FountainBlue

The FountainBlue High Tech newsletter is designed to communicate and connect regularly with our high tech entrepreneurial members, to make special offerings to our members, and to share wisdom gained from our community. It is sent free monthly to all FountainBlue entrepreneurial technology members of our community, with additional information and access to our members through our Wild Apricot site.  

May 2012: Nonprofit Partnerships and Cloud Interviews

This month’s three featured non-profits both support women entrepreneurs in the cloud. We will support both CloudNOW http://www.cloudnetworkofwomen.org and TiE http://www.tie.org  through a series of interviews and shows and communications and look forward to sharing information, facilitating introductions and discussions, and encouraging and supporting entrepreneurship around the cloud. Separately, we will support the Anita Borg Institute http://www.anitaborg.org in their nomination efforts for various women-in-tech-leadership awards, regardless of whether their work is in the cloud. We invite your support and participation in these worthy organizations as well.

April 2012: Thoughts on Hybrid Clouds

Every week in March, FountainBlue featured interviews with members and leaders of CloudNOW, this month's featured nonprofit. With information from these interviews and surveys of dozens of in-the-know activists in this space, FountainBlue is pleased to stimulate discussion about hybrid cloud environments for enterprises, which leverages the data security of the private cloud implementations, while benefiting from the cost effectiveness, flexibility and versatility of public cloud access. Throughout the month of April, we will gather and compile and document examples and conduct interviews on hybrid solutions for the enterprise, and welcome your thoughts, nominations and questions sent to info@sventrepreneurs.com. More information is available at http://www.fountainblue.biz/consulting/cloud.html.

Integration Solutions:

Security Solutions:

Performance Solutions:

5. Solutions that maximize availability of information in large volumes - information locally and immediately - without internet connectivity.

6. Applications which allow users to define tiered access to information, resulting in optimal performance for sets of data of most relevance to them.

Virtualization Solutions:

7. Seamless integration of larger varieties of hardware platforms, operating systems, storage devices and network resources to allow for better security, performance and management.

8. Applications which optimize current resources and proactively anticipate and manage the hardware, infrastructure, application, performance and security needs of each customer.

System Management Suites:

9. Tools for managing the rapid integration of a larger range and volume of private, community and public cloud options.

March 2012: Partnering for Hackathon Events

FountainBlue will be partnering with organizations across the valley and beyond through our ‘Innovation Through Hackathons’ program, to collaboratively create different versions of hackathons, involving programmers working in collaboration over a targeted weekends to develop customer-requested mobile apps and social media/web (or other technology) solutions in Silicon Valley and later other tech regions around the world. These events might include:

• Customer-led Hackathons focused on creating demos for fundable ideas for eager customers;
• Company-led hackathon, delivered in a Reverse Job Fair manner, inviting hackers to create new and complimentary solutions;
• Funder-led Reverse Hackathons which allow active investors to define and invest in the market need, and invite hackers to create solutions for that need at a hackathon;
• And other solutions that focus on the trends in the market, the needs of the customer and the creation of technology-based, scalable, and personalized solutions to address both.  

For more information, e-mail us at info@FountainBlue.biz.

February 2012: What's New with FountainBlue: Advisory Boards

We are serving on the advisory boards of for select members of our community, supporting their marketing, business development and recruitment efforts. Currently, we are providing advisory and business development support Speck Design and their product innovation services http://www.speckdesign.com, and advisory and investment strategy support for Bell Biosystems and their research on heritable magnetic signature in therapeutic cells, with huge implications for diagnostics, cancer, regenerative medicine and cell therapies. http://www.bellbiosystems.com. For more information about any of these organizations and the services they provide, and more information about the organizations where we serve, visit http://www.fountainblue.biz/consulting/advisory.html.

January 16, What's New with FountainBlue: Members as Referral Partners

At the request of our members, we will be sending out our job reqs to our members, inviting everyone to strategically forward them on to their networks of contacts. Thank you in advance to everyone who elects to forward our reqs. Please tell your contacts to mention that you connected him/her to us, so that we can track the origin of our candidate leads. We are happy to pay a referral fee to members who recruit candidates who get hired and stay for a ninety-day period. You may also elect to donate your referral fee to a FountainBlue-approved nonprofit or a nonprofit of your choice. For more information about our job leads, visit http://www.fountainblue.biz/openreqs.html.

January 9, What's New with FountainBlue: Giving Back

Since our launch in January 2006, FountainBlue has been committed to giving back to the community through active participation and financial support. As we shift into recruiting and consulting, we are pleased to contribute financially to nonprofit causes providing executive education, educational benefit, and women-in-leadership. Currently we are supporting the following types of organizations:

Executive Development Organizations:

   Career Actions

Educational Organizations:

   A Schmahl Science Workshop, as a member of the advisory committee.

Women-In-Leadership organizations:

   Global Fund for Women

   Global Women Leadership Network

   Women's Initiative

Please e-mail us with the following information at info@whenshespeaks.com or complete the form above if you would like to considered an approved, adopted FountainBlue cause.

   Your name

   Recommended Nonprofit

   Your involvement with Nonprofit

   Why you would recommend this Nonprofit

   Why FountainBlue's membership of clean energy, high tech, and life science entrepreneurs would find this nonprofit beneficial to the community overall

We are happy to profile a nonprofit each month, and recommend any of these nonprofits as worthy causes.

If you’re interested in catching up over the phone or in person, please visit http://meetwith.me/lindaholroyd and suggest a good time to connect. Please also let us know if we can support you with your recruiting, consulting and coaching needs as you grow your business.

January 2, What's New with FountainBlue: A New Year, A New Newsletter Format!

We are looking forward to an exciting new year, and an exciting new time for the valley and the global community! It is our hope that our weekly newsletter will provide you with relevant, useful information about business and market trends and their implications for your business. We invite your inquiries, suggestions, feedback and interest as we continue with our consulting, coaching and recruiting efforts! If you’re interested in catching up over the phone or in person, please visit http://meetwith.me/lindaholroyd and suggest a good time to connect. Please also let us know if we can support you with your recruiting, consulting and coaching needs as you grow your business.

Emota is our February profile in innovation in social TV, social sharing, and convergence emergence as well as gamification, but also our March profile in innovation around big data.

Under the auspices of the National Science Foundation SBIR Phase II program, Emota http://www.emota.com produces Healthy Lifestyle applications which blend mobile, digital living room, and social networking technologies to help people stay active, healthy, and connected. Emota's focus is creating pleasurable consumer experiences that enrich life through better social and emotional connectedness, while working with health and service providers to deliver personalized health & lifestyle services.

At CES 2012, Emota will be announcing three new products which together form a social experience platform designed to engage friends and families across a broad age and culture spectrum.:

emota.ME - A Facebook app that provides a private and fun place for people to stay in-touch with close friends and families. It’s like friends hanging out around a good bonfire, doing spontaneous fun things together, having the occasional voice/video chats, sharing life moments even though they can be far apart in distance. http://youtu.be/zB_u0vyLbKI?hd=1

emota.TV - A SmartTV app that is designed to bring the Emota experience into the living room. Perfect for those who want to stay close with remote friends and family without having to learn computer and internet skills, or for those who just want to stay away from the computer when they are home. http://youtu.be/7e8gfenafRw?hd=1

emota.THINGS - A series of wirelessly connected objects in the living room designed to emotionally engage the user and to create a sense of social connectedness in the living space. http://youtu.be/7e8gfenafRw?hd=1

For the month of February, we are featuring Six Social Media Trends for 2012, by David Armano, Harvard Business Review, December 12, 2011, http://blogs.hbr.org/cs/2011/12/six_social_media_trends_for_20.html 

1. Convergence Emergence. For a glimpse into how social will further integrate with "real life," we can look at what Coca Cola experimented with all the way back in 2010. Coke created an amusement park where participants could "swipe" their RFID-equipped wristbands at kiosks, which posted to their Facebook account what they were doing and where. Also, as part of a marketing campaign, Domino's Pizza posted feedback — unfiltered feedback — on a large billboard in Times Square, bringing together real opinions from real people pulled from a digital source and displayed in the real world. These types of "trans-media" experiences are likely to define "social" in the year to come.
2. The Cult of Influence. In much the same way that Google has defined a system that rewards those who produce findable content, there is a race on to develop a system that will reward those who wield the most social influence. One particular player has emerged, Klout, determined to establish their platform as the authority of digital influence. Klout's attempt to convert digital influence into business value underscores a much bigger movement which we'll continue to see play out in the next year. To some degree everyone now has some digital influence (not just celebrities, academics, policy makers or those who sway public opinion). But for the next year, the cult of influence becomes less about consumer plays like Klout and more about the tools and techniques professionals use to "score" digital influence and actually harness, scale and measure the results of it.
3. Gamification Nation. No we're not talking about video games. Rather, game-like qualities are emerging within a number of social apps in your browser or mobile device. From levels, to leaderboards, to badges or points, rewards for participation abound. It's likely that the trend will have to evolve given how competition for our time and attention this gaming creates. Primarily, gamification has been used in consumer settings, but look for it in other areas from HR, to government, healthcare and even business management. Perhaps negotiating your next raise will be tied to your position on the company's digital leaderboard.
4. Social Sharing. Ideas, opinions, media, status updates are all part of what makes social media a powerful and often disruptive force. The media industry was one of the first to understand this, adding sharing options to content, which led to more page views and better status in search results. What comes next in social sharing is more closely aligned with e-commerce or web transactions. For example, Sears allows a user to share a product or review with their networks directly from the site. Sharing that vacation you just booked, or recommending a product, or service from any site to a social network is where sharing goes next. We probably don't know what we are willing to share until we see the option to do it.
5. Social Television. For many of us, watching television is already a social act, whether it's talking to the person next to you, or texting, tweeting, and calling friends about what you're watching. But television is about to become a social experience in a bigger and broader sense. The X Factor now allows voting via Twitter and highlights other social promotions, which encourages viewers to tap social networks while they watch. Another way media consumption is becoming social comes from a network called Get Glue which acts as something of a Foursquare for media. Participants can "check-in" to their favorite shows (or other forms of media) and collect stickers to tell the world what programs they love. Watch for more of this year as ratings rise for socially integrated shows.
6. The Micro Economy. Lastly as we roll into 2012, watch for a more social approach to solving business problems through a sort of micro-economy. Kickstarter gives anyone with a project, the opportunity to get that initiative funded by those who choose to (and patrons receive something in return). A crowdsourcing platform for would be inventors called Quirky lets the best product ideas rise to the top and then helps them get produced and sold while the "inventor" takes a cut. Air BnB turns homes into hotels and travelers into guests, providing both parties with an opportunity to make and save money. These examples may point to a new future reality where economic value is directly negotiated and exchanged between individuals over institutions.

For the month of January 2012, we are featuring “One of the Six Investment Themes for 2012”, International Business Times, written by, Moran Zhang, December 23, 2011, Opinion of Kent Croft, portfolio manager at Croft Value Fund:

4. Broadband Internet

Broadband internet penetration growth has caused IP traffic to increase eightfold over the past five years with continued robust growth expected in the future driven by mobile devices and bandwidth-intensive streaming video. The key beneficiaries are companies who provide better service and enrich the online experience via their software, hardware, and applications.

Other five investment trends are natural gas, fresh water, agriculture, timber and electric grid.

http://www.ibtimes.com/articles/272070/20111223/invest-2012-managers-energy-water-gas-agri.htm

Ruckus Wireless is a profiled January Company highlighting the importance of internet broadband.

Headquartered in Silicon Valley, Ruckus Wireless is a supplier of advanced wireless systems for the mobile Internetworking market.  Ruckus Smart Wi-Fi delivers higher capacity and more reliable Wi-Fi connections to client devices.  The patented BeamFlex adaptive antenna technology optimizes RF signal paths in real-time to increase signal strength and dramatically improve overall capacity.   Carriers and enterprise have the option to optimize their networks either for  coverage or high capacity by deploying as few or as many Ruckus APs as desired to meet their goals. Ruckus, led by Ms. Selina Lo, president and CEO, has shipped over 2 million Smart Wi-Fi systems. http://www.ruckuswireless.com

Complete the adjacent form if you have a recommendation for a Silicon-Valley based company we can feature as a ‘Profile in Broadband Internet Innovation’ for next week's newsletter.

You may also elect to e-mail us at info@sventrepreneurs.com with the information below: 

Name and Company:

100-word description of why it is innovative:

Link for more information:

URL with picture of innovation:

Company Contact Details:

This Year’s Funding Trend

2012: The Year the #Startup Playbook Changed, posted by Don Adeo on TheFunded.com, December 29, 2011

2011 was an amazing year for startup financing.

While traditional sources of investment declined, such as venture capital and angel groups, tens of billions more capital was still invested in private companies through a variety of new sources. A completely new financing landscape started to take shape in 2011, making 2012 the year that the “playbook” changed for startup financing.

Just a few years ago there was one startup playbook that was fairly consistent worldwide;

   Step 1: A promising startup looking to change the world would pitch a local angel group and raise a few hundred thousand dollars.

   Step 2: If everything went well and they were able to get traction, they could raise a $1 to $5 MM Series A from hundreds of venture funds spread throughout the world.

   Step 3: When the revenue model of the company was proven out, the startup, now classically called an upstart, would raise a $5 and $15 MM Series B or Series C from dozens of later stage VCs.

   Step 4: As the company scaled the revenue and the team, they would arrange a mezzanine round with a few strategic firms, a bank and a private equity firm to share up their balance sheet before going public.

This has been the playbook for the 18 years that I have been running technology companies, but it is quickly starting to look like ancient history. What has taken its place? Dozens, if not hundreds, of varying financing options now entice and confuse the startup entrepreneur. There is a complex tapestry of capital sources, vehicles and deals for every stage, including liquidity. There are so many options, that 2012 could be called the year of optionality, but the outcome of many of these financing routes are uncertain. So, in 2012, I predict that we will start to see some of these options group together into new viable funding paths for startups.

Let's take a look at just a few of the new options available today that, for the most part, did not exist just a few years ago. How do they work, and what viability questions will be answered in 2012?

• Crowdfunding

Almost overnight, crowdfunding has emerged as a viable financing option - especially for companies who produce a premium offering. Startups usually pre-sell access to media, hardware and software through crowdfunding sites, like Kickstarter.com, which allow the public to contribute different levels of funding based on access. The success of this model has been so dramatic that there are two proposals in the US House and Senate to formally legalize the practice. But can a single crowdfunding round be enough, and can crowdfunding expand beyond movies and hardware accessories?

• Incubators and Accelerators

Hundreds of incubators and accelerators have sprung up to the point where there are now several in most major cities worldwide. Startups can trade a small amount of equity, normally less than 10% of the company, for some cash, usually less than $20,000, and some services, such as facilities, guidance or launch promotion. Incubators, which tend to be earlier stage and have more services, and accelerators, which tend to be later stage and provide more capital, have replaced many of the angel groups that serve a similar function. But can the hundreds of copycat programs in various markets around the world re-create the success of the early pioneers?

• Online Networks

AngelList has grown over the last 12 months to become "the" social network for startups and angels to connect. A startup with a credible lead investor can use the added exposure from AngelList to create a "snowball effect," sometimes turning a five-figure round into a seven-figure one. But what are the regulations that apply to these networks, if any, and can the communities maintain the quality of participants as they expand?

• Competitions and Prizes

A number of "demo day" competitions have emerged with large attendance, pitch guidance, strong media exposure and cash prizes, such as SeedCamp, TechCrunch Disrupt, and the Founder Showcase. Successful companies have won tens of thousands in prize money, secured extensive press coverage and raised millions following such events. But can these competitions be scaled to bring success to multiple companies in multiple locations?

• Secondary Markets

A number of secondary markets, specialty brokers, and secretive funds have emerged to purchase the stock of private companies in both "on the books" and "off the books" transactions, including SecondMarket and SharesPost. Shares in high profile upstarts are sold to private individuals, providing both growth capital and employee liquidity. There is even a vehicle for employees to borrow money on their employee stock options, pledging the options as collateral. But how will these markets be legitimized, accepted and regulated over time?

• The Mega Round

A few late-stage investors, such as DST (now Mail.ru), venture capital firms and investment banks, such as Goldman Sachs, are doing mega rounds - otherwise known as the "IPO replacement" rounds. The fastest growing startups are skipping Series B funding and raising hundreds of millions of dollars at multi-billion dollar valuations. But are these mega rounds sustainable, and will they grow to replace the IPO?

• Multistage Funds

Most of the remaining 200 venture funds that still operate worldwide have moved into stage-agnostic investment, participating in deals from incubation to mega rounds. Today, startups can pitch most venture capitalists at any stage in their lifecycle, and there are opportunities to raise anything from a hundred thousand dollars to millions. But can stage-agnostic funds be successful with such a diverse approach to funding?

• Super Angels/ Micro-VCs

Prominent regional angels around the world have amassed $5, $10 and $20 MM funds to make dozens of local investments. Startups pitch these super angels to receive tens of thousands of dollars in investment plus instant exposure to the local angel funding ecosystem. But can this model work outside of Silicon Valley?

• Government Programs

Governments around the world have been trying to jumpstart local versions of Silicon Valley with a wide variety of programs, such as Startup Chile, Skolkovo Russia, and the IDA in Singapore. With these initiatives, there are usually conditions to receiving capital, such as using the money to hire locally. Are these programs short-term stimulus or long-term value creation?

As if all of these new options were not enough, there has been an explosion in corporate investments, new university funds, philanthropic funds, sovereign wealth funds, industry-focused incubators, prize programs, and multiple other sources of capital.

In general, choice is good for entrepreneurs, but as I outlined above there are still some serious concerns. First, many of these new sources of capital are unproven, and, in some cases, their legal and regulatory future is uncertain. The party can end very quickly. Second, there are no best practices, transparency or guidelines for all these new vehicles - so hiccups and failed experiments are to be expected. Lastly, there are some looming structural problems that could bring the whole boom crashing down - specifically, the billions of unsecured convertible debt issued throughout late 2010 and 2011.

But in the end, we are in the largest startup funding boom since the dotcom bubble burst in 2000, but with probably more money being thrown around. After all, nobody really knows how much capital is being poured into startups since many of the new vehicles are not tracked.

2012 is looking to be a bright year. It’s the Wild West in startupland, and 2012 will be a wild ride. Hold on tight!

High Tech Investment Trends

VCs rise to the top in start-up funding survey: A new generation of VCs spearhead start-up funding, but JOBS Act means change on the horizon Financial trends and news by Ted Hollifield, April 27, 2012, Short URL: http://vator.tv/n/2635

The investment climate for tech startups has undergone dramatic shifts over the last few years. Since roughly 2008, institutional VCs have taken a hit, as angels, super angels and – to a lesser degree – accelerators and incubators altered the investment landscape with fast-moving seed and early-stage deals that VCs typically didn’t want.

As these other investors eventually began to compete for deals classically scored by institutional firms, the VC world became divided between the have’s and the have-not’s in terms of where LP dollars were flowing, with a handful of firms raising enormous rounds, with some unable to raise funds and being labeled the “walking dead”.

But times have changed, according to our just-released survey of startup company CEOs.

Not only is today’s start-up funding climate more robust than it was a few years ago, but institutional VCs have made a resounding comeback, particularly in major U.S. metropolitan areas.  The percentage of Metro startups that have secured funding from traditional VC firms increased sharply since we conducted our first survey in 2010 and the percentage who expect to raise a future round from traditional VC firms experienced a huge increase since 2010 as well.  When asked to write in their top 3 investor choices, startup CEOs conclusively identified institutional VC firms as their preferred investors.

How VCs evolved

What triggered these recent changes in the start-up investing landscape?  As their influence declined, many VC firms were forced to adjust their investment model and accommodate the new reality to stay afloat.  They began to close deals more quickly, established firms like Benchmark and Greylock recruited high-powered entrepreneurs able to attract the most promising tech startups, and investors like Marc Andreessen further upended the VC industry by fashioning himself as an early-stage VC willing and able to double-down with big bets that more resemble a late-stage institutional VC .  The data shows that such strategies have been successful in reviving the VC business model and keeping firms relevant in this new era of startup investing.

Hand in hand with the renewed prominence of institutional VCs, a new dynamic has also emerged around angels, super angels and incubators, a key part of the startup funding equation.  Instead of competing for early-stage deals, VCs and angels, etc. seem to have reconciled and found a way to work together – at least in metro areas – to effectively foster growth for startups.  Our survey data suggests that as angels, super angels and accelerators/incubators continue to fund smaller, early-stage funding rounds, institutional VCs dominate the market for larger, later-stage rounds.  Dividing up the startup investment market this way makes sense and allows each group to play to its strengths.  VCs, for example, can still make a compelling value proposition to entrepreneurs based on their deep pockets, industry expertise, and potential for funding subsequent rounds.

Change, however, is on the way, with the newly-passed JOBS Act, which portends a new era of start-up investing.  With its ability to hypercharge funding of early-stage startups, this new piece of legislation, will change the current investment dynamic substantially.   While there’s no crystal ball to predict the exact impact of the JOBS Act, there are nonetheless early indications of how it will play out in the startup funding world.

Because of its crowdfunding provisions – i.e. permitting unaccredited investors to invest in startups through registered funding portals – the JOBS Act may magnify the influence of angels, super angels and incubators.  As crowdfunding dollars flow to startups, we expect angels and other early-stage investors to take on a much bigger role in vetting companies, possibly lending their name to promote and endorse promising startups to unaccredited investors eager to invest in the next Instagram.  Likewise, it’s entirely possible that incubators and accelerators like Y Combinator and TechStars may even run their own funding portals to capitalize on the JOBS Act.  Not surprisingly, angels and super angels heavily supported the JOBS Act, along with heavy hitters in the tech industry.

Conversely, institutional VCs, who generally raise funds from LPs, may have little desire to open the door to the general public or leverage their brand name in this space.  They will, however, benefit from having a broader array of startups competing for their attention, particularly since other people’s money will provide early funding for these companies and help winnow down the best ideas before effectively passing them along.

Despite widespread support for the JOBS Act throughout the tech industry, critics worry that it will create a glut of startups with “me too” business plans that would otherwise go unfunded.  Our survey data also provides an interesting point of reference for the JOBS Act era.  With their larger rounds and more consistent funding outlook, metropolitan areas, which successfully adapted to the rise of angels and super angels, appear poised to benefit from the JOBS Act, providing cause for hope for the outcome of this new legislation.