, “as a Series A raise. It’s interesting that a syndicate of angel networks can pull together that kind of money and fund a company at that level. ”

Wisegate, he says, “Is not your typical IT service company.” Right now it is focused on what Lewis calls “One of the biggest issues worldwide – the whole concept of Bring Your Own Device (BYOD).” That is causing security problems for many companies.

Wisegate brings -by invitation only – IT experts together to discuss best practices, what works, what doesn’t, which tools are effective, which not, and so on, to provide clients with IT advice from people in the know.

For more about Jamie Lewis, see “Be What You Aspire to Be.” In it, an interview about commitment, determination, and passion in business and life, he quotes Randolph Bourne who said, “He who mounts a wild elephant, goes where the elephant goes.”

Atlanta Technology Angels expanding reach beyond Georgia

Monday, June 24th, 2013

The Atlanta Technology Angels has invested in a company outside of Georgia for the first time. The move signals that the Angel investor group is opening up to investing with other angel groups and venture capitalists in firms across the Southeast.Atlanta Technology Angels

“We’d like to get the word out that the ATA is looking at investment opportunties outside of Atlanta,” Jenn Pratt, who handles PR for the group with Carabiner Communications, said.

The ATA joined Cowtown Angel Network and Central Texas Angel Network and Golden Seeds in a $3 million investment in Austin-based Wisegate,an innovative IT research service founded in 2011.

Here at the TechJournal, we’ve noticed that a number of Angel groups are forming syndicates with other angel groups and early-stage venture capital firms to do somewhat larger than usual deals.

Using a crowdsourcing model

Through its service qualified senior technology professionals share information without the bias of analysts, vendors, media or advertisers.

Using a crowdsourcing model and advanced algorithms, Wisegate gives technology professionals trusted, timely, relevant and affordable access to the   collective knowledge and experience of their peers.

Wisegate membership is available to senior IT professionals working for companies that do not sell IT products or services, and all applicants are screened to ensure they meet strict membership guidelines.

 

Half of media and entertainment revenue coming from digital

Tuesday, June 11th, 2013
Samsung Smart TV

A Samsung Smart TV.

The average revenue of media and entertainment (M&E) companies will shortly cross the 50 percent mark from majority traditional to majority digital, according to a new report, Digital agility now! Creating a high-velocity media and entertainment organization in the age of transformative technology, released today by Ernst & Young that surveyed more than 550 senior executives from global M&E companies.

Today, revenue from digital is 47 percent and survey respondents say that by 2015 it will account for 57 percent of revenue – thus making digital the new norm and the primary source of revenue for M&E companies.

It isn’t always considered in these studies, but the impact of this change on media and entertainment company offerings is already substantial and likely to increase. It can lead to serious disruption of traditional industries. TV replaced radio as the primary in home entertainment device in the 1950s and had a devastating effect on movie attendance. The Internet seriously challenged the newspaper and magazine industries, and continues to do so.

Characteristics of digital leaders

The study goes on to identify characteristics of M&E “digital leaders” – companies that are using new technology not only to deliver digital products and services, but to build more agile organizations capable of sensing and responding far faster to shifting customer expectations and marketplace opportunities and risks.

The digital leaders are pioneering the path to a higher level of organizational agility as the M&E industry transitions to digital as its new norm.

“Mobile-social-cloud and big data analytics technologies are game-changers for M&E firms,” says
Pat Hyek, Global Technology Industry Leader, Ernst & Young. “These technologies can help M&E digital leaders who broke ahead of the pack in the early stages of digital to extend their advantages, as well as offer opportunities for those who fell behind to adapt quickly and catch up.”

Major differentiators

According to Digital agility now! Creating a high-velocity media and entertainment organization in the age of transformative technology, a major differentiator between these digital leaders and other survey respondents is a greater emphasis on mobile-social-cloud and big data analytics technologies for internal collaboration.

For example, digital leaders are 60% more likely than all other respondents to emphasize the importance of social media for internal communication among employees: 67% said it was “very” or “extremely” important, versus 42% of all others. The study points to the kind of rapid collaboration that is enabled by social networks and characteristic of an agile organization, where silos are broken down by the ready flow of information.

Advanced social listening programs

The study shows that digital leaders’ advanced social listening programs, leading-edge analytics and cloud-based infrastructure enable rapid deployment of new products and resources, and give companies the ability to quickly learn from and fix mistakes. This organizational agility is necessary
to meet the demands of rapidly evolving digital consumer behavior.

“Media & Entertainment companies no longer live in a world where everything lives in ‘their’ world. It’s a connected eco-system with consumer technology leading the way,” says John Nendick, Global Media & Entertainment Leader, Ernst & Young.

Other results from the survey include:

  • Technology alliances: Digital leaders emphasize alliances that let them act faster than “going it alone”; 51% rank alliances with technology and other M&E partners among their top three strategic priorities for digital transformation, vs. 30% for others.
  • Second-generation deployments: Digital leaders were generally more than twice as likely to incorporate lessons learned from initial technology deployments to achieve more advanced functionality. For example, 49% of digital leaders use second-generation mobile technologies to develop products/services vs. 16% of all others.
  • Smart mobility: Similarly, 32% of digital leaders use second-generation or later techniques in mobility to enhance employee engagement and communication, vs. 13% of all others.
  • Cloud: Digital leaders emphasize the importance of cloud computing to enhance internal and customer-facing flexibility. For example, 74% of digital leaders say it’s important to host business tools in the cloud, vs. 49% of all others; and 43% of digital leaders use second-generation cloud solutions to speed product/service development vs. 12% of all others.
  • Big data analytics: Digital leaders are three times more likely than other respondents to use second-generation big data analytics techniques to improve customer engagement (26% vs. 9%). Among all respondents, 66% rely on in-house resources to get insight into customers yet 41% say they gain no insight from their data, suggesting they don’t have the right big data analytics tools or skills in place and may be better off partnering to access external resources.

Agility Index

The report concludes with an agility index that ranks the relative organizational agility of different M&E segments as well as enabling technology and digital leaders. The average score of all respondents is indexed to 100. A score of 110 denotes performance 10% above average; 90 is 10% below average.

Intel Capital creates $100M fund for more human like computers

Tuesday, June 4th, 2013

IntelIntel Capital has created a $100 million Intel Capital Experiences and Perceptual Computing Fund to bring more compelling, natural and immersive experiences across the spectrum of Intel architecture platforms.

The Intel Capital Experiences and Perceptual Computing Fund will invest over the next 2-3 years. Areas of software and application investment will include broader touch applications, imaging, gesture, voice and emotion sensing and biometrics, among others.

“Devices with human-like senses – the ability to see, hear and feel much like people do – has long been a subject of science fiction but is now within reach given recent innovations in compute power and camera technology,” said Arvind Sodhani, president of Intel Capital and Intel executive vice president.

Investing in startups

“This new fund will invest in start-ups and companies enabling these experiences, helping them with the business development support, global business network and technology expertise needed to scale for worldwide use.”

Marketers, of course, would love to have emotion sensing capabilities added to their messages. Also, here at the TechJournal, we’ve long said that effective voice control is what will make mobile devices much more useful and dominant.

Intel announced its perceptual computing initiative at its annual Intel Developer Forum in 2012. Since then, the company’s Perceptual Computing Software Developer Kit (SDK) has been downloaded more than 10,000 times. It had already launched the Perceptual Computing Challenge, an early kick-off contest for developers to create innovative applications using the SDK with up to $1 million in awards.

Intel and its industry partners have also made significant progress in bringing the first perceptual computing technologies to the market for today’s Ultrabook systems and PCs, including:

  • An interactive gesture camera from Creative, the Senz3D which is already in the hands of developers and will be available to consumers in the third quarter of this year.
  • Leading the development and enabling the integration of 3-D depth camera technology by working with multiple OEM partners to build the technology into various Intel-based devices with targeted availability for second half of 2014.
  • The largest U.S. PC retailer, Best Buy, is assorting the Nuance Dragon Assistant on 10+ Intel® Core™ based notebooks, Ultrabooks™, and all-in-one PCs from Acer, Asus, Lenovo, and Toshiba. With Dell announced earlier this year, there are now five OEMs shipping designs to consumers during the back-to-school selling cycle.
  • Facial log-in software from Sensible Vision will ship preloaded from multiple OEMs.

“Intel and our key OEM partners are excited about integrating 3-D depth camera technology into our next-generation platforms bringing compelling, natural and immersive experiences to life,” said Kirk Skaugen, senior vice president and general manager of Intel’s PC Client Group.

The Fund will complement the existing Intel Capital Ultrabook Fund. Intel Capital has invested a significant portion of the $300-million Ultrabook Fund in innovative system component technologies in areas such as audio, touch, battery, display, sensor and wireless connectivity to make Intel-based computing devices thinner, lighter, more secure and responsive.

A winning strategy for negotiating a price

Monday, June 3rd, 2013
Columbia Business School

Columbia Business School

Want a stronger position the next time you negotiate a deal – whether for your salary in a new job, selling a house, or a company? Columbia Business School research suggests a winning strategy.

A recently published study on the art of negotiation by two professors at Columbia Business School could help new hires — and all negotiators — seal a stronger deal than before.

Research conducted by Professors Malia Mason and Daniel Ames and doctoral students Alice Lee and Elizabeth Wiley finds that asking for a specific and precise dollar amount versus a rounded-off dollar amount can give you the upper hand during any negotiation over a quantity.

Use a precise dollar amount

“What we discovered is there is a big difference in what most people think is a good strategy when negotiating and what research shows is a good strategy,” said Professor Mason.  “Negotiators should remember that in this case, zero’s really do add nothing to the bargaining table.”

The research, forthcoming in the Journal of Experimental Social Psychology, looks at the two-way flow of communication between 1,254 fictitious negotiators.

The negotiators were placed in everyday scenarios such as buying jewelry or negotiating the sale of a used car.  Some people were asked to make an opening offer using a rounded-off dollar amount, while other people were asked to use a precise dollar amount; let’s say for example $5,000 vs. $5,015.

Conceding more value in the deal

The results showed that overall, people making an offer using a precise dollar amount such as $5,015 versus a rounded-off dollar amount such as $5,000 were perceived to be more informed about the true value of the offer being negotiated. This perception, in turn, led precise-offer recipients to concede more value to their counterpart.

In their negotiation scenarios, the professors concluded the person making a precise offer is successfully giving the illusion they have done their homework. When perceived as better informed, the person on the opposite end believes there is less room to negotiate.

To determine whether people make round offers more often than not, the researchers looked at the real estate market.

Most displayed rounded numbers

Research done on Zillow, the online real estate marketplace, showed the overwhelming majority of displayed prices were rounded numbers, and that only two percent of people listed their homes with precise dollar amounts.

“The practical application of these findings – signaling that you are informed and using a precise number – can be used in any negotiation situation to imply you’ve done your homework,” Mason concluded.

The study, Precise Offers Are Potent Anchors: Conciliatory Counteroffers and Attributions of Knowledge in Negotiations was authored by Malia Mason , the Gantcher Associate Professor of Business; doctoral students Alice Lee and Elizabeth Wiley ; and Daniel Ames , professor. Download the full report.

WedPics bucks RTP trends to land seed round

Wednesday, May 29th, 2013

wedpicsJustin Miller says there is more to the recent $1.1 million funding round for his Raleigh-based startup WedPics than money. “It’s a win for the area,” says Miller, who founded the company originally known as “Deja Mii” near the end of 2010.

The company, which created a free photo sharing app for wedding couples and guests, is not in the Research Triangle area’s sweet spot, Miller says.

“While North Carolina is a rather abundant place for startups,” Miller says, “they’re often overshadowed by the presence of Fortune 100 companies and the typical startup pre-funding here is for revenue producing B2Bs. The traditional investors in this region run from anything else such as social media and pre-revenue B2C.”

Miller and his 12-person crew refocused WedPics, changing more than the name. Originally started with an early revenue model, the firm dropped that to focus on user acquisition for a free service that is data and analytics backed.

Because of that, the company presented potential investors with data-backed forecasts. It convinced them – although it took nine months, Miller notes.

Lands oversubscribed round

In mid-April, it closed an oversubscribed $1.1 million round  comprised of a diverse group of strategic local and nationwide investors. The round was ded by the Brenden Family Growth Fund and including Bob Young (Red Hat Co-founder, Lulu.com Founder); Jed Carlson (Reverbnation Co-founder); Henry Copeland (BlogAds CEO); Chandler Rose (ProVantage Corporate Solutions Founder); Alex Osadzinski (former Trinity VC); Culin Tate (Co-Founder ofMissNowMrs.com); and TAP (Triangle Angel Partners).

Miller explains, “From our initial launch as deja mi – the location based photo/video sharing platform which was often pitched as a theoretical idea of what it might be able to do – pivoted to a data and analytically backed platform, which has disrupted the traditional wedding space in a big way. We currently have over 130,000 users and acquire 1400+ daily, with over 1200 weddings per weekend, and sharing over 100,000 photos each week (1 every 6 seconds).”

While many other photo apps died off, WedPics “Applied its technology to a niche market and capitalized on it,” Miller says.

He expects the company will be back on the fund-raising trail again soon and eventually should be a “cool acquisition play for a larger company,” he says.

 

Women outpaced men in alternative biz loan demand

Tuesday, May 28th, 2013

target

Women outpaced men in demand for business loan alternatives according to Raharney Capital’s analysis of self-originated financing inquiries.

The study examined all inquiries this year from January 1 to May 26, showing that 51 percent of the applications were gender-identifiable as female, with the remainder being gender-neutral or male.

According to the National Women’s Business Council (NWBC), 28.8% of all U.S. nonfarm firms are women-owned, but 77% of women-owned firms are primarily founded by their owner(s) with $5,000 or less in capital.

Lack of startup captial may explain greater later demand

While women business owners are clearly a minority, their lack of capital resources at startup may explain why they have a particularly high demand for financing later on.

In response, Raharney Capital has set up an application page for women business owners specifically athttp://merchantcashadvanceindustry.org/businessloansforwomen.php.

Seventeen percent of this year’s underbanked merchants do not accept credit or debit cards as a form of payment, up from 15% in 2012.

Forty-one percent do accept credit or debit cards, but not enough to make traditional merchant cash advance financing worthwhile, an 8 point increase from last year.

The threshold used is $2,500 in monthly average card processing revenue.

 Raharney Capital’s FICO score poll shows more than 12 percent believed their credit score was above 700 at the time they applied, while 25% believed their score was between 600 and 699 and 15.2% were unsure.

These statistics support Raharney Capital’s belief that business owners are having trouble obtaining traditional financing even with fair, good, or excellent credit.

“We examine the trends on an ongoing basis,” said Raharney Capital founder, Sean Murray. “Many financial indexes analyze the approval rate of loans, but a lot can be learned by studying the demand itself. It helps us apply custom-tailored solutions faster.”

Silicon Valley deals show Q1 weakness in venture environment

Friday, May 24th, 2013

Fenwick signFenwick & West , a law firm providing comprehensive legal services to high technology and life science clients, in its First Quarter 2013 Silicon Valley Venture Capital Survey.

The survey analyzed the valuations and terms of venture financings for 118 technology and life science companies headquartered in the Silicon Valley that raised capital in the first quarter of 2013.

“During the first quarter of 2013, up rounds exceeded down rounds 68% to 11%, with 21% flat.  This was a slight decline from the fourth quarter of 2012, when up rounds exceeded down rounds 71% to 8%, with 21% flat,” said Barry Kramer, partner in the Corporate Group of Fenwick & West and co-author of the survey.

An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company’s prior financing round.

However, the Fenwick & West Venture Capital Barometer – which measures the percentage change in share price of companies funded during the quarter compared with the share price of their previous financing round – showed a 57% average price increase for the quarter, a noticeable decline from the 85% reported in the fourth quarter of 2012.

Similarly, the median price increase of those financings was only 14%, a significant decrease from the 41% recorded in the fourth quarter.

“The Barometer results showed some valuation softening this quarter,” said Kramer.  “We will need to see next quarter if this is an anomaly or a trend.”

“The best performing industries in the quarter from a valuation perspective were internet/digital media and software, but hardware and cleantech did reasonably well, with only life science performing poorly,” added Michael Patrick, partner in the Corporate Groupof Fenwick & West and co-author of the survey.

“At the big picture level, it was a tough quarter for the venture environment, with venture investing, acquisitions and IPOs all down compared to the last quarter of 2012.  And while valuations were reasonably healthy this quarter, they declined from last quarter.

But with the macro environment appearing to stabilize, and Nasdaq up both in the first quarter and second quarter to date, there is reason to believe that the venture environment will improve,” added Patrick.

Complete results of the survey with related discussion are posted on Fenwick & West’s website at www.fenwick.com/vcsurvey.

MicroVentures investors pump $16M into seed stage startups

Friday, May 17th, 2013

MicroventuresSan Francisco, CA and Austin-TX-based MicroVentures, the only combined equity crowdfunding platform and broker-dealer in the US, announced says that accredited investors on their platform have invested $16 million in startups.

With investments in 34 companies, MicroVentures has now invested more with legal, accredited investors than any other equity based crowdfunding platform.

MicroVentures employs a crowd-sourcing process that enables the power of the crowd to decide which startups will receive investments in an effort to provide a higher probability of successful outcomes. Further, MicroVentures has a dedicated due diligence team that screens out companies that may have potential growth inhibiting challenges.

Tim Sullivan, CEO of MicroVentures, said, “As we patiently wait for the SEC to enact rules around the JOBS Act, we are utilizing traditional securities laws to connect startups with great investors. This is only possible as a result of our being one of the only registered broker dealer in the space. This is the first time ever that accredited investors have had the ability to invest alongside VC’s without taking major stakes and ending up with similarly diversified portfolios. However, we may find that the crowd does an even better job at picking winners.”

He added, “We’ve reached a milestone that proves that our platform doesn’t just ‘work’ — but that there is significant demand from smaller investors to take part in this asset class.”

Invests in seed stage startups

MicroVentures’ platform invests primarily in seed stage startups, but will participate in follow on rounds alongside the VCs throughout the life of a company.

For example, visual book publishing platform Graphicly (www.graphicly.com) and rich media advertisement platform Republic Project (www.republicproject.com) have both received multiple investments from MicroVentures as they have continued to gain traction and required additional capital to accelerate their growth.

Other investments include SupplyHog (www.supplyhog.com), a Tennessee-based company that operates a platform that streamlines the process for buying building supplies and material online, along with Kickfolio (www.kickfolio.com), the first foreign management team, who have created a platform that enables developers to run iOS app demos in a standard web browser.

“Our platform has created the opportunity for our investors to invest in everything from seed stage startups to huge companies such as Twitter and Facebook through secondary transactions. We’re giving investors the chance to participate and the transparency to make decisions in a way they have traditionally never been able to,” said Sullivan.

Kickstarter-backed smart watch maker nabs $15M A round

Friday, May 17th, 2013
Pebbble watches.

Pebbble watches.

Pebble, maker of an e-paper smart watch that connects to iPhone and Android smartphones, received $15 million in Series A funding from Charles River Ventures. The funding will be used to grow the software engineering team, expand Pebble’s open development platform and scale to meet customer demand.

Pebble is a highly customizable device, enabling users to download watchapps ranging from creative watchfaces to activity tracker apps.

Pebble’s open approach to development is core to supporting a vast selection of apps that meet the unique needs and interests of users — or even enabling users to create something themselves. Pebble’s record-breaking launch on crowd funding site, Kickstarter, confirmed interest in this concept with over 68,000 backers pledging over $10 million to make Pebble a reality.

Personally, here at the TechJournal, we’re not big believers in the smart watch concept, but obviously, a whole lot of people are. We have enough trouble with the small screens on smartphones. Nevertheless, the idea appears to be catching on. We’ll see how they do in the marketplace.

“The tremendous response we received from Kickstarter backers validated our belief in the value of a smart watch as a wearable computer, but also in the value an open platform brings to truly personalizing the watch to their daily activities,” said Eric Migicovsky, Pebble’s founder.

“This new investment will help us build out the Pebble development ecosystem and deliver on Pebble’s extraordinary potential.”

Development kits available

The Pebble Smart Watch with a running app.

The Pebble Smart Watch with a running app.

Pebble released the first stage of its open software development kit (SDK) in April by enabling third party developers to create watchfaces and games for Pebble. Pebble’s enthusiastic developer community immediately went to work and created hundreds of new watchfaces in just a few weeks.

Pebbler supported sites like mypebblefaces.comforums.getpebble.com and watchface-generator.de are focal points of the growing community. Over 8,000 developers have downloaded the Pebble SDK, resulting in more than 5,000 unique watchapps and 300,000 watchapp installs in just over a month.

Today Pebble released the next stage of the platform enabling two-way communication between Pebble and the smartphone at developer.getpebble.com.

Known as PebbleKit, the update enables third parties to develop watchapps that send and receive information from a connected smartphone.

Watchapps can now be built to receive weather or traffic information, act as remote controls for a phone or internet-connected device, or display bitcoin prices. The Pebble platform will continue improving over the course of this year and into the future.

Also launching today is the Pebble Sports API. RunKeeper, a GPS fitness-tracking app, announcedsupport for Pebble two weeks ago and now that same functionality is available for integration into any sports or fitness tracker app. Other sports apps like FreeCaddie, a GPS golf rangefinder, have also released Pebble-enabled apps.

Pebble’s smart watches have begun shipping to Kickstarter backers and are now available for pre-order at getpebble.com.

BitPay $2M seed round includes 3 PayPal founders

Thursday, May 16th, 2013

 

Bitcoins

Bitcoins

BitPay Inc, the world’s leading payment processor for bitcoin, announces it has raised an additional $2 million in seed round financing led by Founders Fund, which includes three founders of PayPal.

“ECommerce companies see the tremendous value that frictionless international payments bring to their businesses as they expand into emerging markets.

BitPay’s ambitions have been global from the outset, and at Founders Fund we have been impressed with the company’s tremendous growth as they sign up hundreds of new customers a day, turning the potential for opportunity into a reality,” said Brian Singerman a Partner at Founders Fund.

BitPay’s co-founder and co-CEO, Stephen Pair, who spoke at TechMedia’s recent Digital Summit in Atlanta, talked to us about Bitcoin in an interview ahead of the event.

Existing shareholders all aboard

Also joining this round is Max Keiser’s fund Heisenberg Capital, a London-based fund focused on bitcoin companies. The terms of the seed round were not disclosed, although 100% of the existing seed shareholders exercised their pro rata rights to maintain their ownership percentage in BitPay.

“We were not looking to raise any capital until later this year, but we could not ignore the opportunity to have Founders Fund involved with BitPay,” says Tony Gallippi, co-founder and CEO of BitPay. “There’s no single investment firm we would rather have on our team right now than Founders Fund.”

Added 1,900 merchants

BitPay added over 1,900 new merchants during the month of April, and they continue to dominate the bitcoin payments space by signing up over 100 new merchants per day.  Through BitPay’s service, around $5 million per month worth of bitcoins are spent on goods and services with merchants around the world.

Businesses selling electronics, precious metals, and other low-margin products over the internet are seeing a large increase in profitability by accepting bitcoin payments.

BitPay continues to hire Software Engineers for its Atlanta-based headquarters, with two positions open now for experienced node.js developers who are excited about bitcoin, as well as a Senior UX Designer.  The company continues to add resources to product development and engineering of its world-leading bitcoin payment platform.