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StoryPress Helps People Create and Share Stories

January 11, 2013 / LauraLorek@gmail.com / 0 Comments

Got a story to tell?
Mike Davis wants to help you tell it. He’s the founder and CEO of StoryPress, an Austin-based startup which recently launched an iPad and web application to help people create stories about their life experiences and save them for future generations.
Davis was formerly involved with another application called “Guardian Trace.” He recently answered these questions about his new venture.

Q. What is Storypress?

A. StoryPress is a story creating, saving and sharing application. You can either tell StoryPress a story or have the application interview you. After answering the questions, the app combines all of your answers into an audio-book and saves it on our cloud. Your story can now be shared as easily as a YouTube video.
The interview packets are like “sheet music” for an instrument. They allow you to start off on simple topics and work your way up to longer and deeper stories. As we release more interview packets, people can return to StoryPress to talk about different elements of their lives and experiences.

Q. How did you come up with idea?

A. My grandma who is 84 years old asked me to recommend an iPad app that could record her voice. When I asked why, she explained it was because she had all these stories and memories she wanted to save so the rest of us could remember them and pass them along.
After some research I realized there are many recording applications, but they are all cold and intimidating…not designed for a memoir but a grocery list. So I decided to create one, not only with the right interface for this genre but with interview packets to help them get started and a private cloud for story saving and sharing.
When you complete your story, all you have to do is hit upload and with one click your story is now in the cloud and as easy to share as a YouTube video.

Q. Who’s your competition?

A. There are many services to capture personal and family stories but they are typically expensive and involve hiring a crew to come to your home for the interview. In terms of a completed automated software solution for this market, there is no competition I’m aware of.

Q. What are your plans for the company during the next year and the next few years?

A. The primary goal of 2013 is to roll out our minimal viable product and learn as much as we can. In the 3 weeks since we’ve launched we’ve hit 3000 downloads and have made top 25 status for lifestyle apps in several countries, so we are confident that there is a genuine interest in what we are doing. The next step is find our super users (early adopters) and get to know them like the back of our hand. Their insights into how to make the product better are critical as well as their enthusiasm to take later versions of our product to mass market and turn an idea into a movement.
From a technical stand point we would like StoryPress to be on more platforms than just iPad and improve the ways we use pictures in the story telling process.

Q. Who makes up your team?

A. At the time of this writing I’m currently the only full time employee, the rest of our team is made up of local contractors including iOS, server programming and user-interface designers. I am putting together an advisory board with some seasoned personal including former executives from Ancestry.com and Audible.
I am currently looking to expand the executive team and surround myself with like minded creative individuals who can help take StoryPress to the next level.

Q. How is StoryPress financed?

A. It is mostly self financed but we did have some help from family and friends

Q. How does StoryPress make money?

A. At the moment the application is completely free but in time we hope to make money by charging for the cloud storage of peoples stories and for selling users additional interview packets on 100’s of categories and languages.
There is also the potential for us to turn peoples stories into physical CD’s they can buy from us or a movie montage.

Q. Anything else you want to make a point of that we haven’t asked you about?

A. Genealogy is widely believed to be the 2nd largest hobby in America behind Gardening and with the 55+ demographic growing faster than any demographic in our country, I believe that StoryPress is primed for exponential growth as the “niche” of family history may be the largest and most lucrative demographic in the country.

Q. What are your favorite startup resources?

A. Books including:
o Start with Why
o The Lean Startup
o From Good to Great

TechStars Cloud II Kicks Off on Monday

January 11, 2013 / LauraLorek@gmail.com / 0 Comments

The second annual class of TechStars Cloud will begin Monday at Geekdom in downtown San Antonio.
Two San Antonio companies, TrueAbility and ParLevel System, are among the dozen companies selected to participate in the four-month long incubation program.
TrueAbility, a company founded by former Rackspace employees, provides online skills tests to assess an employee’s abilities to do technical skills required of jobs like system administrators.
TrueAbility’s team is made up of CEO Luke Owen, Frederick “Suizo” Mendler, Marcus Robertson and Dusty Jones. Last summer, TrueAbility won the San Antonio Startup Weekend competition.
ParLevel System, founded last year by Walter Teele and Luis Pablo Gonzalez, is working on a monitoring system for vending machine operators. ParLevel received a $25,000 in October from the Geekdom Fund, which provides seed-stage funding to technology startups.
TechStars doesn’t release the names of the companies participating in the program until Demo Day, which takes place in April, said Jason Seats, managing director of the program. However, some of the companies announced participation in TechStars Cloud.
TechStars has become a launching pad for technology startups with five TechStars programs around the country in Boulder, Boston, Seattle, New York and San Antonio. TechStars Cloud focuses on companies that build online products.
Last year’s TechStars Cloud class featured 11 teams which raised $15 million including $2.5 million from local investors in a fund headed up by John Mosher.
This year’s program will be housed on the newly renovated 10th floor of the Weston Centre. The floor features bright red and black colorscape with individual offices and a collaborative open meeting spaces as well as a comfy game room stocked with video games systems and TVs as well as couches and bean bag chairs.
Each team receives $18,000 in cash and $100,000 in debt financing. In exchange, TechStars takes a 6 percent stake in the company.
For that investment, the companies get mentorship from successful entrepreneurs, investment, access to a vast network of entrepreneurs, venture capitalists and other resources, and perks valued at $200,000.

“Something Ventured” Showcases Tech VC Pioneers

January 11, 2013 / LauraLorek@gmail.com / 0 Comments

This weekend, KLRU-TV will highlight technology innovation in both Austin and Silicon Valley.
At 4 p.m. on Sunday, Jan. 13th, a feature-length documentary “Something Ventured” featuring the people who changed the world with the entrepreneurs who spawned the silicon chip industry and biotechnology industry in Silicon Valley to the people who took a risk and financed them.
In addition to interviews with Tom Perkins, Don Valentine, Arthur Rock, Dick Kramlich and others, the film includes some of America’s top entrepreneurs sharing how they worked with these venture capitalists to grow world-class companies.
As an added bonus, the locally-produced series “Capital of Innovation” will air an episode at 3:30 p.m. and then again at 5:30 p.m. showcasing innovation in Austin’s video game industry. The segment puts the spotlight on Richard Garriott, who created the massively multiplayer online role playing game industry with Ultima Online. He made the game as a teenager in the Houston area and sold the floppy disks in ziplock baggies and sent them to people who bought them through ads in the back of gaming magazines.

Diverse Tech Companies Demo at SA New Tech

January 10, 2013 / LauraLorek@gmail.com / 0 Comments

By ANDREW MOORE
Reporter with Silicon Hills News

Clay Selby and Brandon Ashton of SocialREST, photo by Andrew Moore

SA New Tech held its monthly meeting Tuesday with both old and new tech companies in attendance. If you need help putting an app on Facebook or just want some cool rubber sandals from Guatemala, these tech companies have you covered.

SocialREST

SocialREST is a five member start-up born in Geekdom’s Three Day Startup Weekend last November. Its business idea – make it easy for mobile application developers to incorporate social media.
“We address the concerns of mobile developers who want to integrate social media into their apps…but run into a barrier with all the code.” says co-founder Brandon Ashton.
Ashton says it’s difficult for mobile developers to integrate their products with social networks like Facebook because it requires a lot of coding in languages the developer may not be familiar with. SocialREST acts as an intermediary between developers and social networks and essentially provides code shortcuts that greatly reduce the workload of the developer. This allows developers to both integrate with social media easily and to quickly add social functionality – such as having their app interact with Facebook posts. SocialREST will also keep their clients’ application code current with any tweaks or changes that Facebook might make – saving clients the headache of having to go back and re-write code for all their apps.
In addition to their integration services, SocialREST will also provide analytic services that track the use and popularity of a developer’s applications. By looking at likes, mentions, and other social activity directed at a developer’s application, SocialREST will be able to discover how many times that social activity with an app results in a conversion – or inspires someone to download the developer’s app off a mobile marketplace. As a result, SocialRest will be able to tell developers how much cash they are making by being connected to social media or, if their app is free, how much money their app is potentially worth.
SocialREST is about to release their alpha version and has 10 developers ready to start testing it out. The alpha version will be solely focused on SocialREST’s social integration services. The analytics portion of the company will come later – after the bugs have been worked out and the product is more marketable. SocialRest was founded by Clay Selby.
“It’s hard for developers to code to social media, we make it easy,” says Selby. “Second of all, we tell developers how much money they get by coding to social media.

Airstrip Technologies

Founded in 2004, AirStrip Technologies has created a way for doctors to get real time hospital patient information on their iPhone or other mobile device. They are now piloting their AirStrip Patient Monitoring product, which gives doctors mobile access to both the vital signs of hospital patients as well as patient medical history data. The mobile device displays patent vitals exactly as they appear on the patents bedside monitor, allowing doctors to check in on a patent without having to enter their room.
Doctors can also rewind a patient’s waveform data to review what was happening with that patent in a certain time period. AirStrip Patient Monitoring additionally includes access to medication lists, allergy lists, lab results, EMR data, patent histories and more – a feature not available with their previous products.
AirStrip product manager Bryan Crane says the product can monitor vital information on an intensive care patient with only a 15 second delay – giving doctors life saving information before they ever arrive in patient’s room. In some cases, the product can be incorporated into emergency medical vehicles – allowing doctors to access information on a patient in critical condition before they get to a hospital.
This allows the doctors, nurses, and all parties involved to easily share life saving information and provide much faster care to patients.
Displaying waveform data isn’t new for AirStrip Technologies. The company started with AirStrip OB– OB meaning obstetrics – that monitored women in labor. That technology monitored waveforms of fetal heartbeats and uterine contractions in childbirth. As of the beginning of this year, AirStrip OB has monitored more than 1.4 million births and is used in hundreds of hospitals across the nation.

Vos Flips

Founded by entrepreneur Jose Alejandro Flores, Vos Flips is a sandal producing company focused on humanitarian work in Guatemala. The sandals — or Flips — are primarily sold online, but are also available from partnering retailers in the U.S. The sandals are made from natural rubber harvested in Guatemala and are manufactured there as well. Proceeds from the sales are used to increase the quality of life for the plantation workers making them.
“For each pair that we sell we provide from our bottom line basic healthcare education to the people and families that work in our supply chain in Central America,” says Flores.
Vos provides this care through partnerships with Gremial de Huleros and AgroSalud in Guatemala. Clinics at the rubber plantations provide healthcare education services to more than 500 plantation workers. Services offered include providing clean drinking water, keeping children healthy in their formative years, providing vaccinations and essential medication, and providing hygiene education.
Vos also gives away Flips to underprivileged communities in Guatemala. For every pair of sandals Vos sales, a free pair is given away through a partnership with Soles4Souls – a charity organization that has given away around 7 million shoes in more than 125 counties.
In addition to giving away free sandals and providing health services, Vos also has an environmental aspect to their business. The rubber in Vos’s Flips are 100% biodegradable and recyclable, and Vos provides drop locations for worn out Flips on its website for recycling purposes.
Vos’s Flips can be bought online for $19.99. They can also be purchased at Whole Foods Market, as well as a few other U.S. retailers, for $24.99. No matter where the shoes are purchased, a free pair will be given away in Guatemala. So far, the company has sold more than 45,000 Flips. Flores says Vos is committed to keeping its operation in the Americans and he hopes to expand his operations to Colombia or Brazil in the future.
For its humanitarian work, Vos has been recognized by the Rockefeller Foundation in New York.

The Wisdom of Crowdfunding

January 10, 2013 / LauraLorek@gmail.com / 0 Comments

By L.A. LOREK
Founder Silicon Hills News
Crowdfunding will lead to an explosion in entrepreneurship, innovation and job creation in the U.S., according to its advocates.
“We’ll go from 60,000 angel investors to six million angel investors over the next decade,” said Chris Camillo, an angel investor and filmmaker producing a documentary “Crowd of Angels.”
“This will change the way investment is done in the U.S.,” said Trey Bowles, chair of Startup Texas, an affiliate of Startup America.
Lack of access to capital is the number one inhibitor to starting a business today, said Jason Best, principal of Crowdfund Capital Advisors and co-founder of the Crowdfunding Professional Association.
They all spoke at the first-ever Crowdfund Texas Conference in Austin on Tuesday, along with dozens of others involved in the emerging new industry, known as crowdfunding. Most of the industry pioneers attended and quite a few of them were featured in a recent New York Times article “The Crowdfunding Crowd Gets Anxious.” The article detailed how Candace Klein, founder of SoMoLend, and others looked for alternative revenue sources while waiting for U.S. Securities and Exchange Commission approval to go ahead with their equity-based crowdfunding portals that take investments from regular people and not wealthy accredited investors.
At the Crowdfund Texas Conference, Klein participated on two panels and had a table with information on her company in the hallway. SoMoLend, based in Cincinnati, partners with banks and offers low-interest loans to small businesses nationwide.
With equity-based crowdfunding, companies hope to tap into money that isn’t available to them right now.
“If Americans shifted just one percent of the $30 trillion they hold in long-term investments to small businesses, it would amount to more than 10 times the venture capital invested in all of 2011,” according to the Crowdfunding Professional Association.
Currently, crowdfunding allows individuals to invest in new ideas and projects. For the past five years, companies like Kickstarter, RocketHub and IndieGoGo, have allowed individuals to donate money in exchange for perks like a new pair of tennis shoes or a watch. Since the donors are not actually investing in the company, the practice is legal.
In the past few years, individuals have poured millions into new ideas through crowdfunding, which saw its investment rise 92 percent last year, according to Startups.co. And Kickstarter, founded in 1999, reported more than 2.2 million people pledged a total of $319.7 million to successfully fund 18,109 projects in 2012. Many of the projects supported the arts. Kickstarter doesn’t allow people to raise money for charity, a cause or “fund my life” ventures.
The projects-based funding on Kickstarter doesn’t work for some startup companies like a biotechnology company looking to create a new medical device. Best said.
That’s where startups hope to tap into equity-based Crowdfunding, which Congress approved as part of the Jumpstart Our Business Startups, known as the JOBS Act. That law allows companies to raise up to $1 million a year from small investors. It has already created new businesses like EarlyShares in Miami with 20 employees. But EarlyShares hasn’t been able to finance any companies yet through its online portal. The entire industry must wait for regulations from the U.S. Securities and Exchange Commission before they can begin to match companies with small investors. The SEC already missed its deadline for submitting the new rules and no one knows for certain when they might be issued.
But the demand for equity-based crowdfunding is there, said Hall T. Martin, director of Texas Entrepreneurs Networks.
“The angel groups just can’t keep up with the deal flow right now,” Martin said.
Texas Entrepreneurs Networks plans to launch an equity-based crowdfunding portal to augment the deals its already doing with accredited angel investors, Martin said.
“A huge amount of money is sitting on the sidelines right now looking for good investments,” Martin said. “This will substantially increase deal flow.”
Small businesses struggle to get loans especially in the wake of the financial crisis, said Heather Schwarz-Lopes, CEO of EarlyShares.
Small businesses and private companies get less than one percent of investment capital.
“There’s a huge opportunity out there,” she said.
Right now, EarlyShares focuses on investor education. Already, 60,000 users have registered on its site, including 2,000 companies. It’s doing traditional broker-dealer investments with accredited investors until it gets the go ahead to make equity-based investments with non-accredited investors. It’s going to make money by taking a 5 percent to 10 percent fee on each transaction, Schwarz-Lopes said.
“Crowdfunding is going to revolutionize financing for companies,” she said.
But some speculate the SEC has not yet released its rules because of worries about fraud. The fear is that investors will lose money. And some will, said Doug Ellenoff, partner at Ellenoff Grossman & Schole, a New York-based law firm. But that’s the inherent risk involved in financing startup companies, he said.
But the hope is that some of the investments will enable entrepreneurs to create the next Facebook or Microsoft, Bowles said.
So far, few cases of fraud have been reported. In a review of more than $250 million worth of crowdfunding transactions, Jonathan Sandlund, founder of TheCrowdCafé, didn’t find any cases of fraud. That’s not to say that failures don’t occur, he said. But a startup failure is not the same as fraud, he said.
Equity-based crowdfunding is already legal in the United Kingdom and Australia and it is working really well, said Best, who has travelled all over the world to learn about and promote crowdfunding.
Crowdcube in the United Kingdom launched in 2010 and finances, on average, $88,000 per company, said Sandlund. But only seven percent of the companies seeking investment are successful, he said. That shows that the crowd is pretty good at vetting the companies seeking funds and investing in only the best ideas and teams, he said.
“It’s not a financial trend, it’s a cultural shift,” Sandlund said.
Crowdfunding appeals to the millennial generation seeking locally based goods and services and something unique and cool, Sandlund said. They like to invest in startups and new ideas, he said. They also like to seek funding from a community of supporters, he said.
CircleUp, launched in mid-2012, and has already invested $7.5 million in eight deals into privately held consumer and retail companies. CircleUp, based in San Francisco, deals with accredited investors only and that’s why it’s able to do deals. It is the nation’s largest equity-based crowdfunding site.
Best also believes equity-based crowdfunding will provide investment stimulus to a variety of entrepreneurs in all areas of the country.
Currently, angel and venture capital investment is concentrated in a handful of cities: Boston, Austin, San Francisco and Silicon Valley, he said. Entrepreneurs often move to those areas to be close to sources of financing and support, he said. Imagine if an entrepreneur in Louisiana had access to investment capital, he said. They wouldn’t have to move and they could begin to expand their company and impact the local economy favorably, he said.
Crowdfunding can also take the bias out of investments, Best said. Many investors are white men who invest in ideas they feel comfortable with and people like them, he said. But crowdfunding allows people of all races and gender to tap into financing a variety of ideas, he said.
So a 40-year-old Asian woman in Topeka, Kansas who wants to launch a healthy snack food company for toddlers has as great a chance of getting financed as a white male 20-something in Austin with a software as a service company.
Already, a barista in Portland, Oregon had success with creating a new coffee filter. Best invested in the idea by buying his product on Kickstarter.
Keith Gehrke, owner of Able Brewing, raised $155,162, exceeding his $5,000 goal on Kickstarter to create a new coffee filter and ceramic brewer. He was four months late in delivering his product to Best, but he has constantly communicated with his donors and that’s Ok with Best. He’s been able to share in Gehrke’s entrepreneurial journey.
With crowdfunding, the secret sauce is in the person’s social network.
“You’re investing in an idea,” Best said. “You’re investing in a person.”
And crowdfunding allows investors to vet a person because no one knows them better than the people in their social networks, Best said.

RocketHub Seeks to Add Equity-based Fundraising for Startups

January 9, 2013 / LauraLorek@gmail.com / 2 Comments

Perks-based crowdfunding is nothing new, said Brian Meece, co-founder of Rockethub.
In 1885, a fundraising effort to buy a pedestal for the Statue of Liberty raised $102,000 from more than 120,000 contributors.
Joseph Pulitzer, publisher of the New York World, ran an ad in his newspaper offering a six-inch replica of the Statue of Liberty to donors who gave a $1.
“There is a social ritual embedded here culturally,” Meece said.
A big difference is that back then, people needed to know someone like Pulitzer to reach thousands of people. Now people can use Facebook, Twitter and other social networks to reach thousands of people, Meece said.
Meece and Jed Cohen, another co-founder of Rockethub, spoke at the Crowdfund Texas Conference Tuesday morning at the Omni Hotel in downtown Austin. The topic of their presentation was “The Crowdfunding Success Pattern.”
Rockethub is a crowdfunding site that has helped countless people raise funds for projects as diverse as creating a wave-spring tennis shoe to 52 Shades of Greed, a deck of cards highlighting the fraud and other shenanigans related to the financial industry crisis.
Rockethub offers individuals the opportunity to raise money for perks-based projects. In exchange for a donation to the project, a donor can get a product or service from the person raising funds. That kind of crowdfunding is currently legal and companies like Rockethub, Kickstarter and IndieGoGo have helped people raise millions through the Internet to finance a wide variety of activities from journalism to games, books, disaster relief and even a Tesla Museum.
The other type of crowdfunding, and the subject of the Crowdfund Texas Conference, focuses on funding a startup by allowing entrepreneurs to sell small amounts of equity to many investors. The Jobs Act, passed by Congress and signed into law last April by President Obama, allows companies to raise funds from crowdfunding portals online from a wide pool of small investors. But those portals cannot begin offering deals until the U.S. Securities and Exchange Commission issues specific rules and guidelines to protect investors.
Rockethub is looking to do both perks-based and investment-based crowdfunding, Cohen said.
“We want to see if we can meld the two at Rockethub,” he said.
The company has already met with the SEC on proposed rules and Rockethub has submitted white papers to the SEC providing its suggestions on best practices for the equity-based crowdfunding portals, Cohen said.
Rockethub has also identified core patterns that reveal what drives successful projects, Meece said.
“Projects that do well are great projects that engage folks emotionally,” Meece said. “In a world of information overload, there is a shortage of emotion.”
For example, James Portnow wanted to raise $15,000 on Rockethub to build a new game. He raised it in 15 hours, Meece said. His appeal to build games that can change the world appealed to his fans and followers.
“The world noticed his product,” Meece said. “It was picked up on the front page of Reddit, which is like being on the front page of the Internet.”
The secret to success is to have an awesome project spearheaded by real people who are passionate.
The successful projects have three pillars in common: a great project, a strong network of supporters and cool goods in exchange for a financial contribution.
Artists are especially successful because they engage with their audience and they have people that follow them. People have got to tap into their social capital to succeed at crowdfunding, Meece said.
“It’s about trust and credibility,” he said.
Marc Scheff, a graphic artist, raised $25,000 on RocketHub for his project 52 Shades of Greed, a card deck with drawings depicting people responsible for the financial crisis. Scheff created a Twitter flash mob to spread the word about the project which was also featured in 25 publications including the New York Times and The Economist, Cohen said.
“The thing sort of blew up,” Cohen said.
The project got retweeted by Olivia Wilde, a Hollywood actress and activist, and Scheff was able to turn his audience into his salesforce.
Most of the people who funded his project were bankers and lawyers, Meece said.
Meece bought a pair of wave-spring Spira running shoes because he liked the idea. He’s not even a runner, he said. But the shoes, which he wore on Tuesday, are great, he said.
Dallas lawyer turned entrepreneur Andy Krafsur raised $42,000 on Rockethub to produce his Spira wave-spring running shoe. People who gave $70 got a pair of spring-powered sneakers. He was originally looking to raise $24,000.
“Spira became the eighth most Googled running shoe online,” Meece said.
Despite all the success stories, not every project makes its goal and a lot of mythology has been built up around crowdfunding, Cohen said. He likened some people’s expectations to Kevin Costner’s character in the 1989 movie “Field of Dreams” with the tag line “If you build it, they will come.” That doesn’t always happen with crowdfunding projects, Cohen said.
People need to set a reasonable financial goal, Cohen said. The average contribution on RocketHub is $75, he said.
People also need to “plan the work and then work the plan,” he said. Don’t just launch a project and let it take its course, he said. Instead, build a team, organize your contacts, prime the pump before the project launches, celebrate milestones and close strong, he said. On RocketHub, most projects take between 30 to 45 days to raise funds and the fundraising sweetspot is between $3,500 and $35,000, Cohen said.
Rockethub makes its money from fees ranging from 4 percent to 8 percent.
With crowdfunding for startups and equity, RocketHub estimates the sweetspot for fund raising to be between $20,000 and $500,000 with an average investment of $500 to $1,000.

Crowdfunding Set to Transform How Startups Raise Money

January 8, 2013 / LauraLorek@gmail.com / 2 Comments

Congress passed a law last year that allows startup companies to raise money directly from investors through online crowdfunding portals.
The only problem is the U.S. Securities and Exchange Commission has not yet released rules to tell the crowdfunding industry how to do that. It’s part of the nitty-gritty details of the Jumpstart Our Business Startups, known as JOBS Act, that are still being hashed out even after President Obama signed the bill into law last April.
Today at the Omni Hotel in downtown Austin, a group of about 250 people are meeting for the first ever Crowdfund Texas Conference to learn about this emerging industry.
“We did this in hopes of really bringing together the Texas startup community to spark a crowdfunding movement in Texas,” said Chris Camillo, an angel investor and filmmaker.
The day-long event features a variety of speakers talking about everything from crowdfunding regulations to how to succeed at crowdfunding. Startup Texas, a member of the Startup America Partnership and the Crowdfunding Professional Association are sponsoring the conference.
At the event, Camillo, who is producing “Crowd of Angels” is conducting interviews for the documentary which is set to debut at the Crowdfunding Professional Association convention in October.
During a morning panel on “Crowdfunding Investing Insiders: State of the Industry,” Scott Purcell, founder of crowdfunding platform Artic Island, said that crowdfunding was the “perfect storm” to change the world.
“It will change everything, and it’s going to be a lot of fun,” Purcell said.
D.J. Paul, formerly cofounder and chief strategy officer of Crowdfunder, agreed.
“It has the potential to be incredibly transformative,” Paul said.
The panelists estimated that the SEC might take from six months to nine months to release rules for crowdfunding that will let the practice begin in the United States.
“It’s really about politics now and I think there’s some movement,” said Maurice Lopes, cofounder and CEO of EarlyShares, a crowdfunding portal based in Miami.
The SEC has a lot of other regulatory issues to deal with, Paul said.
“An entire industry is being created by this legislation,” he said. “It’s a new asset class. No additional monies were allocated by Congress to create this new asset class. It’s appropriate to be frustrated. It’s also appropriate to understand the other issues the SEC is dealing with right now.”
No one knows how many new crowdfunding portals will be created.
Lopes with Early Shares estimates there will be hundreds of different service providers but few funding portals.
“What most people don’t’ realize is this is not a Web business. This is a financial industry,” Lopes said. “This is a heavily regulated business.”
Early Shares has spent $500,000 in legal fees and in house counsel for compliance issues in the last year, Lopes said.
“I don’t think there are hundreds of players in this space with that kind of money,” he said.
There are going to be more than 10 but there aren’t going to be as many as people think, said Purcell.
“It’s pretty few and far between to find people that understand both worlds and can put this together,” Purcell said.
Purcell estimated that there might be as many as 50 to 100 crowdfunding portals but that they’ll go through a period of rapid consolidation and get down to two or three national players in a few years.
An estimated 1,500 to 2,000 jobs have already been created by the new legislation, Lopes said. His company employs 20 people.
“It’s already working for what it was intended,” Lopes said.

Nurturing a Startup Community

January 4, 2013 / LauraLorek@gmail.com / 0 Comments

Just finished reading Brad Feld’s “Startup Communities: Building an Entrepreneurial Ecosystem in Your City.”
Instead of plunking down $26.95 to buy the book, you can watch the video Feld did for the Kauffman Foundation below and read his blog.
Feld, a venture capitalist and co-founder of TechStars, lives in Boulder, Colorado. In his 188 page book, he details how the town became a hotbed of startup activity. Nearly half of the book is written by guest posts from various members of the Boulder startup community.
The gist of book and video can be boiled down to the four points that make up what Feld calls his “Boulder Thesis.”

1. Entrepreneurs must lead the startup community.
2. The leaders must have a long-term commitment
3. The startup community must be inclusive of anyone who wants to participate in it.
4. The startup community must have continual activities that engage the entire entrepreneurial stack.

Also, the community cannot be too reliant on government, according to Feld. “Although government can play a constructive role in startup communities, a reliance on government to either lead or provide key resources for the effort of building a startup community over a long period of time is a misguided view,” according to Feld.
Feld also mentions the importance of activities and events such as Startup Weekend, Startup Week, Ignite, Open Coffee Meetups, New Tech Meetups, Office Hours and Entrepreneurs Organizations. He also details the importance of accelerators and university programs.

Facekey Seeks to Fight Fraud with Biometric Security Devices

January 2, 2013 / LauraLorek@gmail.com / 1 Comment

By Randy Lankford
Reporter with Silicon Hills News

The potential loss to businesses worldwide due to workplace fraud in 2013 is $3.5 trillion.
That may be the best news Annette Starkweather and Yevgeny Levitov have heard since they incorporated FaceKey Superior Biometrics in 1999. As suppliers of workplace security and time and attendance equipment, the more fraud there is, the more demand they get.
The Association of Certified Fraud Examiners’ (ACFE) 2012 Report to the Nations on Occupational Fraud and Abuse estimated the $3.5 trillion fraud figure. The report, which studied more than 1,000 businesses, also found the presence of anti-fraud controls such as access management and time and attendance verification correlates with significant decreases in the cost and duration of occupational fraud schemes. More good news for Starkweather and Levitov, whose security systems are so James Bond-like they were featured in the 2012 movie “Man on a Ledge.”
The most common technique of access control and attendance verification in use today are card scanners, decades-old technology which Levitov, FaceKey’s president, says can be bypassed for less than $20.
“You can get a handheld device from China for $19 that can replicate most electronic access cards. You don’t even have to get hold of the card you’re replicating. This device can capture the code from an access card in the pocket of someone you’re sitting next to on the subway. Then you can program another card with the same code and have access to anything that person has access to; buildings, files, equipment, computers, anything. All the millions of access cards in use today, they’re no better than an old fashioned lock and key. No matter what the technology in a swipe card, longer codes, more complex encoding, whatever; it’s just an advanced key. It can still be lost, stolen, duplicated.”
That, according to Starkweather, is where FaceKey’s biometric technology comes in. “Biometrics is about knowing who someone is. Who they really are, not who some access card says they are.”
Early biometric technology used minutiae points to tell one fingerprint from another. Electronic scans of fingers would compare up to 75 points of recognition to verify identity.
“While every fingerprint is different,” explains Starkweather, “they have similarities, so once you have a large enough pool of employees, you start to have duplication of those 75 points of recognition. That technology works well up to a point, but eventually, you’ll outgrow it.”
FaceKey’s latest technology, introduced in 2012, goes beyond matching minutiae points to pattern recognition. A wall-mounted camera, little larger than a cell phone, scans a visitor’s fingerprint or face in less than a second.
The technology is being used on the 11th floor of the Weston Centre at Geekdom, where Facekey is based. Geekdom members use the facial recognition and fingerprint scanner to check into the coworking space.
“Everything has a pattern,” explains Levitov. “Fingers, faces, this wall has a pattern. And that pattern can be digitized. Once it’s digitized and in the customer’s database, it can be accessed and matched.”
If a match is not found, access is denied. Various levels of access at multiple locations can be programmed into FaceKey’s firmware.
“I might have access to a building 24/7 where you might only be allowed in from 9-to-5,” Starkweather explains. “Or I might be authorized to operate a piece of equipment you’re not. Our firmware and software can be programmed to provide that specific level of access. If you’re not authorized to operate a particular piece of equipment, it won’t start.”
The second primary application of FaceKey’s technology is recording attendance. “Buddy punching” may not sound like doing someone a favor, but it costs employers millions every year.
“Buddy punching is where one employee swipes two time cards, his and his buddy’s. As far as the time clock knows, both employees are at work and on the clock,” Starkweather says. “Our system defeats that practice, since no one else can scan your thumbprint or your face. You have to be there to be on the clock.”
That functionality is the primary reason Gregory Hudson, CEO of Genesis Concepts in San Antonio, installed FaceKey’s system four years ago.
“We’ve had outstanding results with FaceKey. It provides the assurance that the person we put in the system is the one accessing our facility. And, as CEO, I can see who’s come in and who’s gone out through the FaceKey dashboard management reports.”
FaceKey is currently creating a marketing organization to roll out its products to a wider customer base. With approximately 100 customers in their proof-of-concept database, Starkweather and Levitov are raising $500,000 through bond sales while building relationships with investors and distributors.
“We want to work with people who are already selling into industries and locations where our products will be a good fit,” says Starkweather.
“Our technology gives a business a chance to be more profitable, more secure and even pay their employees better because they’re not losing as much money to fraud. There’s more money to put into payroll.”