Archive for the ‘startup investment’ tag
Archimedes Labs, a Palo Alto incubator, has made its largest startup investment to date, backing mobile web development startup M.dot. Neither side would disclose financial details. M.dot is still in private beta testing, and co-founders Dominik Balogh and Pavel Serbajlo tell us they plan to launch this fall.
M.dot is a free app that allows users to build a mobile website from scratch or a mobile version of their existing website.
“Mobile will probably disrupt much of what we know of web 2.0,” Keith Teare, a serial entrepreneur and co-founder of TechCrunch, tells us.
Teare, who led the investment, is intimately familiar with the web hosting business; his prior experience includes UK giants Easynet, NetBenefit and NetNames. He says the enormity of the web hosting business and lack of an equivalent for mobile intrigued him.
“Could this possibly disrupt web-based businesses?” Teare asks.
Balogh and Serbajlo showed me a beta version of the app here in our TechCrunch office. I was surprised by how simple and intuitive it is to use.
“We know people don’t like to enter a lot of information on their smartphones,” Serbajlo explains as he shows me the GPS features. “So we’ve made it very simple.”
The app has preloaded templates with easily customizable features like store hours, location and price lists for small businesses, which they are targeting. They also have a blog feature which allows users to write and insert pictures and video. Its integrated with Facebook, Twitter, Flickr, YouTube and Dropbox so users can easily add their own media to the site or blog. Serbajlo said they are also working on a feature that scrapes pictures, logos and text from a user’s existing website to use in M.dot.
The two explained that M.dot’s primary use is for mobile websites, but they hope people end up using it as their main site. The coding has been optimized for smartphones, but looks clean and appealing in a web browser.
M.dot is entering a very competitive market with large, established companies like dudamobile, which has partnered with Google Mobile (GoMo), Weebly, Wix and goMobi. Balogh and Serbajlo claim that because these competitors are all on the web, not mobile apps like M.dot, their businesses will be completely different and they will have a competitive advantage.
The pair is using a “freemium” business model, offering the app and its features for free; free sites will be on a M.dot domain, like “domainname.mdot.go” and users can pay for their own mobile domain, such as “m.domaainname.com.” The app also supports “www” domain names. They will also charge for premium features and templates, although those have not yet been released. Balog said they have already had some interest for acquisition, but he could not disclose any details other than that they turned them down.
Balogh and Serbajlo met two years ago and had been working on an application called Webie that allowed users to build a website from their mobile phone. They met Teare this past winter and he helped them pivot and rebrand the idea as M.dot.
“Actually what you’ve built here isn’t really a website,” Teare recalls telling them. “If you look at what you’re actually doing, you’ve actually built a pretty awesome mobile site that you’re calling a website. If you could rethink your story and talk about this: making it as easy to build an m.dot as it is to build a www, then you would have something.”
The Securities and Exchange Commission has finally tracked down a con man who courted naive investors with “the next Google” and promises of quick IPOs, tricking them out of a grand total of $7 million — or more.
The fraudster’s name is Benedict Van. For at least the past seven years, Van had been going around California, preying on unsophisticated consumers with get-rich-quick claims. Now, the SEC has filed a lawsuit against Van, who agreed to settle the case out of court. One of the conditions of the settlement is that Van may not act as an officer or director at any public company ever again.
Van’s name has been linked to tech startup investment scams for some time. There is even some indication that Van might have been a lifelong con man with a career spanning other verticals, other cities, and other decades, as well.
About a year ago, the California Corporations Commissioner issued a cease and desist order to Van’s companies, HereUAre (previously known as PeopleNet) and ECity. Van had been selling stock in the Palo Alto-based companies since before May 2007 (one of the companies was founded back in 1997).
“Benedict Van said that investors could expect to receive returns of 20 percent in the first 12 months,” the letter reads. “HereUare, ECity and Benedict Van omitted to disclose material facts, specifically that HereUare had never been profitable, had successive years of net losses, lacked revenue history and did not have a proven business model to generate revenue, had few capital resources and was dependent upon future financing to generate the cash necessary to operate its business.”
All these red flags are things that experienced investors would have known to look for, but Van’s victims were hardly what you might call experienced investors.
Seven years ago, an anonymous duped investor set up a blog to warn the world about Van. Calling Van a “super scammer,” the blog’s single post goes on to estimate that Van may have already stolen as much as $10 million from investors as of 2005 and that he also may have been involved in a Southern California real estate scam in the late 1990s.
One commenter on the site describes Van as “a scam artist who preys barely English-speaking people. This guy will tell you lies after lies to get your money. This guy has stole [sic] millions of dollars from unacredited investors who had lost their entire life savings. I know several people who even had to pay off 30 percent to a credit card company because they borrowed money to invest in his fake company.”
The SEC brought its lawsuit against Van on Monday, the New York Times reports. The suit stated that Van, contrary to his own claims, had no venture capital credentials and was hardly running a search engine “three times more powerful” than Google’s.
Van sold shares for $9 each, claiming they would be worth as much as $100 each when HereUAre/ECity went public. Altogether, the SEC tracked down 100 individuals in California and Illinois who had been duped by Van and his schemes.
While the SEC can bar Van from participating in public companies, it waived any fines it could have assessed because Van is apparently too broke to pay any such punitive fees.
We’re a bit surprised that, given the fact Van had already been told by the state to cease and desist selling shares in his fake startups, the federal authorities are letting him roam the streets and only barring him from participation in public companies. Frankly, this is the kind og guy we’d love to see behind bars. But we’ll be satisfied as long as we never again have to write another sad story containing Benedict Van’s name.
Image courtesy of J. Helgason, Shutterstock
In the annals of celebrities investing in tech startups, this one’s looking especially smart. Bono and The Edge, the singer and lead guitarist of Irish rock band U2, got into Dropbox’s $250 million second round last year, they said in a tweet today.
It’s the first individual, publicly announced startup investment for the vocalist, to our knowledge. And unlike grandly-conceived social media startups or late-stage investments that celebrities have gone after in recent years, Dropbox is still in its early days. I imagine some khakis-and-blue-shirt VCs are a little jealous of the multiples ahead.
Bono, of course, has something of a track record in tech investing already. He’s the co-founder and managing director of Elevation Partners, which has bet widely over the years with money in Palm, Forbes, gaming companies, Yelp and Facebook. Never mind some of those others, results from the last two have inspired the team to go raise a new $1 billion investment fund, according to reports.
But until now, Bono’s role has been more high-level, not so much in sourcing deals with the latest startups growing out of the Valley floor. The Dropbox investment — and the backstory — suggest that this is could change. Bono and The Edge seem to have gotten into the deal via a relationship that developed years ago, in a different era.
Back in 2007, entrepreneur brothers Ali and Hadi Partovi had just launched a fast-growing music app called iLike on Facebook. They had a new feature they wanted to launch, a way for artists to post videos to fans through the app, so they went through some mutual friends to reach out to U2. The result: a video interview with Bono and the band about a previously-unreleased track, Wave of Sorrow.
The relationship has developed from there, it appears. The Partovis were early angel investors in Dropbox, and have maintained contact. Judging from the photo recently posted to Twitter, they introduced the band members to founders Drew Houston and Arash Ferdowsi.
Even if Bono doesn’t get deeper into other early-stage companies, he has a lot of work left here — doing follow on rounds on Dropbox, possibly via Elevation.
(@Dropbox) April 02, 2012
At VentureBeat HQ, we’re twiddling our thumbs as we wait for official confirmation from Google that the search behemoth did, in fact, just hire Kevin Rose of Digg fame.
Our good pal Liz Gannes of AllThingsD reports that Rose and a few of his current co-workers will now be working for Google. Rose already has a good relationship with the company due a previous investment; since the vehicle of that investment has been shut down, Rose going over to the mothership isn’t to far-fetched.
A Googler writes to VentureBeat, “We don’t have anything to share at the moment.” In other words, Google can’t yet confirm the report, which is quite a different matter from a blanket denial.
Rose, who previously founded link-sharing site Digg, had more recently moved on to start Milk, an incubator he founded in 2011.
Late last year, Google Ventures poured $1.5 million into Milk as a vote of confidence in Rose’s ability to create compelling products.
“It’s been nice to able to ping them when we have certain questions, and to tap into the vast amount of experience they’ve had when building out Google,” Rose previously told VentureBeat of that deal. “Like with any good investor, they’re sitting there on the sidelines, and they’re there when you need them,” he concluded.
In addition to the investment from Google Ventures, Milk also took $1.5 million from an A-list group of angel investors, including Menlo Ventures’ Shervin Pishevar, Twitter co-founder Evan Williams, and former Facebooker and current Path co-founder Dave Morin.
As Rose’s initial startup, Digg, began to show signs of decline, Rose himself had become more involved in the world of startup investment. His investments include Twitter, Zynga, and Facebook, as well as smaller startups such as Coffee & Power, Fab.com, and Path.
Rose’s other entrepreneurial adventures included co-founder roles at Pownce, Revision3, and WeFollow.
Filed under: VentureBeat
Mola.com (meaning “cool” in Spanish), a Palma de Mallorca based startup accelerator/incubator has raised €1.2M three months after announcing it’s official launch. The funding comes from Bernardo Hernández, angel investor and currently Global Head of Marketing for Emerging Products at Google; Javier Gómez Navarro, ex Minister of Tourism in Spain; and Luis Chicharro, ex Executive VP Ibersuizas. Mola.com, founded by Enrique Dubois and Paco Gimena, dubs itself as a startup investment fund, an idea incubator, created by and for entrepreneurs. To date, they have participation in over 30 companies, including their own home-grown projects as well as adopted investments. The company claims a net worth of € 3 million and a total of € 11 million invested in collaboration with other investors.
This is a story worth telling, as money is hard to come by these days in Spain, but with the €1.2M raised, Mola.com has just announced their first share of investments totaling €275,000. Seven Spanish startups were chosen out 500 submissions, all within the online and mobile sphere:
WannaTaxi.com – the name speaks for itself. A mobile taxi reservation service.
Myntmarket.com – A marketplace for freelance professionals.
Mutant-Games.com – video gaming studio for mobile and gaming consoles.
Matchball.com – Fantasy football platform.
Divescover.com – A heaven for scuba divers.
ReviewsReporting.com – SaaS application for online reputation análisis for hotels.
TriaVIP.com- A private vip sales club for tri-athletes.
It’s not clear how the 275,000 was spread out through the 7 companies. During this year, Mola.com plans on investing in another 15 startups.
In the aftermath of the defeat of the Stop Online Piracy Act and Protect IP Act, a long list of organizations have sent a letter to Congress asking members to “take a breath” before they trying to push through new piracy legislation.
The letter argues that the “wide variety of important concerns” that were expressed during the SOPA/PIPA protests cannot be addressed through “hasty revisions” to the bills. Instead, there needs to be more research and transparent discussion about the broader issues:
Furthermore, Congress must determine the true extent of online infringement and, as importantly, the economic effects of that activity, from accurate and unbiased sources, and weigh them against the economic and social costs of new copyright legislation. Congress cannot simply accept industry estimates regarding economic and job implications of infringement given the Government Accountability Office’s clear finding in 2010 that previous statistics and quantitative studies on the subject have been unreliable.
Finally, any future debates concerning intellectual property law in regards to the Internet must avoid taking a narrow, single-industry perspective. Too often, Congress has focused exclusively on areas where some rights holders believe existing law is too weak, without also considering the ways in which existing policies have undermined free speech and innovation. Some examples include the year-long government seizure of a lawful music blog (dajaz1.com) and the shutdown by private litigation of a lawful startup video platform (veoh.com).
A number of Web companies signed off on the letter, including Asana, WordPress-maker Automattic, the Cheezburger Network, Mozilla, Reddit, and Twipic. So did startup investment firms Foundry Group, O’Reilly AlphaTech Ventures, and SV Angel. And lest this be portrayed as simply a battle between the tech and media industries, the letter was also signed by the American Library Association, Amnesty International, and OpenCongress.org (to pick three names at random).
CapLinked, the startup that wants to make it easy to invest in private companies, has just taken an additional $150,000 from a new group of investors.
“Investing in private companies has depended on outdated technology for too long,” said CapLinked CEO Eric M. Jackson in a release this morning.
“Emails loaded with attachments, spreadsheets for tracking leads and clunky enterprise data rooms are straight out of the 1990s. CapLinked makes the process easier for companies, investors and their advisors by giving them social tools to connect and share information.”
The fresh money brings the startup’s total funding to $1.4 million in two rounds, a seed round in mid-2010 and an angel round in March 2011.
Today’s newly announced investors in the company include a few luminaries. Chris Yeh, a prominent blogger and investor who is also a vice president at PBworks, pitched in for the round, as did angel investor and onetime Paypal exec Jason Portnoy, TheGlobe.com founder Stephan Paternot, Althea Foundation chair Alexsis de Raadt-St. James and a couple others.
“Private companies are an important source of job creation and economic growth,” said Portnoy in a statement. “By streamlining the investment process and giving companies new tools to raise capital and sell assets, CapLinked is changing how private investments get made.”
CapLinked, which was founded in 2009 by former Paypal exec Jackson and finance pro Christopher Grey, claims it has almost 100,000 accounts of would-be investors as well as 10,000 profiles for cash-seeking companies. To date, CapLinked has seen $12 billion in transactions through its service.
Through the CapLinked site, privately held companies can better manage the fundraising process, including networking and investor relations. Investors can use the site for deal flow, due diligence and portfolio tracking. And both companies and investors can bring advisers, attorneys and consultants into the loop of information.
While CapLinked is steeped in tech provenance, it’s not just tech companies raising funds through this service. The company tells us it is also being used by private companies in energy, transportation, real estate, financial services and food and beverage verticals.
Previous investors include Peter Thiel, Dave McClure, Yammer CEO David Sacks and a slew of other Silicon Valley luminaries.
Filed under: deals