Startups

  • Posts,  Startups

    Top 20 B2B Startups with the Most Momentum Lead by Disqus, Virool & Bitnami

    Last week I published the April index of startups ranked by momentum. But scrolling through hundreds of rows isn’t much fun when all you really want to find the diamonds in the rough, so I thought I’d pull out the top 20 B2B companies with the most momentum right now.

    The index is built using time series data collected on several signals to create a momentum score combining the footprint of the company and the velocity of changes in the signals. It’s also designed to let consumer and B2B startups to stand on equal footing.

    I’ve also included their most recent funding date and round amount. Enjoy and if you have suggestions for startups we should add to the index submit them here.

    Full Disclosure: I am an angel investor in Bitnami.

  • Startups

    Lawsuit Names Venture Capitalists & Payments Startups in Alleged Violations of California Money Transmission Act & Bank Secrecy Act

    A lawsuit has been filed by Think Computer Corporation – the firm lead by Aaron Greenspan, who has a history of suing Facebook in the past – in the Northen District of California San Jose Division Courts naming a long list of well known investors, venture capitalists and popular startups in a request for injunctive relief.

    Sources have point out that Greenspan previously sued the State of California Department of Financial Institutions in 2010 for $999,000 of injunctive relieft, claiming that the California Money Transmission Act (MTA) was unconstitutional.

    I am still reading through the full suit and will post more information as I process it. The Next Web has written a very comprehensive overview.

    The 5th item in the Introduction & Summary section may provide some insight into why investors have been named in addition to the companies themselves:

    Given the increasingly public difficulty associated with proper compliance with the MTA, Defendants decided to simply break the law while growing their businesses “under theradar,” knowing that the likelihood of being caught was low, and in many cases fully aware that their activities would violate both state and federal law. Their investors either supported them in this regard, or were willfully negligent of the implications of funding unlicensed money transmitters.

    A current list of licensed money transmitters in the state of California can be found here.

    Read the suit in full here:

    20130506.complaint by robinwauters

  • Posts,  Startups

    3D Printing Startup Shapeways Raises Massive $30M Series C

    In a regulatory filing Shapeways, the marketplace for 3D printing, revealed the company has raised $30M in a new round of venture funding from Andreessen Horowitz, Union Square Ventures, Index Ventures and Lux Capital. The round was lead by a16z and Chris Dixon has joined the Shapeways board of directors.

    The company enables anyone to design and produce one-of-a-kind bespoke products using 3D printing.

    Turns out this was already covered by TechCrunch back in April — oh well! — Shapeways is such a cool company why not write it up again? I personally can’t wait to see what comes next from the New York based company who, according to LinkedIn, now have 70-80 employees. In fact, I’m buying this incredible iPhone 5 “Sweater” case right now.

    I still remember the first time I saw one of the products made by them a few years back at SXSW when they were just getting started, and I thought it was a cool thing for hobbyists but didn’t completely understand how it would get big. Turns out things that hobbyists love (ahem Twilio, computers, etc.) can be embraced by a much larger audience, and it looks like Shapeways has figured out how to crack the code and now boasts a marketplace of more than 10,000 stores on their site.

    Cool Things Made with Shapeways

    Image Credit: Fragatory

    Image Credit: Adafruit

    Image Credit: http://www.markflorquin.be

    Image Credit: retrocactus on Flickr

    Image Credit: Shapeways

  • Posts,  Startups

    HealthFleet Raising $3M Series B for SaaS Interactive Healthcare Management

    According to a regulatory filing HealthFleet, a Boston-based health technology startup, is raising up to $3M in venture capital. The company previously raised a $1.1M Series A in August 2012.

    HealthFleet’s platform connects patients with counselors (nurses, nutritionists and other caregivers) and health management content to help manage their health beyond the hospital or doctor’s office.

    Founder and CEO Bill Van Wyck has quite a track record for founding companies and taking the public. According to the HealthFleeet about page:

    Prior to founding HealthFleet, Mr. Van Wyck founded RedRoller, the ‘Travelocity for shipping packages’ where in 2007 he grew it to a public company (OTCBB:RROL) with over 10,000 users. Prior to RedRoller, Mr. Van Wyck successfully built, operated and sold CSI, a technology integrator, to Elcom International, one of the first ecommerce solution companies. Mr. Van Wyck grew Elcom’s same-region sales from $13MM to $110MM in two years, during which time Elcom completed its IPO (Nasdaq:ELCO). An experienced entrepreneur, Mr. Van Wyck has both public and private company operating experience.

    Investors in this and the previous round were not revealed in the funding documents.

  • Startups

    Funders Club Announces It Will Take 20% Carry on Future Investments

    FundersClub, the first online venture capital firm recognized by the SEC, announced in an email today that it will now take the industry standard 20% carried interest on future funds formed to invest in startups on its platform for accredited investors. The announcement comes just over a month after the Securities and Exchange Commission issued Funders Club a no action letter, allowing them to operate as the first online venture capital firm in history.

    FundersClub only receives carry, which is a % of proceeds following some liquidity event, after 100% of the originally invested funds are returned to investors, less a 10% administrative fee on invested funds to cover 3rd party expenses such as legal, banking and accounting. Unused admin fees are also returned to investors.

    Read the full email here, or view it on Scribd.

    FundersClub Announces 20% Carry

  • Posts,  Startups

    Clustrix – #5 on YC Startup Index – Raises $16.5M Series C

    This morning Clustrix announced they have raised $16.5M in a Series C round from Sequoia Capital, U.S. Venture Partners, ATA Ventures and Don Listwin. They are one of the earliest Y Combinator companies, founded in 2005 with nearly $47 million raised to date. Clustrix was ranked #5 on our Y Combinator Index for April.

    The Benefits of MySQL Without the Scaling Limitations

    Clustrix scales MySQL databases as engineering operations needs increase, simply by adding more nodes on Amazon Web Services. The company solves parallel processing challenges associated with applications that have a large quantity of data transactions, and is also used by dev ops to get realtime reporting on database performance an automatically scale up our down the number of nodes in use.

    Before Clustrix an entirely different kind of datastore, such as MongoDB, would be used. This requires developers to split up their data across multiple servers and use a map reduce algorithm in order to query across all the data. However, developers using Clustrix save time because they can use their existing application code and MySQL connectors and don’t have to deal with sharding.

    Possible IPO In Sight?

    A PEHub article covering the announcement says:

    CEO Robin Purohit told peHUB that the company will likely raise more funding in the next year to bring it to cash-flow positive. “And then we’ll see where the public markets are,” he said.

    We’ll certainly keep an eye out for the next REG D to cross the SEC wire from Clustrix, and keep you posted on their monthly momentum and overall progress in the Startup Index.

    Photo Credit: Clustrix Facebook page

  • Posts,  Startups

    New Fund Formed to Hunt Zombie VCs & Private Equity Funds

    These zombie stories just won’t die.

    Last week Kirchner Group and Crestline Partners announced a joint effort to give limited partners (LPs) liquidity:

    There is an estimated $100 billion in private equity assets managed by funds past their investment periods, according to industry estimates. Many of these so-called “zombie funds” have serious issues of alignment between the general partner and limited partners. As a result, an increasing number of institutional investors are looking for creative and effective ways to restructure these funds and rationalize their private equity portfolios.

    Meet the Bobs of Private Equity

    The announcement goes on to explain its areas of focus, which include supporting or replacing general partners, managing or even restructuring troubled funds, providing portfolio follow-on capital and even company level follow-on investment, and finding other opportunities for exits to give LPs liquidity and maximize value.

    According to PEhub Kirchner Group has already has some success with this model:

    Kirchner Group has made a name for itself as a specialist in zombie deals. It took over management of the Brantley Partners V LP from Brantley Partners and renamed it Emerald Partners V LP fund, which it continues to run.

    What’s In Store for Venture Capital?

    VC investing is a subcategory of private equity, accounting for $30B invested by venture capitalists in portfolio companies in 2012, according to the North American Venture Capital Association. This is roughly 10% of the private equity industry’s annual global investment, so I suspect the lowest hanging fruit for this kind of restructuring are among huge private equity firms but I certainly wouldn’t rule out some restructuring of larger zombie VC funds.

    We are at the beginning of an industry transformation for traditional venture capital that has been a long time coming, and the chronicling of this shift began with the May 2012 report from the Kauffman Foundation, one of the largest investors in venture capital firms and an entrepreneurship think tank, on venture capital as an asset class. According to their findings:

    Venture capital (VC) has delivered poor returns for more than a decade. VC returns haven’t significantly outperformed the public market since the late 1990s, and, since 1997, less cash has been returned to investors than has been invested in VC. Speculation among industry insiders is that the VC model is broken, despite occasional high-profile successes like Groupon, Zynga, LinkedIn, and Facebook in recent years.

    You can read the full report here.

    We will be watching to see which LPs take this route to liquidity for their venture capital portfolio, and looking to determine what those restructuring deals and partnership changes could mean for the entrepreneurs within their portfolio companies.

  • Posts,  Startups

    Startup Index: Y Combinator Companies Have More Than 2x the Momentum of 500 Startups, 3x Techstars

    How to Read the Startup Momentum Index
    Momentum measures a quantity of motion, measured as a product of its mass and velocity. In case we want to measure the momentum of a startup (the “body”) where mass is the company’s share of web traffic (as measured by Alexa rank) and velocity is the growth trajectory of several different signals (social, inbound links, page rank, etc). It is weighted toward sustained growth, versus small spurts of growth from press coverage or a burst of paid traffic or Twitter/Facebook followers. Larger companies (by traffic) who see a decline in growth across these signals will be the hardest hit, so the worst place to be on this list is in the approaching 0 momentum points.

    Earlier this week we released the April 2013 Startup Index, which tracks over 1,000 companies in the investor portfolios we’ve indexed with at least 4 weeks of data. Now let’s take a look at the 3 most talked about early stage investment programs and compare the momentum of their portfolio companies.

    While the percentage of active companies in each portfolios differs by just a few percentage points, the total momentum points vary widely. For example the top 500 Startups company Virool (which is was also part of YC S12) has 27.69 momentum points in April, but in the YC portfolio there are 10 companies which have more momentum than this. Similarly the top TechStars company Digital Ocean has 18 momentum points, but 500 startups has 5 companies with more momentum in this and Y Combinator has 17 that rank higher.

    On average Y Combinator companies had 2.4x greater momentum than 500 Startups and 3.1x greater momentum than Techstars companies in April.

    These differences seem to line up with differing investment philosophies. While Paul Graham of Y Combinator is focused on “Black Swan Farming” for the one home run company in each batch, Dave McClure of 500 Startups is building a portfolio around companies hitting solid singles and doubles, while Techstars takes a geographically diversified approach. As we continue to collect data it will be interesting to see if greater momentum results in more exits.

    April Startup Moment Index: Y Combinator, 500 Startups & Tech Stars

    Full Disclosure: both Y Combinator and 500 Startups are investors in Referly, where I am founder and CEO.

    Photo credit: New York Daily News

  • Startups

    Uber Takes on Lyft with Aggressive “Shave the Stache” Mobile Billboard

    This morning at brunch Kevin remarked to me that he’d been seeing a lot more Lyft cars (a donation-based private P2P taxi service) around lately – so I was surprised at the coincidence when just an hour later the driver of the locally famous Disco Lyft car shared an this image (above) of a mobile ad billboard for competing car service Uber with the comment:

    I’m proud to be a part of a community with a bit more tact in their marketing and recruiting.

    #lyftLOVE
    #UBERfail

    Read the full Facebook thread here

    What do you think – is Uber taking things over the top, or a clever tactic? It sounds like Lyft must be doing something well if they’re raising the hackles of a much more established, albeit startup, car service company. At first I actually thought it was an ad for Lyft before I read the copy (and who really has time to read ad copy anyway). The biggest problem with shaving a mustache? It grows back.

    Photo Credit: Matthew Earnest

  • Startups

    New York Startup Fliqq Raises $430K for Realtime Social Video

    Fliqq revealed in a regulatory filing that they have raised a seed round of equity funding. It looks like the company was in startup alley (basically the expo hall) at TechCrunch Disrupt NYC last week and, according to Nibletz.com, they are currently working with celebrities like Wyclef Jean to help gain visibility and new users.

    The service let’s you co-watch videos with friends and layers in additional social feature to enhance the experience. This is how they explain the service on their website:

    With fliqq, you can watch videos together in real time and chat about them with your friends. You can laugh together, groan together and talk smack together as you watch rather than waiting around for a response to a post.

    Content is king and on fliqq we’ve made discovering and sharing new videos with your friends an easy and natural process. Anyone can form a group and “fliqq” to new videos that will synchronize on everyone’s computer, and anyone in the group can “fliqq” to new content themselves.

    Now, you can socialize with your friends and view content in real time with them, even if you are on different continents. There’s nothing to download – just login with Facebook to fliqq, laugh and share.

    The company is cofounded by Christian Bendixen, Matthew Knysz, and Daniel Starin.

    Video credit: Nibletz