Category Archives: Funding New Enterprises

Here’s How Hyperlocal Can Work

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With the highly visible explosions at AOL’s Patch over the past week, a deeper dive into other sites reveals several success stories, albeit at a small scale.Westchester_Chappaqua1-527x375

The common themes:

  1. Local ownership, local scale, low overhead
  2. No National Ads
  3. Only local advertisers with fixed banner positions and sponsored content.

Some examples, from Ad Age:

Plus my local favorite:  http://www.newcastlenow.org/.

This isn’t the formula for a big business, but it is a model for local communities and an opportunity for national service providers with useful and low cost offerings to the local sites.

How the GeoWeb Will Change Consumer and Business Behavior

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Reposted from Street Fight.

How the GeoWeb Will Change Consumer and Business Behavior

30 JULY 2013 BY 

The new Google Maps personalized interface.For about 2000 years, ever since Ptolemy wrote his treatise Geographia, maps and geography have helped humans understand their surroundings in the context of their neighbors, their town, their country, the Earth, and the Universe. For about 400 years, since Mercator figured out how to portray the curved Earth on a flat piece of paper, not much changed in the world of geography — until the launch of 24 GPS satellites by the U.S. Department of Defense about 30 years ago.

Digital location-based technologies are now a transformative force for consumers and businesses, particularly when coupled with the rapid adoption of mobile and the growth of big data. I’m a big believer in the future for “GeoDisruption” — the potential for consumers and businesses to interact in fundamentally new ways to take advantage of increasingly precise location-based technologies.

This is the debut of a column I’ll write for Street Fight exploring the growth of the “GeoWeb” and the emergence of GeoDisruptive trends and companies. When I’m not writing columns, I am the CEO/founder of On Grid Ventures, an investment and advisory firm focused on digital and location-based technologies.

GeoDisruption:  Where we are
Location-based technologies have already been a dislocating force in many industries.

  • Automobile marketing at the local level used to be all about newspapers and television, and companies like Autotrader, Cars.com, and Autobytel have used geo-based lead generation to irrevocably shift in-market auto buyers and local car marketing spending to the GeoWeb.
  • GPS has made paper maps obsolete.
  • General B2C platforms like Yelp are changing the way we evaluate local services.
  • Vertical B2C platforms like OpenTable are changing the way we find and book nearby restaurants.

The major portals and aggregators are all making increasing bets on the potential for GeoWeb.  Google, with Google Maps and Places; Yahoo, with its leadership position in local news and content aggregation; IAC, with CityGrid and UrbanSpoon; and AOL with Patch.Google’s recent acquisition of Israeli startup Waze for over $1 billion is a high-water mark in the development of the GeoWeb as it affirms the importance of user-generated, location-based content.

GeoDisruption:  Where we’re headed
While the growth ambitions of Google, Yahoo, and others will continue to be fed with more acquisitions of GeoWeb companies, the application of location-based technologies is increasing more broadly in three areas: Business-to-Consumer, Business-to-Business, and Consumer-to-Consumer.

  1. B2C marketing (i.e., GeoMarketing) will continue to be transformed as innovative companies apply location-based technologies to how they acquire, transact with, and retain customers. GeoMarketing will be essential for most local retail and service businesses, and the landscape is ripe for vertical players in areas beyond automotive and restaurants, across the entire local landscape. Early stage companies like BeautyBooked are already trying to become the dominant search and booking platform in verticals like place-based salon services. ReachLocal and Yodleare growing fast as companies that help local businesses reach consumers, and national marketers are increasingly shifting dollars to locally targeted digital marketing and promotion.
  2. C2C interaction (i.e., “GeoSocial”) can also be further shaped as individuals increasingly become comfortable with sharing their location with family, friends, colleagues, and people with similar interests. Foursquare has jumped to an early lead as the platform for consumers to share their location, but Facebook, Google, and others are gaining fast.
  3. B2B companies that enable location-based innovation (i.e., “GeoInfrastructure”) continue to be a hotbed for venture investment.  Location itself is nice, but it needs to be in the context of an individual, the surrounding locations, time of day, and other factors.  This all needs to be accomplished respecting an individual’s privacy. Companies like Jumptap and Place IQ are finding new ways to provide marketers with context that makes location relevant.

While I have a background in computer science, I’ve never been a fan of pure technology. I am a believer, however, in the potential for increasingly accurate digital, location-based, real-time data to better inform the decisions we all make every day on where to go, with whom, what to buy, and other areas. The rapid proliferation of mobile devices is certainly an enabler, but the greatest innovation will come from insights into how a consumer’s behavior varies based on his or her specific location. We’re now a long way from zip-code targeting, and more GeoDisruption is on its way.

Jason E. KleinJason E. Klein is the founder/CEO of On Grid Ventures, and investment and advisory firm focused on the startup and reinvention of businesses capitalizing on digital and location-based technologies.  Follow him on twitter @JKNews.

Angel Report 2013: 207 companies funded in 1Q 2013

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The Halo Report is out for the first quarter of 2013, and covers 207 deals totaling $222 million dollars invested.angel-statue-1725x810_19365

Here are some of the key findings: 

  • Median investment is $680k per angel round. Median angel round sizes reached another five quarter high at $680K in Q1 2013 up from $550K a year ago and $650K last quarter.
  • $2.5 million valuation holds.  Pre-money valuations in early stage companies remain steady at $2.5M.
  • Close to Home: Eighty-one percent of deals were completed in the angel groups’ home state over the past 12 months.
  • New York Grows Again. Year over year, companies in the Great Plains region and New York saw the largest increase in angel group deals. 

 

HBS Angels of NY Announces a new VC Advisory Board

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HBS Alumni Angels

The new Venture Capital Advisory Board for the HBS Alumni Angels of New York is comprised of leading, senior-level, NY-area venture capitalists who are advising HBSAANY on its growth and development.

  • Chip Austin, Co-Founder & General Partner, i-Hatch ventures
  • Jordan Bettman, Principal, Bain Capital Ventures
  • Deborah Farrington, Founder & General Partner, StarVest Partners
  • Matt Gorin, Co-Founder & Managing Partner, Contour Venture Partners
  • Rick Heitzmann, Managing Director, FirstMark Capital
  • Jim Robinson, Managing partner, RRE Ventures

Meet the Committee

Chip Austin, Co-Founder & General Partner, i-Hatch ventures
Chip has advised and built companies in Technology and Media for his entire career. In addition to founding BOL.com, Bertelsmann’s E-commerce division, Chip was a member of the senior executive team leading the buyout and restructuring of Prodigy, and was a co-founder of McKinsey’s Interactive Practice, where he spent seven years advising Fortune 500 companies on their media strategies.

Most recently, Chip was President and CEO of Bertelsmann Online, where he was responsible for building Bertelsmann’s global e-commerce business. Chip was the first employee at BOL, and built parallel services in the UK, Germany, Spain, Netherlands, France (via joint venture with Vivendi/Havas), and the US (via Bertelsmann’s 50% investment in BarnesandNoble.com). Chip served as Chairman of the Board of BOL France, and was a Board Member and officer of Doubleday Direct, BCA, BOL, Inc., and Bertelsmann’s E-commerce Control Board. BOL has been the recipient of several industry accolades, including CeBIT Innovation of the Year Winner and the highest rated European e-commerce site by a Forrester Research.

For the launch of BOL, Chip secured internal capital of over $400 million, built a world class team totaling over 200 people in six countries, partnered with strategic vendors such as Oracle, Don Peppers, Ogilvy & Mather, Fleishman-Hillard, Net Perceptions, Cambridge Technology Partners, USWeb and Sun, negotiated major strategic and marketing alliances with major Internet portals such as AOL, Compuserve, DoubleClick, EMS and Earthlink, and established back-end operations, including call centers, fulfillment, logistics, financial clearing, and warehousing, in each country of operation.

Chip maintains an advisory and investor relationship with Bertelsmann Ventures, an independent venture capital fund capitalized by Bertelsmann. Chip also served as Acting CEO of European-based DealPilot.com, a Bertelsmann Ventures portfolio company. DealPilot.com, the first commercial Internet-based comparison shopping service, subsequently sold a majority of its shares to Bertelsmann and then merged into Shopping.com (NASDAQ:SHOP).

Prior to Bertelsmann, Chip was a member of the management-led buyout of Prodigy, where he was SVP of Sales and Business Development and General Manager of Prodigy’s first Internet Service. While at Prodigy, Chip built an ISP from scratch, launched Prodigy Internet, which replaced Prodigy’s Classic proprietary service, and was responsible for all customer acquisition and subscription revenue. In addition, Chip was responsible for all major account relationships, including OEM channels such as Packard Bell/NEC, and technology/distribution providers, such as Microsoft, Netscape, and Excite. Prior to sale to SBC, Prodigy’s initial public offering had a market capitalization that had exceeded $3 billion dollars.

Before joining Prodigy, Chip spent seven years at McKinsey in the Media and Interactive practices advising clients out of New York, Los Angeles, Australia and various European offices. While at McKinsey, as a co-founder of the Interactive Practice, Chip shaped the New Media strategies of the world’s largest media companies in the fields of newspapers, magazines, yellow pages/classifieds, cable programming, network TV and film studio production.

Chip is a frequent keynote speaker and panelist on Technology, Media, and Angel Investment-related topics as well as serving on the boards of several public and private companies. Chip has also worked at Morgan Stanley’s Investment Banking division and IBM’s Personal Computer division during the launch years of the IBM PC. Chip has a degree in Computer Science and Economics from Duke University, and an MBA from Harvard Business School.

Jordan Bettman, Principal, Bain Capital Ventures
Jordan joined Bain Capital Ventures in 2008. Since that time, Jordan has worked on both early-stage and growth-equity investments in a variety of industries, including data services, marketing services, financial services and technology, and digital media. He has also worked closely with numerous portfolio companies on senior level recruiting, strategic planning, business development, and company exits. Prior to joining Bain Capital Ventures, Jordan was an associate consultant at Bain & Company, focusing on a number of strategic and operational issues for clients across a handful of sectors. He also worked in Bain & Company’s Private Equity Group, performing diligence on multi-billion dollar companies.

Jordan received a BS in Industrial and Labor Relations from Cornell University and an MBA from Harvard Business School.

Outside of work, Jordan enjoys outdoor sports, especially skiing and golf. Additionally, Jordan is a member of the Social Investment Council of Echoing Green, a Board Member of the Boston MS Gala, and a part owner of a restaurant. He and his wife, Lauren, now reside on the Upper East Side of Manhattan.

Deborah Farrington, Founder & General Partner, StarVest Partners
Deborah Farrington is a founder and general partner of StarVest Partners, a New York City-based venture capital firm founded in 1998.

StarVest invests in technology-enabled business services companies with a focus on software-as-a-service, ecommerce and internet marketing. StarVest was an early investor in the software-as-a-service trend: in 2000, it invested as the only venture firm in NetSuite (NYSE: N) whose December 2007 IPO, at the time, was the highest market capitalization for a venture backed company since Google. Other noteworthy investments where Ms. Farrington served on the board include Fieldglass, acquired by Madison Dearborn, and Insurance.com, bought by QuinStreet. Prior to founding StarVest, Ms. Farrington held positions including: President and CEO of Victory Ventures, LLC, a New York-based private equity investment firm where she also served as chairman of Staffing Resources, Inc.

Ms. Farrington currently sits on the Boards of NetSuite, where she is lead director and chairman of the Compensation Committee, Xignite, Host Analytics, and PivotLink on behalf of StarVest. She is also a director and chairman of the Compensation Committee at Collectors Universe, Inc. (NASDAQ: CLCT). She was named to the Forbes Midas 100 List of top venture capitalists in the United States in 2008, 2009 and 2011.

She is a graduate of Smith College and holds an MBA from Harvard Business School, where she is a member of the Dean’s Visiting Committee. She is also a member of the President’s Advisory Council and investment committee of Smith College; a board member of the Harvard Business School Club of New York City; a member of The Committee of 200 and the Economic Club of New York; and a board member of Opportunity International, a leading international microfinance organization.

Matt Gorin, Co-Founder & Managing Partner, Contour Venture Partners
Matt Gorin is a co-founder of Contour Venture Partners and has experience in technology operations, start-ups, venture capital and turnaround management. He is passionate about helping to build early stage companies, with a focus on the financial services, internet and applied technology sectors. Contour invests in seed and early stage technology companies in the northeast United States with a focus on the financial services, digital media and the internet sectors.

Matt was previously with Promontory Financial Group, a merchant banking firm focused on the financial services sector. He was part of the launch team at Promontory Interfinancial Network, a financial services technology platform company which has subsequently grown to over one hundred employees. Prior to this, Matt worked for Red Hat in its Strategic Planning & Corporate Development group where he was responsible for starting Red Hat’s Independent Software Vendor (ISV) Partnership Program, ultimately establishing extensive business and technology partnerships with many of the top global independent software vendors. Matt also worked at Morgan Stanley in its strategic venture capital fund, concentrating on making investments in early-stage financial services companies. Earlier in his career, Matt was a turnaround consultant at PricewaterhouseCoopers, where he helped devise and implement operating strategies for troubled companies in various industries.

Matt is the Founder of StreetWise Partners, a nonprofit focused on providing low-income individuals with a path to a successful career through mentoring, job skills and professional experience. He co-authored a Harvard Business School case study analyzing the origins of free trade and a paper in the World Economic Outlook on the economic and political risks in the Middle East.

Matt received his M.B.A. from Harvard Business School and B.A. in Economics and American Studies from Brandeis University, where he was co-captain of the tennis team.

Rick Heitzmann, Managing Director, FirstMark Capital
Rick Heitzmann, a founder and managing Director of FirstMark Capital, focuses on investments in the media, adtech, gaming, and mobile sectors. Prior to founding FirstMark Capital, Rick was a Partner with Pequot Ventures. Rick also serves on the Board of Directors of the New York Venture Capital Association.

Current ventures include: dashlane, Live Gamer, Meteor Entertainment, Pinteret, Playnomics, SneakPeeq, Sulia, Tapad, Tubular, WePlay. Historical investments include: Clickable (acquired by Syncapse in 2012), Riot Games (acquired by Tencent Holdings in 2011), FirstAdvantage (acquired by First American in 2009), StubHub (acquired by eBay in 2007), and US Search (acquired by First Advantage in 2003).

Rick received a B.S. from Georgetown University and an MBA from Harvard Business School. Rick has traveled all seven continents and is a huge Philadelphia sports fan. Friends claim he has seen every movie on Netflix.

Jim Robinson, Managing partner, RRE Ventures
Jim Robinson is a Co-Founder and Managing Partner at RRE Ventures. He has been active within the technology community for nearly 30 years as a venture capitalist, entrepreneur, banker, and futurist. Jim received his B.S. in Business Administration from Antioch College, and his M.B.A. from Harvard Business School. He is an MBA program lecturer at Columbia Business School and Stanford Business School, and a PhD / Master’s program lecturer at CUNY Baruch and The New School.

Ex-Officio members
David Teten, Chairman, HBSAANY; partner, ffVC
Jason E. Klein, Chair, External Relations, HBSAANY; founder/CEO On Grid Ventures

Entrepreneurs Roundtable Graduates 10 Promising New Ventures

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Entrepreneurs Roundtable Accelerator has graduated its fourth and largest class. Startups in the ERA IV program receive a $40,000 investment, access to nearly 200 mentors, free and subsidized services, and three months of office space at ERA new office in Manhattan.  ERA grads have solid success rates for follow-on funding: nine out of ten from ERA’s first class raised follow on funding, and subsequent classes are on track for about the same.  ERA’s portfolio of 40 companies is worth an estimated $150 million today.

Entrepreneurs Roundtable Accelerator Spring 2013 Graduates:

1. Acquaintable

acquaintable

Acquaintable is a new and clever online dating service to meet friends-of-friends, bringing the social graph to online dating.  If you indicate you like someone, and he/she does the same,  Acquaintable makes the connection. Fifteen percent of beta users returned daily.  I asked 15 friends over 40 if they would use this if they were single and in college, and they all said “you bet!”

2. Cognical

cognical

Cognical offers a service for lenders, providing an algorithm-based underwriting engine to helps lenders identify the loan applicants that will pay them back.

3. Consignd

consigned

Consignd provides a way for anyone, particular popular Pinterest users and bloggers, to set up their own eCommerce site.  Influencers with large followings can create their own storefronts and recommend other people’s products in exchange for 25 percent of any sales.

4. EasyPairings

easy pairings

EasyPairings helps restaurants hire new staff quickly, automating much of the process of finding active job seekers with the necessary qualifications.

monaeo5. Monaeo

Monaeo incorporates geolocation into tax preparation, and provides audit-worthy tracking of location to minimize taxes for mobile executives and rich folk.

6. Startist

startist

Startist brings creative people together to collaborate on projects ranging from film and the arts to games and technology by allowing the showcasing and discovery of work.

7. Suitey

suitey

Suitey plans to disrupt the residential real estate broker business. It combines the best of online real estate services and brokers, and saves money for home buyers.

8. TheSquareFoot
thesquarefoot

TheSquareFoot enables commercial real estate prospective tenants to search for executive suites, industrial, retail and office spaces.  Launched in Houston, TheSquareFoot has 75% of the market online, and moving into Dallas next.

9. Trendalytics

trendalytics

Trendalytics crunches the social web and provides insights on fashion trends.  Ideal for fashion retailers, manufacturers, and fashionistas.

10. VocalizeMobile

vocalize

VocalizeMobile hooks small businesses with a free service to manage their online ratings, then helps them with a suite of marketing tools to improve their web and mobile presence  across online directories like Google Places, Yahoo Local, Yelp, Mapquest and YellowPages.

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New York Angels is the Most Active Angel Group in the USA in 2012

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Most Active Angel Groups 2012

New York Angels is the most active angel group in the USA according to the Halo Group’s 2012 Year in Review, based on number of investments.

Source:  The Halo Group, 2012 Year in Review

Ultra Light Startups, May 9, 2013

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Jason KleinBrad HarrisonRahul GandhiBrian Cohen

Join us at Ultra Light Startups:

Thursday, May 9, 2013 from 6:30 PM to 8:30 

Microsoft, 1290 6th Ave, New York, NY 10104

sign up at http://ultralightstartups.eventbrite.com/

Investor Panelists

Agenda

  • 6:30pm – Pizza, networking and introductions
  • 6:45pm – 8 startup pitches; investor panel provides actionable advice following each pitch
  • 8:15pm – The audience votes for the best startup; winners announced and prizes awarded
  • 8:30pm – Drinks at nearby location

Objectives

  • To help early stage startups refine their investor pitch
  • To provide actionable advice and feedback for each presenting startup
  • To provide insight on how investors evaluate startups and pitches
  • To award prizes to the most viable startups, based on audience voting

Hosts

VC Investment in NY Booms in 2013 1Q, up 2x to $715 million

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NY VC Trend 1q2013

VC Investment in NY 2013 1Q more than doubles from 2012 1Q, to $715 million, according to CB Insights.

A Yodle IPO in 2013?

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Yodle, the leading Silicon Alley-based digital marketing platform for small businesses, is “strongly considering” an IPO, according to CEO Court Cunningham, as reported by Street Fight.
10590521-yodle-logo

Yodle is profitable and generating over $130 million in revenue annually, Cunningham said recently.

Yodle bought Atlanta-based Lighthouse 360, it was reported today.  Lighthouse 360 has built an advanced customer relationship management (CRM) system for dental offices which reportedly does a terrific job integrating all those systems in a dentist’s office.  Yodle plans to expand the technology each of its 30 verticals.

Read our 2012 Yodle post here.

Some other metrics of note.

  • Yodle has $130 million annual revenues, and 30,000 mostly smaller clients with an average of $4k per client per year.

ReachLocal stock closed today at $13.50, up more than 2x in 14 months.

Update:  March 7

A Yodle source gave me some other revenue numbers, expecting 35% growth this year.

2011:  $75 million

2012: $130 million

2013F:  $175 million.

Entrepreneurs Roundtable Accelerator Summer 2013 Class

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Entrepreneurs Roundtable Accelerator has a great offer to NYC entrepreneurs.   Start-ups get $40,000 in cash (increased from $25,000), office space for 4-months, and access to 200+ amazing mentors from the start-up community.

ERA’s summer 2013 class starts on June 3, 2013, and runs to September 20, 2013

The deadline for early applications is March 7, 2013, at midnight EST.

To apply:  http://eranyc.com/apply/.

If you’d like to see a list of the current ERA class, click here.