The Slow Revolution of Private Equity

By: Rohan Kusre, COO // Co-Founder, Crowdentials

After months of restless anticipation, there is finally some substantial progress towards the implementation of the JOBS Act. It has been exactly one month since the Title II rules- the ones based around general solicitation- went into effect and the SEC is moving forward with implementing the next portion of the monumental legislation.

Title III, the poster child of the JOBS Act, is focused around the sale of private equities in an open market. It is as groundbreaking for the industry as it is controversial in its own right. There are as many proponents of the crowdfunding bill as there are naysayers and today the SEC discussed the proposed rules that would provide the infrastructure for equity crowdfunding to take place. Platforms such as EarlyShares have been waiting for these exact rules in order to set in motion their part in facilitating the sale of private securities.

There have been claims that equity crowdfunding will result in a ‘ghetto stock market’ due to the high risk of fraud and the low barrier to entry. There have also been concerns about the cost of properly keeping up with SEC regulations. Currently, an investment group will spend anywhere between $50,000 and $100,000 in due diligence and this begs the question of how such practices will be handled at a smaller scale for investments that will be under $20,000.

Well, where there is a will there is a way. Solutions are already in place for companies wishing to utilize the new legislation as the SEC continues to implement it. Companies like CrowdCheck provide quick and secure diligence reports while companies such as Crowdentials assist with making sure your investor is accredited among various other compliance needs. Sure, the waters of the JOBS Act regulations are currently a bit murky but there is a lot of money to be made within these environments and those that take advantage of it will be handsomely rewarded. So when can those interested to utilize the new legislations expect to be able to do so? This is where it gets a bit tricky.

Title II of the JOBS Act, which went into effect one month ago on September 23^rd, and it allows for companies that are making a private security offering to be able to use public advertising in order to get the word out. While the JOBS Act itself was signed on April 5^th,2012, the SEC didn’t release the proposed rules until July 10^th of this year. This seems to be an ongoing trend as the SEC has delayed the implementation of the whole act by several months multiple times.

There is hope that this trend will be broken as the SEC held a live webcast today where the commission discussed the rules surrounding equity crowdfunding. Once these rules are posted to the Federal Registrar (this usually only takes a few days), they will be open for comment and the ball will be rolling to get this brand new industry up and running.

With industry experts waiting to pounce on the opportunity to help out investors and entrepreneurs navigate through the dense regulations of the JOBS Act, those on the fence about joining the crowd should feel a sense of assurance in doing so. CrowdCheck, Crowdentials, and several other industry leaders are poised to iron out the wrinkles as more and more people get involved with Title II and Title III of the JOBS Act.

Startups In The Fastlane: Flashstarts Startup RegulatoryBinder

While Richard Arlow was pursuing a dual MD/PhD at Case Western Reserve University he experienced the pain first hand that so many doctors, researchers and scientists experience far too frequently.

“I realized that my clinical collaborators were killing themselves to painstakingly record data in hundreds of pages in paper regulatory binders. They would get audited and after two days of searching, the auditor could always find some way to show that the documentation was not accurate, complete or current. Their trial would then be completely shut down, sometimes just over a single missing signature.” Arlow told us in a FastLane interview.

We’ve heard this before from our friends going though the ZeroTo510 accelerator in Memphis, and others in the medical and life sciences startup fields. We also found out that restarting a trial, even after being shut down for something as small as a signature can cost thousands upon thousands, if not millions of dollars. This of course is a huge pain point and a huge problem.

Arlow is hoping to solve this problem with his SaaS solution for the regulated medical industry. RegulatoryBinder is an enterprise document management (EDM) web app specifically for clinical trial regulatory documentation. When researchers, scientists, and doctors integrate their research with RegulatoryBinder, the system will help them keep all of their documentation organized, current and in compliance, saving millions of dollars.

Check out our Startups In The Fastlane interview with Arlow below:

Where is your startup originally from?

Cleveland, OH

Tell us about your current team?

As the sole founder of RegulatoryBinder.com, I am a medical geek who unexpectedly became an entrepreneur. I was trained as a biomedical engineer and started a device company at Lehigh University in PA. The company created a clinical grade device, several patents, and was named one of BusinessWeek’s Top 25 Under 25 in 2010.

As for my education, I went to Case Western Reserve University to pursue a dual M.D. / Ph.D. degree again in biomedical engineering. I conducted clinical trials, particularly supercomputer simulations for medical research. I have presented at conferences and have been published in top journals, including Elsevier Neuroscience.

Throughout my involvement in clinical trials

So, I started RegulatoryBinder.com and have since taken leave from the M.D. / Ph.D. program to pursue this opportunity full-time. I have built a strong team of advisors and developers that compliment the vision.

What does your startup do?

We are a software and service provider for the regulated medical industry.

We developed the first clinical trial regulatory software (CTRS). The software is an enterprise document management (EDM) web app specifically for clinical trial regulatory documentation.

We are also the only hosting provider that assumes responsibility for eRecord regulation compliance for instant, risk-free use.

Without RegulatoryBinder.com, institutions need to perform additional procedural controls (i.e. training, backups, tech support, access control) and validate software technical controls, in order to comply with regulations. The performance of these controls comes with additional cost, time to implement, numerous procedures and still the risk of non-compliance.

Existing comparable eClinical software takes $3-5M and over 1 year to implement. We bundles these procedures and risk for the user whining their license cost, and provide them with the ability to electronically complete their regulatory binders in the shortest possible amount of time. We can thus exceed both customer and regulatory expectations while lowering total cost.

What are your goals for the accelerator program?

Throughout the rest of the accelerator program, I plan to close more clients, finalize our next major release and start our next funding round – while ensuring that the needs of existing customers are still being met.

What’s one thing you’ve learned in the accelerator?

Iterate everything. As a startup, you have to iterate—or rethink, adjust, change everything you think you know. Iterate your client and investor materials. Iterate your product. Iterate your quality, support and sales strategies. Then iterate your vision, which will cause you to iterate all the former. Of the most importance, iterate how you iterate and manage operations. Have defined and realistic goals, metrics and timelines for all iterations.

What’s the hardest piece of advice you’ve had to stomach so far?

Doctors don’t make great businesses (on average), so if I want to make a great business, I need to focus 110% of my energy solely on that goal.

I became a doctor to help individuals.

I’ve become an entrepreneur to make a great business and help society.

What is your goal for the day after demo day?

It’s just another day. I’ve got to talk with potential clients, support users, engage the developers and raise money.

Why did you choose this accelerator?

I was not looking to join an accelerator. I did not need the money or experience of being in an accelerator. And, if you look at the math or history, almost all companies from accelerators fail.

I chose FlashStarts because of the team, environment and enterprise-IT focus. It was the right choice for me and has enabled me to scale the company.

If you relocated for the accelerator are you staying in your new city?

I am a Clevelander.

What’s one thing you learned about an accelerator that you didn’t know when you applied?

I was gratefully surprised by the integration of business, development and designer interns that work with my team.

This enabled me to start assigning tasks and focus on core deliverables, like learning how to be a CEO. :)

Where can people find out more?

www.RegulatoryBinder.com

Check out more of our Startups In The Fastlane interviews here.

Nashville Is Great. Ohio Is Too. This Guy Is Oblivious.

On Saturday, the Cleveland Plain Dealer ran a guest post by Dr. Jeffery Canter. Canter is a retired professor of molecular physiology and biophysics at Vanderbilt University Medical Center and a consultant for many healthcare startups in Nashville.

Apparently Canter lived in Ohio before Nashville. In his piece Canter criticizes Ohio as a whole and offers a laundry list of tips to keep it’s talent, which he says Ohio is giving to Tennessee for free. All of this is based on people Canter has met who relocated to Nashville to launch their businesses. Canter makes a point that Ohio has paid for these people twice: “First, you paid for educations that were far better than ones these new Tennesseans would have received in Nashville. Second, these productive young people removed themselves from your tax base and left you behind to pay even higher taxes.”

At Nibletz our mission is clear: to give a voice to startups everywhere else. With offices in both Memphis and Cincinnati, we know a lot about the ecosystems of each state.

Tennessee has an impressive startup ecosystem. They were the second state region in the Startup America Partnership. There are 9 accelerator regions across the state that are administered by a public private partnership called Launch Tennessee. There are several incubator and accelerator programs, with the biggest being GigTank (Chattanooga), Jumpstart Foundry (Nashville), Seed Hatchery (Memphis), and Zeroto510 (also Memphis).

If you think there’s a lot of entrepreneurial and startup activity in Tennessee, you’re absolutely right, but some believe that Ohio has even more going on.

For starters the Brandery in Cincinnati is one of the top 10 startup accelerators in the country. Cincinnati also has the new Cintrifuse initiative, CincyTech for capital, and regularly holds events like Startup Weekend.

Traveling north, Columbus also has it’s share of exciting startup activities and initiatives. Columbus is home to not one but three accelerators; 1492, 10x, and the Founder’s Factory. TechColumbus is one of the driving forces behind the startup scene, and there are also plenty of resources for capital.

Move a little further north to Cleveland and there’s still NO shortage of startup activity. In fact the nationwide non-profit startup acceleration organization, Jumpstart Inc, is headquartered in Cleveland. Then again there’s not just one but two startup accelerators: LaunchHouse and the new FlashStarts founded by Cleveland serial entrepreneur Charles Stack.

So, what makes a good ecosystem?

Gary Hardin at Knoxville startup BounceIt tweeted us the other day, after we ran Entrepreneur Magazine’s 7 best places to startup. Hardin thought that Tennessee should be on that list because there’s no income tax. Makes logical sense, right? Maybe.

As all of our readers know, during the nationwide sneaker strapped road trip, we’ve seen nearly 100 different startup ecosystems in person and are often asked where would we move if we could go anywhere. We chose Memphis, and at that time we had no idea there was no income tax in Tennessee.

When a startup chooses an accelerator or to relocate for one reason or the other, it’s typically resource or industry related. Nashville is hot for medical devices (you’re probably thinking music, but medical devices definitely prevail). If I needed help with branding, I’d move to Cincinnati; automotive, yes we’d still move to Detroit, Government relations or government sales, DC and so on.

Native Memphian Sarah Lacy penned a column just days after her trip to Nashville’s Southland conference entitled “Memo to non-Valley, non-NYC ecosystems: No one you want cares about cost of living.” And guess what, they don’t. Facebook Co-Founder Dustin Moskovitz also says he wouldn’t move somewhere just for optimized taxes. In fact he said this 13 months before Lacy’s article.

Are the Plain Dealer and Dr. Canter just oblivious to what’s going on around them in the startup space?

There are two certain things certain in life: death and taxes. In general, startups are oblivious to both.

Where ever you are, you need to make plans to attend this startup conference for startups everywhere else.

Image credits: Nashville Cleveland

These 11 Startups Have 6 Weeks To Go In Cleveland’s New FlashStarts Accelerator

Earlier this year Cleveland serial entrepreneur Charles Stack decided to launch a startup accelerator. Stack is credited as one of InfoWorld‘s “top 10 innovators in e-business.” Stack’s first company provided asbestos case management for law firms and was launched in 1984 immediately after his graduation. When he sold that company he had the capital to start his first e-business “books.com” which was eventually acquired by Barnes And Noble. Stack was early to the e-commerce and online bookstore space, having sold books.com in 1996.

Stack’s most recent venture, FlashLine, was acquired by BEA for $50 million dollars in 2006 and then acquired again in 2008 by Oracle. Stack’s story is a huge attraction for entrepreneurs and founders across Ohio and across the country.

With more and more startup accelerators popping up, entrepreneurs and founders are seeking out accelerators which have a pedigree in starting businesses. No one wants to get accepted to a 3 month program with a small seed investment to find that the people teaching the accelerator have no entrepreneurial experience.

With that in mind, Stack and hist team announced the FlashStarts accelerator in January.

Jennifer Neundorfer, FlashStarts Managing Partner, also comes to the table with meaningful experience. She comes from a role as Fox Networks Director of New Business Development where she helped create and launch the Dyle Mobile TV network, which PC Magazine called a “promising technology”. Neundorfer holds a BA from Harvard and an MBA from Stanford she is also Google/YouTube alum.

While Cleveland may not come to your mind as a startup hotspot, it is quickly becoming one. They have the LaunchHouse and Jump Start are both based in Cleveland. We’ve met many great entrepreneurs in the Cleveland startup ecosystem, and the 11 startups in this class at FlashStarts are no exception.

These 11 teams will graduate from their rigorous program on August 27th, and Neundorfer already asserts they are exceeding expectations:

Anigraphic is re-imagining the graphic novel. Its unique platform enables graphic storytellers to make use of interactive scene-based panels, text options, audio and sound libraries, and animation sequences.

AProofed allows writers and editors to collaborate with each other in a marketplace environment. The online cloud-based platform allows editors to become self-employed while improving writers’ academic performances. www.aproofed.com

BOLD Guidance navigates students through college applications and allows counselors and parents to view their progress. The online platform and app makes the college application process easier with step-by-step guides and automated deadlines, tasks and reminders specific to each application. www.boldguidance.com

The BranDR is committed to helping physicians create and maintain their personal brand identities online. Its mission is to revolutionize the way patients find, select, and interact with their doctors, by allowing them to access personalized doctor profiles.

Crowdentials helps businesses, investors and crowdfunding platforms comply with the Securities and Exchange Commission’s rules on equity crowdfunding. By completing a simple web form, Crowdentials users receive a report of their financial information and compliance status. www.crowdentials.com

Curiosidy is a new online platform for sharing and promoting life’s meaningful experiences. Users can write about experiences that have shaped them and draw inspiration and insights from a passionate, global community. curiosidy.com

LegalFunnel helps lawyers meet and engage with targeted clients through efficient lead generation and personalized online branding.

Ohio Independent Cinema strives to inspire an appreciation for independent films by making them more accessible for the general public. The company provides a new distribution option for independent filmmakers.

Smooth is a sophisticated, yet simple personal finance app currently in development. The program generates personalized recommendations that help users improve their standard of living and offers incentives for users to follow the recommendations.

Synthetic Intelligence sells Big Data cloud and consulting services. The company “makes Big Data go faster”.

RegulatoryBinder.com, a product of Trailhead CFR, is a web application for managing regulatory documents of physician-sponsored clinical trials. The app is the only platform that instantly enables physicians to coordinate a clinical trial without additional procedures or risk.

You can find out more about FlashStarts here.

This conference is the best conference for startups everywhere else.

Sports Fans Find Your Out Of Town Bar With Cleveland Startup: BackerBar

You see the tweets, Facebook mentions and Google+ messages all the time, someone in your timeline is out of town and wants to catch their favorite game at a team friendly bar. After all you don’t want to go into just any sports bar in Baltimore Maryland and ask to put on the Steeler’s game. Those special bars are what this Cleveland startup refers to as “BackerBar’s” which is where their name came from.

The team at BackerBar came up with this clever little definition:

backerbar: [n.] /ޖbakər/ bär/ – a bar that supports, or ‘backs’, a team foreign to the local market. Support can range from just a banner or two hanging up, or on game days packed wall to wall with fans wearing the teams’ jerseys…even the bartenders! Bar owners can choose to support a professional and/or college team. Examples include an Ohio State BackerBar in Chicago, Dallas Cowboys BackerBar in Los Angeles, or USC Trojans BackerBar in Boston. The combinations of teams/cities can be endless. We cover the NFL, NBA, MLB, NHL, as well as NCAA football and basketball.

As you can see if you’re a sports fan this is a very important startup. BackerBar has developed a gigantic database and interactive web based platform so that any traveling or transplanted sports fan can find out where their team’s “backer bar” is. They also told us in the interview below, that naturally a mobile app is in the works. No more worries about getting laughed, at made fun of or even injured for supporting your own team. You’ll find that special backer bar with BackerBar.

In the interview below BackerBar co-founder Michael Stratis talks about their startup and also building a startup in Cleveland which has become a town full of startups and innovation. In fact one of the biggest organizations that supports startups and entrepreneurs, Jumpstart Inc, is also based in Cleveland.

Check out the interview below:

Cleveland Startup: CollegeSkinny Gives You The Skinny To Apply To College

The college application process can be a long and daunting task. Yesterday we brought you the story about a startup in New York that helps high school students prepare for college by offering a platform to find extra-curricular activities outside of the school. Today, while this story is about a college focused startup, it to is more about pre-enrolled high school students.

Cleveland based startup CollegeSkinny provides incoming students everything they need to know about the colleges they want to apply to. It also helps them keep all their prospective college applications and information organized so that they can continue to access it until the time comes to make a decision.

According to founder and CEO Bryant Hardy:

“Students browse colleges and Universities hosted on the CollegeSkinny network and learn everything from How to Apply all the way to the specific Greek Life organizations on campus and everything in between. We also provide interactive tools for the schools themselves to recruit and connect with potential students.

Our features include: How to Apply, Important Dates, Where to Live, What’s on Campus, College Process, Greek Life, Packing Checklist, Meal Plans, Things to Know, and The CollegeSkinny Connection (feature that provides a link between a student and the University).”

The entire focus of CollegeSkinny is to help transitioning high school students, pick and then transition into college. To get a better perspective on what CollegeSkinny is all about we interviewed Hardy below:

Bizdom Cleveland Startup Accelerator Gets A New Bizdom

Bizdom is a startup accelerator program with locations in Detroit and Cleveland. Both Detroit and Cleveland have growing entrepreneurial and startup ecosystems, where Bizdom’s program and facilities naturally fit in.

Bizdom was launched in Cleveland by one of their biggest tech startups turned successful giant companies, Quicken Loans Inc,and Chairman Dan Gilbert’s Rock Ventures. Gilbert is passionate about technology, entrepreneurship and Cleveland is also the majority owner of the Cleveland Cavaliers.

The Bizdom program is actually one of the earlier startup accelerator programs. They hold three month sessions and provide startup companies, selected for their program, with $25,000 seed investments for 8% equity. Startups selected for the Bizdom program at either location are given office space, internet access, access to a wide variety of mentors, business services and other perks.

The Cleveland program has been operating out of the Quicken Loans Web Center inside the MK Ferguson Building at Quicken Loans Arena. Now they’re moving to their own 7,000 square foot space at 250 W. Huron Road in the 250 Huron Building. The Bizdom Cleveland headquarters will be inside the five story commercial building which sits directly below the Ritz Carlton Cleveland Hotel.

“Establishing our Cleveland headquarters at 250 Huron solidifies Bizdom as an anchor in the city’s growing tech hub,” said Ross Sanders, chief executive officer of Bizdom. “Much like our Detroit headquarters, we have designed a collaborative and dynamic space that fosters an atmosphere for our entrepreneurs to truly excel,” he said.

The Detroit Bizdom location moved to a new headquarters in the Madison building in Detroit back in March. Space is one of the values that is very important to Gilbert which explains why both locations have relocated prior to their next session.

“The opportunity came open at the Madison and part of Dan Gilbert’s vision is that place matters,” says Maria LaLonde, Bizdom’s recruiting and development leader told XConomy about the Detroit move. “We’re trying to create a great tech community where our entrepreneurs are closer to mentors, closer to funding sources, and can collaborate in an open workspace.”

Both locations offer four seasonal sessions a year and have graduated over 50 startups.

Linkage

Check out Bizdom here

Nibletz is the voice of startups “everywhere else” here are more startup stories from “everywhere else”

The nibletz team could really use your help

Cleveland Startup Organization Jump Start Receives $250,000 To Spur Development Of Women,Minority and Inner City Startups

The JumpStart organization in Cleveland Ohio is a non profit organization looking to help startups across the country. While Startup America does a great job on a broader scale, JumpStart focuses on women, minority and inner city based entrepreneurship. JumpStart is also a member and partner with Startup America.

The $250,000 grant came from the Surdha Foundation one of the nation’s oldest and largest family foundations. The foundation is headquartered in New York City and was founded in 1917 by John Emory Andrus, a successful New York businessman who served four terms in congress.

“Through our Strong Local Economies program, we aim to create robust and sustainable economies that include a diversity of businesses and sectors, improved access to quality jobs and opportunities for economic mobility. We are proud to support JumpStart in its efforts to expand this valuable program,” said Surdna’s president, Phillip W. Henderson.

“Minority and women entrepreneurs growing larger scale firms can contribute meaningfully to the country’s economic output by becoming more significant job creators,” says Darrin Redus, JumpStart’s Chief Economic Inclusion Officer. “With Surdna’s help, JumpStart can continue to develop and share inclusion best practices and make key connections that will help speed the growth, market entry and success of these high potential young companies.”

Along with the Knight Foundation, the charitable foundation that is the legacy of the Jack and Jim Knight, the brothers who started the Knight Ridder newspaper empire, Surdha is a founding partner of Jumpstart Inc.

Linkage:

Find out more about Jumpstart here

Nibletz is the voice of startups “everywhere else” here are more stories from “everywhere else”

Nibletz is on a sneaker-strapped, nationwide startup road trip and could use your help please check out this link and also watch the video below:

Cleveland Startup: Foundersync Helps Startups Everywhere Find Co-Founders

You may have heard about the exclusive and very cliquish, Silicon Valley based Founderdating. The site suggests they connect the best of the best to founders in the Valley and a handful of other cities, but what about everywhere else? Well there’s a company in Cleveland Ohio has you covered.

The problem with the founderdating site is it bleeds the mantra that everything that happens in the Valley is better. However with over 300,000 startups across the country there are plenty of great ideas, great founders and great startups, well “everywhere else”. Foundersync will of course connect valley startups to founder and other resources, but they definitely realize the growth of startups on a nationwide level.

Foundersync is a startup itself, they started in 2011. Foundersync deals in a pretty easy to understand idea, there are plenty of business oriented social sites that connect you with people that you do know, or are connected somehow. Foundersync connects you with people that you SHOULD know.

Foundersync’s mission is “To ethically and efficiently help entrepreneurs reach their potential by providing a conduit to the resources that will best serve their needs.”

They achieve this mission with their combined mixed experience in marketing, design and development. The four co-founders, Ryan Gambrill, Nick Pavlak, Robert Clark and Todd Goldstein met by accident in 2011 and immediately clicked. They are all entrepreneurs in their own right and wish that they had a service like Foundersync when they were getting started.

If you’re idea driven, a workaholic entrepreneur that bleeds ideas than you need to register for a Foundersync profile. On their website they also offer some great startup advice on their blog page like, exercise before pitching.

If you’re tired of the snobbery from sites like founderdating we’re sure you’ll benefit from the community of founders being built at Foundersync

Linkage:
Go get a foundersync profile

Nibletz is the voice of startups “everywhere else” check out these new stories

We’re on a sneaker strapped nationwide road trip, check it out and support us here