Seth Goldstein Reveals the Secret to Raising Money

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What does it take to be an Entrepreneur? Join us as Seth shares his Entrepreneurial mindset and an inside glance at his journey to becoming a successful Entrepreneur.

For twenty years, Seth has been a serial entrepreneur and angel investor. He recently wrote the definitive guide to raising money at TheSecretOfRaisingMoney.com

Success Quote

  • ‘Anything worth doing is worth doing badly.’ – G. K. Chesterton click to tweet!

Business Failure

  • Seth burst onto the scene with Turntable.fm, and then collapsed in a heap of failure. Listen to this story Fire Nation, it truly is a cautionary tale!

Entrepreneurial AH-HA Moment

  • Seth saw the magic that exists when you make someone feel good about an action.Crossfader is the result, and it’s taking the DJ world by storm!

Current Business

  • Crossfader: Listen to an instant dance party of mashups made in real-time by a global community of DJs.

Small Business Resource

  • UE Boom:  The 360˚ portable wireless speaker that drops bold, immersive sound in every direction. Rage, riot, party and play the music you love, out loud.

Best Business Book

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How to Broaden Your Search for the Right Investors

two people making money deal

If you’re part of an accelerator or startup, the SEC just granted you a new way to approach funding in 2014: the right to solicit a broader range of investors.

I wouldn’t jump the gun on this opportunity too quickly, though — there’s a bit of fine print to read first. For one thing, the new, relaxed rules on “general solicitation” are subject to change.

What You Need to Know About This SEC Change

In response to the JOBS Act, the SEC is now allowing startups to advertise their stock to investors. Many people believe this gives companies free rein to go after money — an assumption fueled by crowdfunding platforms like Kickstarter and Indiegogo.

In reality, you and your legal team have to take more precautions to ensure the buyers are accredited, which essentially means that they’re financially capable and know what they’re doing. If you don’t know a buyer, you must do the appropriate research to confirm the investor is accredited.

Besides researching the legality of an investor, startups and accelerators also have to work on their marketing strategies. To fully enjoy this new opportunity, founders must know how to attract the right investors and then reel them in with the right pitch.

Marketing to Investors

Here are three marketing tactics to help you find the right investors.

  1. Leverage the power of social networks. LinkedIn is a great place to start looking for potential investors. Try posting enticing information or even direct messaging some of your connections.
  2. Look into crowdfunding websites. Crowdfunding websites curate and position business concepts to a community of potential investors. If an investor is interested, his contact information is passed on to the startup. Research the crowdfunding sites that fit your industry best.
  3. Utilize community events. Community and public events are excellent ways to solicit interest in an exciting business opportunity. By getting exposure at contests, trade events, and other public displays, you can generate investor curiosity.

Pitching to a New Audience

Once you’ve garnered investor interest, the next step is creating the right pitch. Historically, pitch decks were targeted at investors who knew the company well. When marketing to a more general audience, you must work with a different set of assumptions.

Not all investors will understand the business, let alone the market opportunity. The pitch has to be broadened, well-supported, and designed to attract the right potential partner. Think of it as fishing: In a small pond with fewer species, you know exactly which type of bait to use. With a huge lake, you’re making an educated guess.

Crafting Your Pitch

To give you more than a shot in the dark, here are some guidelines to craft a successful pitch.

  • Clearly show the potential for return. Investors are interested in how an investment can mature, earn a profit, and get them a nice multiple on exit. Explain how scalable the opportunity is, the size of your market, and how disruptive the product or service will be to this market. Most importantly, clearly explain how you plan to earn revenue.
  • Don’t get caught up in “how it works.” Many entrepreneurs get caught up in the technical details when pitching their business ideas, but investors don’t care nearly as much about how something works as they do about the potential impact it will have on the market. 
  • Ensure you’re pitching the right investor. The wrong partners can be toxic. As you discuss your business idea with investors, consider whether or not they’re a good fit for your startup. Just because they have money doesn’t mean they’ll make good partners. (This goes beyond ensuring investors meet the criteria in the regulations.)

In addition to the guidelines above, the key is giving the investor confidence that you haven’t invented the numbers or the market opportunity. You want to convey that your prospects are very real in a way the investor can understand.

These newly relaxed rules don’t give you carte blanche, but by doing your homework, marketing to the right investors, and carefully considering each prospect, they could create a great opportunity for your business.

Alex Friedman is the co-founder and president of Ruckus [http://ruckusmarketing.com/], a full-service agency, tech partner, and accelerator that is devoted to helping businesses grow. At Ruckus, Alex has been at the forefront of developing technology for nearly a decade, advising entrepreneurs and growing brands and Fortune clients alike.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Austin Startup Boxer Closes $3M Seed Round

Boxer, Andrew Eye, Austin startup, seed roundI was one of the  first people to dismiss the hoopla surrounding Mailbox, the wildly popular startup that provided what appeared to be a good alternative to iOS mail. They were able to get millions of people excited about the app by creating an exclusive sign up / invite list when you downloaded the app. When it was launch day you got to check your phone every few minutes to see how far you were away from getting one of the most overly hyped apps of all time.

Early on I thought I was the only person on earth who thought Mailbox sucked. I was quickly vindicated by fellow journalist Nicholas Carlson at Business Insider, who saw the same shortcomings of the Mailbox app for people who actually get and rely on email.

Luckily for me, shortly after the Mailbox dust settled (and they were acquired by DropBox), I met Andrew Eye at SXSW. Eye was showing off his new app, at the time called TaskBox. Now Taskbox was made for people that get a constant flow of email for work.  You can see some of the reasons I love Taskbox, here.

After spending some time with Eye at SXSW, we were one of the first media outlets that he called when they announced they had merged with Boxer, the latest startup created by Xoogler Jason Shellen, founder of Brizzy and his even newer latest thing, The Secret Agency. They quickly combined features and in June relaunched as Boxer.

Yesterday they announced that they had raised a $3 million dollar seed round led by Sutter Hill Ventures. In addition to having an excellent feature set, Boxer cites their open integration platform and existing integrations with Box, DropBox, LinkedIn and Facebook as keys to their future.

“As mobile devices have become our primary means of receiving and reading email, users have become increasingly frustrated with the primitive experiences provided by stock email apps,” Eye said in a statement. “Now, with the backing from Sutter Hill Ventures, Boxer can continue to execute on our strategy of extending the mobile mail experiencewith relevant third party information and interactions.”

Boxer has assembled a worldclass executive team and advisory board filled with proven entrepreneurs and industry veterans. Originally founded in 2012 by CEO Andrew Eye (former COO Ciphent Inc. 500 #16) and CTO Adam Cianfichi, Boxer added VP of Engineering Ian Ragsdale (former CTO at email startups OtherInbox and Skylist) and VP of Product Timothy Sullivan, (former mobile product lead at Zynga) in 2013.

“Mobile devices have changed the way we work, however the mobile inbox remains much the same as it was earlier this decade,” said Sam Pullara, Managing Director at Sutter Hill Ventures.“Boxer was an attractive investment opportunity because it opens the inbox to third party innovation, and a new era of mobile productivity.”

The Austin based startup launched out of the Capital Factory, which is led by Josh Baer, a pioneer in the world of email.

Download Boxer for yourself here, and find out why it really just works.

 

 

 

Wow! 19 Chicago Startups Raise $265M In Q3 2013

Builtinchicago, startup news, Chicago startup fundingOn Friday Chicago Mayor Rahm Emanuel’s office, in conjunction with Built In Chicago, announced that 19 startup and technology companies in Chicago’s Tech Sector raised a collective $265 million dollars in Q3 2013. This is an  amazing testament to the success of Chicago’s startup and technology ecosystem.

“Capital investments like these in Chicago’s growing companies are solid proof that what is happening for our technology sector will have a lasting and substantial effect on Chicago’s economy,” said Mayor Emanuel. “These companies are creating jobs and the technologies they are developing will shape the future of the city’s economic landscape. I am proud of their success and I look forward to working with all of these companies as they continue to grow.”

The biggest raisers were Network Merchants with $100 million, Cleversafe with $55 million, and Avant Credit with $20 million. Additionally, the breadth and depth of Chicago’s growing digital economy was evident in this fiscal quarter with nearly 40 startups receiving funding, 19 of those raising more than $1 million or more. 44 new startups came online.

builtinchiq32013Matt Moog, founder and chairman of Built in Chicago added,  “The growth of funding and new digital technology startups being created combined with the breakout growth of companies founded in the recent past is helping fuel a job creation boom in the digital sector.  And there is more to come.  We are seeing the benefits of a culture of innovation and risk taking.”

Last week, Built In Chicago released the Top 100 Digital Companies report on the Chicago technology sector, which had some outstanding news for Chicago’s digital technology sector. In 2012 367 startups launched– that is one new startup every 24 hours in Chicago (up from one every two days in 2011). The total employment in the tech sector ballooned to over 40,000 people, up more than 20 percent from the previous year. And more than 1,500 technology companies now call Chicago home.

The diversity of Chicago’s technology companies is also notable.  No sector of the digital economy occupies more than 33 percent, ensuring that all five major sectors (software, ecommerce, agency, consumer web, and b2b web) have a significant share of the digital market. Additionally, 90 percent of the technology companies in Chicago are now more than 5 years old, meaning that there is a level of maturity in the companies as they move into the next stage of their development.

Chicago is preparing for Chicago Ideas Week next week, which will bring together entrepreneurial speakers, innovators, and thought leaders from across the country to Chicago for a week of amazing discussions, talks, lectures, hacking and more. You can find out more about Chicago Ideas Week here.

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Cyanogen’s Startup Was Cyanogen, Closes $7 Million Series A Round

 

Cyanogenmod, Seattle Startup, Series A, Venture Capital, Steve Kondik

(img: Technobuffalo.com)

Back in May we ran a story on Steve “Cyanogen” Kondik, the Android developer behind the Cyanogen Mod operating system that runs, and improves, the Android operating system. The popular “rom” has millions of users who root their Android device to run the open sourced software.

After creating the initial Cyanogenmod, the project became a community effort with several developers working on future releases of the firmware that when installed, allows users to take advantage of many of the benefits Google has in the Android Operating system.

Android’s biggest manufacturer, Samsung, took notice of Kondik and his work with Cyanogenmod. Kondik moved from his Pittsburgh roots to Seattle to work on Samsung’s Android team.

Kondik posted a note on his Facebook page looking for developers in the Seattle area. We reached out to Kondik at the time, and told us he was working on a startup but couldn’t tell us what it was. Knowing that Cyanogen is the most popular “Rom” for Android, we were quite curious as to what could be so interesting that Kondik would quit that job at Samsung and get his feet wet in the startup world.

It was revealed last week that Kondik had teamed up with Kirt McMaster,a cofounder of Boost Mobile, to turn Cyanogenmod from a community based effort, happening in garages and basements across the globe, to an actual company where they could push out the latest features faster.

Kondik wrote on the company blog that McMaster had contacted him by email last year and they were able to secure venture capital meetings in December. Those meetings led to a $7 million dollar series A round led by Benchmark with RedPoint ventures also participating. A confidential source told us by phone that CyanogenMod had turned down other investors including Google Ventures.

Kondik is adamant that the community know that Cyanogenmod won’t fundamentally change, but rather get better. Now they won’t have to worry about raising money from the community for new servers or having to use day jobs to support their development.

With the $7 million dollars, CyanogenMod became CyanogenMod Inc. They also opened up offices in Seattle and Palo Alto. Kondik was also able to bring three long time members of the Cyanogen team to work for the company full time. Kondik first recruited Koushik “Koush” Dutta. They also brought Chris Soyars Head of Infrastructure and designer Dobie Wollert from Google.

Monetization

We were tremendously excited to hear that a project that started out community based, and built up a huge following, was getting funded. But we were curious about how Cyanogenmod was going to make money. After all they just raised $7 million dollars from some of the biggest VC’s around; surely thode investors would want their money back. Also, Cyanogenmod itself is free and Kondik has already indicated it would stay that way.

We spoke with industry analyst Russell Holly over the weekend who assured us that the “ROM” or “OS” would remain free. Cyanogenmod is looking at hardware partnerships that they couldn’t get before because they weren’t a “real company,” and there should be news on their first hardware partnership in the coming week.

They will also work on other features outside the realm of their operating system that could become premium features. For the immediate future we can expect quicker, more thorough releases.

“Our mass market plan is for the second half of 2014, which will include services and third-party integration,” McMaster explained to Fortune.com. “We’ll begin to make money on services we can build and integrate in ways that Google or Apple (AAPL) don’t necessarily do for their own business reasons. We’re not beholden to any OEM or mobile operator.”

When we originally read that statement, we were curious as to the implications stemming from “Apple” being in McMaster’s statement. Holly told us that while we won’t see a “CyanogenMod” for Apple anytime soon, services that may link the two operating systems could be forthcoming. As a hypothetical example Holly brought up the fact that while great in their own systems, FaceTime and Google Hangout were incapable of talking with each other. A more streamlined messaging service may be something the new CyanogeMod takes on.

While that still paves no direct route to monetization, Cyanogemod seems to be in a much better predicament than several social startups that have ballooned to astronomical valuations and huge funding rounds without a solid plan for growth. Undoubtedly the investors will see their money back, in the meantime though, they have now funded a collective of some of the best mobile OS developers in the world.

Findo out more about Cyanogenmod here.

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Mark Cuban Never Sleeps: Backs Harvard Startup HourlyNerd

HourlyNerd, Boston startup, Harvard Startup, Mark Cuban

(HourlyNerd team photo: HourlyNerd)

Just yesterday we reported on Mark Cuban’s two most recent investments. Now we have a third. Back in July we reported that Mark Cuban had backed Harvard startup Tivli, a company that brings live TV over the internet to college students. The company allows college students to view their live TV content over any connected device no matter where they are on campus.

Well Cuban is back at Harvard investing in another high growth potential startup, again in a totally different industry.

HourlyNerd, the Harvard startup, is the latest startup trying to connect MBA’s to work. The company says they have 900 MBA’s who are willing and ready to work for small businesses on an as needed basis. The service is ideal for “small businesses that want to access premier quality professionals at reasonable rates and on an ‘as needed’ basis,” HourlyNerd told the Boston Business Journal.

There are a lot of MBA graduates and MBA students that upon completion (or nearly completing their MBA) struggle trying to find the ideal long term placement for themselves. There have been a handful of startups that are trying to find ways to connect these MBA’s to work, be it extremely short term or on a project by project basis like DC based MBA Project Search which we profiled back in November.

In regards to HourlyNerd, Cuban said in a statement that the company “fills a need every entrepreneurial company faces,” and said he expects to use the service “heavily.” Cuban is investing rapidly in several startups that run across a variety of industries, often times outside of his direct scope.

Cuban led HourlyNerd’s $750,000 round with a reported investment of $450,000.  The company was founded in a Harvard University course by Rob Biederman, Peter Maglathlin, Joe Miller, and Patrick Petitti.

The Business Journal notes that Accanto Partners and Connect Ventures also participated in the round.

See how our co-founder Nick Tippmann directly  helped Atlanta startup Badgy get an investment from Mark Cuban.

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Mark Cuban Shows Variety In Portfolio With Latest Startup Investments

Mark Cuban, Fiscal Note, Ranku, Funding, startup

Some may think that Mark Cuban’s investment strategy is all over the place, but teh truth of the matter is it goes hand in hand with his varied background. Cuban’s career crosses a variety of industries, all of which were self taught.

Cuban began his career as a self taught computer salesman who didn’t  even own a computer. From here his next big accolade is selling broadcast.com to Yahoo, starting HDTv (now axs). Now he’s also a NBA franchise owner, shark on ABC’s Shark Tank, dancer on Dancing With The Stars, startup investor, philanthropist, and more. With all of that in mind Cuban is still just one of the guys, just ask anyone that knows him or frequents places he likes to hang out.

Cuban’s investment portfolio encompasses lots of industries. He’s invested in things that touch his TV business like Tivli and One Condition. He’s also invested in app selling company Apptopia, multilingual analytics firm Linquasys. and local rewards startup Badgy. That doesn’t even scratch the surface of Cuban’s portfolio; you can find more of his investments here.

Cuban’s two most recent statup investments are equally diverse.

After meeting Kim Taylor at the Kaplan accelerator program for edtech startups, Cuban led a $500,000 round for Ranku. Taylor also happened to be one of the featured entrepreneurs on Bravo’s reality show about startups called Startups: Silicon Valley.

Ranku ranks colleges by the success its graduates have with finding jobs rather than how they rank on the US News & World Report list. Obviously this is a much more relevant way to rank schools for students headed into college.

On Wednesday evening TechCrunch’s Anthony Ha reported that Cuban has also backed legislation tracking and prediction startup FiscalNote.  The $1.2 million dollar round will help the startup continue working on new technologies to support their original model.

FiscalNote provides a service to businesses that keeps them up to date with legislation across all 50 states that may affect their business. Co-Founder and CEO Tim Hwang told Ha that many businesses are affected by these changes in legislation and for a business to keep up with them they would need a large staff hitting refresh on all 50 states websites continuously. Beyond that they would need to decode that legislation and see how it really affected their business. FiscalNote’s algorithm does all of that for them.

For more on Mark Cuban and his  startup investments check this out.

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St. Louis Startup Aisle411 Raises $6.3M Series A

Aisle411, startup news, funding, St. Louis startupThe St. Louis startup that’s changing the in-store experience for everyone has just closed a massive series A round. Aisle411 is an interactive indoor mapping startup for grocery stores and other places where you need to locate things on an indoor map.

The St. Louis based startup has raised $10M since its launch in 2008.

This latest round of funding came from Google’s Don Doge, Plug & Play Ventures of Silicon Valley, Cultivation Capital and St. Louis ArchAngels. In addition to the funding the company already has some big partnerships in place including one with Walgreens, Home Depot, Schnucks, and Stop and Save.

While people immediately recognize the need for Aisle411, the company is still working on aggressively building scale and going global.

“We’ve seen a significant increase in demand from the retail market for our services,” Nathan Pettyjohn, founder and CEO of aisle411, said in a statement. “The investment round allows us to aggressively scale to a growing list of global retail partners.”

You can check out Aisle411 here.;

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Chicago Startup DoggyLoot Gets Just That

DoggyLoot, Chicago Startup, startup news, funding

Doggyloot, an internal project at Chicago’s Sandbox, a startup incubator of sorts, has just closed a $2.5 million dollar round. The company was founded in 2011 and already has 700,000 subscribers according to Crain’s Chicago Business.

Doggyloot subscribers get access to flash sales on products they need for their animals. It’s a modern day pets.com complete with all of the things that are making e-commerce startups successful in 2013. To add to that success the company is led by former Orbitz guy Jeff Eckerling.

Eckerling said they will use the money to “crank up the company’s technology, especially mobile apps and more personalized targeting of its offers, and to step up advertising to attract more subscribers. ”

Although pets.com was one of the biggest victims of the dot com bubble, the pet industry is stronger than it’s ever been. It’s a $50 billion dollar a year industry with that doubling over the last decade. Pets.com closed in November of 2000.  “There are over 50 million households in the U.S. with dogs. That’s more than have kids under 18,” Eckerling said.

He’s no stranger to the flash sales market either. He developed the flash travel site BonVoyou which was acquired by HauteLook.

Peter Krasilovski, an analyst with BIA/Kelsey told Crain’s “Newspaper sites get thousands of visitors from pets. We have a luxury culture for pet owners. There are dog biscuit stores popping up all over. But we all saw the big flameout of Pets.com. Is it time to revisit, maybe? It might be a good niche opportunity.”

Check out DoggyLoot here.

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2 Gener8tor Startups Raise Over $600,000 In Seed Funding

WeMontage, Quietyme, Gener8tor, Wisconsin, Startup Accelerator, Accelerator, FundingWisconsin’s duel city accelerator, Gener8tor, is producing startups in both Madison and Milwaukee Wisconsin. Two of their Winter 2013 graduates (Madison program), WeMontage has just closed out a $310,000 seed round. Quietyme has raised a $300,000 seed round.

The Greater Milwaukee Business Journal reports that the startup that allows users to turn their mobile pics into actual wallpaper, received their funding from Angels On The Water LLC, Gener8tor and an “undisclosed”  Wisconsin based angel investment fund as well as several private investors.

While turning your mobile pics into decals, stickers, wallpaper and other forms of art is nothing new, WeMontage has found a way to does it in a way that’s better for the wall and looks better overall. Unlike their competition, WeMontage uses  “premium high-tac adhesive, fabric-based wall covering, which adheres to textured walls, while not damaging the wall or paint,” the company told the Business Journal.

We are excited to have closed our seed capital round and are working hard to build a premium brand for WeMontage and acquire new customers,” said James Oliver, Jr., founder and CEO. “Since closing the seed round, we’ve been able to hire an outstanding software developer, Chris Schmitz, from Green Bay, as technical co-founder.”

Quietyme has developed a technology that allows hospitals, hotels, nursing homes and property owners to monitor the quality of indoor environments like noise, temperature, humidity and water leaks, the Business Journal reported on Wednesday.

In addition to Gener*tor and Angels On The Water LLC, American Family Insurance, KSFI Partners LLC and a private investor participated in this round. The startup previously received $20,000 in seed capital from Gener8tor at the on-set of the program.

“Hospitals and hotels now have an unprecedented tool that can put a spotlight on when and where customer sleep experiences are in jeopardy,” said CEO John Bialk in a press release. “Just imagine how special you feel when a front desk manager or nurse recognizes that your sleep may have been disrupted. By being proactive about disruptions, businesses can demonstrate their sincere commitment to a high-quality customer experience.”

Find out more about Gener8tor here.

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ShareThis, The Social Sharing Startup With Cincy Ties, Closes $30 Million Dollar Round

ShareThis, Silcon Valley, Cincinnati Startup, Cintrifuse, FundingShareThis, one of the most successful startups to come out of Cincinnati, has just announced the closing of a $30 million dollar round of venture funding.

The company, now based in Paolo Alto, has created a platform that makes it incredibly easy to share any kind of content across over 120 different social channels. ShareThis claims that they touch the lives of 95 percent of U.S. internet users across 2 million publisher sites. Whenever you’re cruising a website like AllthingsD, Cosmopolitan or any of the Food Network sites and you see the little green sharing icon that’s ShareThis.

The company was founded by native Cincinnatian Tim Schigel who before he founded ShareThis was the director of Blue Chip Venture Company, a Cincinnati based firm which participated in the startups latest round. Schigel is also the founder of the public/private partnership Cintrifuse that’s supporting downtown Cincinnati’s startup movement.

Back in April when ShareThis acquired Socialize they opened up a funding round and raised $23 million dollars. They left the round open and took another $7 million dollars before closing the round.

In addition to Blue Chip Venture Company, Blair Garrou of the Mercury Fund , Heidi Rozen of Draper Fisher Juverston and T-Venture also participated in this round. All of the investors had previously invested in the company.

Come see Cincinnati’s amazing startup community for yourself during this national startup conference!

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CincyTech Closes Biggest Fund To Date

CincyTech, Funding, Cincinnati startups, Everywhere Else

CincyTech, the public/private partnership, seed stage investor, and pillar of the Cincinnati startup community, has reportedly raised it’s largest fund to date. Earlier this month The Cincinnati Business Courier reported that CincyTech has closed on a $10.8 million dollar fund.

CincyTech Fund III, LLC combines a $5 million Ohio Third Frontier investment with $5.9 million raised by CincyTech from Southwest Ohio partners.

Like CincyTech Funds I and II LLC, Fund III will invest in companies focused on information technology and bioscience that are based in or willing to move to Southwest Ohio. The fund has the capacity to invest in at least 15 companies.

“Over the last five years there has been a significant increase in seed stage investment activity in the Cincinnati region. CincyTech Fund III will enable us to continue to invest in entrepreneurs in Southwest Ohio to create jobs and wealth to propel our region forward,” said Bob Coy, president of CincyTech.

CincyTech has a variety of investors that have participated in Fund III, including eight local institutions and 51 individual investors.

“The number of individual investors in Fund III represents a dramatic increase from the nine individual investors in Fund II. These individuals are the foundation of the larger seed stage investment syndicates that we organize for our portfolio companies. Based upon our past investment experience, for every dollar invested in a startup from Fund III, an additional $3 will be invested by other investors in the seed round prior to an investment by an institutional venture capital fund,” said Coy.

Local institutions that have committed to invest in Fund III include Castellini Foundation, Cincinnati Children’s Hospital Medical Center, The Christ Hospital, The Greater Cincinnati Foundation, and the Health Foundation of Greater Cincinnati.

CincyTech has invested in $15.3 million dollars in 43 portfolio companies, including ChoreMonster, Impulcity, Lisnr, VenturePax, Ahalogy and many more.

Speaking of Cincinnati, this huge national conference for startups everywhere else is in Cincinnati Sep 29- October 1.

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$600,000 Investment In GigTank Startup WeCounsel Proves Accelerators Still Work

WeCounsel, Chattanooga startup, GigTank, UltraGroup, Funding

WeCounsel CEO Harrison Tyner pitches at GigTank demo day (photo: NMI 2013)

Just last week we were in Chattanooga for the GigTank accelerator’s second demo day. GigTank debuted last year, right on the heels of Chattanooga becoming the first (sorry KC) city with 1gb ethernet to all residential and business addresses.  This year’s cohort came literally from across the globe with startups from Bulgaria, India and the Cayman Islands choosing to spend the summer in Tennessee.

During the two day celebration of startups in Chattanooga, there was a lot of hush hush talk about accelerators in general. It’s actually a common discussion, whether or not accelerators are worth the time and money. Many think the 3-4 month model isn’t enough time to build real companies, and with accelerators all over the country, there may be an accelerator bubble.

Another struggle is attracting investors. Outreach is tremendously important for an accelerator. Sure you can invite the same 50-100 investors on the VC academy list of VC Pro database, and they may come. But often the startups presenting aren’t in their investment wheelhouse. For accelerators not in their first season, the investors have seen the same PowerPoint template presented over and over again .

Accelerators and their demo days get interesting when you include anyone who’s interested into the startup community. Entrepreneurs come in all shapes, sizes, and colors and so do startup supporters. CoLab and GigTank director Sheldon Grizzle is very good at bringing the whole community together around entrepreneurial events. On the eve of the GigTank demo day, there was an event called Fireside Talks which included entrepreneurs 20 and under working on a variety of projects.

UltraGroup is not one of your typical startup investors.  UltraGroup is a healthcare company that specializes in behavioral health programs.  They provide outpatient care at 40 rural hospitals across eight states, according to the TimesFreePress. They are based in Chattanooga.

WeCounsel is a GigTank startup that went through the most recent cohort, graduating  last week. They offer an online platform  that allows therapists to take notes, coordinate scheduling, share documents, store client records and interact with colleagues. They are also based in Chattanooga, and one of three local startups in this year’s GigTank Cohort.

WeCounsel co-founder and CEO Harrison Tyner told Nibletz by phone that UltraGroup was on their radar to talk with earlier this summer.

“Relationships we built at the GigTank made our talks with UltraGroup progress even further,” he said. He went on to say that without the GigTank helping them iterate their idea to perfection and mentorship from others in the GigTank’s network, they would not have been ready for UltraGroup’s $600,000 investment reported Wednesday.

“None of this would have been possible for us without the GigTank. It’s been the best thing to happen to our startup,” Tyner said.

Tyner  and his co-founders Riley Draper and Joshua Goldberg are all originally from Chattanooga and will stay there to grow WeCounsel. Currently they are still operating out of CoLab but plan on moving to their own office in about a month.

“Chattanooga continues to prove that it’s a great city for entrepreneurship,” Tyner said. By staying in Chattanooga, they will be able to work closely with UltraGroup and continue to work with the mentors and leaders they formed relationship with at GigTank.

When the GigTank presentations kicked off, Toni Gamayel co-founder and CEO of Banyan took the stage. His company, which has designed a collaboration platform for researchers, won $100,000 from Alcatel Lucent at last year’s demo day. Shortly after demo day the company went home to Tampa, Florida, where Gamayel has been a fixture in the startup community.  He told a story about coming up to visit during the winter last year and realizing that Chattanooga was on its way up. With that realization entire team loaded up a Uhaul and moved back to town.

For more info on WeCounsel visit them online here.

Check out more GigTank coverage here.

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GlaxoSmithKline Betting $50 Million On Bioeletronic Medicine & Technology Startups

GlaxoSmithKline, Medical Startups Venture Capital fund

If you’re pursuing a startup in bioelectronic medicines or technologies, then pay attention to this news from one of the nation’s largest pharmaceutical companies.

GlaxoSmithKline announced on Thursday that they are launching Action Potential Venture Capital (APVC) Limited, a new $50 million strategic venture capital fund that will invest in companies that pioneer bioelectronic medicines and technologies. The fund’s first investment will be in SetPoint Medical, a California company considered a trailblazer in creating implantable devices to treat inflammatory diseases.

The fund complements the work of GSK’s Bioelectronics R&D unit, which was established in 2012 after a two-year effort to seek out and engage the most promising researchers in this emerging area of science. The name of the fund comes from electrical signals called action potentials that pass along the nerves in the body. Irregular or altered patterns of these impulses may occur in association with a broad range of diseases.

GSK believes that miniaturized devices, or bioelectronic medicines, can be designed to read these patterns. The devices could be designed to interface between the peripheral nervous system and specific organs. They can help treat disorders as diverse as inflammatory bowel disease or rheumatoid arthritis, respiratory diseases such as asthma and COPD, and metabolic diseases including Type 2 diabetes.

The field of bioelectronic medicines is in its very early stages. GSK’s ambition, through collaboration with scientists globally, is to have the first medicine that speaks the electrical language of our body ready for approval by the end of this decade.

“We want to help create the medicines of the future and be the catalyst for this work,” Moncef Slaoui, chairman of R&D said in a statement. “GSK can play the integrating role that is needed to drive this new type of medical treatment all the way from the bench to the patient and this fund is a key part of our efforts.”

Action Potential Venture Capital intends to build a portfolio of five to seven companies over the next five years. The fund will focus investments in three areas:

  • New start-up companies that aim to pursue the vision of bioelectronic medicines
  • Existing companies with technologies that are interacting with the peripheral nervous system  through first-generation devices that can stimulate or block electrical impulses
  • Companies advancing technology platforms that will underpin these treatment modalities

Action Potential Venture Capital will be based in Cambridge, Massachusetts and managed by a small, dedicated team. The fund has named Imran Eba as its first partner. Imran will move from GSK’s Worldwide Business Development organization and work closely with the Bioelectronics R&D unit.

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Image Credit: GSK HQ