Equity crowdfunding vs venture capital fundraising

NEW YORK–This was not Batman v Superman where emotions flare and somebody is flung out of the New York skyline. At the NYC Incubator last June 9, the Equity Crowdfunding vs. Venture Capital Fundraising talk was just a convivial talk about the differences between the two funding methods.

https://www.eventbrite.com/e/the-investment-question-vc-vs-equity-crowd-funding-tickets-25730337131#

Allen Jebsen seemed to have channeled Clark Kent as he took the side of equity crowdfunding at Start Engine with earnestness. Sumeet Shah of Brand Foundry Ventures, made light of the event, making fun of the fake fight.

“We see VCs as collaborator,” Jebsen said.

“We consider (equity crowdfunding) a competitor,” Shah said, then playfully moving his chair away as he said that in front of Jebsen.

If you don’t know the difference, here’s one thing that should settle it for you.

An accredited investor in the US must have a minimum annual of $200,000, a joint income of $300,000 or a net worth of $1 million. Without this moolah, you cannot be an accredited investor, according to the Securities and Exchange Commission.

But in June 2015, the SEC enacted “Regulation A+” which resulted in a brand new fundraising category for use by smaller companies also called equity-based crowdfunding.  This is different from the reward system used by Kickstarter or Indiegogo. Equity crowdfunding actually affords investors (read: anyone) shares in the company with some type of ownership in the business. It levels the playing field.  Non-accredited investors or anyone can invest in Regulation A+ offerings. There’s more information on investopedia.com

Venture capital is money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets.

Recently, the SEC adopted rules to permit companies to offer and sell securities through crowdfunding, including to individuals that are not accredited investors, which is anyone out there.

Some differences are obvious. Crowdfunding in general requires a lot of time and effort. When raising money from people you have never met, you better have a good product to show – that means, you’ll need great content and video – to make it easy for people to decide if you’re a good investment.

Jebsen breaks it down: You can set the term. If you hit your goal, you can write an amendment. You can get a few hundred thousand possibly between 1 and 3 months; for $50 million, 4 to 6 months. If you don’t hit your goals, your money goes to escrow. You can choose to do equity or debt (convertible debt), if you don’t want equity crowdfunding.

You could say there is some overlap here, especially when it comes to the reason you want to get funded. Like VC money, you have to know why you have to take the money but Jebsen said it’s important to know your product more than conveying a message. But that’s about it.

When you approach Sumeet for funding, you’ll need to recognize how much funding you need, because you’ll need to know how to scale up to 18 months. Once you figure out the amount of capital you need, and then you’re good.  “I wished there were so many more whiteboards in the world, so you can put all your ideas (that will help make you a decision),” he said.

As for the other side of funding, Sumeet said it would be hard to get anything done with 6,000 investors.

Why would you invest your money in a startup, as a non-accredited investor?  Jebsen said it could simply because you are a “believer or consumer of potential products.”  In advertising, it’s what’s called brand ambassadors.

StartEngine launched with two partners, Elio Motors and game publisher XREAL. Elio Motors is an alternative transportation startup as it has an “ultra high mileage car (84 MPG) and costs only $6800, perfect for first time drivers and college students.

“It’s less about product, but the democratization of investment,” Jebsen said. “You need to have a strong vision and message in equity crowdfunding.”

On the other hand, VCs can help startups do much bigger rounds if they see a billion-dollar opportunity while also giving you connections and instant legitimacy. It’s only important to know if you can meet your targets. Can you actually rely on crowds for your fundraising efforts?

You’ll have to think both options thoroughly to find out what you really want. But if you don’t have money and you want to invest, your only option is to try equity crowdfunding.

Allen Jebsen focuses on educating entrepreneurs everywhere of the new fundraising options available under the JOBS Act. Initially created in Los Angeles as an accelerator by Howard Marks, co-founder of Activision and Acclaim Games, StartEngine has grown to become the leading equity crowdfunding platform. Since June of 2015, when Regulation A+ was enacted, StartEngine has helped companies raise 17 million dollars from over 6,000 non accredited investors. StartEngine has continued to help companies raise capital under Regulation Crowdfunding, the newest rules to be enacted by the SEC on May 16th, 2016.

Sumeet Shah handles sourcing and managing new opportunities as a Senior Associate at Brand Foundry Ventures, an early-stage consumer product and device venture capital firm. He has 6 years of experience across the startup and private equity industries, formerly running new business strategies at Gist Digital and handling business development and project work at Gotham Consulting Partners.

Angel investors and startups meet in exclusive event

NEW YORK–iBreakfast/iEvening held its first 2016 Startupalooza event last January 27 at Microsoft following its mini-trade show format. It’s how angel investors go around to talk to each entrepreneur at their own pace.

http://www.eventbrite.com/e/pitch-2016-tickets-19873395862

Most of the startups at the meetup were clearly in their very early stages. Vidpal is an online video auctioning platform where people anywhere in the world can request videos while giving anyone an option make money by accepting video assignments.  

Toby Dattolo of Chaptertheapp has come up with an app that encourages people to share their passion with like-minded people in that hope they can ignite positive action together. 

Nothing stands out more than an actual functioning apps, which Shrinktheapp.com demonstrated on its phone. Because each brand runs its own loyalty program, the app offers rewards as one taps into one brand after another to claim in stores.

Another finished product from a young Brazilian-American is what he called “Flipboard for lists” called Listbeam.

 

Other presenters include Tech Trader, which reportedly works as a fully autonomous system capable of trading thousands of stocks simultaneously with no human intervention. Instead of relying on the points of view of an academy, mathematician or scientist, it leverages what the best traders do at scale.  

Another company, USBsports, is looking into providing a platform that houses all the information athletes and coaches need to reach their goals.

For Skin OS, it’s all about how it offers an applicable skin treatment technology for use at home.

CommonSensibly assists people and businesses in using simple common sense processes for their growth.

Vognition has been around for sometime, but if you haven’t heard about it, it offer natural language voice controls for home automation systems.  

Vognition offers a voice control solution that lets users choose any mobile device or smart home controller to give a voice command.

Other exhibitors included Groom Dinkneh for Anchor Your Bike, Helena Merwe of A-Plus Consulting, Trevor Crest of Crest Wealth Planning, Ohad Tov of ISM Wearable Electronics and Syed Shah of 12 Tech LLC, a web development company.  

Crowdfunding forecast for 2016

NEW YORK–Last January 21, Gotham Media gathered experts in the crowdfunding space to  give us the lowdown on the best option for you at the Frankfurt Kurnit Klein & Selz offices.

http://www.meetup.com/GothamEntrepreneurs/events/227298466/

Gordon Platt, founder and president of Gotham Media, moderated the panelists Christian Busch, senior VP of marketing at Indiegogo;  Peter Einstein, co-founder of The Crowdfunding Network & LaunchIPO.com; Ariel Hyatt, founder of Cyber PR/Cyber PR Music; Julia Maltby, director of business development at Plum Alley and Nicolas Leeper, analyst at Seed Invest.

Following are the insights from the panelists:

  • The act of crowdfunding campaign is an advertising campaign; the lower end of it, it’s a sales campaign
  • You need to have specific targets when email blasting
  • Crowdfunding is a form of marketing; you need to have a plan, even paid media efforts, very good marketing efforts  
  • People look for those already with a platform
  • Growth hacking is actually direct marketing times 10
  • You need a soft launch campaign or private funding a week before or 48 hours at least to raise initial funds (for show)
  • Get 30 percent funding ahead so when you launch in a crowdfunding site, you’re more legit
  • Getting some initial funds (and people seeing it at a crowdfunding site) is all about psychology; people like to see a winner
  • A business model that is easier to understand can make it work in a crowdfunding site
  • (A good) consumer-facing product (works most of the time)  
  • Make sure you have engaged users
  • Largest crowdfunding countries are US and China
  • Only a dozen among thousands of fund-seekers have reached the million-dollar level in funds — and they are the ones who get in the news
  • How crowdfunding seekers are featured in Indiegogo are based on site’s algorithm and editorial (choice). A certain velocity on a campaign is needed
  • Be careful when using videos in your crowdfunding efforts or you could face a lawsuit with the wrong message
  • Crowdfunding platform’s share of 5 percent in most crowdfunding sites may not go down or up (anymore)
  • 5 percent share in equity crowdfunding is (obviously) not going to work
  • Equity crowdfunding success is about diversification; investing in 10 or so companies

Grist for the tech mill: 2015 events from over 1,100 NY tech meetups

data-driven meetup-nov2015

By Dennis Clemente

There are more than 1,100 tech meetups in New York. Here’s a summary of what happened in one year from March to December 2015.

Instead of having the always selling mentality, Mark Roberge, chief revenue officer of Hubspot, suggests having an always-be-helping mentality. Roberge’s sales talk last December 17 at Enterprise Sales Meetup in midtown Manhattan was especially meaningful as it’s not too often you hear someone from a programming background lead sales teams. The topic, Sales Acceleration Formula, was the same title of his book based on his experience taking a job in sales at Hubspot and coming from a programming background.

It was not your typical meetup in the city. For one, it was scheduled on a Friday night last December 18 (most meetups in the city are from Monday to Thursday). Second, it was held at a store, the new Microsoft Flagship Store on the shopping district of Fifth Avenue. But the crowd trickled in to watch the presentation of devices at the meetup curiously billed “Understanding Live Video Streaming with Periscope and Meerkat.”

German startups Keeen, Favendo and Night Adivsors took turns demonstrating their platforms at the German Accelerator NY last December 15 at Rise NY.

Would you rely on Big Data or The Force? It was a Star Wars evening for the Data-Driven meetup last December 14 at Bloomberg, especially for Nick Mehta, CEO of Gainsight who sounded giddy using the epic fantasy flick as reference for his presentation. He was joined by Arcadia Data, MapR and Datameer.

”How do you make sense of any mess?” That was the first question information architect Abby Covert threw at the audience last December 10 at the Designers & Geeks meetup at the Spotify offices.

“Life’s too short to build something nobody wants,” says Ash Maurya in his talk last December 8 at We Work in Wall Street. Maurya is the acclaimed author of “Running Lean,” a concise guide that helps you take action in using lean startup and customer development principles. He was at We Work to present his ideas for scaling business–clearly a prelude to his upcoming book, “Scaling Lean.” For Maurya, the root cause of a startup’s problem is when solution is perceived as the product. “Your solution is not the product. Your business model is the product.”

Last Dec 9, Uncubed took the holiday season as an opportunity for startups like Moat to discuss their 2015 accomplishments and future plans at its offices in the Lower East Side. By 2016, Moat, an independent SaaS Marketing analytics firm focused on transforming online brand advertising through trusted measurement and analytics, will reportedly be the first third party to measure viewability on YouTube.

Last December 1, Hardware Meetup featured talks from the founders of Grove, OneDrop and Boxee at the Microsoft offices. Gabe Blanchet, CEO of Grove, showed how food lovers can grow food at home while–get this–fish swims below it. Yes, even it will fit in a cramped New York apartment.

How do you make data scientists more productive? Jeremy Achin has an answer for you. The current path to becoming a data scientist is based on learning statistics, programming and algorithms, then applying practical knowledge and practicing real world experience which can unfortunately take up a lot of time. Achin spoke with other presenters Josh Bloom of Wise.io, Alexi Le-Quoc, founder of Datadog and Haile Owusu, chief data scientist of Mashable at Data-Driven’s monthly meetup last November 16 at Bloomberg.

Moral rights versus individual rights. That’s the struggle the entertainment industry faces these days when individual rights have blurred the lines between individual ownership and what is other people’s content, the title of the breakfast forum hosted by Gotham Media last November 18 at the Frankfurt Kurnit Klein & Selz at 40th Street on Madison Avenue.

What is Birchbox? In the city, most tech meetups always asks people by a show of hands, how many people have heard of Birchbox? Most of the nearly hundred people raised their hand. If you’re still wondering, what it is about, it’s this: Birchbox delivers monthly boxes of beauty or grooming samples, picked to match your profile. Last November 19, CTO Liz Crawford talked about her role and how the company operates at the NYC European Tech Meetup at Spotify’s roomy offices.

Last November 9, Coinvent held a whole-day tech startup fair with several startups and inspirational talks at the Metropolitan Avenue in Chelsea. Dog Parker was one of the most popular startups as it showed a “doghouse” that provides secure dog parking when you’re out and about in the city with your dog and you need to run an errand. Dog Parker partners with businesses to place Dog Parkers in front their stores.

Last November 3, Alley Boost held a half-day startup expo featuring more than 60 startups at La Venue on 12th Avenue, blocks away from the Javits Convention Center.

The future of event ticketing will have some kind of empowerment and engagement, according to Taku Harada, CEO and co-founder of Peatix who presented at last November 2 at the Japan NYC Startups at Pivotal Labs.

The NY Expo Business Conference held last October 27 at the Javits Center packs in hundreds of startups, not necessarily all online-based companies or early startups. Touted as the largest New York business conference event, it has exhibitions, seminars and free business consultations for an audience that’s not entirely from the city either.

Last October 14, OLC attended AngelCube NYC Demo Day at WeWork in SoHo. In classic WeWork fashion, it took less than a minute for us to be reminded that there was beer on tap (In addition to a cheese plate and an array of mini-burgers). WeWork’s creative space had a foosball table, a kitchenette disguised as a bar, and hanging light bulbs with exposed filament.

What is the real reason why Microsoft Ventures Accelerator can choose to fund your startup for $500,000 without equity? Not only that, you get work in its Seattle office and have what graduates say are great meals as you work on your startup there.

“It’s Tinder for doctors,” says Toby Hervey about his app, on-demand house-call doctors. He was one of the presenters that included Ulula, Kiddo App and Domain Skate last October 20 at the NY Tech Breakfast at Microsoft.

The second Korean Summit NYC last October 16 at the New Yorker Wyndham. featured several Korean startups with Charlie Kim, founder and CEO of Next Jump, and Murat Aktihanoglu, managing director of Entrepreneurs Roundtble Accelerator as main speakers.

Last October 14, the New York Tech Meetup brought back two of its most popular demos – Addicaid and Pager — to mark the launch of its new “Demo Deep Dive” event series in lower Manhattan.

Last October 12, Area 1 Security, Birchbox, Livefyre and Metamind, presented at the packed Data-Driven meetup at Bloomberg.

It’s seldom you hear honest talk about investors snoring soundly or checking their phones every so often when you’re pitching to them but the founders of these companies — Wayup, F Cubed, Manicube, getringly and ELOQUII — had those stories to share. What’s more unusual perhaps is how even those who they thought couldn’t care less were the ones interested in investing in them.

Last October 7, Devin Rogerino of Inc.com presented a talk on video creation or how to cost effectively enter the video creation community at the Wix lounge in Chelsea. Essentially, you need four things—ideation, inspiration, brainstorming, planning—before you even make your video, and let’s not forget how you have to know whether you need YouTube, Facebook or Vimeo.

Last September 30, Tech in Motion deviated from its usual show-and-tell meetup presentations for an exposition of startups with cocktails at Ainsworth Midtown East. The startups on exhibit were beGlammed, GoButler, FlyCleaners, Zeel and ZIRX, all riding on the popularity of uber and the way it’s propping up the sharing economy.

How do you become a digital nomad? If you care to listen to the speakers of Cafe Numerique (Beligan for digital), you’ll find out how the world is getting smaller the way people from all over the world are finding each other, doing business and sharing ideas.

Last September 17, the Brooklyn Borough Hall was the setting for the International Day, the last of the four-day international Transatlantic Entrepreneur (TEP) conference which brought together investors, entrepreneurs, media and policy makers from the US, Asia and Europe.

Scott Heiferman is perhaps the most unassuming CEO and co-founder you’ll ever meet in this city. For someone who runs one of the city’s earliest and most successful startups, meetup.com, which was formed 13 years ago, he still considers his company a startup. His company, he says, is older than most startups. It’s older than Google Maps, older than Facebook,– heck, older than Friendster and yet, he pauses to think if he’s still a startup.

Twitter’s Adam Sharp, Head of News, Government and Elections and Niketa Patel, News Partnerships Manager were the speakers at Conversations, a series of open discussion held by NY Daily News Innovation Lab, at Microsoft last September 9. It was also a way for Twitter to drum up support for its upcoming Project Lightning, a curated feed of tweets.

When every tech meetup seems to be covered at night, count NY Tech Breakfast counts on the early risers to come to its monthly event, now held at Microsoft for the second month. Last September 8, NY Tech Breakfast featured PolicyGenius, Proscape, TableSwipes and LawGo.

Last September 2, General Assembly held a talk featuring three companies offering online coding courses, One Month, Thinkful and Hopscotch at its offices in the Flatiron District.

The product challenges at the Product Council last August 31 were the digital clinic app offered by Maven Clinic and the new permissions level to be offered by JustWorks starting September 1. The meetup was held at the Pivotal Labs.

What is the future of media? The question may resonate the most among journalists and other media practitioners. After all, it’s their livelihood at stake. The answer in a word may be video, especially the way the panelists talked about how it is going very far and coming in. Even GoPro is reportedly adding some kind of news coverage.

On the second day of the Yahoo Developer Conference last August 26 at the Marriott, breakout sessions were held, with user acquisition as a topic attended by OLC. The key takeways: Developers have a three-month grace period to get sticky; get the app store experience right; app install ads work, but it’s important to talk to your users through a variety of marketing channels.

Is one percent better than zero or none at all? We’re not talking about the affluent in the United States, but if the one-percent effort or initiative that big companies dedicate to social impact is sufficient—or if it’s just a compromise, a public relations move. If you’re keeping up with the tech scene these days, you won’t hear Mock Series A Term Sheet Negotiations too often. It may be your first time to hear it, as we did, so we went to Orrick’s Total Access last August 24 at CBS to find out how it would unravel for us.

Tech meetup groups have taken most of the summer off, but Codecademy took the quiet time to hold an HTML and CSS workshop of its newly released web projects last August 20 at its office in midtown Manhattan with the people behind it in attendance–Zach Sims and Ryan Bubinski.

If you’ve seen a drone, most likely you’re thinking how hard can it be to fly one, right? Well, it was not so easy for Easy Aerial’s CEO Ivan Stamatovski. Stamatovoski was one of four other presenters at the NY Video Meetup last July 23 at the AOL offices. “I have been flying a drone for two years but still suck at it,” he admitted.

Some apps certainly function as if they were invisible like Dennis Mortensen’s x.ai. It’s an artificial intelligence powered personal assistant that schedules meetings for you. Mortensen was again going the rounds with Amy, the name of his A.I. personal assistant who happened to be in the same room as Larry, which is Raad Ahmed’s text-responder of a lawyer, a mix of automation and human beings. Larry is the text version of Ahmed’s LawTrades. It’s personalized legal help tailored to your business over text. Both presenters and other startups Alfred and Stefanshead were at The Product Hunt meetup last July 22 at Animoto’s offices.

How do you cover the media when you’re the media? For its fifth meetup, The Tech Press Meetup invited Jason Abbruzzese of Mashable, Shannon Bond of the Financial Times and Tom Kludt of CNN to shed light on this topic at the Arthur L. Carter School of Journalism at 20 Cooper Square.

Having covered the tech meetup scene for the past few years, it’s interesting how a meetup about “Getting your startup set up and funded” produces a new group of aspiring entrepreneurs, new to the tech scene and what it takes to build one. There’s certainly something for everyone in the fastest-growing tech city and that’s what Megan Hannum, venture partner at Comcast, co-founder at Fundedby, was at Spark Labs last July 15 for–to help newcomers get their feet wet in the startup scene.

More than 35 investors, panel talks, lightning pitches, everyone one-on-ones with VCs, a venture fair—it was a summer blockbuster of a tech meetup what NY Tech Breakfast pulled off last July 10 at Microsoft, near Times Square. What’s amazing is how it was all pulled off in one half day, from 8 am to noontime.

What do you think people would Google: How to survive a breakup or divorce lawyer? You could do both or just the former if you think it’ll be better SEO for your business. “The key is to be creative with your link-baits (to set you apart and own that search), said Kevin Lee, founder and CEO of Didit.com last July 11.

JJ Fliegelman is generous with his ideas and insights into his business, Campus Job, an online marketplace for college students to find jobs that he co-founded with ex-Googler Liz Wessel. Launched only last September, Campus Job has already signed up 2,300 colleges, 3,000 employers, 100,000 students and—music to every startup founder’s ears—funding to the tune of $9 million.

When you have everyone discussing about their design process, it makes for an engaging presentation. Last June 24, Design Driven’s meetup was the best so far the way each speaker presented a specific topic—and more importantly, because the presenters were generous with their thoughts and candid with their answers, especially Bradford Shellhammer, founder of Fab.com and most recently, founder of Bezar.

Joseph Essas of Open Table, the world’s leading provider of online restaurant reservations, opened the talk at the Data Driven last June 16 at Bloomberg’s offices. It was Data Driven’s last monthly meetup as it takes a well-deserved two-month summer break.

“If it doesn’t fit excel, it’s big data.” That was Gilad Lotan, chief data scientist at Betaworks, giving a digestible meaning of how big data is about volume and variety as much as it is about velocity and variety, which conveniently rounds up to the four essential Vs you need in big data. Lotan was speaking at Tech in Motion’s first ever Big Data meetup at the spacious office of Mediaocean, a leading software platform provider for the advertising world. He was with two other Big Data panelists Bruce Weed, program director of Big Data and Watson at IBM and Claudia Perlich, chief data scientist at Dstillery.

Asking if you really need to know the number of your eggs on your fridge is perhaps the best way to determine how much automation you need for your home. It determines if you need Canary, Hggns, Keen Home or Smart Things, the presenters at the IoT Central meetup last June 17 at R/GA Accelerator’s offices near Port Authority. How do you get attention amid all the noise out there? If you ask Ben Parr, he will tell you that you need 7 captivation triggers, which he expounds on his recently launched book, “Captivology.”

How do you get attention amid all the noise out there? If you ask Ben Parr, he will tell you that you need 7 captivation triggers, which he expounds on his recently launched book, “Captivology.” Asking if you really need to know the number of your eggs on your fridge is perhaps the best way to determine how much automation you need for your home. It determines if you need Canary, Hggns, Keen Home or Smart Things, the presenters at the IoT Central meetup last June 17 at R/GA Accelerator’s offices near Port Authority.

Last May 28, The Hatchery presented four startups–Moving Analytics, Crowds Line, Mobiquire, Centrallo and Revenue Mantra at the Microsoft Building. “The Hatchery: Are You Serious?” Meetup group has been holding startup presentations for eight years now, but sometimes this writer wonders if the question extends beyond the earnest question. After all, it’s not easy to launch a successful startup let alone present in front of VCs.

The Market New York Expo for small businesses last May 21 at the Javits Center featured several talks on branding, email marketing, digital sales and mobile marketing. What stood out for us were the talks on Search Engine Optimization by Ruben Quinones, NYU adjunct instructor and VP, Client Strategy at Path Interactive and Mobile Marketing by Warren Zenna, EVP & Managing Director at Mobext (Havas Media).

FlyLabs has wowed audiences at the NY Tech Meetup months back and at the NY Video Meetup last May 20, it again drew some ecstatic applause for its video-editing apps, Fly, Clips and its new one called Tempo, a quick way to alter video time speeds.

Last May 14, PandoMonthly hosted a one-on-one interview with Sheila Marcelo, CEO and co-founder of care.com who talked at length about her Filipino roots and how the influence of her “Tiger mom” and the discipline they inculcated in her formed a big part of her success now.

Minerva Tantoco, New York City’s first-ever chief technology officer (CTO), said she pretty much created every job she had at the StartupGrind meetup last May 7. Tantoco directs the Mayor’s Office of Technology and Innovation, overseeing the development and implementation of a coordinated citywide strategy on technology and innovation and encouraging collaboration across agencies and with the wider New York City technology ecosystem. “We are a little startup inside city hall,” she said.

It’s good to see Scott Heiferman show up at NY Tech Meetup last May 5. Once a regular fixture of it many years ago, even as co-host, the Meetup founder has understandably been busy building his community of meetups, 30,000 for tech alone around the country. It was, as he has explained over time, a “9/11 baby.” He was at this particular meetup to announce the NY Tech Meetup Apple Watch app. The presenters of the night were Ananas, AptDeco, Amadeus, CornellTech, Epicure, OneDrop and X.ai with Wikitongues as hack of the night.

Adesoji Ojugbele of Google Android may have nailed it when asked about how to measure people’s attention span these days by using Instagram as an example: How long does it take you to post a photo on Instagram? The photo app is a good example, because as more people get used to its quick functionalities, the more people will not have patience for everything else that takes longer. The word “longer” here has come to mean longer than, say, 10 seconds; that could be an eternity for some people. Instagram is quick enough that anything else will be slow.

Last April 29, Uncubed held its meetup, “Hacks that saved my life” at Refinery 29 with the World Trade Center building gleaming behind it as early evening set in. This is not your typical show-and-tell meetup. It might as well be classified the hacked-and-tell meetup as each presenter talked about how a new app or site made their life easier, more fun and even useful in an unusual way.

Hardwired’s 19th meetup last April 22 might just have assembled the most interesting mix of startups so far —a drone that collects data fast, a pet activity and health monitor, a virtual reality content creator and—are you ready?—a new way of growing meat. Not your typical tech meetup in the city, folks.

More than 400 startups pitched to 10,000 attendees at the fourth-year of the largest annual tech fair called Tech Day. The event held last April 23 showcased startups in various industries such as education and e-commerce, design and deliveries, food and fashion, music and things mobile as well as that services catering to them like co-working spaces, immigration and recruitment companies.

Last April 22, a new venue emerged from the meetups gaining popular steam in springtime New York, just as the Tribeca Film Festival was rolling its week-long fest of indie and alternative films. It had the same makeup as the tech meetup talks, except it was held at the De Niro-propelled film center and headlined Designing Innovation.

Last April 14, the Data Driven Meetup featured How Liu, founder and CEO of Airtable; Scott Crunch, co-founder and CEO of Mark43; Bob Muglia, CEO of Snowflake and Emil Eifrem, founder and CEO of Neo Technologies at the Bloomberg offices.

Last April 8, AlleyNYC’s SquadUp featured three female-owned startups Bird and Stone , Plum Alley, Quarterlette and Dreamers//Doers with some VC guests giving tip on how to get funded. Made in New York, Bird and Stone sells its own jewelry line with 15 percent of sales funding micro loans and agri-business training in Kenya, where 75 percent of its people live in rural areas. So far, it has funded 8 women with $200 microloans and provided them with financial training, industry training and mentorship.

Dash, City Maps and even a 105-year-old startup named IBM stood out from the demonstrations hosted by NY Tech Meetup last April 7 at the NYU Skirball Theater. But Dash was clearly the night’s favorite the way it connects cars to smartphones and unlocks enhanced performance, cost savings and social driving.

Sometimes the title of a meetup ends up being more. You simply need a host who knows how to push the right buttons and no demos. Last April 1, the Disruptive Technologists group planned a forum called “Balancing a Cool Idea with Profitability” with host/moderator Bruce Bachenheimer, a Pace University professor. It turned out to be about a lot more, including a call for immigration reform to fill up the critical need for developers and other talented people in the United States.

How would you like your bike to guide your way with navigation lights? Hammerhead wants to lead the way with this idea. How would you like virtual reality as a productivity tool? IrisVR aspires to make that a seamless experience. These were just two of the presenters at Hardwired NYC’s meetup last March 24 at Quirky at 28th West and 11th Avenue. The others were Brilliant Bike, American Prison Data Systems and Wink.

Last March 23, the On-Demand Economy meetup featured Button, Managed by Q and Minibar at the Animoto offices in midtown Manhattan. Much of the tech world is trying to figure out deep linking, that is, making the mobile app ecosystem work more like the web.

Silicon Alley is extending all the way to Queens as the Digital NYC Five-Borough tour made its stop at the LA Guardia Community College last March 26. An initative of Mayor Bill de Blasio, digital.nyc is the city’s online hubs for all things tech and startups. Eric Gertler of NYCEDC (New York City Economic Development Council) said it is making sure all of its programs extend to everyone in New York as part of an initiative to reduce income inequality.

Any takers? Microsoft Ventures Accelerator dangles no-equity 500K funding

NEW YORK–What is the real reason why Microsoft Ventures Accelerator can choose to fund your startup for $500,000 without equity? Not only that, you get work in its Seattle office and have what graduates say are great meals as you work on your startup there.

https://www.microsoftventures.com/events/entry/MachineLearningAcceleratorOpenHouse-NY%7C171

Microsoft’s goal is to help startups foster exciting new ideas by providing mentorship, $500,000 of Azure Credit, access to the Microsoft distribution channel, without taking equity. About 80 percent of the startups that have graduated from its accelerators have received an average funding of $1.9M (USD) within a year from graduation. About 16 startups have reportedly also had exits with some of the top companies in the industry.

At the meetup last October 21 at the NYU Stern Building, host Tim Enger was circumspect and about the intentions of Microsoft—and it just made sense. “What do we get out of it?  You use Azure. Then it becomes a business for us,” he said.

Microsoft is hoping that the startups they fund will use Azure, its open, flexible, enterprise-grade cloud computing platform, but in no way, he stressed, is Microsoft forcing people to use any of its software. It’s an investment the company thinks is worth the money they fund companies.

At what stage should your startup be to apply for funding? It turns out you must gained some traction already. However, Enger preferred the guests talked to him personally after the meetup to discuss their startup. There were also several decision makers from the Microsoft Ventures team at the meetup as well as the Microsoft Azure Machine Learning Product Group.

It was a night where information was not presented, even basic information like deadlines, if you didn’t ask the Microsoft team. Deadline for applications is November 20. Most of the questions asked revolved around the requirement for startups seeking funding. You must be in the machine learning and big data space. Enger said on Jury Selection Day, there could be 20 to 30 external investors, 5 senior level execs, and 14 companies involved.

Microsoft is working with startups these days because its CEO Satya Nadella believes “all growth comes because of startups.”

Enger even emphasized how on average more than one $1B-worth companies are born every month, with 90 percent of Fortune 500 companies planning on a big data initiatives in the next year. “More than 200 billionaires were created last year,” he said.

Two of its graduates presented, Outleads and Openhour.  Outleads tracks when a web visitor calls or submits a form on your site. What’s interesting about is what it claims it can make your ad work by getting your data on salesforce and/from call center activities, among others.

Both startups recounted their experience and why they chose Microsoft. “It’s the clients they bring to your door, the relationships.”

Orrick’s Mock Series A Term Sheet negotiation takes people on step-by-step process

NEW YORK–If you’re keeping up with the tech scene these days, you won’t hear Mock Series A Term Sheet Negotiations too often. It may be your first time to hear it, as we did, so we went to Orrick’s Total Access last August 24 at CBS to find out how it would unravel for us.

http://blogs.orrick.com/totalaccess/events/event/new-york-mock-series-a-term-sheet-negotiation/

Chris Austin, partner at Orrick, presided over the mock negotiation with Liz Wessel, CEO of WayUp and Ellie Wheeler, principal of Greycroft Partners. Wessel and Wheeler wheeled and dealt their way to the mock negotiation of term sheets, talking about how allocate value, manage the company, investors’ rights and miscellaneous terms as if we were eavesdropping on two people’s conversations. It’s a good exercise for anyone curious about how a startup founder interacts with an investor.

With Austin as the moderator, the two talked their way through allocating value, covering valuation, capitalization, liquidation and dividends. Questions about board composition, protective provisions and drag along rights were also discussed.

Austin suggested 3 to 5 board members for obvious reasons—to avoid deadlocks with 4 board members. Wessel said she would have herself, a co-founder, Wheeler and someone who can serve as an “independent” seat. It’s important to point out why Wessel added Wheeler; it’s common for a VC (venture capitalist) to ask for 1 to 2 seats. The VC will ask for special provisions, preferred director consent. But at Series A, keep in mind that a VC need not be in board majority.

Austin said higher valuation is not always the best. “Look for a good fit, strategic value, understanding of the business.”

For founder vesting, standard schedule is a four-year term with a one-year cliff. For the stock option, the key issue you need to answer is what you will need to compensate your employees between this round and the next. It will depend on the current team.

As for dividends, the advice is to stay away from cumulative dividends. Current market standard is “as if and when declared.”

At liquidation/dissolution, keep in mind that a VC gets the right to receive proceeds first. Also before you can sell, you must give company and investors the right to buy. And if the investors and the company decline to buy, then the founder must give investors a right to participate in the sale.

Elaborating on drag along rights, the discussion veered toward drag-along rights. Investors, it turns out, can force Common stockholders to participate in a sale of the company while also pointing out that drag-along rights are not present in every deal, but becoming more frequent.

Recommendations in terms of managing the company included protective provisions like questioning your ability to satisfy business objectives; consider class voting; and keep standard market terms. If you don’t manage the company well, investors can ask your company to return the money to investors at a specified time. This can be in 7 years or so when the VC comes knocking on your door to ask for their money back. But try to push for exclusion of this term. If not possible, have the terms provide your company enough runaway, say, 5 to 10 years; redeeming investors only receive what they paid plus dividends, or see a higher approval threshold (but other investors must consent).

Orrick’s Mock Series A Term Sheet negotiation takes people on step-by-step process

NEW YORK–If you’re keeping up with the tech scene these days, you won’t hear Mock Series A Term Sheet Negotiations too often. It may be your first time to hear it, as we did, so we went to Orrick’s Total Access last August 24 at CBS to find out how it would unravel for us.

http://blogs.orrick.com/totalaccess/events/event/new-york-mock-series-a-term-sheet-negotiation/

Chris Austin, partner at Orrick, presided over the mock negotiation with Liz Wessel, CEO of WayUp and Ellie Wheeler, principal of Greycroft Partners. Wessel and Wheeler wheeled and dealt their way to the mock negotiation of term sheets, talking about how allocate value, manage the company, investors’ rights and miscellaneous terms as if we were eavesdropping on two people’s conversations. It’s a good exercise for anyone curious about how a startup founder interacts with an investor.

With Austin as the moderator, the two talked their way through allocating value, covering valuation, capitalization, liquidation and dividends. Questions about board composition, protective provisions and drag along rights were also discussed.

Austin suggested 3 to 5 board members for obvious reasons—to avoid deadlocks with 4 board members. Wessel said she would have herself, a co-founder, Wheeler and someone who can serve as an “independent” seat. It’s important to point out why Wessel added Wheeler; it’s common for a VC (venture capitalist) to ask for 1 to 2 seats. The VC will ask for special provisions, preferred director consent. But at Series A, keep in mind that a VC need not be in board majority.

Austin said higher valuation is not always the best. “Look for a good fit, strategic value, understanding of the business.”

For founder vesting, standard schedule is a four-year term with a one-year cliff. For the stock option, the key issue you need to answer is what you will need to compensate your employees between this round and the next. It will depend on the current team.

As for dividends, the advice is to stay away from cumulative dividends. Current market standard is “as if and when declared.”

At liquidation/dissolution, keep in mind that a VC gets the right to receive proceeds first. Also before you can sell, you must give company and investors the right to buy. And if the investors and the company decline to buy, then the founder must give investors a right to participate in the sale.

Elaborating on drag along rights, the discussion veered toward drag-along rights. Investors, it turns out, can force Common stockholders to participate in a sale of the company while also pointing out that drag-along rights are not present in every deal, but becoming more frequent.

Recommendations in terms of managing the company included protective provisions like questioning your ability to satisfy business objectives; consider class voting; and keep standard market terms. If you don’t manage the company well, investors can ask your company to return the money to investors at a specified time. This can be in 7 years or so when the VC comes knocking on your door to ask for their money back. But try to push for exclusion of this term. If not possible, have the terms provide your company enough runaway, say, 5 to 10 years; redeeming investors only receive what they paid plus dividends, or see a higher approval threshold (but other investors must consent).

Powerfelt claims it can power portable devices like the iPhone

uls-ener

By Dennis Clemente

International ThermoDyne’s Powerfelt bagged the most votes at the Ultra Light Startup presentation of eight energy startups that presented last October 9 at Microsoft, as it claimed to answer the ever-increasing need for clean power, especially in portable devices.

“Powerfelt is a thin material that harvests heat and motion and converts energy into useable electricity,” Paul Solitario said. “You can use it to charge your iPhone.”

The other startup presenters were Shailendra Suman of SmartCharge, Burt Hamner of Titan Ocean Energy; Jason Force of E-Mow; Ariel Fan of Grid Symphony; Raj Lakhiani of Athena Power; Graham Smith of Open Energy Group and John Jabara of Savenia Home Ratings.

The panelists who gave their critique and feedback were John Freer, manager of External Technology Initiatives at GE Global Research; Dave Kirkpatrick, managing director of SJF Ventures; William Lese, managing director of Braemar Energy Ventures and Willem Rensink – GameChanger of Shell.
ThermoDyne’s prospective customers for Powerfelt cut across various industries– mobile electronics, construction, transportation, textiles, government.

Asked if it could narrow down its intended market, Solitario said they could focus on remote sensors as it offers portable “electricity” anytime anywhere without batteries or the grid. “We have no moving parts.”

Investor’s advice to Solitario: Focus (on a specific market); find where the material can be unique; find an application where it’s available; understand how product competes in the landscape; study lifespan with a device.

Suman of SmartCharge was also one of crowd favorites. His successful Kickstarter campaign launched the world’s first LED light bulb that you can turn on or off from the same wall switch even during a power outage. It provides four hours of continued use. Battery is reportedly 300 cycles. When using the light bulb normally, it will reportedly last for three years.

The panel was impressed to hear that SmartCharge is selling already at $34.95. It started shipping 5,000 units in 32 countries last month with 100,000 units of soft orders. His gross margin is 20 percent of cost.

Suman hopes to target homes owners, small businesses, the direct online sales sector as well as wholesale to big box retailers such as Amazon.com, Duke Energy, Lowe’s and Home Depot.

Investors’ advice to Suman: Work on IP; introduce more product(s); look for other distribution channels to accelerate the business; find out where it goes on store shelves; and figure out positioning of the product.

Titan Ocean Energy’s Hanner presented the mobile platform for office offshore wind power and drinking water production already installed in Sweden. A panelist said, “You’re on the right track in Europe.”

Globally patented, the mobile jack-up platform reportedly supports 6MW + offshore wind turbines and met towers ad desalination systems.

Investors’ advice to Hanner: Make sure you’re protected; Target corporations; repurpose existing rig; keep it light; laser-focus on costs

E-Mow came next with Jason Force talking about its self-powered drone bioenergy harvester which creates renewable grass fuel pellets at low cost. It seeks revenue from pelleted agricultural products.

“It will be a significant cost reduction again existing methods,” Force said who’s looking forward to it as a build-and-operate model.

Prototype challenges for him would be the maintenance of this self-powered technology

Investors’ advice to Force: Work with a big player like John Deere so you can market faster; powering it by biogas is not the best way to go about it; look at all the pieces you want to integrate; and determine MVP, being a relatively complex engineering system.

Ariel Fan presented Grid Symphony, an intelligent brain for the electric grid to prevent utilities and priority clients from power meltdowns like Hurricane Sandy. It emerged from Columbia University’s machine learning lab.
“It’s not an emergency product. We want to create an optmization product,” she said.

Utilities are targeted customers but right now, it is looking at system integrators. The distribution strategy aimed at selling directly to enterprise smart/medium customers.

Investors’ advice to Fan: Survey how many people will use it; think how this business scales; test in some places like Hawaii to get customer exposure before scaling; work with system integrators, because they see everything; make sure you have a partner; explore idea in business model canvas.

Athena Power has developed a self-powered wireless fault sensor for underground distribution networks. It is hard to find faults, but Lakhiani is confident about its startup based on its four-year engine and his experience.
Still, he thinks it’s better if Athena works with utilities. “Underground (networks) are tricky.”

Investors’ advice to Lakhiani: Know the sensor market to make sure you get plenty of pilots; score early with Exelon as a demonstrable result; (recognize) it’s a timely product to bring to electric utility to the world; (think of it as a) unique entry point to get data

The last two presenters were Smith of Open Energy Group and Jabara of Savenia Home Ratings.
The former is an online marketplace for renewable energy investments.

“We offer accredited investors direct access to higher return, lower risk, fixed income products by directly funding the construction and operation of commercial renewable energy power projects in the States,” he said. This includes solar projects.

Investors’ advice to Smith: Make loans that banks don’t give; look for a partner when it’s time to add deep pockets, focus on residential (market)

Savenia Home Ratings helps home sellers unlock the value of home efficiency upgrades to differentiate, sell faster and capture more value.

“Energy auditors focus on the negative. We focus on the positive,” Jabara said. “We’re CARFAX for home efficiency.”
Asked if it has a method, he said the company validates the rating through documentation. “Customers do most of the work; we check (the work).”

Investors’ advice to Jabara: The platform can be bigger, think of other groups doing the rating; and get accurate data from third-party source.

This time, Graham Lawlor of Ultra Light Startup hosted the meetup with Tim Hoffman of Cleantech Open.

David Tisch talks about his Spring e-commerce app, startups’ key to success

david tisch

By Dennis Clemente

Last October 8, Orrick hosted a fireside chat with David Tisch, former managing director of TechStars NY, co-founder of BoxGroup and startup investor at the WeWork offices in Soho West.

The chat centered on his new Instagram-like mobile e-commerce startup Spring where he sits as chair, and his former role as managing director of TechStars.

Spring was funded under Series A by Thrive Capital, Groupe Arnault and Box Group. Other investors included Founder Collective, Google Ventures, SV Angel, and Lerer Hippeau Ventures.

“We believe buying things should be simple,” a listing for Spring on AngelList says. “We are on a mission to build a platform that connects the people who make products directly with consumers who love them.”

Available only on iOS, Spring aims to make the best experience for buying things on your phone or tablet.
Tisch co-founded Spring with his brother Alan Tisch, Ara Katz, and former Googler Octavian Costache with talents from Bergdorf Goodman, Cannon Tekstar Hodge and former fashion director of ShopBop, Kate Ciepluch. The other team members came from Fab, Beachmint, Google, Foursquare, Ralph Lauren, and DVF.

“We launched our company with 32 staff. That’s insane. But each startup is different,” he admitted.

Tisch was quite candid in the chat which was unfortunately marred throughout by a dysfunctional microphone, obscuring some key points. Still, we managed to hear some gems for startups:

RESEARCH
On day one of your startup, do research. The best companies take a lot of time with their idea and research before they start building

MARKET
Have a real understanding of the market

COMPETITION
If you have a similar startup with another and you don’t have the culture (in place), you lost already

SECRET SAUCE
Ask yourself why you are the best person for an idea
The most important for a startup to have—leadership; (it’s crucial) if you can convince people to join you
Those who are ready will be able to accelerate
A startup is rebellious by nature yet so many founders spend a lot of time conforming

OUTSOURCING
You can’t outsource if it requires local discovery and it’s one of the differentiators

DEALING WITH INVESTORS
Food is a great leveler when talking to investors
Build real relationships that will last years; find 5 people not 150 people, and not because they are on a list
They are (investors) not going to take you if you are not ready

FUNDING
We (investors) look at those who have built stuff before. We have to see something, especially (one that matches) your background
You can get money from banks with no equity
When do you need to ask money? If you need to accelerate faster. Money is fuel
How much money do you need? Based it on your milestones
We (investors) don’t even need to see the idea; we don’t even need to see the product—(we look at) the team and the market, because they are easier to identify
Your Idea must match startups with investors

GROWTH SECTORS
Healthcare and automotive sectors will grow

CONTENT
Create your own story. Engagement is key

SUCCESS OF SPRING
As an entrepreneur, he is confident it will succeed but there’s always “my awkward Jewish nervous self.”

Hatchery is back with no-nonsense feedback to startups

hatchery-yao

By Dennis Clemente

You better be prepared when you present at “The Hachery: Are you serious?” meetup, because even if there are so many similar meetups in the city, it doesn’t fail in one regard: giving serious, constructive feedback.

The secret to its no-nonsense approach probably lies in two things. It has fewer startup demonstrations—four this time, as one presenter didn’t show up. Second, startups have five minutes to pitch to the panel of investors, usually four or them. In the startup demo world, the five-minute presentation format is, of course, an eternity and for the panel listening, just more information for them to give serious feedback that startups truly need to hear.

It also helped that The Hatchery’s first meetup last September 25–after taking the summer off–had the candid Kamran Elahian talking about his decades-long investing experience. The other panelists were Jeff Neu of B2B Ventures and Gregg Young of NY Angels, respectively.

The investors were unanimous in saying how all the presenters need to review their financial projections. Elahian spoke at length about how in the interest of time, presenters should not do three-year financial projections, believing this to be unreliable based on his experience.

“Value is in the eye of the beholder…not in the spreadsheets,” Elahian, talking about an unspoken reality in this business. “Make (investors) like you.” He added: “Establish value then negotiate.”

With over 29 years of experience in the tech industry, Elahian has co-founded 10 hugely successful companies. As the chair and co-founder of Global Catalyst Partners, he has invested in multi-stage companies in the United States, China, Japan and Israel.

The first presenter, Aspirevest, connects individual investors to financial advisors and asset managers in the alternative investments space pay per connection auction and data social feeds.

CEO Daniel Roth sees a $1 billion opportunity, especially with “the financial world (being) 10 years behind the internet.” He is looking to raise $750,000 with a milestone in 18 months.

With 3 US patents, bio-medical startup Synchropet is also seeking $750,000 in its variation on PET scanning for animals. Working prototypes are called rat cap and pet insert MRI It is competing in a $235 million by doing something smaller and cheaper.

Each unit could cost $295,000. Beta products are expected to be done in December, delivery by the end of the summer of 2015 and sales by the end of 2015. It’s a high ticket product, especially being in the hardware category. “Make sure you are in the cash flow,” one of the investors said.

“I have about 15 customers for the rat cap from Europe,” said founder and CEO Marc Alessi.

The rise of personalized medicine is something that Bridget Osetinsky, co founder and CEO of Hyperfine, is hoping to capture with its Cornerstone tool. It aims to redefine the landscape of data search tools by introducing intelligence algorithms that will help in knowledge extraction in hospitals initially.

For $20,000 a year, doctors can also reportedly use it among patients using on-premise solutions and later, in the cloud. It is seeking $3 million and would have to figure out issues of liability and confidentiality.

CEO and founder Chris McBride presented Alta Editions, a digital platform for premium cooking content as a way to solve hard-to-find free recipes online.

“Cookbooks represent a $3 billion global market,” he said as he noted how Cooks Illustrated may have the American market but not the global market.

What is it going to do different? Re-launching early 2015, it will reportedly have a more personalized (approach) based on skill level, dietary needs, food purchases and user tastes. Founded in 2011, it faces an uphill battle. Content space is really difficult.

GoPRit and University Beyond were initially scheduled to present.