Got an idea but nowhere to pitch it? Try Intel and Facebook
Have you dreamed up the next social media sensation, energy-efficient engine or hot consumer gadget but don’t know where to pitch your idea? If you’re between 18 and 24 years old, log onto Facebook.
Intel and Facebook are teaming up in a new program called Intel Innovators to give young people a forum to debut new ideas and give feedback on other people’s. And $100,000 a month are up for grabs to help turn winning concepts into real start-ups — as long as you’re in the United States.
Through the Intel Innovators platform on Facebook, participants can lay out their business ideas and receive suggestions from fans to help refine and improve their plans.
Once a month, a panel of experts including venture capitalists from Intel Capital, SV Angel and Betaworks will award $50,000 to one participant. And the Facebook fan who has built up the most “social capital” by providing feedback to participants will be allowed award another $50,000 to the entrepreneur of their choice.
Would-be Silicon Valley leaders of tomorrow have already pitched several ideas, including a medical tool for collecting bone grafts, a high-tech tent for homeless people and a web application to help patients find affordable prescription medicine. Are we about to discover the next Mark Zuckerberg?
Lending Club taps into consumer ire
With consumers more angry than ever with credit card companies and big banks, and increasingly worried about another economic downturn, one upstart company has made this into an opportunity.
Lending Club has been going after consumers who have stellar credit histories but have a less than stellar view of credit card companies that don’t reward their good record. The company also targets investors looking for a low-risk return on their capital.
Since it opened for business in 2007 the company has attracted big backersincluding Union Square Ventures and Thomvest, the venture fund of Thomson Reuters director Peter Thomson,
Lending Club recently reported that it passed $400 million in total loan originations. Less than four months ago that figure stood at $300 million. The San Francisco based company also reported that the platform has now paid investors more than $33 million in interest.
People turn to Lending Club for lower interest rates than the credit card companies (or any bank) typically offers. Roughly 2/3 of its loans are used by customers to pay off credit card balances. Its loans range from $1,000 to $35,000 with an average size of $10,000.
In turn, Lending Club goes out to investors and pools their money for loans that generally give them a 9 percent return each year, according to the company’s Chief Executive Renaud Laplanche. Lending Club declines about 90 percent of loan requests. The recent growth spurt has come as lending club has invested in its platform and hired new people including former hedge fund partner Brad Pattelli from Angelo, Gordon and Co. and Jeff McCarthy, a former Jefferies senior vice president.
(Photo: Reuters)
What’s in store for Dropbox after receiving a big pile of cash
Dropbox, one of the most watched companies in Silicon Valley, officially announced on Monday that it raised an astounding $250 million in a Series B round led by Index Ventures, reportedly valuing the virtual file cabinet company at a whopping $4 billion. This massive round stands in contrast to the first bit of money raised — about $7 million – from early investors including Sequoia Partners, Accel Partners, and Hadi and Ali Partovi.*
Founded in 2007, Dropbox is virtual storage that allows consumers to access documents, photos and videos from several devices. So if you happen to snap a picture on your Android operated phone and store it to your Dropbox, you can pull that same photo on your iPad or laptop, for example. It eliminates the need for thumb drives or even email as long as you download a storage box on each device.
The company has about 45 million users. Dropbox provides a certain amount of storage for free before charging people for extra capacity. People can also get more storage by referring friends. Dropbox won’t reveal revenue or profit figures.
Drew Houston, the co-founder and CEO of Dropbox, spoke with Reuters yesterday about the pile of cash the company just landed and what they plan to do with it.
It’s a huge jump in funding from $7 million to $250 million. Why?
DH: It was completely opportunistic. We are profitable. We actually don’t need the money. The way we think about is a couple of things. Last year we had millions of users, this year we have tens of millions of users, soon we will have hundreds of millions of users. We are scaling to this other level. For example, for many people it’s great you can take pictures and HD video with your phone but how many people have seen that on their TV? Or if you leave that phone in a cab then it takes baby pictures with it. And so people love all the things that technology can do but it brings with it other problems and we think we can contribute a lot in solving them.
I think one thing people don’t realize is that we are so early in terms of our audience and in terms of what we are building. Take a number like 40 million users. That is actually only a couple of percent of the 2 billion people that have phones or computers or Internet connection all of who ought to be using Dropbox. We’ve actually reached a small percentage of people we want to reach. The ability to get their as fast as possible and be flexible through partnerships or acquisitions or grow the team aggressively and just as importantly to bring people around the table who have built these iconic companies – Danny Rimer at Index who is on the board of Skype, Reid Hoffman at LinkedIn and Matt Cohler at Benchmark who is early on at Facebook We just thought it was a really interesting opportunity for the company.
Is part of this money going to go towards customer acquisitions?
DH: Probably not directly. We don’t advertise right now. We do things by word of mouth and viral growth—we might do experiments. That is the thing flexibility – if we wanted to, we could.
Any types of companies you are looking at for acquisitions?
It’s a wide variety. We don’t have any specific companies that we are looking at. More broadly the surface area of what we do is so large –anything that remotely deals with how you consume, access or create data or interact with it is tangent to what we do. There are lot of great entrepreneurs working on ideas we think are interesting. If we can help them reach a much larger audience and have a much bigger impact.
Do you want to stay independent, IPO, or to be acquired?
DH: The plan is stay independent. That is what gets us so excited– the opportunity to do bigger and bigger things not only in terms of reaching more and more people but in terms of becoming a more important part in your life.
How do you plan to compete with Google and Apple who have their own cloud based storage services?
DH: First we are agnostic of any of those companies. We are the only ones that are going to put just as much emphasis on building out a great Blackberry experience as we are an iPad experience as we are a PC experience. iCloud is a great example. There is some overlap in functionality but only if you are an Apple user. My mom has an iPad but she also has a Droid. That is exactly the kind of frustration that emerges when you have these things from different vendors that doesn’t work well with other vendor’s stuff.
We’re were not the first or the tenth or the 100th company to have this idea. Take Google. Anybody can make a text box that returns links to Web pages but when you hit search all kinds of crazy stuff is happening under the hood. The same thing is true with Dropbox. If it were easy to build, someone would have built it already. That includes Apple and includes Google.
(Photo of Drew Houston courtesy Dropbox)
* Added Hadi Partovi as an early investor.
Online education site raises $3 mil in a round led by Groupon founders
Groupon co-founders Eric Lefkofsky and Brad Keywell have invested in online educational site (with one complicate name) Udemy through their venture capital fund Lightbank. Udemy just announced a $3 million Series A round of financing led by Lightbank that also includes funding from MHS Capital and 500 Startups.
Udemy plans to use the money for hiring and marketing and biz development.
Udemy “the academy of you” offers 6,000 courses covering all sorts of hobby-related subjects like social marketing, how to build a iPhone app, and Art 100 in addition to more traditional topics like intro to psychology. About 90 percent of Udemy’s courses are free.
Online education is a pretty hot sector now — just go ask the Washington Post and its Kaplan division which for the most part has been the driver of growth behind the company synoumous with Watergate and newspapers . Even News Corp is getting in on the act and set up an education unit focused on technology last year.
The $3 million round follows $1 million in funding from MHS Capital, 500 Startups, and several other individual investors.
Tinsel town turns deaf ear to Kutcher’s request to plug his start-ups
Ashton Kutcher may have more clout in Silicon Valley than in Hollywood.
The star of movies like “Dude, Where’s My Car?” and now of the hit show ‘Two and a Half Men” told conference goers at TechCrunch Disrupt that he tried to get the studio to plug some of his Internet start-up investments on the show– but they wouldn’t do it without compensation.
Kutcher, who said he majored in biochemical engineering in college, has invested in some of Silicon Valley’s hottest companies. His bets include check-in service Foursquare, bed-and-breakfast service Airbnb, and personalized magazine Flipboard.
He also said he invested in companies that he thought ultimately would contribute to greater happiness in the world– but won’t open his wallet unless he clicks with the entrepreneur. “At the end of the day it’s about the person who runs that company, and whether it’s a person I’d want to spend some time with,” he said.
While sometimes he likes to go stealth to avoid his name getting in the way of potential customers paying attention on the underlying business, he thinks he brings more than just star power to his start-ups.
“I have pretty good connectivity in marketing,” he said. “I have pretty good product savvy.” And when he draws on his network of contacts to call in a favor for one of his companies, “they generally will call me back.”
But Kutcher really brought the house down when he explained how he got to San Francisco– a seat on no-frills airline Southwest. Given the short trip from Los Angeles, “I feel bad taking a private plane from there to here,” he said. “It’s not very energy efficient.”
Sequoia’s Doug Leone on the spot for lunch, money
By Sarah McBride
Nailing down a few minutes of a VC’s time can be tough, but one start-up tried a novel approach at the TechCrunch Disrupt conference: put the guy on the spot.
During the audience Q&A after TechCrunch founder Michael Arrington interviewed legendary venture capitalist Doug Leone from Sequoia, one Danish entrepreneur told Leone that his question was whether he could have a lunch date with Leone– today.
Leone begged off, citing a partner meeting, but promised lunch down the line. “Email me,” he suggested, giving his Sequoia email address.
But then the entrepreneur got demanding, saying that because he was going back to Copenhagen, the lunch would need to be before Thursday. This time Leone cited his travel schedule as a reason for declining, but told the entrepreneur he would meet with him eventually– as long as the follow-up email reminded Leone they’d talked at TechCrunch.
That is of course if Arrington doesn’t get there first with his new venture CrunchFund. He asked the entrepreneur to cc him on the email and said his CrunchFund money was better than Sequoia’s. Earlier on Monday Arrington said that he was leaving TechCrunch, the influential technology blog that AOL bought last year after a fracas involving the launch of CrunchFund – a $20 million venture capital fund.
In the end, the entrepreneur may have to go hungry despite his efforts. During the same event, Leone talked at length about how Sequoia tended not to invest in faraway companies because of the difficulty in providing resources to them. “If you’re in Cleveland, we cannot help you,” he said.
I’m assuming that Doug Leone arbitrarily chose Cleveland as a way to illustrate that his fund is most interested in companies within a few hours drive of his California-based office. The fact that many VCs on America’s coasts feel this way—that Ohio might as well be Timbuktu—is a challenge Midwest entrepreneurs trying to raise money face every day and a reason we created JumpStart, a venture development organization that has invested $21 million in 56 Northeast Ohio (which includes Cleveland, btw) companies. After seven years of seeding great Ohio-based companies, investors seem to be getting the message that high quality, venture-fundable companies can be found right here in the “heart of it all.” In 2010 alone, our region’s entrepreneurs attracted capital from 42 investors outside of the region, including five from outside of the United States. And, for those investors worried about geographic proximity post-investment (and the onerous travel involved), there’s enough deal flow here to make it worth your while. Recently, several non-Ohio based VCs decided to put some “feet on the street,” and have hired locals as partners. So, the next time you’re searching for high potential medical device, biopharmaceutical, IT, clean tech, or business services companies, why not look in Ohio? I’m pretty sure you’ll like what you find from both a quality (and valuation) standpoint.–Lynn-Ann Gries, President and Chief Investment Officer, JumpStart Inc.
Arrington Exits TechCrunch; Takes jab at Arianna Huffington
From the TechCrunch conference in San Francisco, this post is brought to you by Alexei Oreskovic and Sarah McBride:
Michael Arrington, one of the most high-profile figures in the world of tech blogging, has lost the TechCrunch soapbox he built. But he’s found a new way to get his point across: T-shirts
Arrington took the stage at the TechCrunch Disrupt conference on Monday, moments after parent-company AOL announced that he was no longer part of the company due to his new role heading up a $20 million venture capital fund.
“It’s no longer a good situation for me to stay at TechCrunch,” Arrington said, calling it a sad moment for him and promising to get the controversy out of the way at the start, to avoid distracting from the 3-day conference in San Francisco.
True to form, the pugnacious Arrington unbuttoned his shirt to reveal a t-shirt with the words “unpaid blogger” printed in large letters, a jab at AOL/Huffington Post’s Arianna Huffington, who had insisted that Arrington was no longer an AOL employee after news of his VC fund surfaced.
“That’s what I’m down to: making statements on fucking T-Shirts. That and Twitter,” Arrington said later, during an on-stage interview with Linked-In co-founder Reid Hoffman.
Hoffman, an investor in the fund, said earlier comments he had made about the connections between the fund and TechCrunch’s closeness to start-ups were interpreted too broadly. “I don’t have any doubts about yours or TechCrunch’s integrity,” he said on stage.
If you haven’t seen his departure speech at techcrunch disrupt, here is a summary: http://srml.in/i9WpS/.
Gina Bianchini rings up Mightybell, a social media help kit
Gina Bianchini — the bubbly, well-connected former CEO of social network Ning — is back in the social media game after a 18 months as entrepreneur-in-residence at venture capital firm Andreessen Horowitz. Her new venture is called Mightybell and essentially is a back to basics type of social media start-up which aims to help users create step-by-step, day-to-day actions which friends and others could follow. For example, if you’re exploring a new hobby you could follow an expert or enthusiast and read their blogs, status messages, see their photos and watch videos on how they achieved a particular goal. “Mightybell seeks to offer creators, instigators, bloggers, organizers, operatives, entertainers, artists, teachers, guides, and everyone’s alpha friend a simple way to take new social technologies and turn them into better, more compelling experiences for people in the real world. It’s the obvious next step in social media,” said Bianchini in a statement. Mightybell launches in beta form as an iPhone and Web-based application. The start-up, of just 9 people so far, raised $2.1 million in seed funding led by Floodgate and First Round Capital as well as “a handful” of angel investors.
Taptu gets new funding, readies new social media B2B platform
Taptu, the social media mobile search start-up based out of Cambridge, England and Denver, raised another $3.5 million from its existing backers as it starts to focus on its it new TapForm platform to help media companies build their own social news aggregator.
Most users who know Taptu are probably more familiar with its ‘DJ mixing’ news service (see video below), which reminds us of the Flipboard experience. You can aggregate and manage all your favorite news sources into an easy to read format on your chosen mobile device.
But with TapForm, Chief Executive Mitch Lazar plans to extend that capability to media partners and told Reuters he’s close to announcing the start-up’s first partner in coming weeks.
This latest round brings Taptu’s funding to a total of $23.5 million with backing from DFJ Espirit and Sofinnova.
Crunch theater: blogger’s VC fund creates media spectacle
The tech blogosphere was on fire on Friday with a flood of constantly-updated news reports and a barrage of tweets dissecting every angle of the story.
A new iPhone? Details of the long-awaited Facebook IPO?
Not quite. The object of fascination was the preceding day’s news that high-profile tech blogger Michael Arrington has launched a $20 million venture capital fund.
The move instantly triggered a debate about the inherent conflict of an influential blog editor investing in many of the start-ups that would presumably be covered by TechCrunch — a must-read in the tech crowd.
But things only got more confusing as Arrington’s role at TechCrunch and parent company AOL appeared to undergo a series of metamorphoses as each hour passed.
AOL, which acquired TechCrunch in September 2010 and is also an investor in Arrington’s new CrunchFund venture fund, initially said Arrington would become “founding editor” and that AOL would look for a new managing editor.
But a flurry of subsequent reports on the Business Insider blog had Arrington moved to an unpaid contributor role, a non-employee of AOL and finally an employee of the AOL Ventures division.
