GoCardless tries to disrupt the credit card industry

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.

GoCardless joins the ranks of companies, like Square and Dwolla, that are trying to challenge and out-innovate traditional payment/credit companies like Visa, Mastercard and even PayPal, which was acquired by eBay in 2002. With the ubiquity of mobile devices, and new technologies like the Square payment system, the credit/debit payment space seems wide open and ripe for innovation.

“As a merchant, card companies are a rip-off and the application process is eye-wateringly complex,” said Matt Robinson, founder of GoCardless in an interview with Wired. “We charge 1 percent per transaction — a step-change cheaper than alternatives. We can do this and still have attractive economics because we’re able to cut out the cost and complexity of the card networks.”

Angel investor makes a Mint

From right to left: Dave McClure with Rob Hayes and Mark Goines at TechCrunch50, courtesy of Dave McClure

At 5-foot-8, Dave McClure calls himself “one of the smallest” venture capitalists in Silicon Valley, either “by height or by wallet size”.  But he was walking tall after Intuit announced it was buying Mint.com recently for $170 million.

That means McClure, who invested $25,000 in Mint two years ago as part of a Series A funding round, is in line for a healthy payout. At the time McClure was actually on Mint’s payroll as a consultant, but was so impressed with the startup’s founder, Aaron Patzer, that he took the money they were paying him and “turned it right back around and wrote them a check.”

What the Tesla founders’ feud can teach entrepreneurs

Tesla Motors Inc. CEO Elon Musk

High-powered electric-car startup Tesla Motors has hit a speed bump with the filing of a lawsuit by former CEO and founder Martin Eberhard.

The libel suit, filed on May 26 in San Mateo County, Calif. Superior Court, alleges current CEO Elon Musk falsely portrayed himself as the founder of the company and orchestrated Eberhard’s ouster as original CEO in 2007. In the lengthy 22-page document, Eberhard accuses Musk and Tesla of, among other things, libel, slander, breach of contract, negligence and failure to pay wages. The suit doesn’t even refer to Musk as a co-founder, but simply as one of “various investors,” who joined the Tesla board in April 2004.

Eberhard’s suit claims that from the moment he came on board, Musk “began a campaign to appropriate control of Tesla Motors and Eberhard’s legacy as the company’s founder and visionary.” The suit further alleges that Musk “began a pattern and practice of defaming and disparaging Eberhard in various widely distributed media outlets,” a few of which included The New York Times, Newsweek, USA Today and NPR.

from MediaFile:

A familiar name in real time search

The Musk name is famous among techies thanks to high-profile companies like PayPal and Tesla Motors, the electric car maker, which were founded or funded by entrepreneur Elon Musk.

Now another Musk-backed start-up is looking to make a splash. Only this time it’s younger brother Kimball at the helm, as CEO for OneRiot.

OneRiot is launching a real time search engine on Tuesday that combs through the flood of messages and Web links that are shared through services Twitter and Digg, as well as in OneRiot’s existing browser toolbar product, to determine the hottest topics on the Internet.