After a few weeks of email discussions and meetings lead by CED a local group of entrepreneurs and investors have thrown their support behind LaunchBox Digital and Triangle Startup Factory, two RTP based startup company incubators who will join forces under the LaunchBox Digital brand. I’m really excited to see the incubator model coming to the Triangle and starting with an established brand name with LaunchBox means that some of the early ground work has already been done. For instance, upon the graduation of recent LaunchBox Digital classes TechCrunch has provided good coverage and exposure for the graduating companies and their products/services. The announcement of LaunchBox starting up in RTP is no exception. I look forward to being involved either as a spectator, adviser, or mentor to the startups and the incubators as they work together to create the next great companies in this part of the country.
A few of my favorite entrepreneurial groups (NC Spark and TheFunded.com) have been buzzing in recent weeks about the current Chris Dodd financial reform bill. I submitted my support for one of the online petitions collecting signatures against this proposed legislation this evening. I am strongly against the suggested 120 day waiting period before a startup could receive funds raised from investors. I am also strongly against the increased bar on accredited investor status which is proposed to be raised from $1M in net worth to over $2M in net worth. Some estimates say that the accredited investor requirement change would remove nearly 70% of the options that startups have when raising money from wealthy individuals referred to as angels. Here are the details I included as I signed the petition this evening:
Adding anything that slows down the process of raising investment capital for startups is counter productive. These companies embody the American Dream and the current flexibility in the system attracts innovation to our country. A 120 day waiting period and a higher bar for accredited investment status will slow innovation and job creation in startups in this country. In this economy, as we are all starting to dig our way out, these new restrictions pose one more challenge to new ventures.
Below is the message that TheFunded.com sent out to its nearly 15,000 members this evening. Please get involved, sign the petition, and spread the word about all of the damage that this proposed legislation would do if it becomes law. The brilliant entrepreneurs who create new ventures don’t need anything else making the challenge even more difficult and our community doesn’t need another roadblock standing in the way of new job creation.
Save Angel Investing
The US Senate Committee on Banking chaired by Senator Chris Dodd of Connecticut is proposing changes to angel investing buried within the “Financial Reform Legislation” on the floor of the Senate now. The reforms will effectively double the standard to be an “accredited investor” in the US, which most estimate will reduce the pool of accredited investors by over 70%. Additionally, the proposed legislation requires that financings, whether accredited or not, must be registered with the SEC, and the SEC has up to 120 days to respond. If the SEC does not respond, the financing goes to the applicable State organizations for review.
Reducing the number of accredited investors, slowing down the investment process significantly and adding considerable cost to small financings will decimate angel investing. For all US Members, unless you want to wait for months to get a wire after your next financing is closed, please take a moment to spread the word and call Senator Dodd, as well as your own State Senator.
– Amend Section 926 to exempt startups from SEC filing, state regulation, and 120-day review.
– Strike Section 412 to prevent 77% of current angel investors from losing their accreditation.
CALL SENATOR DODD:
– DC: 202-224-2823
– CT: 800-334-5341
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I have been following wireless electricity in this blog for some time now, through these previous posts:
Wireless Electricity (multiple updates within)
Here’s the most recent installment of news on the topic.
It looks like the folks at WiTricity, of whom I am their biggest fan, in Massachusetts are well on their way to having a commercial wireless electricity product on the market within the next 12-14 months. Based on this timing it will just miss the 2010 Christmas shopping season.
I wonder if this is a commercial product that can then be integrated into other manufacturers devices through OEM arrangements (ie: iPhone, now compatible with WiTricity for wireless charging) or a direct consumer device that you can either purchase individual device interfaces for or that will have multi-connector functionality built-in. Since the whole point of wireless charging is about removing chords and the concept of proximity of devices to power sources I hope they are able to offer individual device interfaces at launch and then eventually become so important to the market that they will get the OEM arrangements, like BlueTooth has done.
Considering the fact that people use chord-based charging stations to power up their mobile devices now, the move to wireless electrical charging will also cause a new problem which is “I can’t find my [insert device name].” When it comes to cell phones you will at least be able to call your phone, assuming it isn’t on vibrate, to locate it within your house since the battery won’t be dead… as long as you’re a member of the younger generations who never turn their mobile phone off. It amazes me how often my parents and those of their generation (early sixties now) still turn their mobile phones off at various times. Anyway, my point is that for devices other than mobile phones (battery powered vacuum cleaners, lawn mowers, and especially smaller ones like watches, hand-vacs, etc) an audible locating feature might be a great addition. You could use a central WiTricity panel to cause each device to beep at you for a bit to remind you where you hid it last.
The WiTricity system sounds like it will give you enough freedom to fully misplace your items without any concern of them losing a full charge. What a fun problem to have.
Through a series of comments this week the Venture Capital industry has proven once again to be a highly fragmented group of independent thinkers who will likely never play nicely with each other. A great article in the NY Times on the state of the Venture Capital market shows contending visions for the path back to glory… from removing firms from the market to adding firms to increasing investment and fund size to lowering it. And as you might imagine, they all think they’re right. Don’t we all?
What ever happened to raising money and investing the right amount in the right companies? It seems like all of the current debate is regarding the sweet spot of investment size and the sweet spot of fund sizes . In an industry that thrives on the ability to find a unique diamond in the rough and the savvy to understand and catalyze the creative class I’m surprised that they think it should be so simple. Really though, since the industry is broken, and they broke it, should they really be listening to their own advice as they try to piece together a solution? This all quite circular if you ask me.
Venture Capitalists are used to giving lots of advice. I think maybe it’s time that they sat down and asked some entrepreneurs (one of their customer bases) what they need. Oh… I think I’ve heard that exact advice in the VC boardroom before 🙂
- Financial partners who think operationally
- The right amount of capital at the right time
- Patient, level-headed board members
- VC firms made up of former company operators (up to a maximum of one Wall Street financial numbers guy among the partners)
- A clear understanding of the mutual expectations of the relationship
- What is currently the biggest opportunity in our market?
- How often will we talk about the business (daily, weekly, quarterly, annually)?
- How often will we receive advice from you?
- Are you providing money or leadership or both?
- Who exactly will you be introducing and promoting us to?
I’ve spent the last few weeks, in the occasional moments of downtime, reading through the NVCA’s four pillar plan for reopening the IPO markets with the goal of restoring liquidity to Venture Capitalism. Any executive or board member of a venture backed startup doing $20M in annual revenue or more should get really familiar with this content. The NVCA’s efforts along these lines will be important input to your financing strategy for the next 2-3 years.
Here’s my summary of the four pillars:n
1) Ecosystem Partners: Working with the global investment banking and accounting firms to help them develop programs that are more relevant to small cap companies. One method discussed is encouraging smaller boutique investment banking firms to provide ongoing coverage and research on small cap companies in exchange for fasttracking the boutique bankers as co-leads when the VC backed firms go public.
2) Enhanced Liquidity Paths: Improve efficiency in the crossover between private and public markets by connecting pre-IPO firms with committed investors which makes the IPO process easier on the company and reduces post-IPO volitility.
3) Tax Incentives: Extend capital gain holding period to 2 years (from one year now) and implement short term tax incentives to stimulate IPOs.
4) Regulatory Review: Review SOX and reduce regulation of pre-public and smaller public companies by fine tuning the abuse controls that were created to keep large companies honest.
To see the plan or to get some more context on the situation check out the following sources:
- Q&A with Dixon Doll, partner at Venture Capital firm DCM, outgoing Chairman of the NVCA, and major contributor to the NVCA’s Four Pillar Plan.
- Press release announcing the NVCA Four Pillar Plan to restore liquidity to the US Venture Capital Industry. The release includes a nice outline of the four pillars that can be read in less than five minutes.
- Online version of the NVCA Presentation of the Four Pillar Plan to restore liquidity to the US Venture Capital Industry.
This is an update on recent developments in wireless electricity. I’ve been writing about wireless electricity for several years now and have corresponded with Marin Soljacic at MIT on one occassion regarding his progress as well.
The MIT Technology Review is doing a good job of following along with the race between their team (now operating within the independant VC funded startup WiTricity) and Intel (who appears to be building on top of some of their own technology) to bring a wireless electricity product to market first . Thanks to my buddy Jim for pointing me to this article last week. The article talks pretty much all about Intel and their June 18th presentation at the Computer History Museum in Mountain View, California. At the event they showed a wireless electricity prototype which charged an iPod speaker at a distance of one meter using a 60 cm diameter loop transmitter and a 30 cm diameter loop receiver both tuned to a frequency (electrical current oscillation) of seven megahertz. Electrical power was transmitted with 80% efficiency through the specific arrangement they demonstrated.
This display is similar to one they showed in the Fall of 2008 which lit a lightbulb over a similar distance with only slightly less (75%) efficiency. Because of the small improvement in efficiency (5% increase in 10 months) I wonder if they are approaching a unique design limitation or a fundamental limitation with the transfer of a magnetic field through the air. It’s also worth wondering whether the 20% of energy lost is falling out as the magnetic field passes through the air (currently a distance of one meter) or through the process in which electric energy is converted into magnetic energy and back within the wire loops that comprise the transmitter and receiver. I figure the magnetic field transfer through the air is to blame for most of the energy lost in this model. Does anyone know?
I also haven’t heard anyone talking about efficiency gained or lost when a single transmitter is used in combination with multiple transmitters. If a transmitter is able to send a magnetic field out in multiple directions (which I don’t know if it does) then it seems to me that a receiver in a location far away from another receiver would not reduce the ability of the other receiver to be driven by the magnetic field. Could this technique be used to increase efficiency to a level that the current energy losses would be more than compensated for? I don’t see why this wouldn’t work… but my physics knowledge is based mostly on Physics 26 and 27 in the undergrad program at UNC from eight years ago 🙂 At least the classes did include sections on electricity and magnetism.
Another note about WiTricity, the company pushing MIT’s research forward that I mentioned earlier, their website contained a few things I found interesting:
1) It mentions that WiTricity has an exclusive license to the wireless electricity prototype intellectual property developed by Marin Soljacic and his team at MIT. There are also some other interesting details on the about us page of the WiTricity website as well.
2) It contains a nice illustrated description about how wireless electricity works which is a great read for a wireless electricity novice and probably great content for a lesson plan if you are a teacher.
Our friend Tully over at MyTireMonkey.com created a nice video today that explains how their unique system works and how partners can get involved in their private label program for online tire sales. Right now they’re running an offer with no upfront costs to become a private label partner. This is a great opportunity for local service stations, general automotive providers, and even corporations to extend the offer of discount tires to their prospects, clients, or employees… and make some money in the process.
Check out the video of Tully describing how it all works below.
I had the pleasure of enjoying several automatically vended Sapporo Beers from an amazing Sapporo Beer Machine (my name for it) during a five hour layover in Toyko’s Narita airport on May 4th 2009. I found this little jewel of beer serving luxury in the Priority Lounge while I was flying Northwest Airlines on my way to Bangkok, Thailand. This thing puts the Heineken Mini-Keg Dispenser to shame.
Here’s how it works. You take a freezing cold glass out of the tall glass freezer immediately beside the beer dispenser and you place it upright at the back of a little flat tray. Much like a gas station hot chocolate dispenser or the automatic soft drink dispensers behind the counter at your local fast food joint this machine would, upon the push of a button, fill a frosty glass with Sapporo right to the 90% mark every time. First the tray would lean backwards to create the perfect angle for the addition of a stream of cold beer with minimum froth. Then the beer flows and stops perfectly just before the top. Next the glass is raised back to level again. Then a sneaky little second nozzle that you didn’t even notice comes out and adds the perfect amount of head to the top of the beer. Next you drink the glass to empty and return to the beer robot. Repeat the process until you forgot that you have five hours to waste in an airport lounge.
Although I was able to remember to post a note about the dispenser to Twitter while in the lounge I forget to shoot a video of it with my digital camera. But, someone didn’t forget so you can check out the machine in action here: http://www.youtube.com/watch?v=JycHLwfv_U8. I’m probably not Googling properly but I cannot find any other references to this exact machine online. I’d love to buy one or at least figure out how much it costs (so I can add it to my Christmas wish list). If you can read the Japanese label on the front of the machine from the video please post a comment and let me know if it says anything that would aid my search. Or send me a link to more information about this machine.
I’m a big fan of the movement around Global Climate Change right now and if nothing else it should help the US and other industrial powers stop polluting the world for the rest of civilization. Let it increase the prices we pay for energy. We’ll deal. The price we pay for almost anything these days is really not the real “price” in terms of global impact so an increase in prices is reality and the right thing to do. Over time if the demand for clean energy increases as it should the prices will come back down through innovation and the proper global sourcing of effort.
Anyway, my brother-in-law sent me a link to this article today and I found it very interesting.
What if global-warming fears are overblown?
This is the first decent scientific argument I’ve seen against global warming, or at least against the urgency that the current movement around Global Climate Change is professing. I love a good counterpoint to get me thinking and this one impressed me.
It raises a great question… is our strategy for measuring global temperatures flawed? It claims that over time (let’s say the last 100 years) temperature sensors have gone from being located in more rural areas to more urban areas where higher heat near the sensors is now caused by the mass of materials that are common in urban environments. Furthermore it defends this position by stating that by far the greatest increases in temperature occur in readings taken at night which under his theory makes sense because large buildings and concrete in urban environments hold heat over from the day into the night.
In addition to this argument the article also states that the volume of new ice forming in the Southern Hemisphere greatly exceeds the volume of ice melting in the Northern Hemisphere. This means that the total amount of ice on earth is actually currently increasing although we are most often shown pictures of receding glaciers throughout Europe and Alaska.
Furthermore, the scientist pushing all of these positions claims to have never taken a single dollar from corporations or the oil industry. Very interesting. Either this scientist is really on to something or he just knows how to perfectly craft a counter-argument that is very difficult to disprove. He was certainly the President of his debate club in college. Or maybe Al Gore stole his wife.