Posts Tagged ‘venture funding’
Friday, April 19th, 2013
 Venture capital firms that invest in women-led businesses see positive returns, says a new report issued today by the U.S. Small Business Administration (SBA) Office of Advocacy.
The report, called Venture Capital, Social Capital, and the Funding of Women-led Businesses, focuses on women entrepreneurs’ access to equity funding and how social networks influence venture capital firms’ decisions to invest.
Social capital affects funding
In the report, the authors, Joy Godesiabois and Lawrence Plummer , find that social capital (“who you know and how you know them”) affects funding of women-led firms in different, sometimes conflicting ways.
Venture capital firms tend to invest with familiar social networks that may not include women entrepreneurs.
Yet this study shows that when venture capital firms do invest in women-led businesses, they generally improve their bottom line. And venture capital firms that regularly invest as a group in the same businesses tend to invest more often in businesses led by women entrepreneurs, according to the report.
“As investors look for new opportunities, and as we focus on ways to grow our economy, we should look to women entrepreneurs for a good share of new growth,” said Dr. Winslow Sargeant, Chief Counsel for Advocacy.
“Policies that encourage venture capital networks to be more inclusive will create the environment for new high-growth innovative businesses.”
Here at TechMedia, we seen an increasing number of women entrepreneurs at our various digital conferences and venture capital events. Many of today’s digital businesses are women-friendly in that they seek women as primary customers. But the women we see launching startups certainly are not limited to women focused businesses.
The full report is available on the Office of Advocacy website at http://www.sba.gov/advocacy/7540.
Tags: SBA, Social capital, venture funding, women-led businesses
Posted in Money, Studies, surveys, reports | No Comments »
Friday, March 15th, 2013
 A new analysis, published by The Big Data Group and powered by SiSense’s Prism technology, unveils venture capital trends that challenge common beliefs.
“The data points to a Series B crunch, rather than a Series A crunch,” explains David Feinleib , Managing Director of the Big Data Group.
“Venture Capital is a hot topic. Yet, Venture Capital data is hard to come by and is difficult to analyze,”
The study analyzes ten years of startup data on 100,000 companies from a variety of sources, including Crunchbase, Wikibon and NASDAQ, and is available at http://www.bigdatalandscape.com/news/100k-company-venture-capital-study.
Key findings:
- Less is More: Fewer startups received funding in 2012 but the ones who did, raised 22% more capital on average.
- “Series A crunch” doubtful: There were more Series A deals done in 2012 and they closed on average 2 months faster in 2012 than in 2011.
- “Series B crunch” possible: There were fewer Series B deals done in 2012 and they took on average 45 days more to close in 2012 than in 2011.
- Enterprise deals are back: Enterprise deals increased in 2012 and gathered on average 40% more capital in 2012 than in 2011.
- Web deals are cooling off: Web deal volume dropped in 2012 and the average amount raised per company shrunk by close to 45% in 2012.
Tags: Enterprise, Series A, Series B crunch, venture funding, web deals
Posted in venture capital report | No Comments »
Wednesday, September 19th, 2012
 Leonardo DiCaprio is an investor in Mobli. So, does the world need another photo and video sharing app? Global investor Kenges Rakishev, who just invested $20 million in the firm Mobli, thinks so and he’s in prominent company. Other investors in the company include Leonardo DiCaprio, Tobey Maguire, Serena Williams and Lance Armstrong.
Mobli, a photo and video sharing app built to connect content with captive audiences, has raised a $20 million Series B round of financing provided by Rakishev, a well-known global investor, and an additional $2 million from previous investors.
Rakishev has some prominent company as an investor in the firm.
For Rakishev, this is part of a series of recent strategic investments in innovative mobile and multimedia technology players. Late last month, he invested $5 million into TriPlay, a global provider of cross-platform cloud services and the developer of MyMusicCloud and MyDigipack.
Prior to this, he announced his acquisition of $32 million in stock of Net Element (OTCQB:NETE), a global technology and publishing company that operates in mobile commerce and payment processing, and also publishes popular entertainment portals and destinations.
On Mobli, users follow and engage with individuals, as well as subject-based channels they find interesting. Posting photos and videos to relevant Mobli channels ensures content creators receive the feedback they deserve.
The company, which has now raised a total of $28 million, plans to use the financing to continue development and expand its audience base.
“Mobli has tremendous potential because it enables people to do something very powerful – to see the world through other people’s eyes – in a simple, easy to use, and highly engaging format,” said Rakishev, chairman of numerous boards in private and public sector companies worldwide, listed by Forbes as one of the 50 most influential people in Kazakhstan.
“Mobli leverages social media to meet a very real human need to visually share experiences, thoughts and ideas with other people in real-time.”
The Mobli app is available free for iPhone, Android and the Web.
For iPhone: http://itunes.apple.com/us/app/mobli-share-photos-videos!/id426679976?mt=8
For Android: https://play.google.com/store/apps/details?id=com.mobli&hl=en
Tags: Kenges Rakishev, Lance Armstrong, Leonardo DiCaprio, Mobli, photo and video sharing, Serena Williams, Tobey Maguire, venture funding
Posted in Internet/New Media, Money, venture capital report | No Comments »
Friday, September 7th, 2012
 New York-based Quirky, a company that helps people bring their product ideas to market, has wrapped up a $68 million in Series C funding led by Andreessen Horowitz, with significant participation from new investor Kleiner Perkins Caufield & Byers (KPCB).
The funding round also included existing investors Norwest Venture Partners and RRE Ventures. Quirky has raised $97 million to date.
Quirky has built a platform that facilitates invention and pairs its online community of creative people with an expert in-house team of product designers, engineers, and manufacturing and retail specialists.
The process allows Quirky to develop two new and innovative products each week. Since its launch in 2009, Quirky has collaboratively developed hundreds of new products, many of which can be found in Target, Staples, OfficeMax and Bed Bath & Beyond. The revenue from all these products is shared with those who created and collaborated on them.
Quirky speeds up the product development process. “It took one year and 45 days to build the Empire State Building,” noted Ben Kaufman, founder and CEO of Quirky. “It takes most consumer product companies 18 to 24 months to launch a new vegetable peeler. Something is wrong here.”
Quirky will use the new funding to grow the company’s capacity to produce products across an increasing number of verticals.
The company will also refine its community submission and contribution process and grow its product development and community engagement teams. Additionally, Quirky will seek to involve community members at the retail level through a new distribution program.
Anyone can participate on Quirky.com either by submitting their own product idea for $10, or by voting, determining pricing and influencing other people’s product ideas. Thirty cents of every dollar generated from the direct sale of a product on Quirky.com goes back to these influencers.
Scott Weiss, general partner of Andreessen Horowitz, and Mary Meeker, general partner at Kleiner Perkins, will join Quirky’s Board of Directors.
Most exciting retail concept since the Apple store?
“Offline retail and product development are well overdue for innovation and Quirky is the most exciting new retail concept we’ve seen since the Apple store opened over a decade ago,” said Scott Weiss. “Ben Kaufman had the vision to democratize product development. Quirky has taken the speed and best practices of online software development and brought it to bear in developing offline consumer products.”
Read more about Quirky on Scott Weiss’ blog here.
Mary Meeker said, “Quirky’s social design platform is reinventing consumer product R&D with materially faster time from product conceptualization, to design and manufacturing and, ultimately, to retail sale. Since its founding in 2009, Quirky has launched more than 200 innovative products — including top-sellers Pivot Power, Cordies and Crates — and has paid out over $2 million to its inventors and contributors. The pace of Quirky product launches and number of contributors, now at 260,000 online users, is rapidly accelerating.”
Tags: Andreessen Horowitz, Ben Kaufman, Kleiner Perkins Caufield & Byers (KPCB), Mary Meeker, Quirky, Scott Weiss, venture funding
Posted in Internet/New Media, Money, venture capital report | No Comments »
Thursday, August 16th, 2012
By Allan Maurer
 Atlanta-based Social123, a social media management and lead generation company, has received $500,000 in Series A funding, led by Linch Capital. Its CEO and founder says it provides that actual tangible return on investment businesses want from their social media activities.
“The amount of data and content that Internet users are creating and sharing through social media is expanding exponentially―by the hour,” says Aaron Biddar, chairman and CEO at Social123.
“Social data is more complicated to process and analyze because it’s so unstructured. We are providing innovative social media tools that enable sales and marketing professionals to turn this rich source of data into actionable intelligence.”
Biddar, who previously co-founded Atlanta-based Controlscan and ran sales and marketing for the CRM firm, the Port Network, started Social123 about two years ago.
Investment will fast-track the firm’s marketing
“This investment will not only allow us to scale our IT infrastructure, but also to fast-track the introduction of our Social123 family of products into a marketplace that is moving at the speed of light where gaining valuable insight from social interactions will be a key differentiator for conducting business―both online and offline.”
Social123 plans to expand marketing and sales initiatives with the funding. Biddar says the company has just hired two people in Charlotte, NC and is also hiring one in Charleston and three in Roswell, Georgia where it is based. It currently employs eight.
Social data platform connects firm with contacts
The company’s technology is a easy-to-use social data platform that offers sophisticated tools that collect, filter and analyze social data, giving sales teams an intelligent way to connect with contacts.
For years, Biddar notes, “People have been coming up with their own metrics – such as return on engagement – because they couldn’t get true ROI for their social media marketing. At some point, you have to stop making things up and analyze your true return.”
Only social influence score on the market
The SocialData+technology provides Facebook, LinkedIn and Twitter information for companies’ contact lists. “We use their APIs and its all publicly available data, but we do it a lot faster than someone could without our technology. What might take you all day takes us 30 seconds.,” Biddar says.
 With the only customizable social influence score on the market, SocialPoints+ gives sales professionals the ability to rank their most influential contacts so they can focus on the ones who matter most.
SocialLeads+ searches millions of records on all the major social media platforms, based upon specific search criteria.
SocialCRM+ seamlessly integrates with popular customer relationship management systems (CRMs), such as Salesforce, so that all data is housed in one location and is accessible when companies need it most.
“Social CRM is the new frontier for organizations that want to get closer to customers,” said David Linch, managing director at Atlanta-based Linch Capital.
“Social123 is one of the first companies to develop a reliable and cost-effective means to optimize the power of social interactions and extract true value from social data specifically for sales and marketing professionals.”
We have covered hundreds of tech startups in the last decade and the ones that enjoyed the most success often did so because they solved a real problem with an elegant solution.
Linch says “The Social123 team has a customer-focused product strategy with three of the four products developed as a result of direct customer requests.”
The holy grail of social media: a tangible return on investment
Biddar says the technology, which sells for a $49 a month for a license that provides 10,000 contacts a month, works best for clients who have been using other emarketing solutions. “They get the fastest return on investment because this is the missing piece They have email and they track who opens it, who’s signing up and so forth, but haven’t had a way to see what they’re doing with social media.”
Social123 currently has approximately 25 customers, including Avectra, a developer of web-based Social Constituent Relationship Management (CRM) solutions for fundraisers, not-for-profits and associations.
Avectra, which is in the association space, resells the Social123 technology. “They’re already seeing ROI from their customers,” says Biddar. “They’re seeing an increase in membership, which is a tangible return.”
Tags: Aaron Biddar, Atlanta, David Linch, Linch Capital, sales & marketing tool, social data analysis, social media ROI, Social123, venture funding
Posted in Analytics, Facebook, Internet/New Media, LinkedIn, Marketing, Money, venture capital report | No Comments »
Tuesday, August 14th, 2012
 Local digital advertising has been one of major new media strategies and having technology that automates the process is paying for Durham, NC-based Netsertive.
Netsertive, a fast-growing ad tech firm specializing in localized digital advertising and channel marketing technology, has closed $10 million in a combination of a $7.3 million round of Series B equity financing and a $2.5 million credit facility.
According to the Raleigh News & Observer, the company anticipates doubling its size by adding 60 more employees over the next 12 months.
Netsertive’s proprietary platform helps local businesses, multi-location retailers and product brands reach target customers in their respective local markets with automated digital marketing.
Local digital marketing expected to double
Local marketing spending in the United States totals more than $130 billion annually. According to research firm BIA/Kelsey, about $21 billion of that has already shifted to newer forms of interactive digital marketing, and that amount is projected to double to nearly $40 billion within four years, driving a massive market opportunity.
In addition, there is over $22 billion in co-op funding made available to local retailers, though a major portion of that goes unused or is deployed inefficiently.
Netsertive brings automation and efficiency to that $22 billion in co-op to unlock the power of co-branded performance marketing at the local level, and eliminate burdensome reimbursement processes for both the brand and the retail partners.
Standalone localized ad campaign automation
The company provides standalone localized campaign automation as well as its innovative Digital Co-Op system that combines brands and local channel partners in turnkey, cooperative online ad campaigns.
It applies its patent-pending technology in specific vertical markets including Audio/Video & Security, Home Goods, Automotive, Sports & Fitness, and Medical Practices.
“We have a simple vision: creating innovative technology to connect local consumers to products and businesses,” said Brendan Morrissey, CEO, Netsertive.
“We’ve tapped into a massive market that has gone largely unnoticed for years. Ninety percent of local purchase decisions are influenced by online experiences.”
Harbert Venture Partners, of Richmond, VA, led the equity round and was joined by existing Series A investors RRE Ventures and Greycroft Partners, both of New York City. Debt financing was completed with Square 1 Bank,Durham, N.C.
“We’ve watched Netsertive grow rapidly over the past three years, and we’re convinced that their team and technology is solidly positioned to be a market leader in the channel marketing and local digital advertising arenas, both large and growing markets,” said Wayne Hunter, managing partner with Harbert Venture Partners. Hunter, who has joined Netsertive’s board.
He added “We were particularly excited with their vertical specialization and channel marketing innovations that have attracted many notable brands to their platform.”
Moving to larger offices in the Research Triangle
“This latest round of financing enables us to continue expanding our capabilities, scale the business, and deliver more solutions for brands and local businesses that help them drive more revenue,” said Morrissey.
Netsertive secured a $4.5 million Series A round in late 2010. Since that time, revenue has increased seven-fold and they’ve hired more than 50 employees. The company expects to hire at least 60 more in the next 12 months to meet demand and extend its technology platform with more products.
As a result of its continued fast growth, Netsertive will be relocating to a larger corporate headquarters in RTP this fall.
Tags: Brendan Morrissey, Durham, Greycroft Partners, Harbert Venture Partners, local digital advertising, NC, Netsertive, Richmond, RRE Ventures, Square 1 Bank, VA, venture funding
Posted in Internet/New Media, Marketing, Mobile, venture capital report | No Comments »
Wednesday, August 8th, 2012
By Allan Maurer
 Andre Parreira, CEO, founder of Realtime. SANTA MONICA, CA - Realtime, creator of a global technology framework and applications to power what CEO and founder Andre Parreira calls “The foundation of Web 3.0), has launched in the United States with a $100 million investment from BRZTech Holding, a São Paulo-based technology investment group.
Parreira tells the TechJournal the technology has the potential to change the Web by delivering real time updates of text, images, video, and advertising as well as making visiting every website a interactive, social experience. Site visitors will be able to see who else is there and interact with them in real time.
It can also make e-commerce more like an in-store experience while providing retailers and advertisers with the ability to track what users are viewing as they see it. “You can see where people are and what’s in front of them,” he says. That means advertisers will have a new metric – the time a user spends looking at or interacting with an ad. “They can charge for time spent instead of for impressions or clicks,” says Parreira.
That could put Internet advertising on more of a par with television – which currently remains the top medium for high dollar advertising.
It could revolutionize e-commerce
“This could be a great help in e-commerce, because for the first time you can see what customers are doing. You can send them a promotion or flash sale. If you see a product trending, you can adapt in real time and send offers to one person or everyone.”
It could also be a boon for publishers. “Once you deliver a real time experience, the time users spend on a site increases by several times,” he explains. That’s not just wishful thinking. “We did a test in Portugal with a leading mobile cellular operator. They increased their sales by six times that day and put the technology on all their properties. They want to sell our product as part of their cloud offering.”
You can check out some case studies here.
He says any small business or large enterprise can use the technology to have real time capabilities. “Our technology will be the foundation of the next era of the Internet,” he says.
BRZTech, which made the $100 million investment, is a three-month old investment vehicle backed by a number of private investors in Europe and South America, including Portuguese conglomerate The Ongoing Group.
Realtime was founded in 1997 as Internet Business Technologies (IBT).
Company is hiring in multiple locations
Today, Realtime has offices in Sao Paulo, Rio de Janeiro, London, Madrid, Lisbon, and its new newest offices in Santa Monica, CA, and New York and Parreira says the company is hiring.
The technical nitty-gritty
Realtime Messaging System & Framework is powered by ORTC (Open Realtime Connectivity) and the xRTML - extensive Realtime multiplatform language.
The ORTC (Open Real-time Connectivity) is a highly scalable, cloud-hosted, many-to-many messaging system for Web and mobile apps.
Due to its bidirectional permanent link between server and connected user, ORTC allows a web application to broadcast (push) data to a single user or to every connected upon demand. This is a huge improvement over needing to refresh a browser.
This important change increases the speed of message delivery (low latency) and saves bandwidth costs, allowing the development of Web applications that until now would be too slow to be effective or too expensive to operate.
A Realtime multiplatform language
xRTML is a Realtime multiplatform language that can convert existing static HTML code into Realtime “live Web” delivery – with no need to ever refresh – as well as be implemented into a wide range of APIs for NODE.JS, Javascript, ASP.net, Java, PHP and more, including the Mobiles iOS, Android and Windows Phone.
The programming environment is completely secure, featuring a broad number of languages with full control of tagging and extensibility. In its early beta release, Realtime has already signed up more than 1,000 developers to the xRTML community, and it will be shortly announcing developer conferences, incentives, hackathons and competitions for new applications.
Making the Realtime Web a reality
“Many people have talked about the coming ‘real-time Web’ in very abstract terms, and Realtime is the first company building a tangible framework that will make that abstraction a reality. We did not create a product. We created an industry,” said Parreira. “We are committing the resources to make Realtime the fluid, next-generation, truly conversational standard for the Web across the world.”
Realtime has already secured partnerships in the United States and worldwide with large-scale media publishers. In addition, Realtime has over 2,000 other existing global client relationships, delivering an average of 500,000 messages per second, with a worldwide footprint that surpasses 120 million user-connections every 24 hours.
Realtime Platform Will Create Tens of Thousands of Applications
Realtime’s sign-up of its first 1,000 developers is just the beginning of what it sees as a large-scale deployment of innovative “live Web” applications in the coming years utilizing the xRTML/ORTC platform, similar to Linux kicking off an explosion of new companies and applications based on its platform two decades ago.
The company is also developing and selling applications of its own, initially focusing on the e-commerce and advertising verticals.
Realtime will soon be demonstrating the power of its technology across the United States in the form of hosting local meetups in large web development communities, regular webinars, and other events.
Tags: Andre Parriera, Brazil, BRZTech Holding, CA, IBT, live web apps, NY., Open REal-time Connectivity, ORTC, Realtime, Santa Monica, Sao Paulo, The Ongoing Group, venture funding
Posted in Internet/New Media, IT, Money, venture capital report | No Comments »
Tuesday, August 7th, 2012
 Affdex reads facial expressions using a webcam to help understand how people feel. (Graphic: Business Wire) Are you ready to share not only videos you find interesting, but your emotional reactions to them? You may be able to do just that in the not too distant future. A company that has raised nearly $20 million in venture backing and several National Science Foundation grants is already marketing emotion-reading technologies.
Waltham, MA-based Affectiva has secured $12 million in Series C financing, backed by Hong Kong businessman Li Ka-shing’s Horizons Ventures and Kleiner Perkins Caufield & Byers (KPCB) Digital Growth Fund, with participation from existing investors.
The company’s technologies interest marketers and online video makers because it could sharpen their ability to create emotionally effective videos.
Affectiva, an MIT spin-off founded in 2009 by professor Rosalind W. Picard, Sc.D. and research scientist Rana el Kaliouby, Ph.D., has successfully commercialized emotion technologies, including Affdex, an automated facial coding platform and Q Sensor, a wearable biometric sensor.
Building on its momentum in market research, Affectiva will use the new funds to accelerate Affdex development of emotional insights for all forms of online video content, including advertisements, trailers, TV shows and movies.
Will use built-in webcams on laptops
Using the webcam found on laptops, tablets and smartphones, people will watch Affdex-enabled online videos and easily share their emotional experience with friends, family and content providers.
This accurate, scalable emotional insight will also allow content providers to optimize their content with improved relevance, engagement and viral impact, resulting in more user traffic and increased advertising revenue.
“Our goal is to make Affdex a globally ubiquitous tool that enables people to understand and share their emotional experiences online,” said David Berman, chief executive officer at Affectiva.
“While there is tremendous value for online video publishers to better understand consumer engagement with their content, we want to take this even further, so that consumers can see and share their own personal emotional scores.”
Opportunities for marketers
“Capturing and viewing online video has become mainstream. The ability to effectively measure real-time emotion while consumers are watching video has the potential to improve online engagement and satisfaction for users, in addition to creating opportunities for marketers to more effectively determine what consumers care most about,” said Mary Meeker, a partner at KPCB and Internet-industry expert.
The additional financing will also support the continued development for Q Sensor, already in use by hundreds of leading universities and corporations, to collect data and develop meaningful insights for areas such as sleep, anxiety, and stress.
Affectiva is partnering with a number of leading research and commercial institutions on healthcare applications for clinical and consumer health.
Affectiva previously raised $7.7 million from WPP, Myrian Capital and the Peder Wallenberg Charitable Trust, represented by Lingfield AB.
In addition, the company has also won several National Science Foundation (NSF) Small Business Innovation Research (SBIR) grants to further develop the cloud-based Affdex platform for brand managers seeking to optimize ad performance.
As a part of the financing, Frank Meehan at Horizons Ventures will join Affectiva’s board of directors and Mary Meeker, a partner at KPCB, will join as an Affectiva board observer.
Tags: Affectiva, Digital Growth Fund, emotion insight technology, Horizons Ventures, Kleiner Perkins Caufield & Byers, M&A, Mary Meeker, online video, sharing emotional reactions, venture funding, Waltham
Posted in Internet/New Media, Marketing, Money, Tech life/Culture, venture capital report, video | No Comments »
Thursday, July 19th, 2012
 33Across, operators of the largest social and interest graph in the world, reaching over a billion users globally, has secured $13.1 million in new equity financing.
The round was led by new investor Pelion Venture Partners, with continued support from existing investors Flybridge Capital, Greycroft Partners, First Round Capital, iNovia Capital, Panorama Capital, QED Investors, Metamorphic Ventures, and Great Oaks Venture Capital. To date, the company has raised more than $26 million in total.
“The term ‘social graph’ is more often associated with Facebook than any other technology company,” stated Chad Packard, Partner of Pelion.
“However, there is a wide-open race underway to determine who will most successfully leverage anonymous social data gleaned from billions of actions taking place across the ‘rest-of-web.’ Clearly, we and our investor partners have placed our bets on 33Across.”
“The movement to understand how massive amounts of content, search and social data surround and inform a brand is underway; many are calling it a marketing evolution,” said Eric Wheeler, CEO of 33Across.
“Big data has the potential to transform digital marketing and publishing, and this capital infusion accelerates our position as the most trusted partner for the world’s largest advertisers and content owners.”
New York-based 33Across is on a rapid growth trajectory. The company’s revenues shot up dramatically in 2011: its compound annual growth rate (CAGR) from inception in 2008 through 2011 was 468%.
33Across will use this added capital to continue its industry leadership and accelerate investment in new product innovation and engineering.
The company plans to significantly expand its presence in the advertising and publishing industries and build on its current client roster, which includes more than 375 Fortune 1000 marketers and over 600,000 publishers.
Recent company highlights include:
- Continued employee growth, including recently adding four new management team executives and five new sales executives. The company currently has 85 employees.
- Tynt Acquisition in January 2012.
- Introduction of The Brand Graph, a blueprint for advertisers to transform unstructured social, interest, and search data into actionable, high value audience segments.
- Expansion in US market, with offices in 11 cities including New York City, Sunnyvale, San Francisco, Salt Lake City, Detroit and Chicago.
- Recognition by AlwaysOn with its third annual award for technology and innovation, eRetail for its leadership in the category, and SXSW solo speaker at the 2012 Interactive event.
Tags: 33Across, First Round Capital, Flybridge Capital, Great Oaks Venture Capital, Greycroft Partners, iNovia Capital, Metamorphic Ventures, Panorama Capital, Pelion Venture Partners, QED Investors, social & interest graph, venture funding
Posted in Analytics, Internet/New Media, IT, Money, venture capital report | No Comments »
Monday, July 2nd, 2012
 Jumptap’s $27.5 million funding round from investors including General Catalyst Partners, Redpoint Ventures, Summerhill Ventures, Valhalla Partners, and WPP; as well as two new investors — Keating Capital and a large, institutional investor, is another indication of just how hot targeted mobile advertising is right now.
Jumptap says the capital will be used to accelerate growth through additional investments in product and technology development and prepare for a public offering.
Over the past year, Jumptap has extended its industry-leading ability to target through partnerships with more than 20 third-party data providers such as Polk, Acxiom, Datalogix, TARGUSinfo, Catalyst, and i360, making Jumptap the first to bring offline data to mobile advertising.
Additionally, the company forged partnerships with hyper-local leader PlaceIQ, and social ad service 140 Proof.
Each month Jumptap reaches 107 million mobile users in the U.S. and 156 million mobile users worldwide, and delivers 20 billion mobile impressions. The Company has also experienced a surge in the development of its technology patent portfolio, with 29 patents issued and 200 pending. To support its escalation, Jumptap has grown its employee base by 50 percent in 2011.
“The mobile advertising industry continues to grow at more than 50 percent annually. Jumptap is growing in excess of that,” said George Bell, CEO, Jumptap. “We’re focused on expanding our leadership in this surging market, developing our patented technologies in data and targeting, and preparing the company to go public.”
Here at the TechJournal, we often publish stories based on Jumptap’s Understanding Mobile Audience series adn its MobileSTAT reports.
Tags: 140 Proof, General Catalyst Partners, IPO, Jumptap, Keating Capital, PlaceIQ, Redpoint Ventures, Summerhill Ventures, targeted mobile advertising, Valhalla Partners, venture funding, WPP
Posted in Internet/New Media, IPOs, Marketing, Mobile, Money, Telecommunications, venture capital report | No Comments »
Monday, May 14th, 2012
 CHICAGO – SilkRoad, a provider of social talent management solutions, has completed a $35 million Series C financing round.
New investors include Keating Capital (Nasdaq: KIPO) and NTT Finance (NYSE: NTT). Existing investors including Intel Capital, Crosslink Capital, Foundation Capital, Azure Capital and Tenaya Capital, amongst others, invested in the oversubscribed round.
This new funding will support worldwide expansion and product innovation in preparation for a potential 2012-2013 initial public offering. The company has raised a total of $129 million.
Global human capital management (HCM) spending is expected to hit $8.1 billion by 2015, according to IDC. ’
Additionally, the recent wave of acquired talent management companies is further proof of the significant market opportunity expected. As the economy continues to recover, HCM will continue to be one of the hottest areas for IT spending.
Tags: Chicago, Human resources, SilkRoad, software, talent management, venture funding
Posted in Internet/New Media, IT, Money, venture capital report | No Comments »
Friday, March 16th, 2012
 San Mateo, CA-based Bright Edge, a site, search and social management platform for global enterprises, has raised $12.6 Million in a series C round led by Intel Capital and joined by existing investors, Battery Ventures, Altos Ventures and Illuminate Ventures.
Bright Edge pioneered enterprise-grade search engine optimization (SEO) in 2008 by delivering the first and only cloud-based platform that systematically allowed enterprises to grow their web site traffic and revenue through organic search.
Today, it is the most widely used enterprise-grade search engine optimization (SEO) platform used by more than 2,000 brands and top digital agencies to attract customers from the billions of searches that happen on the web every day.
BrightEdge added support for Facebook page optimization, Social signal measurement, Global SEO, SEO recommendations, and SEO tasks and workflow.
“We revolutionized how enterprises manage to be found when potential customers search for terms relevant to their business. Demand for BrightEdge S3 has been massive, and we welcome this funding to further grow our dominant market leadership position,” said Jim Yu, co-founder and CEO of BrightEdge.
2011 a watershed year
“Last year was a watershed year for us. We saw more than 400 percent growth, and doubling of our employee base. 2012 will be an even bigger year as we expand our business operations across the U.S. and in Europe.”
“With consumer and business audiences competing for customers in search and social, BrightEdge’s platform is an elegant and effective solution that makes it possible to manage and optimize the process for companies that rely on the Internet for the last mile,” said Lisa Lambert, vice president at Intel Capital and managing director, Software and Services sector.
“Their big-data technology, experienced cloud/SaaS leadership team and commercial success to date position them to be one of the core platforms for companies that rely on digital channels.”
BrightEdge has experienced tremendous growth in the past 18 months. It now serves more than 2,000 leading brands around the globe. BrightEdge currently serves 7 of the top 10 retailers, 8 of the top 10 digital agencies, and software leaders such as Microsoft, Facebook, VMWare, Symantec, Intuit and Citrix.
The funding will be used to continue its team growth, which has doubled in size as well as help expand the company’s footprint with offices in NY and London.
Tags: Altos Ventures, Battery Ventures, BrightEdge, C round, Illuminate Ventures, Intel Capital, Jim Yu, Lisa Lambert, SEO, social management, venture funding
Posted in Internet/New Media, IT, Marketing, Money, venture capital report | No Comments »
Thursday, March 1st, 2012
 By Joe Procopio
Last night at dinner, Windsor Circle’s Matt Williamson was a busy man. In between bites and drinks, he filled pages in a notebook with research on a number of investors who introduced themselves after his pitch. The beautiful thing was there was a veritable cornucopia of information to be had among the six of us at dinner, and by the time it was over, he was armed.
Williamson says, “It’s been an incredible experience being in such a tight concentration of venture capitalists. The overwhelming response is that we’re a compelling story for such a short amount of time that Windsor Circle has been around. I’ve been pleasantly surprised at how helpful the VCs are.”
He said a lot more than that, but I blacked out. It was late.
He’s not alone. Several startups are making that upward swing from the pitches into meetings, and if yesterday was an explosion of activity, then this morning and afternoon should be buzzing with follow up.
Not Just Digital
PodPonics is an Atlanta based high tech agriculture startup, converting shipping containers into high tech controlled growing environments producing fresher, urban, weather-safe produce — in other words better and faster with incredible yield. These containers can be stacked 10 high to produce 150x yield per acre.
That’s a game changer.
CEO Matt Liotta will present this afternoon. But they’ve been networking and meeting people in preparation. They say it’s a good setup, allowing mass concentration of conversation is short periods of time and they’ve been able to generate interest before they even take the stage.
Not Just Deals
It isn’t just the dealmaking though. This year, I’ve met more entrepreneurs and potential entrepreneurs who are here just to get the lay of the land and figure out how to take the next steps with their idea or fledgling company.
The panels have also been refreshingly honest. The first sentence I heard in the Venture Capital Outlook session was that “the wheels fell off on August 15th.” Having been out in the field raising money at that point, I absolutely agree with that. It’s like the mirage vanished.
Overall, there seems to be a lot of activity in the $1 billion plus range, and a lot in the under $100 million range, with a big black hole in the sweet spot. This is troubling for those early-stage graduates, but with such an emphasis on customers and revenue over the last four years, it’s certainly not a shocker.
Crowd-funding
There is a lot of visceral reaction to crowd-funding, and you’re going to see a lot more in this space in the near future, and it will probably be volatile and filled with argument.
It’s tricky, to say the least. There was a lot of talk about how it can and should be done, not only from a legal perspective but also making sure that you can get follow on money and that there are no surprises going into your next round.
However it can’t be ignored. Kickstarter, though not technically crowd-funding but more beta-product pre-purchase (or free T-shirt), has done three $1 million plus deals already this year.
So while Groupon, Facebook, and Zynga dominate the exit talk, crowd funding made up a large portion of the entry talk.
Undercover Angel
But it wasn’t the only talk. Angels are making more noise these days, and a common theme, the lack of organization in the Angel community that makes it hard to get started, is still an issue, even post AngelList. One of the questions was “where do I find Angels” and the first answer was “LinkedIn.”
Coincidentally, TechCrunch did a post last night on AngelList potentially creating a common pitch-deck template. And while I don’t agree that that’s the right next step, it should be about more robust ways to build relationships between the entrepreneurs and the angels, it’s at least a step.
Tags: angel investors, AngelList, Atlanta, crowd funding, facebook, Google, Kickstarter, LinkedIn, Matt Liotta, PodPonics, SEVC, Southeast Venture Conference, TechCrunch, Tysons Corner, VA, venture funding, Winsor Circle, Zynga
Posted in Columns, Events, Facebook, Google, Internet/New Media, IT, LinkedIn, Money, Viewpoint | No Comments »
Thursday, March 1st, 2012
 San Francisco-based Yammer, Inc., a top provider of enterprise social networks, has received $85 million in its fifth round of funding, bringing its total financing to $142 million.
DFJ Growth, part of the core team at leading venture capital firm Draper Fisher Jurvetson, led the round, with participation by new investors Meritech Capital Partners; Capricorn Investment Group, the investment arm of Jeff Skoll; Khosla Ventures; and CrunchFund.
Previous investors Charles River Ventures, Emergence Capital, Founders Fund, Social+Capital Partnership, and U.S. Venture Partners also participated, as did angel investors Bill Lee, Max Levchin, and NFL Hall of Famer Ronnie Lott. Randy Glein, managing director at DFJ Growth, will have an observer’s seat on Yammer’s board of directors.
Yammer has 4 million corporate users
In less than four years, over 4 million corporate users have adopted Yammer, including employees at more than 85 percent of the Fortune 500. In 2011, Yammer tripled sales, employee headcount, and paid seats.
Yammer will use the additional financing to rapidly scale its sales and engineering teams in the U.S. and internationally. This growth round of funding will also allow Yammer to consider potential strategic acquisitions and invest in building brand awareness among enterprise buyers.
On March 1, Yammer will launch its first advertising campaign with print and online ads highlighting the value of Enterprise Social Networks.
“Yammer launched the category of Enterprise Social Networking and pioneered a new model that drove unprecedented adoption in the enterprise,” said David Sacks, founder and CEO, Yammer.
“This significant influx of capital provides us with the resources to expand quickly and strategically, innovate rapidly and extend our market leadership.”
Investors weigh in on Yammer
“In the past few years, Yammer has assembled a world-class team and built a pioneering social networking product for enterprises. Yammer’s customers absolutely love the product and its benefits for their organizations, turning them into brand advocates and helping fuel Yammer’s explosive growth. This financing will enable Yammer to extend its market leadership and seize the massive opportunity in front of them.”
– Randy Glein, managing director, DFJ Growth
“When we first invested in Yammer, it was because the company reminded us so much of the early days at Facebook. David and his team have built a truly unique business — an enterprise company with fundamental product value that grows like a consumer company through virality and product engagement. Yammer is the only company in the enterprise collaboration space that really understands how to build social products and look forward to more eye-popping growth in the years to come.”
– Chamath Palihapitiya, founder and managing partner, Social+Capital Partnership
“Yammer has a preternatural understanding of where the enterprise software market is headed, allowing them to remain one step ahead of the competition through constant innovation. We look forward to watching the company’s continued success as it builds on its strengths.”
– Stephen George, co-founder and CIO, Capricorn Investment Group LLC, the investment arm of Jeff Skoll
“Having worked with David previously at PayPal, I know his ability to lead a company to greatness. David and his team built Yammer to be social from the start and with their relentless focus on usability, Yammer succeeds across every industry and geography where it is deployed. Yammer was the first mover in the enterprise social networking space and is surely the best, making work massively more efficient.”
– Peter Thiel, partner, Founders Fund
“
Tags: Chamath Palihapitiya, Crunchfund, DFJ Growth, Draper Fisher Jurvetson, Founders Fund, Khosla Ventures, Meritech Capital Partners; Capricorn Investment Group, Peter Thiel, Randy Glein, social networks, Social+Capital Partnership, venture funding, Yammer
Posted in Internet/New Media, IT, Money, social media | No Comments »
Thursday, December 15th, 2011
 MicroVentures, an online crowdfunding investment service that allows accredited investors to invest in deals that they might not otherwise see, has raised $150,000 while it continues to focus on helping entrepreneurs connect with individual investors.
This latest round was raised by using the service itself – all contributions were from several of the investors currently in the network, with the average investment of just over $10,000 per participant.
As easy money for founders is coming to an end in the current economic climate and an increasing number of start-ups face significant struggles to secure money, crowdfunding has continued its rise.
When VC money dries up
When VC money dries up, the opportunity to get in on deals does not – quite the contrary.
Crowdfunding services like MicroVentures open doors for individuals to invest in carefully vetted high-growth companies early, and have a return on their investment should the company have a successful exit. Entrepreneurs, for their part, have realized that it pays to shake your bootstrap to build a nimble, successful start-up and are turning to services like MicroVentures to find their perfect match.
“We are excited about the level of participation from the individual and independent investors we’re talking to. They clearly value the due diligence process we use for each of the start-ups that apply to the network,” said Bill Clark, CEO and founder of MicroVentures.
Entrepreneurs creative with spending
“The new generation of entrepreneurs has become very creative with how they spend funds, and they have learned that they don’t need massive amounts of financing to build innovative services and scale them.”
Crowdfunding not only puts individuals in touch with high-growth start-ups, it also has a larger positive side effect. It addresses the question of how to generate economic growth from a web-enabled, bottom-up approach: individuals coming together to support small businesses that are the engines of creation of the U.S. economy. By 2012, the peer-to-peer trend is forecast to reach $1 billion in transactions.
The more participants on the MicroVentures platform, the more opportunities exist for start-ups to get off the ground and succeed. And the more participating investors can leverage the power of this new funding platform.
In late October, MicroVentures announced that it raised $300,000 for a fund created to buy private shares in Facebook on a secondary market. The latest round of funding will be used to grow the platform and investor base to offer more opportunities to entrepreneurs and expedite the funding process, with the goal of reducing the fundraising cycles down from an average six months to even as little as a month or less.
Tags: crowdfunding, fund raising, MicroVentures, venture funding
Posted in entrepreneurship, Internet/New Media, Money | No Comments »
Friday, November 18th, 2011
 MOUNTAIN VIEW, CA – Fenwick & West,a law firms providing comprehensive legal services to high technology and life science clients says the results of its Third Quarter 2011 Silicon Valley Venture Capital Survey shows strong valuations for venture financings continued during the third quarter in the Valley. Internet, digital media and software firms performed best.
The Third Quarter 2011 survey analyzed the valuations and terms of venture financings for 113 technology and life science companies headquartered in the Silicon Valley that reported raising capital in the third quarter of 2011.
Up rounds exceeded down rounds
“During the third quarter of 2011, up rounds exceeded down rounds 70% to 15% with 15% flat. This was an increase from the second quarter of 2011, when up rounds exceeded down rounds 61% to 25%, with 14% flat.
Series B rounds were especially strong with 89% up rounds. The was the ninth consecutive quarter in which up rounds exceeded down rounds,” 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.
The Fenwick & West Venture Capital Barometer™ – which measures the change in share price of Silicon Valley companies funded during the quarter compared with the share price of their previous financing round – showed a 69% average price increase for the quarter, a slight decrease from the 71% reported in the second quarter of 2011.
Additionally, one of the companies in the internet/digital media industry had a 1,500% up round, and were this company excluded the Barometer would have been 54% for the quarter.
“This was also the ninth consecutive quarter in which the Venture Capital Barometer was positive,” said Kramer.
Internet, digital media, software best performing
“The best performing industries in the quarter from a valuation perspective were internet/digital media and software (including a significant number of “software as a service” companies and companies building applications for mobile devices), which substantially outpaced the other industries, followed by hardware and cleantech, while the life science industry continued to lag,” added Michael Patrick, partner in the Corporate Group of Fenwick & West and co-author of the survey.
“The third quarter of 2011 was a mixed quarter for the venture capital industry, with healthy valuations, solid amounts of investing and an improved M&A environment. However fundraising by venture funds, IPOs, venture capitalists’ confidence level and Nasdaq, were all off significantly.
Nasdaq has recovered significantly in 4Q11 to date, and Groupon had a successful IPO, but the macro environment continues to be unpredictable, and accordingly the future direction of the venture environment is uncertain,” added Patrick.
Both venture capitalists and entrepreneurs tells us that valuations on the East Coast and the Southeast are not on a par with those on the West Coast, particularly in Silicon Valley. Perhaps that will bring more West Coast VCs into the heartland and the opposite coast to hunt deals, but they do seem to have an aversion to too many cross-country flights.
Complete results of the survey with related discussion are posted on Fenwick & West’s website atwww.fenwick.com/vctrends.htm.
Tags: CA, digital media, Fenwick & West, fundings, Internet, Mt. View, Q3 2011, Silicon Valley Venture Capital Survey, software, up rounds exceed down rounds, Venture Capital Barometer, venture funding
Posted in entrepreneurship, Internet/New Media, IT, Money, Studies, surveys, reports, venture capital report | No Comments »
Friday, June 24th, 2011
 DURHAM, NC -With oil prices high, government support for alternative energy projects and investors hot for companies with advance solar technologies, a Durham, NC firm has nabbed substantial new venture backing. Semprius, the Durham, NC-based company with a proprietary technology for printing semiconductors on glass, plastic or other materials for use in solar panels, has raised $20 million of an offering targeted at $30 million, according to a filing with the U.S. Securities and Exchange Commission.
Investors in the firm include Durham’s Intersouth Partners, Austin’s Arch Venture Partners, Chicago’s Illinois Ventures, CA-based Applied Ventures, and Tokyo-based Global Venture Partners.
Semprius develops novel technology for the manufacture of advanced semiconductor devices. This technology enables “point-of-use electronics,” greatly broadening the options available to designers of advanced electronic devices. Semprius presented at TechMedia’s 2010 Southeast Venture Conference.
For many existing designs, the technology can enable a manufacturing process that is faster and far less expensive. It is ideal for multiple markets and applications, the company says, including solar modules, electronic displays and wireless devices.
Tags: alternative energy, clean energy, Durham, NC, Semprius, SEVC, solar, Southeast Venture Confernce 2010, venture funding
Posted in Energy, IT, Money | No Comments »
Monday, June 20th, 2011
 Raleigh, NC-based Valencell, an innovator in mobile health and fitness technology, has received $5.5 million in Series B venture investment. The round was led by Best Buy Capital, the investment group of Best Buy Co., Inc., with participation from Series A investors TDF and True Ventures. Valencell was a presenting company at TechMedia’s Southeast Venture Conference in Atlanta in March.
Seeded by its three founders, Valencell previously raised a Series A round of $1 million and has been awarded more than $3 million in R&D grants.
Valencell created a technology it calls Healthset powered earbuds, which gives audio headsets the ability to monitor the health and fitness of the user.
Healthset sensor technology tracks real-time physiological metrics including heart rate, calories burned, steps taken, distance traveled, speed and more, while the consumer listens to music, talks over the phone, or goes about daily life activities. Data is streamed to smartphones and/or mp3-players through wired or wireless links, enabling live body metrics, training, and coaching via fitness applications on mobile devices and online.
“People everywhere are listening to music while running and exercising,“ explained CEO and cofounder Dr. Steven LeBoeuf. “Integrating heart rate sensors directly and seamlessly into music earbuds fits right into the behavior of consumers today. Everyone’s body responds differently to exercise, so being able to monitor the heart, the body’s engine, will help consumers customize and personalize workout regiments for their specific goals whether it’s for weight loss, toning or endurance. Users will be able to view their metrics live through fitness applications on their iPhone, Android phones, other mobile devices and online.”
Recent research from PricewaterhouseCoopers cites growing demand for mobile health monitoring: 88% of physicians said they would like their patients to track their health information and 40% of individuals said they would buy a personal health-monitoring device or pay for a subscription to send health information to their providers.
California-based social commerce firm BeachMint chews on $23.5M financing
BeachMint has secured a $23.5 million round of funding led by Scale Venture Partners and Lightbank, the technology investment fund started by Eric Lefkofsky and Brad Keywell, cofounders of Groupon.
Existing investors, New Enterprise Associates, Trinity Ventures, and Anthem Ventures also participated in the round. The new funding will be used to grow the existing brands, JewelMint and StyleMint (launching July 1), to accelerate the company’s phenomenal growth and to expand into new categories.
Sharon Wienbar, Scale Venture Partners’ managing director, will join the company’s Board. She said, . ”Consumer e-commerce is being transformed by social networking and curation,” said Wienbar. “BeachMint is redefining online shopping by taking advantage of these trends to deliver great consumer value. We are excited by the amazing traction BeachMint has achieved in a short time with JewelMint.”
BeachMint was founded by MySpace Co-Founder, Josh Berman, and serial tech entrepreneur, Diego Berdakin.
Evernote raising about $50M in new capital
TechCrunch reports that the popular notetaking service, Evernote, is raising about $50 million in venture funding in a round led by Sequoia Capital. It is already up to $40 million in the round. It previously raised $20.5 million. We use the free version of Evernote, which makes it easy to save text, images, and urls when you’re doing web research, and saves your data in the cloud, so it is available on any machine on which you install the software.
Daily Deals for Moms lands angel funding
Yet another niche play in the crowded daily deals space has grabbed initial angel funding.
Denver-based Daily Deals for Moms, a social couponing website for moms and families looking for and sharing great deals with a commitment to support small business and keep retail dollars in the community, says it has secured a round of angel funding. The group of investors includes Victor Lazzaro, Jr. of Denver based Volante Capital.
The company will keep the financing open to strategic investors, but intends to close the round within the next few weeks. The infusion of capital will fuel growth, further build infrastructure, and continue to drive awareness of the site as it expands into more cities.
Launched in 2010 by Mompreneurs Ashley E. Kingsley and Whitney Trujillo, Daily Deals for Moms primarily serves secondary markets such as Denver, Toledo, and Des Moines. It is specifically focused on daily deals for moms and families.
Some of these niche players in the daily deals and coupons sites may have a better chance of survival in the long run than the 800 pound gorillas if they create deals that benefit both the consumer and the business. If nothing else, they’re likely to be targets for the larger companies if they go public and have substantial reserves of cash to make acquisitions.
OwnerIQ closes on $7M for targeted advertising platform
OwnerIQ, the inventor of Ownership Targeted media and developer of one of the most advanced Real-Time media buying platforms in the industry, announced today it has closed a $7 million expansion round. All existing investors participated, and Longworth Venture Partners also joined this round.
Founded in 2006 in Boston, OwnerIQ operates a network of channel-focused websites to help consumers easily find and store must-have self-support product information. The company pioneered the concept of Ownership Targeting, providing brand advertisers with highly customized programs to precisely target consumers based on products they already own.
Tags: Atlanta, BeachMint, BestBuy Capital, Boston, Brad Keywell, CO, Daily Deals for Moms, Denver, ecommerce, Eric Lefkofsky, Evernote, financings, Groupon, Healthset, JewelMint, Lightbank, Longworth Venture Partners, m Anthem Ventures, mobile health monitoring earbuds, NC, NEA, online note taking software, OwnerIQ, Raleigh, Scale Venture Partners, Sequoia Capital, SEVC, social commerce, social networking, Southeast Venture Conference, StyleMint, targeted advertising, TDF, Trinity Ventures, True Ventures, Valencell, venture funding
Posted in Uncategorized | No Comments »
Monday, June 13th, 2011
 Bunchball, a San Jose, CA-based company that sells “gamification” solutions, has raised $6.5 million in a round led by Triangle Peak Partners. Northport Investmenst, Correlation Ventures and return investor Granite Ventures participated. Adobe Ventures previously invested but did not participate in this round.
The company says its Nitro gamification platform helps turn site visitors into fans and fans into customers. The platform helps brands and TV networks reward people for doing something, such as liking a brand on Facebook, leaving a comment, sharing an article or watching a movie trailer. Fans compete against other fans for various rewards. Molly Kittle, director of client services for Bunchball told MSNBC’s Tech News, “It’s about appying thee mechanics of gaming to non-game activities.”
This one sounds like a good loyalty building product, combining the sharing aspects of social media with rewards, a tactic that works for credit card providers. We’re also willing to bet this isn’t the last time you hear the term “gamification.”
Everloop nabs $3.1M for protected social network for kids
San Francisco-based Everloop, a startup offering a protected online social platform for kids under 13, has raised $3.1 million in funding by vFormation, Silicon Valley based Band of Angels, Envoi Ventures, Richard Chino, formerly of Overture, Wayne Goodrich of Apple, Deena Burnett-Bailey of Angels of Hope and additional investors.
Everloop was created by parents to give other parents peace of mind. It lets kids connect, communicate and collaborate in a closed “social loop” of their friends and others who share their interests. Everloop also provides creative applications, music, social games, videos, photos, animation, user-generated content and other integrated online experiences.
MyRegistry.com lands an additonal $3.7M for gift registry service
MyRegistry.com, a New Jersey-based firm providing a resources for life cycle occasions, has raised $3.7 million on the heels of landing $5.25 million in equity in April.
The company provides gift registry services for weddings, baby showers, birthdays, graduations, holidays and more.
The company disclosed the raise in a filing with the U.S. Securities and Exchange Commission.
Tags: Bunchball, Everloop, financings, gamification, kid's social network, loyalty programs, Marketing, Myregistry.com, New Jersey, rewards for actions, San Francisco, social media, venture funding
Posted in Internet/New Media, IT, Marketing, Money | 1 Comment »
Friday, May 20th, 2011
By Joe Procopio
 Joe Procopio Starting a company in post-mobile, post-social 2011 is a little like enrolling in a notorious party school. It’s not that hard to get in, it’s a hell of a lot of fun, but at the end of ride, not too many graduate and those that do might find themselves with an end result a lot less valuable than they had imagined going in. Plus alcoholism.
Seriously though, it’s cake to start a startup these days, especially in technology. In fact, by the time you finish reading this column, three more startups will have emerged in Durham, and there’s a 17 precent chance that you’re the CTO of one of them.
What with frameworks and toolsets and SaaS and eCommerce and automated storefronts, all you really need is an Internet connection and a couple hours in a Starbucks.
Get the Venti, your beta will be live by noon.
Lean Funding?
As the options have expanded and the barriers to entry fallen for creating the company, the options for funding have evolved in a similar fashion. As we approach the inevitable (but still far off, in my opinion) social/mobile bubble, Venture Capitalists have revised their theses to include companies that are earlier and leaner and thus in need of less of an initial investment.
This is what used to be Angel and Super Angel territory, but an interesting phenomenon is happening, especially in the RTP. The Angels are disappearing, or at least aren’t as active as they used to be, and the Angel groups that were mainstay of the dot-com era are all but gone. So the VCs are now filling some of that gap at the higher end.
At the lower end, we’re seeing everything from an increase in friends-and-family and bootstrapping to new trends like Micro and Kickstarter-style donation investing. Let’s call this Lean Funding – enough to get the product out the door to see if it’s going to be successful.
The return for this kind of funding is terrible, but the risk is also usually pretty low (provided some due diligence is done) as many of these businesses turn out to be of the Chamber or lifestyle variety, with enough success to keep the company growing slowly over time and providing (hopefully), a return to the initial investors.
But no exit.
The Middle Ground
So with the high end going to the VCs (roughly the $1M to $4M range) and the low end going lean ($10K to $50K), there’s still a big fat niche in the middle, companies that are on solid footing, with a viable product, pre-customer, but not enough capital to take the next step.
This is where IMAF-RTP wants to play.
The Inception Micro Angel Fund
IMAF-RTP made some noise a week or so ago when they announced they’d opened their doors and were beginning the investment process. They benefit from being a part of a larger and established entity, with IMAF already having a presence in Winston-Salem (two funds), Eastern NC, Charlotte, and Western NC (where they’ve invested in Creative Allies, an outgrowth of Sean O’Connel’s Music Allies in Asheville).
The RTP franchise is run by Bill Warner and Rich Kramarik, both of whom have worked together on Angel investments and a previous Angel group. IMAF-RTP is backed by a number of accredited investors. The fund is actively involved with companies seeking $100K – $150K to get from idea to final proof-of-concept or to get sales and marketing in place.
IMAF-RTP, like the rest of the IMAF funds, operates independently and seeks preferred equity. They work with a term sheet and expect a board seat just like your everyday Angel or VC. In fact, the likely next step for these companies, after the IMAF-RTP investment, is an additional investment from Angels or perhaps VCs.
So it’s a stepping stone for an early-stage company that isn’t quite Angel or VC-ready.
But is it the kind of company you’d start in a Starbucks?
Maybe.
Expensive Money
The risk/reward ratio of the playground in which IMAF-RTP will set up shop is higher than possibly any other type of investment, although it correlates to Angel and VC. These companies are very early, and the risk is not only off the charts, it’s hard to determine, let alone due-diligence be done.
IMAF-RTP has a formula, and I bet it doesn’t have a lot of rainbows and smiley faces.
At the end of the day, it’s all guts.
They apply this formula where they find cost-effective, fair, and elegant solutions to very painful problems. They’re not exclusive to B2B or B2C, or product or service (although I’m thinking the service model has inherent margin and rate-of-return issues that makes it a less likely candidate).
Ideally these companies have not sold anything, but they should have some initial contact with customers to prove out their product. When the company does move into the market, it should move quickly, with no long sales cycles or high capital expenses. There should be a very low barrier to entry and a short runway to exit. The company has to be able to grow to $10M or more in revenue in less than 5 years.
I Know, Right?
That’s every startup and it’s no startup.
But while IMAF is looking for a very unique type of company and making a very unique type of investment, it has a few differentiators that can make the deal compelling, the most important of which may be the network.
The IMAF group can do deal flow sharing/syndication and add on investments. After or even along with the initial $100K – $150K, the members individually can make additional investments and write the check through the fund. They all use the same resources for due diligence and the investment is all IMAF.
Further, all the IMAFs are positioned the same way, looking for the same things. The industries they invest in are different mostly due to the makeup of the membership. This makes it easy to agree on terms across the syndicate.
So Is It For You?
To me, this seems like the kind of opportunity for a startup that’s perched and only needs a quick kick in the pants to be very successful. Those are few and far-between, and sometimes the issues preventing said success go beyond access to capital.
Again, it’s very high risk investment, and they tell me that the investors involved are risking no more than 5% of their overall portfolio in IMAF. They plan on investing in 15-18 companies with the RTP fund, some of which are already in due-diligence, and while they expect a home run every time they make an investment, they know they’re not going to bat a thousand. They expect a broad range of success, and I believe they’re looking for one or two homers and maybe a few triples.
Lean Angel?
So maybe it’s Lean Angel, the evolution of early Angel investment in post-mobile, post-social 2011. It all comes down to their model and the ability to do due diligence at that stage. If they can accomplish that, IMAF could be the impetus for a renaissance of seeding the Angels and VCs, which could open the doors for more startups. Which I like.
If it doesn’t? Well, I’ve played some poker in my time, and I can tell you, when you’re playing guts, you’re not thinking about losing, because that’s a sure sign that you will.
Joe Procopio heads up product engineering for sports media startup StatSheet (. He also owns startup consulting firm Intrepid Company and creative network Intrepid Media. He recently revived ExitEvent (ExitEvent.com) as a social/community outlet for startups. Joe can be reached via Twitter @jproco.
Tags: Funding syndication, IMAF high stakes funding approach, Inception Micro Angel Fund, Internet startups, Intrepid Media, Joe Procopio, NC, Research Triangle, Super Angel Funds, venture funding
Posted in Carolinas, Columns, Internet/New Media, Money | 2 Comments »
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