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Texas Proposes Equity-based Crowdfunding Rules

May 16, 2014 / LauraLorek@gmail.com / 6 Comments

By LAURA LOREK
Founder of Silicon Hills News

Crowdfunding Photo licensed from iStockphotos.com

In Austin, one of the big issues facing startups, particularly in the technology industry, is lack of access to capital.

Last year, Austin companies received $626 million in venture capital, or 49 percent of the venture capital dollars for Texas, said Michele Skelding, senior vice president of global technology strategies at the Greater Austin Chamber of Commerce.

“That still represents just 2 percent of the nation’s venture capital,” Skelding said. “So we’re hungry for capital.”

Equity-based crowdfunding may help meet that need.

Skelding hosted about 50 people involved in Austin’s startup industry at a roundtable lunch discussion Wednesday focused on newly proposed Texas crowdfunding rules.

Crowdfunding is one of the hottest trends now for entrepreneurs, said Joy Schoffler, owner of Leverage PR and a board member of the Crowdfund Intermediary Regulatory Advocates.

Soon entrepreneurs will be able to use equity-based crowdfunding to tap into investments from the general public. The U.S. Jobs Act, signed into law by President Obama in 2012, is making that possible. It will begin once the U.S. Securities and Exchange Commission issues its final rules governing the practice. So far, the SEC has missed several deadlines to enact the rules.

Meanwhile, Texas and eight other states have proposed regulations that would allow for intrastate crowdfunding.

“The term crowdfunding can really cause some confusion,” Schoffler said.

Several types of crowdfunding exist including reward-based crowdfunding on platforms like Kickstarter and IndieGoGo. And individuals can crowdfund for donations on platforms like GoFundMe.com. Some crowdfunding sites like Kiva.org allow people to provide loans to small businesses worldwide. And sites like AngelList.com allow companies to raise funds from accredited investors or individuals who make more than $200,000 annually and have a net worth in excess of $1 million, not including their house.

But the ability to raise money from the general public through equity-based crowdfunding is not yet possible in Texas. But in other states like Georgia it is legal. Georgia already passed its own rules allowing for equity-based crowdfunding.

The SEC has 175 pages of rules being proposed to govern equity-based crowdfunding, said John Morgan with the Texas State Securities Board. Texas’ rules would not supersede the SEC rules, but if Texas passes its own crowdfunding rules, the state would allow equity-based crowdfunding before the federal government.

In April, Texas proposed its own equity-based crowdfunding rules. The Texas State House Committee on Investments and Financial Services will hold a hearing on May 21st to discuss the proposed regulations.

“The great thing about the rulemaking process is it’s flexible,” Morgan said. “There’s time to tweak these rules to get the exact right product we want.’’

The proposed Texas regulations let a company raise a maximum of $1 million every 12 months. An accredited investor can invest any amount. But a non-accredited investor can only invest $5,000. They can only invest through a Texas-owned website, known as a crowdfunding portal, which holds the funds in a bank account until the company meets its funding goals.

And all investors must prove they are Texas residents by providing a valid driver’s license or voter registration card. The regulations also require companies looking to raise money to post a detailed business plan, financial statements and other documents including a list of risk factors.

During the roundtable discussion, Ben Dyer, a serial entrepreneur and entrepreneur in residence at the University of Texas, asked about the ability to raise funds from investors in other states.

With the proposed Texas equity crowdfunding rules, all of the investors in a company must reside in Texas, Morgan said.

Shari Wynne, founder of Incubation Station, a consumer products accelerator, expressed concerns about the filing of a business plan and freezing a business outlook for a certain time since so many startups constantly pivot and change.

“There’s any number of things that are shifting with these companies,” she said

Paul Trowe of Replay Games expressed concern about the $5,000 limit per un-accredited investor. He said his company received $650,000 in 30 days on Kickstarter in 2012 and multiple donors gave more than $10,000 each.

“My questions is why would I want to do equity based crowdfunding with such strict regulations when I can go onto Kickstarter or IndieGoGo or any of the other platforms and not have such restrictions?”

Jason Seats of Techstars said Kickstarter and IndieGoGo work well for certain types of businesses focused on consumer products. It’s more difficult for companies working on enterprise sales tools to raise money from rewards-based crowdfunding, he said.

The legislation isn’t just aimed at tech companies, said Nathan Roach, an attorney with the RAM Law Firm. It’s designed to help all small and medium sized businesses statewide that need access to capital to expand, he said.

The crowdfunding portals help standardize the process of raising money from investors, Roach said.

Investors need to be able to trust the information coming to them, Roach said. The crowdfunding portals provide an entrepreneur with the necessary tools to raise money in compliance with the securities regulations, he said.

The portals also have to vet investors to make sure they are qualified as residents under the Texas rules.

Rick Timmins, chairman of the Central Texas Angel Network, said his members would not invest in equity-based crowdfunding ventures because of the regulations and disclosure requirements.

He said he sees a bifurcation of offerings when equity-based crowdfunding is enacted. Companies will either go down the path of traditional fundraising from accredited investors or they will choose to do equity-based crowdfundng from non-accredited investors, Timmins said.

“I don’t see it being co-mingled at all,” Timmins said.

CTAN is one of the most active angel networks in the country. The organization’s members invested $9.7 million in 33 companies last year.

Crowdfunding is one more tool in the arsenal of tools that are being provided to small and medium sized business throughout Texas, said Amir Mirabi, director of the governor’s office for small business economic development.

Crowdfunding provides more ways for the entrepreneurs who are building things to get close to their customers, said Gordon Walton with Gaming SIG in Austin. Kickstarter has been the most successful platform for game companies. They make up the largest category on Kickstarter, followed by film and TV, Walton said.

But equity based crowdfunding for the gaming industry is going to be a challenge, Walton said. The regulations need to be simple and friction free, he said.

“We would love to have our consumers become investors if they can overcome the challenges,” Walton said. “But the hurdles are high.”

A conference on crowdfunding is being held later this month in Austin. The CFGE Crowdfund Real Estate Summit and Entrepreneur Summit will be held May 29th and 30th at the Hilton Austin.

Datical Tackles Database Issues for Companies

May 15, 2014 / LauraLorek@gmail.com / 1 Comment

By JAIME NETZER
Reporter with Silicon Hills News

The world is experiencing a data explosion.

Datical seeks to help companies manage all that data flowing through their organizations.

The Austin-based startup has created software that lets companies update applications on their databases easily and efficiently.

Last week, the Greater Austin Chamber of Commerce named Datical as one of its A-List Startups to watch for 2014.

So far, Datical has raised $4.7 million, according to its Crunchbase profile. Last December, Datical closed on a $3 million Series A round of funding led by Mercury Fund.

Its flagship product is Datical DB software, based on the open-source project Liquibase, which is used by hundreds of organizations. The software can help companies forecast how a database change will affect production and it makes it easier and faster to update databases.

“Essentially, it allows development operators and database administrators to sort of collaborate on database change management,” explains Pete Pickerill, vice president of products and co-founder of Datical. “We think everybody with a large-scale web-presence would benefit.”

W20 Group, a Datical DB customer, uses it to analyze large volumes of online interactions for information about its customers in health, technology, and consumer products.

“Datical DB gives our teams complete visibility into all of our relational database environments, and integrates seamlessly with our continuous integration process,” says says Steve Blackmon, Director of Data Sciences at W20 Group.

Datical DB eliminates manual change scripting and the errors that can result with automatic script authoring, Pickerill explains. The solution works within existing application release processes, using existing tools. This reduces risk and cost and speeds time to market, he says.

Datical only emerged from stealth mode in October of 2013, but its management team is experienced: Datical is co-founded by Daniel Nelson, Datical CEO; Robert Reeves, Datical CTO; and Pickerill — all founders of Phurnace Software, which was acquired by BMC Software in 2010.

Mercury Fund, a seed-stage venture capital firm, focuses on tech innovation. Datical was an appealing investment for the firm for multiple reasons, explains Aziz Gilani, Director at Mercury Fund and a Datical Board Member.

“Their unique business model makes developing new functionality very fast and provides a loyal, active user base for Datical to tap into,” Gilani says. “We invested for these reasons, but primarily because of Datical’s experience and track record.”

Grocery Delivery Service Instacart Launches in Austin

May 14, 2014 / LauraLorek@gmail.com / 0 Comments

How many times have you sat around wondering if you could get someone to deliver your groceries in one hour by horse in Austin?

Well today is your lucky day if you’re downtown. Instacart, a San Francisco-based grocery delivery service, will be doing that today in downtown Austin. But the horse delivery is just for one day as a special way to introduce the service to the market.

The one-hour guaranteed delivery service launched Wednesday in Austin. It allows customers to order items from Royal Blue Grocery and H-E-B and have them delivered in an hour or less. Instacart plans to add other stores in the coming weeks.

Instacart charges $14.99 for one-hour delivery or $3.99 for two-hour delivery with a minimum order of $10.

Instacart, which is available in nine other cities, faces competition in the Austin market by Burpy, a Longhorn Startup company. Burpy offers grocery delivery in the Austin, San Antonio, Houston and Dallas markets.

Instacart, which raised $8.5 million last year, is available in San Francisco, Boston, Chicago, Los Angeles, New York, Philadelphia, San Jose, Seattle and Washington, DC.

Instacart touts its “crowdsourced labor force dubbed personal shoppers” who use their own cars for delivery which makes grocery delivery more affordable since the company doesn’t need inventory, warehouses, trucks and full-time drivers.

“Austin is the fastest-growing city in the U.S., with a young, tech-savvy culture and a major university downtown,” Apoorva Mehta, Instacart founder, said in a news release. “Those are all factors that we look for in an expansion city. We think Austinites will really appreciate the convenience factor of Instacart, and we’re working hard to establish relationships not just with the big chains, but also the local merchants such as Royal Blue Grocery who add so much to the local Austin community.”

Instacart will initially deliver to downtown neighborhoods. It also offers a subscription-based delivery service for $99 for free delivery on all orders of $35 or more.

Phunware Buys Digby

May 13, 2014 / LauraLorek@gmail.com / 0 Comments

Phunware, a mobile advertising platform, announced it has bought Digby, marketing software for retailers to reach customers on their mobile phones.

The two Austin companies did not disclose the terms of the deal.

The deal adds Digby’s customers including Cabela’s, Kohls, Catalina Marketing and Hasbro to Phunware and lets the company offer consumers ads on demand at the store on their mobile phones.

“Digby is a pioneer in the mobile commerce and location based marketing software market and we’re thrilled to add their team and platform to the expanding Phunware ecosystem,” Alan S. Knitowski, co-founder, chairman and CEO of Phunware, said in a news release.

Phunware, founded in 2009, has raised $38.4 million, according to its CrunchBase profile.

LanternCRM Raises $250,000 from Local Angels

May 13, 2014 / LauraLorek@gmail.com / 1 Comment

A graduate of the Longhorn Startup class for undergraduates at the University of Texas, LanternCRM just landed $250,000 in angel funding.

The Austin-based startup received funds from angel investors Jason Cohen of WP Engine, Rob Taylor or Black Locus, Mikey Trafton of BlueFish, Bill Boebel of Pingboard, Pat Matthews, formerly of Rackspace, and Joshua Baer of OtherInbox and the Capital Factory Fund.

“The funding comes as user signups increased 300 percent over a period of three months, which included the Austin Chamber of Commerce,” according to a news release.

The company plans to use the money to hire more employees and to market its software to more customers.

LanternCRM provides automatic email tracking, phone service and integration with hundreds of existing business services in its software. Those features make it different from competitors like Salesforce and Microsoft Dynamics, according to the company.

“We found that a vast majority of users either hated their current CRMs or didn’t use them because they required too much manual data entry,” Alex Smith, CEO and co-founder said in a news release. “By focusing on automatically importing from existing systems like email, calendar, and phone, our users can focus on building their business instead of maintaining information in their CRM.”

LanternCRM is part of the Capital Factory’s accelerator program.

“The CRM market for enterprises may be maturing, but the market for small businesses is wide open and growing, fueled by the popularity of mobile and tablet computing. Entire industries that still operate on pen and paper or email and spreadsheets are going to be transformed over the next few years,” Baer said in a news statement.

Remote Garage Stores Clutter by the Box

May 13, 2014 / LauraLorek@gmail.com / 1 Comment

By LAURA LOREK
Founder of Silicon Hills News

Jaakko Piipponen, founder of Remote Garage, photo by Laura Lorek

Mei Butler, a senior at Trinity University, needed to store some household goods while she studied in China for seven months.

“I didn’t want to rent out a storage unit since I didn’t have enough belongings to take up the whole space,” Butler said.

Instead, she signed up with Remote Garage, a San Antonio-based storage on demand startup. It provides a storage bin and even picks up the goods.

Butler’s storing kitchen supplies, bathroom supplies, decorations and other home furnishings with them while she’s studying in China.

Last year, Jaakko Piipponen, launched Remote Garage with his friend Valdas Galdikas. And in December, they received a $25,000 investment from the Geekdom fund. Since then, they have been marketing the company and enrolling more customers while working on the technology behind the site and securing partnerships.

Piipponen is from Finland. He earned his undergraduate degree from the Helsinki School of Economics and studied abroad at the University of Southern California at Los Angeles. He also worked previously for an investment bank in London and founded another startup, Kiitos Technologies, a marketing service for online videos. He moved to San Antonio in 2013 with his girlfriend. She is attending medical school at the University of Texas Health Science Center.

At first, the Geekdom Fund turned Piipponen down, but he came back the next month with customers and partners, said Cole Wollak, spokesman for the fund. They were also convinced of his expertise in the storage market and were impressed with the beta version of his product, Wollak said.

Storage is a $25 billion market, Piipponen said. About one in ten Americans use self-storage facilities, he said. But that’s doesn’t work for everyone, especially for people who don’t have a lot to store and can’t afford to pay $1,200 a year or more for a storage unit, he said.

That’s where Remote Garage comes in, Piipponen said. It’s there for the rest of the population with smaller storage needs, he said.

“They pay by the box,” Piipponen said. “We pick up, store their stuff securely and let them monitor it online and they can get their things back whenever they want.”

Remote Garage partners with well-known, professional storage and delivery companies. It charges $7 per box for a month with the average order of five boxes.

The company does face some competition from other on-demand storage services like Makespace, a New York-based micro-storage startup that has raised $1.3 million, Boxbee, based in San Francisco has raised $2.3 million for its storage on demand service and PODS. And Austin-based SpareFoot, which works with storage companies, to fill up their space through its online marketplace, is not really a competitor, Piipponen said.

Remote Garage has been marketing the company by working with apartment leasing agents. They are seeking to fill the niche for apartment dwellers that store things on their balconies, which is usually prohibited by the complexes. Now the apartments can offer up Remote Garage as an alternative storage source. Piipponen has signed up more than 50 apartment complexes in San Antonio including The Broadway, The Crescent and Mosaic.

Butler heard about Remote Garage from her boyfriend. She decided to try them out and she’s been pleased with its “excellent customer service.” She thinks the service has a lot of potential.

“Its appeal lies in the fact that it does not require you to make a big commitment in terms of rental length, or amount of space you rent,” she said.

Oracle Plans to Bring 200 Jobs to San Antonio

May 12, 2014 / LauraLorek@gmail.com / 0 Comments

Oracle has announced plans to bring 200 jobs to San Antonio by 2016 in a new operations center.
The deal is contingent on the approval of economic development incentives from local government. The San Antonio City Council will consider a $1 million grant for Oracle on Thursday and the Bexar County Commissioners Court will consider Oracle’s application for an economic development grant at its meeting on Tuesday.
“The negotiated agreement is expected to be brought back to Commissioners Court on June 3 for final approval,” according to a news release.
The Oracle center will hire finance and contractual support service workers.
“San Antonio is making tremendous strides in attracting companies in 21st century industries,” Mayor Julian Castro said in a news release. “These 200 jobs at Oracle will be a powerful addition to the city’s fast-growing IT sector.”
“Oracle’s interest in locating operations here is proof that our economy is strong and our business climate is attractive to such global companies,” County Judge Nelson Wolff said in a news statement. “This also affirms that we are building a diverse multi-industry economy where our residents can find meaningful career opportunities.”
“San Antonio offers opportunities for economic growth as well as a highly skilled workforce, making it an ideal location for Oracle,” Oracle Vice President of Real Estate and Facilities Randy Smith said in a news release. “This new location will bring new jobs to San Antonio and serve a critical financial function for our North America and Latin American businesses.”

Hatching Thunder Lizards from Radioactive Eggs in Austin

May 9, 2014 / LauraLorek@gmail.com / 0 Comments

By LAURA LOREK
Founder of Silicon Hills News

Godzilla Movie Photo: Classic Media

Can Austin produce a thunder lizard, a $100 billion tech startup?

Mike Maples Jr., managing partner of Floodgate Ventures in Palo Alto, thinks so. He wants Austin to hatch what he calls a thunder lizard in the next 10 years.

Bob Metcalfe, professor of innovation at the University of Texas at Austin, creator of Ethernet and founder of 3Com, quizzed Maples about thunder lizards and Austin’s entrepreneurial ecosystem, during a fireside chat at the Austin Chamber of Commerce’s A-List awards event Wednesday night.

“The metaphor comes from Godzilla,” Maples said. “Godzilla was half radioactive from atomic eggs and swam across the ocean and emerged with an attitude and began destroying things breathing fire on things, swiping buildings, eating on cars and trains like they were sausage links and that always just struck me as the right metaphor for a startup.”

“A startup that is great should try to be a thunder lizard,” Maples said. “It should be an attacker, not a defender. It should be adaptive.’’

Google and Microsoft are thunder lizards and Twitter is a thunder lizard in the making, Maples said.

Metcalfe asked him if there are any thunder lizards in Austin.

Maples said at times Dell has encroached on that title, but he said there’s an opportunity for more here.

What does Austin have to do to get more? Metcalfe asked.

“I’ve surveyed the infrastructure pretty systematically and I think we’re doing really well – we’re firing on all cylinders as I’m fond of saying,” Metcalfe said. “So what do we have to do differently to get some thunder lizards?”

First, Austin needs to believe it can happen, Maples said. He first mentioned the idea of creating a thunder lizard a year ago at the Austin Technology Council’s CEO summit.

“My manifesto is Austin creates a $100 billion exit in the next 10 years,” Maples said. “Some people would say $100 billion you’re smoking weed, that’s crazy.”

But Google is worth more than $300 billion, Maples said. Facebook is worth more than $150 billion, he said. Cisco and Microsoft and Apple, were worth more than $500 billion each at one time, he said.

“A lot of people I talk to in Austin don’t really believe it can happen yet,” Maples said. “In order to have $100 billion outcome, you have to be willing to try to go after the exponential game-changing ideas. And we need to have a community that supports that. We need to have a community that doesn’t call those people crazy and whacky and stupid but sort of roots them on and cheers them on.”

Silicon Valley knows it can do it because it has Google, a thunder lizard, but Austin doesn’t have one, apparently, Metcalfe said.

“So how do we get to believe we can?” Metcalfe asked.

Maples said he doesn’t have the answer. But he looks for change events that are even bigger than the company, Maples said. For example, Microsoft was started in the era of the microprocessor and Bill Gates envisioned that hardware would be a commodity and software would be the rare, valuable resource, Maples said.

“Most of the startups I’ve seen that have that potential to be super huge they find some tectonic shift in the technology landscape that’s bigger than any one company,” Maples said.

Then the entrepreneur has some proprietary insight and then they go build a company around that, he said.

Maples invested early in Twitter and it’s evolving to become a thunder lizard. Some of the ideas sound kind of crazy early on, Maples said.

The founders of Twitter were either going to call it Voicemail 2.0 or Twitter, Maples said. The founders explained that Twitter didn’t have a roadmap or revenue model but that it was a micro-blogging service that let people say what they were doing in 140 characters or less. Yet Jack Dorsey and Evan Williams were able to explain the potential that blogging and self-expression is a big idea and that they expected millions of people to use the platform.

To create a thunder lizard, an entrepreneur has to have “a non-consensus but correct view of technology transformation,” Maples said.

Maples looks for an “entrepreneur who is such an authentic match to a technology change it’s almost like they couldn’t do any business but that business. Too many people when they start a company are just doing a startup. They are not doing the kind of startup that could be their life’s work.”

For example, Ethernet was Metcalfe’s life work so it made sense for him to found 3Com, Maples said. He was moved to start something because he had fundamental insight the rest of the world didn’t see, he said.

“I used to say the answer is Ethernet, what is the question?” Metcalfe said.

Metcalfe asked Maples if Austin’s thunder lizard might crop up out of the new Dell Medical School at UT.

The potential areas of “atomic eggs” or radioactive eggs to hatch the thunder lizards in Austin are from the new medical center or from Google’s super fast Internet broadband network, Maples said.

One area that could possibly create a thunder lizard is in the area of genetic engineering, Maples said.

The question is when will someone drop out of UT to create the next thunder lizard, he said.

Metcalfe said he didn’t encourage people to drop out of UT and that he finished his undergraduate degree at MIT and graduate degree at Harvard and was still able to create a game changing technology and company.

Going back to the topic of thunder lizards, again Metcalfe asked how does Austin encourage them.

“In Austin, we continue to up our game, we continue to add fuel to the fire, we keep adding cinders to the fire,” Maples said. “I would like to see the belief we can create a $100 billion outcome become more mainstream. I would like to see us do things as a community to encourage that outcome.”

Maples said he will come to Austin more often to work with Metcalfe on incubating “radio active eggs.”

The talk ended with Maples, who got choked up recalling being in high school and reading about Metcalfe and his Ethernet invention, told Metcalfe he just wanted to thank him.

“Well you’re welcome,” Metcalfe said. “And that’s sort of the difference between you and me because I can’t remember when I was in high school.”

Bob Metcalfe, professor of innovation at UT, Ethernet inventor and 3Com founder with Mike Maples Jr., managing partner of Floodgate Ventures. Photo courtesy of Bob Metcalfe.

Making Data Centers Smarter and Greener

May 8, 2014 / LauraLorek@gmail.com / 1 Comment

By LAURA LOREK
Founder of Silicon Hills News

Facebook data center, photo courtesy of Facebook

Facebook has saved $1.3 billion in the last three years by making its data centers more energy efficient.

That’s enough energy to power 40,000 houses a year and saves on carbon emissions the equivalent of taking 50,000 cars off the road, said Charlie Manese, vice president of channel development for Facebook’s Open Compute Project and infrastructure.

Facebook’s data centers run on alternative energy including hydrodynamic and wind power.

The company has focused on making its data centers faster, leaner and better since it broke ground four years on its first “green” data center project in Prineville, Oregon.

Manese spoke Thursday morning on the last day of the two-day Open BigCloud Symposium focused on cloud computing and big data. The conference, held at the University of Texas at San Antonio, attracted about 200 people and featured presentations from Rackspace, Facebook, Gartner, Internet2, Dell, University of Texas Advanced Computer Center and others.

The Open Compute Project started at Facebook in 2011. A big focus of the Open Compute Project is to share best practices with software, hardware, networks and data center designs to increase efficiency and cut down on energy consumption.

“There’s a lot more data being created these days than ever before,” said Attilia Finta with Dell. His presentation focused on infrastructure cooling technology used in the data centers to keep the servers from overheating.

Ron Mann, a senior director of data center infrastructure with Hewlett-Packard showed off the container-sized data centers that HP can put in tight spaces and even on rooftops. Some of the data center containers have even been painted to look like mobile homes.

The efficient data centers are greatly needed because the world is awash in data, and the amount of data created has greatly accelerated in the last few years, said Frank Frankovsky, chairman of the Open Compute Project Foundation. It has grown from .8 zettabytes (one zettabyte equals 1 billion terabytes) of data in 2010 to 2.8 zettabytes in 2012. And it’s expected to hit 40 zettabytes in 2020, he said.

Austin Chamber Names 12 Startups to its Austin A-List for 2014

May 8, 2014 / LauraLorek@gmail.com / 1 Comment

By LAURA LOREK
Founder of Silicon Hills News

The Austin Chamber of Commerce Wednesday night named 12 companies to its A-List of Startups for 2014.

In the “Emerging” category, for companies that have raised less than $1 million, the winners were Datical, Compare Metrics, Embrace, TeVido, TrustRadius and Spot on Sciences.

“You look at the companies that won last year and this year, it’s a great honor to be part of that group, because they are next generation of startups that are pushing us forward,” said Bart Bohn, founder of Embrace, customer relationship management software.

“It’s such a strong entrepreneurial business environment in Austin and it’s such an honor to be part of it,” said Jeanette Hill, CEO of Spot On Sciences, the maker of HemaSpot, a medical device that allows for remote blood sampling.

“It really means that all your hard work paid off. People see that what you’re doing is exciting and innovative and game changing and Austin is the place to be game changing,” said Laura Bosworth, CEO and co-founder of TeVido BioDevices, which uses 3-D printing technology to reconstruct and print breast tissue.

In the “Growth” category, for startups that have raised more than $1 million, but less than $10 million, the winners included Umbel, Square Root, Set.fm and TurnKey Vacation Rentals.

And in the “Scale” category, for companies that have raised more than $10 million, the winners were Novati and Chaotic Moon.

More than 250 startups applied for the Austin A-List awards, a 65 percent increase in participation from last year’s list, said Michele Skelding, senior vice president of global technology and innovation for the Greater Austin Chamber of Commerce.

Skelding and Hugh Forrest, executive director of South by Southwest Interactive, announced the winners at the inaugural State of Innovation event at the ACL Live at the Moody Theatre. Several hundred people attended the event which featured fireside chats by Laura Kilcrease, managing director of Triton Ventures, and Gene Austin, CEO of Bazaarvoice and Bob Metcalfe, professor of innovation at the University of Texas, inventor of Ethernet and co-founder of 3Com, and Mike Maples Jr., partner at Floodgate Ventures.

In addition, Mayor Lee Leffingwell proclaimed May 7th as “Austin Innovation Day.” He also discussed the city forming an “Innovation District” around the Dell Medical School. And Thomas G. Osha, managing director of Innovation and Economic Development at the Wexford Science and Technology, gave a talk about the development of Innovation Zones.