This is part of my Series on Angel Investing.

There is a rather large missile rapidly approaching America's innovation culture. Predictably, it has been hurled in the most careless of manner by a group of uninformed politicians and their staffers in the form of Senator Dodd's sweeping Banking Bill. Putting aside the merits and thrust of the Bill itself, (which ostensibly seeks to regulate the banking industry), there are two provisions in it which, if not removed ASAP, will essentially wipe out a large chunk of one of America's engines of innovation- namely angel investing. These provisions will raise the bar on the definition of an 'accredited investor' from $1M in net worth or $250K in annual income to $2.3M in net worth or annual income of $450K! It will also hamstring angel investing by slapping any such investment with a 120 day SEC review.

If this concerns you, you may want to call your congressmen and educate them on this issue. 

For more in depth condemnation of these stupendously destructive provisions, I refer you to the following cacaphony of frustrated voices emanating from the startup and investment community:

Venture Beat: Angels Sing: Frankly Ridiculous Restrictions Might Destroy Silicon Valley

NY Times: Angels Rebel Against Dodd Bill

Kopelman: Dodd Isn't on the Side of Angels... or Startups.... It Proposes a 120 Day SEC Review Period

Litan: Proposed 'Protections' for Angel Investors are Unecessary and Will Hurt America's Job Creators

Xconomy: Dodd Bill Could Render Startups Too Small to Succeed

TechDirt: Why Does Financial Reform Punish Startups and Angel Investors?

Wilson: Startups Get Hit by Shrapnel in the Banking Bill

Shane: How Dodd's Reform Plan Hurts Startup Finance

This is part of my Series on Entrepreneurial Culture.

Those of us who have set-up LLC's in NY State know well of the antiquated 'publication requirement' the State still imposes on so many of its entrepreneurs. (In 2007 alone, 50,000 LLC's were formed in NY State!).

Along with standard incorporation fees, having to publish the "existence of your LLC" in these obscure journals can easily run up an entrepreneur's total expenditures to $2,000 even though any company formed in NY State can easily be found online at the NY Department of State website. This anachronism achieves only one result: it penalizes those same entrepreneurs that the State and the City have spent so much time, effort, lip-service and money trying to empower.

The good news is that there is an effort underway to repeal this legislation in the form of Assembly Bill A04496/Senate Bill S1667.

You can do your part by familiarizing yourself with this issue and if so inclined, by signing this petition.

A couple of weeks ago, nextNY had a great round table discussion about the explosion of new models and companies in eCommerce—from group buying to flash sales to local discounts.  A lot of ideas came out of it—many were ones that we’ve been thinking about at First Round for a while, given our investments in One King’s Lane, Homerun, Bigdeal, Modcloth, Monetate and Packlate, among others.  There’s also been some great blog chatter from Sarah Tavel (here) and Josh Kopelman (here and here) on the topic.

One thing that Chris Fralic and I have been tossing around is the lack of a retailer centric play—where individual retailers can run their own group buys, manage discounts across various sites, run local campaigns across Foursquare, Facebook fan pages, etc.  All of the current sites revolve around a centralized curation and sales function.   To get that spa or sandwich shop onto your system, you still need a person getting on the phone, calling them up, running through the economics and particulars of the deal, scheduling, etc. That leaves a lot of open space in the market.  Even if you have 5 major competitors in a city and they do a different place every weekday, you’re still only covering about 1,000 retailers and merchants per year, assuming no overlap and no repeats.  On top of that, the economics of having that salesforce requires you to raise boatloads of money. 

On the other hand, how many places would love to run their own little group sales—sales that might not be big enough to be the Homerun deal of the day, but might make sense to do economically if they can get two dozen people in that day?  Many would run those deals everyday if they could.

Enter Closely.  Closely just launched at DEMO this week and is the natural evolution of group buying and discount sites—allowing retailers to run these deals on their own in front of their own audiences.  I’m sure at some point, the best of these deals will be syndicated to Homerun, Groupon, Buywithme, etc., and maybe those sites will eventually compete, paying for the right to run the best deals at the most highly sought after venues.  They might even do it at a loss on a per deal basis if it means acquiring a customer. 

I’d also want to see the ability to manage deals across existing local platforms—as there’s been an explosion in local inventory that needs to get monetized.  Will Foursquare start running Closely ads?  It should… and retailers should be able to see how their campaigns are doing across sites and platforms.

Another early effort to watch in this space is BeeMe, which is a project run by some ITP students.  BeeMe is taking those little coffee shop loyalty cards (the ones you punch for your 10th and finally free coffee) and moving them online.  Retailer centric, self serve models are where it’s at—*IF* they can figure out how to acquire customers cheaply.  These plays still have the “last mile” problem of getting new venues onto the platform when the average retailer barely knows how to use the web and generally sucks at online marketing. 

Community is one solution I had in mind.  What if you weren’t just a platform for distribution of deals, but a kind of local virtual chamber of commerce or small business organization—with some social networking features so that retailers could get together to share best practices, work with each other, cross-sell, etc.  In fact, the failure of the local chamber of commerce and economic development organizations is largely the reason why it’s so expensive for local plays to acquire customers.  If you get a permit to do business in the city, you should automatically get signed up to take an online marketing course and be presented accounts in all of these local plays.  Same with banks—they’re equally incentivized to have you figure out how to bring customers in the door after they loan you money.  Chase should be a reseller of Homerun, Foursquare, Square, and all of the different ways that retailers can innovate, save money or grow revenues.

A good example is the Etsy seller community which does a lot for new sellers to help them get up and running—sharing best practices about taking photos, copy, pricing, etc.  This kind of selling optimization takes the pressure (and cost) off of Etsy to solve this problem of getting and onboarding new sellers on their own.

Not only is deal origination likely to disaggregate, but so will the end purchases.  After Facebook integrates payments, how long before you start making purchases right in your newsfeed without ever leaving the page.  Your friend will say that they bought a dress from Modcloth, publish it to their newsfeed and you’ll be able to buy the same dress right there in the newsfeed with your Facebook Payment account without leaving the site.

NYConvergence ORIGINAL
by: Amy Berryhill

The Fashion 2.0 meetup, held last night at the W New York in midtown, brought together designers, marketers and developers to promote and discuss the use of online tools in the world of fashion. Speakers on the panel represented different areas of the fashion business, but their comments shared a common thread. They explained that social media and ecommerce are a must for new and established designers alike.

Some of the advice was specific. "People don't realize that tagging is a really great thing," said Rafe Totengnco, after explaining how his company adds loads of keywords to online content.

On other topics, the discussion was more general. "People on Facebook love free stuff," said panelist Dave Cook, with an echo from panelist Aaron Mandelbaum. The speakers gave examples of different marketing events where free giveaways on Facebook delivered exponential increases in Facebook Fans, as well as increases in traffic back to the company website.

While technical tools allow designers to reach abroad and avoid brick and mortar costs, there is still an aspect of relationship management required. Kerry Bannigan described a contest, created in partnership with Ask.com, that has been able to generate over 30,000 entries through relationships developed with fashion bloggers.

Bloggers lend their support to an initiative for three reasons, according to Cook: exposure, content and recognition. As it happened, these were the same issues at the core of many of the audience's questions during the meetup.

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> Tech Startups Show Off at Fashion 2.0 Meetup

The New York Founder Institute graduation ceremony and investor preview is this Thursday, March 25, at 55 Broad Street, 6:00. Up to fourteen businesses are poised to graduate, ranging from a fantasy sports company with a family focus to a business designed to cure cancer. The best business to present, according to a vote by the guests, will win a $5,000 prize on the spot.

Accredited angel investors are welcome to attend. In addition to a free dinner and some fun pitches, Adeo Ressi (founder of the program) will give a 30 minute talk about the lessons learned after aptitude and personality testing nearly 1,000 people interested in becoming an entrepreneur. You’ll be one of the first to hear some of the surprising results about age, intelligence and personality.

Recent success stories from Founder Institute: Skimble, a Founder Institute Graduate, is a finalists for the "Innovative Web Technology" category at the SXSW conference in Austin.  TechCrunch has recently profiled a number of graduates: Molo Rewards; RewardChart; Monstrous.

If you’d like to attend: RSVP.

The Finalists are:

Aaron Price of makeMania

- makeMania.com enables a community of Do-It-Yourselfers (DIYers) to connect, compete with, and learn from one another, while accessing relevant exclusive discounts.

Adam Neary of Profitably

- Profitably is a web-based business intelligence solution for small businesses with a simple proposition: Give us 10 minutes, and we will help you run your business more profitably.

Alexander Ressi of Immortalize.it

- Immortalize.it is a tracking tool that blends user-contributed milestones with social media and 3rd party data-sources to create timelines for personal intelligence.

Bryan Housel of Ditto Health

- Ditto Health allows patients to enter their medical data in one place on the web, rather than on paper at every doctor’s office that they visit.

Edward Kim of Simple.PR

- Newswire enabling businesses to reach targeted local audiences.

Jacob Howerton of Zipmark

- Zipmark enables people to make financial transactions with their smartphones.

Joshua Bernstein of Ancile Biomedical, Inc.

- Ancile Biomedical develops medical devices that accelerate wound healing, saving money for payers and providers while addressing the results of global obesity and diabetes epidemics.

Kyle Jasey and Thomas Pierce of Wepoli

- To bring citizens, elected officials and political candidates closer together, and to facilitate and enhance their interaction.

Olivier Couronne of Genomes United Inc.

- Genomes United sequences the genomes of cancer patients in order to identify novels biomarkers.

Shirley Chow of ProjectChow

- Food pictures exist in fragmented areas all over the web. ProjectChow will serve both as an organized repository for these photos by presenting these images alongside the restaurant menus allowing diners to more informed of a restaurant’s offerings.

Tobin Schwaiger-Hastanan of Plan.fm

- Plan.FM is a social utility for collecting the plans you make on other sites and organizing them into a single source that you can access from anywhere. "It’s tripit.com for your events."

Vincent DiBartolo of FanSprout.com

- FanSprout is a family-friendly fantasy sports site with educational components that allows dads and kids to connect in the context of sports.

Vincent Mota of vimota

- vimota creates the tools & intelligence which helps monetize the costs of rich media.

 

Again, RSVP at: http://nyfi-investor.eventbrite.com .  See you there!

(Image via CrunchBase)

 

I’ve been very excited to see the boom in the New York startup community in the last 2 years, driven in large part by the shrinkage in the NY industries that traditionally lured some of the most entrepreneurial and aggressive personalities (finance, consulting, etc.) Michael Karnjanaprakorn posted a detailed list of resources and players in the local community.

One category of resources I wanted to add to Mike’s list are educational programs for entrepreneurs. I’m faculty in a number of these organizations, particularly the Founder Institute. I was a Mentor in the Winter 2009 New York semester, and will be faculty for the inaugural program in Singapore, in late April 2010.

This Thursday night, March 18, the participants in the current Founder Institute program will be presenting to some angel/VC investors downtown. If you would like to join the audience, please contact me and I’ll forward your request to the lead organizer for New York’s Founder Institute, Craig Kanarick.

I’m excluding here some of the many organizations that run conferences/events geared to entrepreneurs in New York, such as Bootstrapper Summit; Bootup; DigitalMediaEvents; Entrepreneurs Roundtable; Feedback Forum; Fashion 2.0; The Founders Club; Founders Roundtable / Pluggedin NYC; Gaming 2.0; Girls in Tech; IxDA; Microsoft Startup Zone; MIT Enterprise Forum of NY; New York Entrepreneur Week; NextNY, New York Technology Council; New Work City; NYVideo; NY Tech Meetup; NY Video; Private Equity Forums; Semantic Web Meetup; Silicon Alley Insider; Startup at Work; Summit Series; Talk NYC; TechAviv NY; The Hatchery; Ultra Light Startups; youngStartup Ventures; NYC Economic Development Corp.; and Y+30. I think these programs are very worthwhile; I excluded them because they don’t offer a formal training and faculty.

 

We’ve drafted profiles below of the major selective educational programs in NY for entrepreneurs. Please advise if you know of any that I’m missing.

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FastTrac

Organizational Sponsor: Levin Institute

Location: New York

Faculty: academics and entrepreneurs

Duration: 7-day intensive boot camp (2 full days a week over 4 weeks)

Cost: These programs are currently offered at no charge to qualified applicants, through funding from the NYC Department of Small Business Services, and with support from the Kauffman Foundation.

Selectivity Ratio: NA

Info: The FastTrac program has trained over 700 individuals to launch new businesses (through its NewVenture program) or to grow existing businesses (through GrowthVenture).  SBS surveys indicate that over a third of the brand new businesses have recorded sales since completing New Venture, and half of the GrowthVenture firms have indeed grown their businesses.

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First Growth Venture Network

Organizational Sponsor: First Growth’s executive committee/founding growers includes venture capital firms – Bain Capital Ventures, Battery Ventures, Charles River Ventures, First Round Capital, Flybridge Capital Partners, Highland Capital Partners, North Bridge Venture Capital, OpenView Venture Partners, Valhalla Partners and Venrock; angel investors Grape ArborVC and AngelVineVC; the Tech Group at Lowenstein Sandler, and the tech investment banking firm GCA Savvian.

Location: New York

Faculty: entrepreneurs, tech executives, VCs, professional advisors

Duration: seven half day sessions over two "semesters"

Cost: $0

Selectivity Ratio: Most recently accepted about 15 out of 60+ applicants.

Summary: "First Growth is a program for high potential, seed and early stage start-up tech entrepreneurs in and around New York City. First Growth takes high potential entrepreneurs and accelerates their "first growth" by (1) connecting them with venture capitalists, angel investors, successful entrepreneurs and advisors, all of whom have spent years in and around technology start-ups; (2) connecting each start-up with a First Growth Advisor Team of 3 or 4 successful network members who will serve as mentors to the team; (3) providing regular opportunities for substantive information and networking with the broader First Growth community; and (4) providing a peer group of other high potential tech leadership teams in the First Growth program."

 

9 of the first 15 companies have already received seed funding, which is a very high ratio.  One company recently announced that it was acquired in a successful exit.  Two advisors (successful serial entrepreneurs) also received funding from First Growth connections.

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Founder Institute

Organizational Sponsor: TheFunded.

Locations: NY, Denver, San Diego/Orange County, Singapore/Asia Pacific, Paris, LA, Bay Area, Seattle Area, Greater DC, others to come later

Faculty: serial entrepreneurs

Duration: three months

Cost: In US, $600 per program + an application cost of $50. In addition, The Institute takes a small percentage (3.5%) of warrants in a company that is formed by a Founder during the program, priced at the value the company receives in its first outside round of financing. 

Selectivity Ratio: Accept under 40% of applicants. Approximately 45% of the enrolled Founders graduate. In New York, approximately 30% will graduate.

Summary: "The Founder Institute is a four month training program for both new and seasoned entrepreneurs. The Institute prepares founders to lead the next generation of world-class technology companies across a wide range of industries, from the biotech to the internet. Weekly company-building sessions are guided by experienced CEOs, and they are held in the evening to allow participants to keep their day job or develop their companies during business hours. All of the program stakeholders, from the participating founders to the experienced CEO Mentors, share in the upside generated by the companies formed during the program. Participants also enjoy free services from three dozen Institute Partners, fundraising opportunities at fair market value, and a teamwork-oriented environment to build a company."

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Mentor Capital Foundation

Organizational Sponsor: Reitler Kailas & Rosenblatt

Location: New York

Faculty: Primarily service providers. Steven and Bill Harding of Financial Summit Ventures are the "guiding spirits".

Duration: ten three-hour sessions, over 10 weeks

Cost: $500

Selectivity Ratio: Accept all or almost all applicants. Currently 15 companies are participating.

Info: "Mentor Capital Foundation is a newly formed non-profit entity involved in various philanthropic activities and early stage technology investments." They lead a series of seminars structured for technology companies seeking the knowledge and leadership needed to secure venture capital.

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JumpStart NYC

Organizational Sponsor: Levin Institute

Location: New York

Faculty: academics and entrepreneurs

Duration: 3 months

Cost: $0

Selectivity Ratio: NA

Info: "A proven, three-month educational program to help individuals leaving jobs in the financial services sector to apply their knowledge, skills, and abilities in opportunities beyond financial services.  One of Mayor Bloomberg’s initiatives to boost the New York City economy, JumpStart NYC was pilot tested in Spring 2009, delivering a program that helped participants develop new skills, explore project opportunities in New York’s entrepreneurial firms, and in many cases create new career paths and opportunities." The program targets primarily people interested in joining startups/technology companies, as opposed to founders themselves. Disclosure: I was faculty for the launch program of JumpStart NYC.

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SeedStart

Organizational Sponsor: NYCSeed

Location: New York

Faculty: VCs and entrepreneurs

Duration: 8 weeks

Cost: includes funding

Selectivity Ratio: NA.  Currently applications are closed for 2010.

Info: An incubator program, providing up to 10 startups $20,000 plus mentoring and guidance for any worthy entrepreneurial idea. SeedStart is a joint effort among Contour Venture Partners, IA Ventures, NYC Seed, RRE Ventures and Polaris Venture Partners, and also includes Fish & Richardson, Manatt, Phelps & Phillips and Silicon Valley Bank.

SeedStart is clearly inspired in part by similar seed fund incubator programs such as Boostphase (Atlanta, GA); Bootup Labs (Vancouver, BC); Capitalfactory.com (Austin, TX); Charles River Ventures QuickStart (Boston, MA); DreamIT Ventures (Philadelphia, PA); Iaccelerator.org (Bangalore, India); Launchboxdigital.com (Washington, DC); Nextstart.org (Greenville, SC); seedcamp (London, UK); Shotputventures.com (Atlanta, GA); Summer @ Highland (Lexington, MA and Menlo Park, CA); Techstars.org (Boston (MA), Boulder, CO, and Seattle, WA; The Difference Engine (Sunderland, UK); Y Combinator (Mountain View, CA); and Y Europe (Vienna, Austria). For more information on how to build a replica of Y Combinator, read Jed Christiansen. For a comparative listing and more background, see Readwriteweb and Dan Veltri. TechStars recently released very positive data on the success of their incubated companies.

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I’m excluding here some of the traditional incubators that typically offer a physical plant but not formal training. For a list, see the Business Incubator Association of New York State, Inc., and particularly NYU-Poly’s incubators. 

 

(Thanks to Nikhil Iyer for his help researching this post.)

This past weekend, I had the privilege to attend the StartingBloc Institute for Social Innovation conference in New York as a StartingBloc Fellow for 2010. The conference will continue on March 27th and conclude on the 28th, but already it’s been hugely insightful for me as someone interested in the intersection of social entrepreneurship and venture capital. Thanks to Adriana, Taryn, and Sarah for putting this on!

I have not only met others passionate about this intersection (shoutouts to @MESSExpress and @DaveRiess) but also gained additional understanding into the challenges facing the organization of funding for-profit social enterprises, thanks especially to Nathaniel Whittemore, one of the leading voices of social entrepreneurship who blogs at Change.org. Check out his two most recent blog posts: “The State of For-Profit Social Entrepreneurship” and “5 Ideas for Social Venture Angel Groups.”

During his StartingBloc talk, Whittemore briefly mentioned the current funding gap challenges for for-profit social enterprises, and I followed up with him afterwards to ask about more details. As Whittemore sees it, there are a few key challenges for social venture capital, the investment in for-profit social enterprises, two of which are due diligence and dealflow.

Due diligence  as a challenge relates primarily to the question, “How do you identify promising social venture capital investments?” Given that this area is still quite new, there isn’t much aggregate knowledge or experience in terms of evaluating successful investments. Furthermore, how do you even define “successful”? What kind of metrics are we looking at, both financially or socially? How is return measured? And what even qualifies as a “social enterprise”? There is definitely much work to be done!

The dealflow hurdle refers to the fact that there simply aren’t that many for-profit social enterprises out there. Whittemore elaborates on this issue in “The State of For-Profit Social Entrepreneurship.” To some extent, it’s a chicken-and-egg problem. Without an abundant for-profit social entrepreneurial community, it would be difficult to start a social VC fund that would be sustainable. On the other hand, without a robust ecosystem to fill in the funding gap for social enterprises, many founders may decide to go the non-profit route, or even abandon the social enterprise format entirely, which would be a great shame. That’s why I believe that building an infrastructure for the funding of for-profit social enterprises, whether it’s in the form of VC funds, angel networks, or something else entirely, is so important.

I have spoken with some others about the issues facing the burgeoning social VC industry this week as well, including Kevin Doyle of Good Capital and Josh Cohen of City Light Capital, so thank you for your insight!). For those of you reading this blog, I would love to hear your thoughts regarding this as well. Please comment or contact me, and also subscribe!

NYConvergence ORIGINAL

ABC announced that progress had been made in its talks with Bethpage, LI-based cable operator Cablevision during this evening's Oscar telecast and according to tweets being monitored by NYConvergence, WABC-TV is again available to Cablevision customers in the NY-area.

Update: The New York Times' Media Decoder blog reports that the channel became accessible again at 8:44 PM ET as Cablevision and ABC have agreed in principle to a new contract governing WABC-TV.

The New York Times' Media Decoder blog

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> Cablevision, ABC Fail to Reach Retransmission Deal