Reuters’ Rhonda Schaffler checks in at the first New York Tech Meetup since the Facebook IPO to talk financing and startups with entrepreneurs and venture capitalists.
All the elements of a thriving tech/startup scene are coming together in Berlin. The engineers are there. The VCs are there. The local tech blog, aptly named “Silicon Allee,” is there, and now a new office complex, built in the structure of an old brewery and designed to bring entrepreneurs together, will soon be there. But don’t expect to get office space anytime soon as it’s already oversubscribed without even being fully built yet, Reuters reports.
Some 1,300 startups call Berlin home, attracting 136 million euros (U.S. $169 million) in funding. And as the tech scene in Berlin grows, it’s attracting the attention of international investors and entrepreneurs too, like LinkedIn co-founder Konstantin Geurike who just joined EarlyBird ventures, a Berlin-based VC dedicated to funding European startups. Another company, SoundCloud, launched in Sweden and relocated to Berlin to attract talent and take advantage of the international city’s thriving creative class. They’ll be the first major tenant in the brewery-turned-office space, which will have room for some 30 companies.
Other notable startups in Berlin include Spotify as well as Gidsy, which attracted the attention and capital of actor/investor Ashton Kutcher.
A few weeks ago, President Obama signed the JOBS Act into law, making equity-based crowdfunding legal for businesses that want to raise capital in smaller amounts than traditional venture capitalists or accredited investors supply. Depending on who you ask, crowdfunding is either going to democratize access to capital and serve as a boon to small businesses across America, or it will be rife with con artists intent on bilking seniors out of their hard-earned savings.
Let’s hope the former is true. But concerns about fraud must be addressed so the emerging market can thrive without being spoiled by fraud and scams.
The Securities and Exchange Commission is currently writing rules that will govern crowdfunding and, it’s hoped, guarantee its success. (Disclosure: I worked as a securities lawyer at the SEC from 1986 to 1990.) To properly regulate crowdfunding without suffocating it at inception, the regulators at the SEC must strike the right balance between guarding against fraud and allowing the marketplace to work its will.
It’s Small Business Week, and here are a few links to help you know what’s going on.
Inc. has a list of ten impressive attendees in D.C., and the New York Times has a post packed with useful Small Business Week links. At Entrpereneur.com, Victoria Tifft, the Small Business Administration 2012 National Small Business Person of the Year and founder of ClinicalRM, a medical device and vaccine research company, discusses the growth of her business.
And at Reuters, John Stoehr is asking, in light of a challenge to the health care law: Who truly speaks for Small Businesses?
Small business owners are optimistic about the future of the economy. That’s the gist of a new Bank of America survey released last week. The first of its kind, the survey included some 1,000 small business owners.
“The overarching theme here is despite of all the stress and challenges, small business owners in this country are confident folks and feeling pretty good about the near term future of their business,” said Robb Hilson, a small business executive with Bank of America. “Optimism has improved over the last several quarters.”
Though the survey found that small business owners feel confident about their local economies, they feel less confident about national leadership, which is unsurprising given the upcoming election and the shaky economic recovery.
For small business owners, frustration with credit card companies is nothing new.
“You are a slave to the lender,” said Doris McMillon, owner of a communications consulting business, in a recent Reuters article. “What some of these banks have done to small business owners is unconscionable.”
Luckily for entrepreneurs like McMillon, one UK based startup, fresh with $1.5 million in venture capital, is trying to shake up the credit card industry. GoCardless is building a way for UK businesses to cut out the credit card middleman, and instead allow customers and businesses to deal directly with banks by tapping into banks’ APIs, which were previously reserved only for larger companies and organizations, reports Wired.
The big business of sports may have a new challenger. Endorsement deals, giant salaries, big name sponsorships — this is what we’ve come to expect when we watch our favorite teams compete at their huge stadiums broadcast on major television networks. But what about the lesser-known, lesser-viewed sports? And the athletes who don’t have broad appeal and access to these sorts of lucrative deals? How do they support their athletic hopes?
That’s the subject of a Mike Pesca’s report on NPR’s Morning Edition: Olympic Runners Find Unique Ways To Raise Funds. A few athletes are changing the way they get paid to compete. For Anthony Famiglietti, a steeplechase runner, the reason for looking for alternative sponsorships was fairly simple. None of the shoes produced by shoe companies willing to sponsor him fit comfortably. He literally could not compete in their products. So he tapped into the crowd, raising smaller amounts of money and offering advertising space on his running uniform to bidders.
Nick Symmonds, an 800 meter runner, also tried an alternative sponsorship idea: auctioning a sponsorship placement in the form of a temporary tattoo he applied before a race.
The crowdsourcing site Kickstarter just turned three years old, and the New York Times has a nice profile that explores how the company has evolved and how its changed the way entrepreneurs, artists, and anyone else with an idea can raise capital online.
Much as the introduction of cheap Web services lowered the barrier to entry for people seeking to create a start-up, and as offshore manufacturing gave entrepreneurs a chance to make products without having to build a factory, Kickstarter offers budding entrepreneurs a way to float ideas and see if there’s a market for them before they trade ownership of their company for money from venture capitalists.
Tapping into the wisdom of the crowd is nothing new. And now that Kickstarter has beaten the path, there are a few similar, and niche-focused, alternatives to Kickstarter. One interesting development to consider, though, when thinking about the online fundraising space, is the Jumpstart Our Business Startups Act, also known as the JOBS Act. As Talking Points Memo reports:
Joe Witte is the co-founder and Executive Vice President at MycroBurst, a crowdsourcing site for companies and individuals who want custom logos and designs. Reuters Small Business interviewed Witte about building a tech startup and how Mycroburst balances work with clients and designers.
First off, can you briefly describe MycroBurst? How it works, etc.
I’ve always described MycroBurst as an eBay for design services. We have a community of more than 35k designers representing more than 100 countries. They participate in design contests for our customers (aka Project Holders), who require anything from a brochure, postcard, website or logo design. What makes our marketplace so powerful, is that a Project Holder will typically receive dozens, and typically more than 100 design concepts from our design community to choose from. And that’s in one week. Our platform makes it easy to communicate with all the designers, and easy to review the concepts side by side.
Where did the idea come from?
Previously, we had a design team that provided services to our clients via online transactions. Many of our designers were leaving in order to freelance for sites like eLance. And after seeing this model work for other crowdsourcing sites, we felt that this was where the future was with sourcing design services. After we shifted in 2009, it was apparent that everyone was happier. Our designers had freedom, and our clients received far greater choice, and flexibility in a faster delivery method.
Brothers Will and Dave Willis launched the Boston-based craft distillery Bully Boy in 2011. It’s the first distillery in Boston since prohibition and one of many new small batch distilleries that have sprang up across the U.S. in the last few years. Reuters Small Business interviewed Dave Willis over email about launching Bully Boy and what he’s learned along the way.
Moving from the idea of a distillery to actually distilling took about a year and a half. Nothing about the process was easy. We knew we wanted to be in Boston, so one of the biggest challenges was finding suitable manufacturing space. We need fifteen-foot ceilings for our still, concrete floors, and either a loading dock or bay doors. Most of the industrial space in Boston is either way too big, or small, cramped, and raw. Funding the operation wasn’t easy either. We started looking for capital in 2010. The economy was improving, but there still wasn’t much appetite for risk, and starting a distillery is very risky. What’s more, the risk is difficult to assess because the banks have no point of comparison. We ended up raising cash through friends, family, and anyone who was willing to listen. Then, of course, there is the licensing component. Don’t even get me started.