All posts tagged ‘Funding’

Spark Capital, the venture capital firm behind startups like Twitter, Tumblr and Boxee, has launched a new early-stage investment program called Start@Spark as part of its larger initiative to spur tech innovation in the Northeast.

Boston and New York based entrepreneurs with companies in media, technology, and entertainment are eligible for the program and can receive up to $250,000 in jump start money.

But this is just one part of a wider initiative that involves connecting entrepreneurs with VCs through weekly meetups and pushing for non-compete agreements in Massachusetts and New York.

"Our feeling is that with the downturn in the economy, a lot of angel and seed investors that were typically very active over the last few years aren’t as active anymore," said Bijan Sabet, general partner with Spark. "As an important part of the ecosystem and value chain when it comes to startups, this piece needs to happen."

Spark has been involved in many early stage investments, like funding a second round for Twitter and gaming site OMGPOP (seeded partially by Digg’s Kevin Rose) and some of their own seed funding like $300,000 in Tumblr.

It has also been working with entrepreneurs at weekly meetups stemming from a program that kicked off two years ago in the U.K. called OpenCoffee, and Sabet serves as a mentor with the seed stage investment fund TechStars.

Sabet has also actively been involved in encouraging entrepreneurs and VCs to drop non-compete agreements which he thinks are slowing down innovation. Several lawmakers are currently drawing up a bill that would outlaw non-competes in Massachusetts.

"There’s a huge imbalance between the east coast and west coast when it comes to non-competes," said Sabet.

"On the West Coast, non-competes are not enforceable. So people can leave Google and start up a company without a problem," he said. "As long as they don’t violate trade secrets and confidentiality, you can leave Facebook, Yahoo, Google, Apple and start any company you want. In the East Coast you can’t do that; they will sue you."

Angel funding for small startups has also dried up amid the recession, as VCs are looking to less risky investments. 

Spark says they think this is the best time to swoop in and get behind what could very well be the next big thing. 

"We don’t expect the economic woes to evaporate soon; however, we are long term investors. We are looking forward to what will happen in four years rather than in the next four months," general partner Santo Politi writes in its blog.

For the seed program, Spark notes that one area they are particularly interested in is applications that leverage open platforms like Android, iPhone, and Twitter, as well as next generation personal finance and education.

As part of the initial investment, Spark will retain the rights to provide at least half the financing in a future round.

By special correspondent Sam Gustin

On assignment for Wired.com, Sam Gustin is exploring the economic meltdown’s impact on Silicon Valley, and the prospects of innovating our way out of the current financial debacle. He caught up with Google’s chief information evangelist Vint Cerf. Cerf expounds on Google’s role in the recovery, the best use of stimulus dollars and why we can’t count on private capital or VCs to float the innovation boat.

WIRED.COM: Google has been tremendously successful over the last decade with web search. What opportunity do you see for Google to innovate in the future? Energy? Health care? Education?

VINT CERF: You have touched on three areas in which Google not only has interest but has already begun to express it. Google Apps for Education is a suite of applications intended to be helpful to higher level educational institutions but in the long run, I think
Google has a role to play in helping to assemble relevant content for classroom use. It seems highly likely to me that even in its present posture, Google’s resources are being used for teaching purposes or to help students prepare homework. Google Earth is becoming a familiar tool for exploring global geography and for drawing attention to what we know about various places in the world. The most recent addition to
Google Earth is Google Ocean allowing users to learn more about the 70 percent of the Earth’s surface that is not land.

Continue Reading “Epicenter Q&A: Google’s Vint Cerf on Recession, Recovery and Innovation in Hard Times” »

LinkedIn has received another $22.7 million from three strategic partners, rather than venture capitalists, including SAP Ventures, Goldman Sachs and McGraw-Hill, with whom they have a partnership with regarding BusinessWeek.com.

The financing is part of a Series D round that the social network announced back in June when it raised $53 million led by Sequoia Capital and Bain Capital Ventures.

CEO Dan Nye told the Wall Street Journal that company “wants to ‘have the strongest balance sheet possible’ to make acquisitions, among other moves.”

Web video may be struggling to prove its earnings potential, but that isn’t stopping the industry from chugging along and trying to win over viewers. Today blip.tv announced its second round of institutional investing, led by Bain Capital Ventures.

New York-based blip.tv is a video sharing service focused on original content. The company distributes over 37,000 actively updated Web shows and served more than 51 million video views in September, a 250 percent increase over September of last year.

Blip.tv has not disclosed the dollar amount of funding for this round or the company’s previous round of funding, but Blip’s CEO Mike Hudack says that the company was well on its way with gathering funding before the economy started to tumble.

Continue Reading “Online Video Hub blip.tv Secures Second Round Of Funding” »

Sports advertising network Sportgenic today announced $10 million in a Series B financing round led by Adams Street Partners. Previous investors Alsop Louie Partners, KPG Ventures, and Greycroft Partners also invested in the new round.

As far as sport networks go, Sportgenic is the second largest behind Yahoo! Sports, and according to ComScore, they have the greatest “potential reach.” With 20 million unique visitors per month across the sites where it serves ads, Sportgenic cannot compete with the top 50 ad networks, but it is instead working on serving targeted ads to sports publishers. The company has over 350 niche sites in its network and works with brands such as AT&T, Mountain Dew, Nike, Saab, Saturn, Secret, and Toyota.

Sportgenic also announced that Kevin Granath will take over as Senior Vice President of sales. The company plans to use the new funding to invest in its ad network technology and to continue to expand its sales force.

CBS buys CNET. Comcast buys Plaxo. Ask.com buys Dictionary.com.

There is something happening here, and what it is ain’t exactly clear. But those of us with memories that extend to the previous millennium do detect a bit of irrational exuberance.

Remember when we partied like it was 1999? We are starting to have painful reminders of those heady days when it was morning in America every single day at 9:30 a.m. sharp.

CBS’s decision today to pay almost 45 percent more for CNET than shareholders thought their company was worth yesterday may not qualify as the dumbest old media foray into new media, but that might only be because there is plenty competition for that distinction:

Who can forget all the love (Ted Turner notwithstanding) when insightful old media company Time Warner saw the infinite and indisputable wisdom of being taken over by new media vanguard AOL?

“AOL Time Warner” memorabilia is probably worth more than most people now think the merger was. AOL is a division in the company, which is now Time Warner again, and it doesn’t take too much imagination to see a future when it is a separate company again.

Continue Reading “Woohoo! It’s Like Irrational Exuberance All Over Again” »

Say you’ve got an idea for a brilliant startup, and someone you know has the money. How do you form a fair and effective business partnership?

Don’t rush out and incorporate right away. I speak from unhappy experience: Lawyers will suck up far more money and time than you can afford in the early stages of a startup. Even "DIY incorporation" books from Nolo Press are more trouble than they’re worth, because the benefits of incorporation are largely wasted on a small company that’s just getting off the ground. Focus on building the business and leave incorporation for a later stage, when you’re raising your first big chunk of funding.

Instead, what you need is a simple, fair, and legal framework to account for your contributions (time and talent) and your business partner’s (money). Ask Metafilter has a few useful suggestions for structuring your business partnership.

I was, and still am, the money guy. I like to keep things simple. At the onset I give the working partner 50% of the business and say "GO".
At the end of the year we split profit 50-50.

I let the working guy pull a salary each month so he can stay afloat. … You need not make this too complicated. If the money guy is solid, really has the cash to risk and believes in what you are doing, then it is not necessary to go any further than signing the paper work stating you are both owners.

Photo credit: Chuckp/Flickr

When TV stations go all-digital on February 18, 2009, as mandated by the FCC, people who own older, analog televisions will find nothing but snowy screens on every channel. A digital TV converter box will translate digital signals into something old TVs can display, but those boxes cost money. Fortunately for the TV-watching masses, Uncle Sam began issuing accepting applications for $40 vouchers good for one DTV converter as a part of its Digital-to-Analog Converter Box Coupon Program on Jan. 1.

In theory, those boxes are supposed to be available at most major retailers across the country, and the $40 coupon should account for more than two-thirds of their price.

In reality, converter boxes are not only hard to track down, but there’s also a limited three-month time frame to use the $40 coupons — so by the time you find a converter box, your coupon may have expired. 

"Go to the electronics store or search online for the converter boxes. You will find that there are many approved models of the box, some are even listed by retailers, but none are in stock or available for sale," one Wired reader recently observed.

Nielsen estimates there are a little over 14 million households in the U.S. that rely on over-the-air television for programming, or about 13 percent of the 113 million total television households in the nation.

So will consumers find themselves with coupons for items that don’t exist?

Continue Reading “As the End of Analog TV Approaches, Converter Boxes Are Scarce” »

City-wide Wi-Fi might not be a pipe dream for San Francisco residents after all. After successfully rolling out mesh networks in 6 San Francisco neighborhoods, Meraki Inc. has announced its plans to blanket the entire city with coverage by the end of 2008.

Google and Earthlink hatched a similar plan for a municipal Wi-Fi project last year that ultimately fizzled. However, Meraki believes that by bypassing coverage for the public safety sector, relying on volunteers, and installing dozens of wireless gateways on rooftops it can rapidly roll out coverage.

"This groundbreaking network in San Francisco will show the world that with Meraki’s unique approach to building networks, we can quickly bring broadband Internet access to every city in the world," said Meraki CEO, Sanjit Biswas.

A $20 million Series B from Sequoia Capital, DAG Ventures, Northgate Capital has ensured that Meraki will be able to eat the cost of the new equipment, while users can still volunteer their own bandwidth with Meraki’s repeaters. To find out how to get involved in your own neighborhood, be sure to visit Meraki’s website.

See Also:

• Fon Partners With British Telecom for WiFi Deal
• San Fran to Finally Get Its Free Wi-Fi?
• Why Community Wi-Fi Plans Fizzle
• Muni Wi-Fi Projects Faltering Across the Nation?

In a frothy marketplace, what’s a web entrepreneur to do — build a site to critical mass and worry about revenue later, or make the business plan a priority and put scale on the back burner? The blogosphere has been atwitter today over the advantages of each in regard to the popular microblogging site Twitter.

Although both sides raise decent points, there’s a factor that draws a dividing line — funding. A bullish Jason Calacanis explains that building a huge audience is more important if funding isn’t an issue:

Running a startup is NOT about revenue anymore–it’s about critical mass. It’s about scale. When you’re playing in the big leagues with unlimited access to capital you shouldn’t worry about revenue BEFORE you have critical mass.

Bottom line? [Twitter] shouldn’t worry about a business model for another two years. Just build the service to *massive* critical mass. Get to 100M users–which is where the service is headed. If the service gets to 100M monthly users it will be worth a couple of billion.

Insiders like venture capitalist Fred Wilson also seem to be in agreement:

You can’t monetize web services very well until you have an audience of scale. Jason Calacanis suggests that 10mm monthly uniques is where you have scale. I think it can be less in some cases (highly targeted services) and more in some cases (social nets). But every ounce of time, energy, money, and brainpower you spend on thinking about how to monetize will take you away from the goal of getting to scale. Because if you don’t get to scale, you don’t have a business anyway.

However, it’s clear that those without endless amounts of capital (like Facebook developers) don’t always have the luxury of temporarily disregarding monetization. Our advice for the aspiring entrepreneur? Business plan or not, developing an overall strategy that fits both your levels of commitment and funding is a good start.

Photo: Flickr/hyku

See Also:

• Fred Wilson: What Credit Crunch?
• Twitter Raises Capital From New York Investment Firm
• Google: Android Has No Built-in Business Model
• 400000 Users and No Business Model: What Now?