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.

AngelCube presenters offer cold call, sit-stand workstation solutions

By Dennis Clemente

NEW YORK- Last October 14,  AngelCube held a 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.   

AngelCube is a mentor-driven startup accelerator which has invested in over 30 companies in Australia. It provides $40k in seed money, office space, and hands-on coaching and a major network (which includes drawing crowds to events in New York) for 8% equity. All he thick Australian accents made the 6-train to Spring Street feel more like a transcontinental flight.

The event started promptly at 7 pm despite some apparent technical difficulties with the projector. AngelCube designed the presentation to introduce entrepreneurs with investors. It was like  watching ABC’s Sharktank sans the drama. Over half a dozen investors attended, asking questions like Mark Cuban and Barbara Corcoran.

Sweethawk presented first. It offers subscription service which enables a company to more effectively target people via cold calls. Its research shows that a voice interaction increases the likelihood of a sale by 18%. Seahawk did not ask for an investment.

Next up Cam McGrane presented Jack.io. Jack.io has keyed into two major trends in contemporary office space. First, the sit/stand workstation is becoming more popular as office spaces become less traditional. Second, people want everything to be “smart.” Its product, costing just under $200 in addition to a monthly subscription service, measures how much time you spend standing vs sitting. Jack.io also measures how much time you spend away from your desk.

During the Q & A, an investor asked the question we were all wondering: what kind of ROI can a company get from this? He made a promising sell for the sit/stand workstation (it increases health and efficiency), but its product relies heavily on the Hawthorne effect; that observation changes behavior. He claimed that people stand more and switch between sitting and standing seven more times when they are being observed. It is asking for a $500k investment.

Ryan King presented Coin Craft, a cash flow & workforce planning platform, is targeted at architecture firms. King is asking $750k for a 20% equity investment. Coincraft “automatically updates, allowing you to achieve the highest possible profit margins.” It was hard to understand the problem he was solving and why his product was better than anything else on the market.

Curve Up presented next and seeks to measure PR results. Co-founder Rojand Noroozi presented. He claims that it is the only company in this field that measures ROI. Etsy Australia is one of its first companies. It hopes  to have 100 clients by the end of the year.

Last we heard from was Kylie Long of Peer Academy. Peer Academy “teaches soft skills and in person communication.” It is  similar to General Assembly, but the focus is more on presentation, and handling investors and just other learners rather than hard skills. It is asking $1.2M to launch in New York and Sydney.

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).

10 things you need to know about investors

Investors

By Dennis Clemente

NEW YORK–Learning about how to find investors is almost always different when you’re in 40s-up midtown (much older crowd) and 30s-below midtown (younger crowd). The former usually frowns on the word “meetup” to describe an after-office talk whereas a few zip codes down it’s less of an issue.

If you’re new to the tech community in New York, just use “talk” to describe what happened last March 19 at the Lee Hecht Harrison law offices when investors from different companies gave people tips on how to find an investor in the city. Here are some of the thoughts of Anna Garcia of 37 Angels, a community of women angel investors; Michael Beller of CoVenture; and Judith Feder of Harvest Capital.

1. Know if you really need investment. Know if you really need venture capital or angel investment or if you need to find out if you can get corporate grants or non-profit grants. Your idea could still be financial tech and still be non-profit.

2. Know when you need to pitch. Angel investors hold quarterly pitch forums. You will also find accelerators and incubators accepting startup funding applications quarterly and may run a pitch training program for 3 to 4 months.

3. How to find out if you’re a good fit for a venture capital investor or an angel investor. With VCs, study their websites and blogs and more importantly, their portfolio. Be aware that VCs invest in themes, while angel investors, because they come from different backgrounds, may have a diverse portfolio.

4. Still, VCs have some differences. There are VCs who are either hedgehogs or foxes. Investors who are hedgehogs are single-minded and tend to invest in teams with deep expertise and come from the same industry. Investors who are foxes are more dynamic, more adaptable and more open to anyone with a transformative product and creating new markets.

5. How to email investors. They prefer that you are coming to them with reference. If you met them before and they gave their contact info, you can contact them directly. For VCs, it’s important you have the same connections. For angels, know one and you raise the possibility of being introduced to another angel. Approach everything not as a mechanical process, but as a relationship-building exercise.

6. How to meet investors. Put yourself out there and be engaged in the startup eco system. Go to meetups, hackathons (even if you’re not a developer), tech talks, founders’ clubs, and mixers.

7. What is a no-no. No investor will read a business plan (but have one for yourself), because investors get it right away. Pitching to investors don’t exceed 7 minutes and can even be about 2 minutes. Also, make sure to describe your startup instead of using big words. When it comes to pitching, though, no is just an opportunity to explain your business better.

8. The bigger pie over small pie. A small slice of pie from a big pie is always better than a small slice from a small pie. Keep that in mind when you’re seeking investment.
When to grow your business and ask for money. Sometimes startups are far too early in the process to think of growth. You’re going to lose money, because you need to care about the growth. Growth is not a proxy for product-market fit.

9. How much money will you need? Think 18 months of runway. When you need to raise money, you need to know for sure how much you need, because sometimes you can underestimate your needs. How do you know if it’s a good deal? Think of how much money you need. Then double it. The best way to negotiate terms is have VCs competing

10. Other takeaways:

  • Be completely researched on what your competition is
  • Don’t be afraid to contact people you haven’t talked to in years.
  • Investors always want an equity deal than a convertible note
  • Husband-and-wife team not exactly ideal partnership to invest in
  • Smith of Qualtrics, Medlock of Swiftkey draw huge crowd at Data-Driven meetup

    data-driven meetup2

    By Dennis Clemente

    NEW YORK—CEO and founder Ryan Smith of Qualtrics spoke candidly about his beginnings in Ohio when he set up his company with his academician-father, ran it in his basement for five years and how he knocked on university doors in New York to offer his service to academicians at first last March 17 at the Data-Driven meetup at Bloomberg’s offices. After 12 years, the company is now valued at $2.1 billion.

    “We built a product together that was simple enough for me, and sophisticated enough for him (his father),” he said of his product that makes sophisticated research simple.

    In a sit-down talk with host Matt Turck, Smith talked about how many companies sometimes miss the forest for the trees. He remembers being asked so many business questions when almost always, it would have been better to ask “your employees and customers.”

    The Data-Driven meetup is a mix of both presentations and sit-down talk in a span of an hour and a half.
    CTO and co-founder Ben Medlock of Swiftkey chose to talk next about artificial intelligence in general as it relates to the future of mobile typing, the way it’s building the world’s smartest keyboard.

    Ben Medlock of Swiftkey talked about his smart prediction technology for easier mobile typing. “Swiftkey is a narrower AI company,” he said of his company designed in 2010, with close to 10 billion users today and 50 trillion characters written down.

    “How can we model how we think?” asked his audience.

    Swiftkey is building language models among other things based on fast and efficient smoothed n-gram models ; optimized trie search; morphemes and neutral nets/representation learning

    For input modeling, it uses Gaussian distributions to model interaction with the keyboard surface and linear gaussians. As for data collection, it has partnered with a UK-based company.

    CEO Paul Dix, for his part, presented how Influx DB works

    InfluxDB is a time series, metrics, and analytics database. It’s written in Go and has no external dependencies. Once you install it, you don’t need to install Redis, ZooKeeper, HBase, or whatever.

    InfluxDB is targeted at use cases for DevOps, metrics, sensor data, and real-time analytics.

    “It arose from our need for a database like this on more than a few previous products we’ve built,” Dix said.
    Dix announced plans to launch the testing build of version. 0.9.0 in a few months. Some new features will include support for tags and API changes. InfluxDB currently supports the following:

    • SQL like query language
    • HTTP(S) API
    • Storage of billions of data points
    • Database managed retention policies for data
    • Built in management interface
    • Aggregation on the fly

    “It’s (InfluxDB) is a discovery engine for what you are collecting,” Dix said.

    CEO Ion Stoic sat down to discuss the history of Databricks which was founded by the creators of Apache Spark.