LOS ANGELES – Technology incubator Be Great Partners announced the admission of four new tech companies into their portfolio today: Enplug, Dealflicks, Close.com, and Taste of Blue.

BGP’s chief executive Lin Miao told VentureBeat that these investments “reflect our own long-term mission to innovate and grow the economy in L.A. with new tech industry jobs. We’re very excited to support these startups with the resources of our unique incubator-accelerator model.”

This announcement comes two months after BGP established a $6 million fund, which enables the incubator to invest anywhere from $25 thousand to $50 thousand in companies with promise.

Of all the new startups BGP is announcing, Miao said that Enplug, a network of intelligent and social-media enabled billboards, stands out as the one with the most traction and potential.

Enplug’s target markets are “high-foot-traffic areas,” like restaurants and bars where they can set up digital billboard displays and engage individuals through their mobile devices. Miao said that Enplug has signed up over 10,000 locations and needs funding, so it can provide the digital billboards to their clients.

BGP is financing Enplug’s copyright process, including the contracting of an intellectual property attorney.

The other new additions to BGP’s portfolio operate in a wide range of sectors. Dealflicks is an online deal site, which helps connect customers with the best offers for the most popular Internet services. Close.com is a social network aggregator that claims it can deliver a richer and more comprehensive social media experience. And Taste of Blue, an offshoot of luxury concierge and travel service Bluefish, offers customers preplanned itineraries minus the concierge fee, which often costs around $5,000, according to Miao.

Miao said that his firm is different from the seven major startup incubators and accelerators in the L.A. area because BGP boasts an in-house team of 25 developers. “Startups have great challenges building a product if they don’t have developers,” he added.

BGP has eight portfolio companies and three startups they are developing in-house. Miao said he aims to make four-to-five new startup investments every month. The incubator employs 51 people and is located in L.A.’s Miracle Mile district.

Lin Miao photo courtesy Be Great Partners.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

NEW YORK, NY – Deloitte released its seventh annual “State of the Media Democracy” survey yesterday, and its findings suggest there is even less hope for the human attention span than previously thought.

To compile the survey, the consultancy analyzed the digital consumption habits of over 2,100 American consumers aged 14 and older.  The report said that from 2011 to 2012, there has been a 160 percent surge of “digital omnivores,” or people who own smartphones, tablets, and laptops. Americans who own this trio of devices now represent a quarter of the domestic consumer market.

Digital omnivores often consume digital content on all three devices simultaneously, and 80 percent of this concurrent-multi-device content viewing occurs inside the home while people are watching television, the report said.

The report’s other notable discoveries:

* There was a 177 percent spike in tablet ownership, and tablet owners are 70 percent more likely to stream movies. Also this group is projected to watch more movies than any other video content in the next 12 months.

* In the last year, people in the 14-to-23 age bracket have doubled the rate at which they access online video services. This group is also 10 times more likely to watch television on tablets than it was the year before.

* Online video game subscriptions have increased by 47 percent in the last year; and video game advertising affects millennials more than any other consumer segment.

“This new reality creates opportunities – and an imperative – for organizations to differentiate themselves by utilizing multiple platforms to reach prospects and serve their customers,” said Gerald Belson, Deloitte’s vice chairman, in a prepared statement.

VentureBeat attempted to contact Belson for further discussion, but he was not immediately available for comment.

Above: “Cuddling with Multiple Devices.”

Image courtesy Jeremy Keith.

BEVERLY HILLS, Calif. — The elites from Los Angeles’s entertainment, financial, and technology industries descended on a Beverly Hills estate last week for a buzzword-filled discussion of the state of media and the trends that will disrupt it.

Summa Group, Oppenheimer & Co.’s L.A.-based wealth-management cell for ultra-high-net-worth individuals, sponsored the private “State of the Industry” party, which hosted 500 guests at a home just south of  Sunset Boulevard. American Standard Television founder Jonas Jonsson, one of the three young executives who helped organize the event, gave us a report on what went down. (Summa Group associate director Jason Ziven and marketing executive Kate Miller teamed with Jonsson to produce the exclusive conference.)

Jonsson said the event brought awareness to the shifting landscape of media in the digital age and provided analyses of opportunities for venture capital investment in that space.  The keynote panel discussion featured an off-the-record conversation between Maker Studios chief executive Danny Zappin and Julia Boorstin.  Maker has over has over 5,000 YouTube channels that receive over 2 billion views per month, and closed a $36 million round of financing led by Time Warner Investments last December.

Zappin and Boorstin’s talk focused on the empowerment of content creators and Maker’s ability to streamline the distribution process, according to CyberNet Communications director Dan Hakimi, who attended the event.  “Zappin hit home the point that technology has completely changed the game in TV production, music and film, and provided savvy entrepreneurs with an opening to monetize these changes and provide a superior experience for the consumer,” Hakimi said.

Additionally, the event featured off-the-record conversations with “Paranormal Activity” producer Jason Blum, “X-Men,” and “Transformers” producer Tom DeSanto, Lowercase Capital partner Matt Mazzeo, former News Corp. executive Emiliano Calemzuk, ex-Fox Television Entertainment Group chairman Sandy Grushow, and Hollywood power-lawyers Tara Kole and Mark Geragos.

    Jason Ziven interviews Jason Blum.

Kole, who represents clients like Gwyneth Paltrow, said she was intrigued by Blum’s prognostication of the coming video-on-demand-event-movie.  That is to say, Blum believes that the new model for home entertainment will follow the “House of Cards” trend, where on-demand video will become a pay-per-view-styled event, not unlike a boxing match.

“It’s interesting that Jason is looking for a supplement to theatrical that you can market cost-effectively,” she added.

In the closing panel conversation, Calemzuk and Mazzeo discussed the “redimensioning of content production” and opportunities to invest in companies that have disrupted traditional media, said Jonsson.  He also said that Kole spoke about the opportunity for talent to take advantage of new channels of content distribution, like YouTube.

Unlike most banking and media conferences, last week’s event was exceptional because it was coordinated entirely by a team of young and relatively unseasoned execs. While twentysomethings Jonsson and Miller recently graduated from the University of Southern California in 2009 and 2010, respectively, Ziven just turned 30 in January.

Jonsson said guests mingled in the open air eating hors d’oeuvres and sipping Casa Dragones Tequila, a spirit founded by Clear Channel Communications Inc. chief executive (and MTV co-founder) Robert Pittman. After the panel discussions finished, guests were treated to a live performance by a DJ who played electronic dance music, he added.

Additional featured guests included “Contagion” screenwriter Scott Z. Burns, International Creative Management partner Rick Levy, and Picturehouse chief executive Bob Berney.

Top: (l to r) Tom Desanto, Tara Kole, Sandy Grushow, Mark Geragos, Matt Mazzeo, and  Emiliano Calemzuk. Images courtesy ABImages.

LOS ANGELES – Democratic mayoral candidate Emanuel Pleitez says his ‘big data’ expertise can help Los Angeles’ city government become more efficient and improve conditions in some of its poorest and most crime-plagued neighborhoods.

Technology plays a strong role in Pleitez’s vision for education reform in the city. Pleitez, a Stanford graduate molded by the rough and gang-ravaged public school system of East L.A., wants to address the city’s disappointing high school graduation numbers, specifically that only 50 percent of students finish high school in four years.

The candidate believes a greater emphasis on digital literacy, and incorporating more tech-focused courses in school curriculums might help steer struggling students towards better academic performance. “The foundation of a sound economy is a skilled workforce,” he noted.

But can you teach gangbangers to code?

“It’s cheaper than incarcerating them.”

We asked Pleitez for specific numbers, and he referenced a statistic from the documentary about the state of the U.S. educational system, “Waiting for Superman,” that concludes a year of educating a student in a private school costs less money than a year of educating an inmate in prison.

L.A. votes on a new mayor Tuesday.

Another facet of Pleitez’s tech- education plan is his desire to convert the city’s official website, lacity.org, into a brand-name learning portal that offers visitors free or low-cost applications that teach digital skills. Pleitez thinks L.A. can become a leader in nationwide digital education and even raise revenue by charging non-California residents to enroll in the city’s online tech applications.

The candidate claims the city’s website’s draws 500,000 to a million unique visitors a month and says this proves lacity.org’s potential to be a vital educational resource and city-revenue driver.

I asked Pleitez about his thoughts on the locally hyped Silicon Beach movement, concentrated in L.A.’s more affluent Westside nodes. Pleitez praised the rise of startup activity and technology investment on the beach but said, “It shouldn’t be concentrated in one or two places.  We need to make sure we are providing these hubs across the city, but especially in the most underserved communities.”

He said investors do not promote innovation in South L.A. communities because they fail to recognize their value propositions, ones that are significantly enhanced by the candidate’s plan to transform the area into a hub of clean energy production.

“These are emerging domestic markets,” he said.

Pleitez, who resigned from the role of chief strategy officer at the social-network aggregator Spokeo, to pursue politics, said he also strongly believes in technology’s capability to improve the political process by enabling campaigns to engage the public on many more platforms.

The broadened scope of online communication channels available today enables a political candidate’s message to be more “targeted,” said Pleitez, sounding more like a media strategist than a politician. “I took a lot of notes from the Obama campaign,” he added.

Part of Pleitez’s voter-outreach strategy involves “house meetings,” where the candidate invites the public to hear him discuss issues at a private residence. Pleitez says these functions have attracted a total of 40 to 50 people, who learned about the event through Facebook advertising alone.

We asked Pleitez if his campaign’s data strategy was truly innovative and if it signified a real disruption of politics in L.A..

Pleitez cited the team of in-house data scientists that compile and organize his voter base’s raw analytics. An in-house team eliminates the need for data-vendor middlemen, and saves the campaign $40,000 to $80,000, he estimates.

“We did it ourselves, so were able to overlay data,” he said. That, in turn, enables his data scientists to perform more specific analytics queries in real time, resulting in better microtargeting initiatives. Pleitez highlighted his team’s ability to create subsidiary campaigns tailored to the voter sentiments of specific neighborhoods as one example of his micro-targeting advantage.

“I am more tech-savvy and innovative than the other candidates, period,” he said.

But that might not be enough to win him the mayorship. The L.A. Times notes that he’s still fifth in the polls and that he’s raised significantly less funding than the leading candidates.

Photo: Emanuel Pleitez and his wife, Rebecca (far-right), field questions from supporters.

Image courtesy Pleitez for LA.

Club W uses an algorithm to provide customers with personalized wine recommendations based on their tastes and purchasing histories, said chief financial officer and cofounder Geoff McFarlane.

Chief marketing officer Ari Radetsky said that Club W subscribers must order at least three wine bottles per month, spending a minimum of $39 (not including shipping) at each interval. He said Club W sells bottles at two different price points: $13 and $19 for each individual bottle.

“We want people to learn, experience, and discover wine in a non-pretentious way,” said McFarlane.

Club W’s most significant competitors are traditional wine clubs and Wine.com. Radetsky is critical of Wine.com, citing its impersonal user experience and “bloated wine jargon that doesn’t help people connect with wine.”

Cofounder and chief business development officer Mark Lynn believes Club W’s business model is superior to the competition because it showcases small-batch curators, who produce the artisan-crafted wine favored by a growing share of the consumer market. A recently authored Forrester Research Report estimates that the domestic wine industry generated $35.9 billion in 2012.

Club W was founded by chief executive Xander Oxman, Lynn, and Mcfarlane in Denver in February. The company later relocated to Los Angeles and shifted its business development operations to startup accelerator Amplify LA’s Venice Beach campus, said Radetsky. He also said that Club W plans to spend the bulk of its funding on customer acquisition and increasing brand awareness. McFarlane emphasized that Club W’s marketing efforts will focus on the 25- to 35-year-old demographic.

Crosscut Ventures led Club W’s Series A, with participation from Guild Capital, L.A.-based Siemer Ventures, 500 Startups, Brenner International Group, Amplify L.A., and angel investor Csaba Konkoly.

Club W has raised $3.6 million in all and has sold over 100,000 bottles of wine, said Lynn. The company employs seven people full-time and is located in Manhattan Beach.

Image of McFarlane, Oxman, and Lynn courtesy Club W.

ChowNow gives restaurants streamlined mobile-and-online-ordering templates and marketing consulting services for $89 per month, pricing independent app developers ($15,000 per contract) and online deal services like Groupon out of the market. ChowNow’s template allows restaurants to customize their own online marketing strategies and customer incentives.

The growth of e-commerce, projected to rise 62 percent by 2016, according to a Forrester Research analyst report, puts ChowNow in a favorable market position.

“We help [restaurants] build a snowball, and we push it down the hill, and we give them two months of help, and there’s so much repeat business that the snowball builds itself,” ChowNow founder and chief executive officer Christopher Webb told VentureBeat.

Webb identified ChowNow’s primary competitors as grubHub and Seamless, but said restaurants using these services are giving up 15 percent of their revenue on every order.

Webb said he and co-founder Eric Jaffe launched ChowNow in May of 2012 and have already acquired hundreds of clients, including franchises like CiCi’s Pizza and Ground Round as well as dozens of smaller establishments. Additionally, ChowNow has recently expanded its service into ski resorts Mammoth Mountain and Homewood Mountain Resort, said Webb.

ChowNow will use its Series A funding to support the launch of new products and scale its operations around the country, according to a company press release. The same document says that these additions include a catering service and an online-ordering platform made exclusively for pizza restaurants.

GRP Partners led this first institutional round for ChowNow, with participation from Daher Capital, Double M Capital, Karlin Ventures, and Velos Partners.

To date, ChowNow has raised over $4 million, including funding from accelerator Launchpad LA, which graduated the company last May. ChowNow is headquartered in Santa Monica and employs 16 people all over the country, said Webb.

Image courtesy ChowNow.

The digital economy demands a workforce that is computer-literate, fluent in technology trends, and attuned to the market. General Assembly, a global education network focused on technology, business, and design, claims it can get the masses up to speed faster than existing models of computer-science instruction.

Launched in January 2011, by Adam Pritzker, Jake Schwartz, Brad Hargreaves, and Matt Brimer, in partnership with the New York Economic Development Corporation, General Assembly offers classes to students interested in programming, web development, online marketing, and other business-related subjects. It’s got locations in New York (where it started), Los Angeles, Boston, San Francisco, and Hong Kong, among others.

VentureBeat recently met with Pritzker in Santa Monica where he discussed the outdated teaching models holding students back, his plan to make General Assembly a premiere educational-service-and-community around the world, and his company’s strategic partnership with local start-up accelerator Launchpad LA.

“We don’t want to teach what a professor believes is important, we want to teach what the market is demanding,” said Pritzker.

General Assembly offers a wide range of classes (more than 1,200) at multiple tiers and price points, he said. Combining online and offline instruction, Pritzker said General Assembly’s educational programming varies from hour-long classes for $25 to $50, to immersive weekend workshops for $500, to 16-week courses for $5,000.

“The product really steps up in terms of what your desires are as a student, what you’re willing to pay, and the time you’re willing to commit to learn the content,” he added.

Pritzker said his company has an interesting problem because his instructors aren’t certified teachers, but practitioners: working engineers and web developers. “They’ve done user-interface design for YouTube or they scaled Amazon’s email marketing and those are really the people our students want to learn from,” he said.

Additionally, while Pritzker said General Assembly does offer its students certification, he stated that his service does not provide accreditation, which means General Assembly doesn’t allow its students to take on debt to enroll in classes.

Pritzker declined to discuss the profitability of his business, but said that there is demand, emphasizing that over 30,000 students have enrolled in two years, and citing the company’s expansion into eight markets in the United States, Europe, and Australia. In addition to General Assembly’s flagship locations in New York and London, it has outposts in Berlin, Boston, Los Angeles, Melbourne, San Francisco, and Sydney, according to company documents.

To promote technology education around the world, Pritzker said General Assembly’s strategy includes forming partnerships with government entities, like the New York Economic Development Corporation and “10 Downing,” a colloquialism for the British government. Pritzker cited Prime Minister David Cameron’s recent visit to General Assembly’s New York headquarters to illustrate the strength of the latter partnership.

While General Assembly has expanded rapidly, Pritzker cautioned that he doesn’t want his company to grow too fast, emphasizing the importance of maintaining the quality of his content and his community.

“We’re really focused on places where we think we can be an immediate value-add to that community, and L.A. was one of those places,” he said.

In L.A., General Assembly came to an agreement with Launchpad LA for the accelerator to host its local outpost campus. Pritzker said the entertainment industry’s core expertise, combined with the emerging local tech community’s new ideas, make L.A. an ideal ecosystem for innovation in the digital space.

VentureBeat spoke with Launchpad LA Managing Director Sam Teller, who said “we’ve always been eager to offer more events and programming for the L.A. startup community at large. Joining up with GA, a leading global education startup, was the perfect way to achieve that goal.”

General Assembly has raised $14 million in Series A and B funding from Maveron, Mousse Partners, Bezos Expeditions, Learn Capital, Vegas TechFund, Alexis Ohanian, Digital Sky Technologies founder Yuri Milner, Hosain Rahman, and Alexander Asseily, according to company documents.

A representative of the company told VentureBeat that General Assembly’s closest competitors are Dev Bootcamp and Flatiron School, but that both are primarily focused on long-form courses.  Pritzker said his company employs 90 people.

Adam Pritzker image courtesy General Assembly.

LOS ANGELES — With about six months left before his term ends, Los Angeles Mayor Antonio Villaraigosa is looking to cement his legacy as the man who catalyzed the city’s tech-and-venture-capital renaissance.

VentureBeat attended the Los Angeles Mayor’s Council On Innovation And Industry (LAMCII) year-end meeting, which took place Wednesday morning at the Rubicon Project’s West L.A. headquarters. The purpose of the event was to present the LAMCII’s initial findings and show off new ways to help L.A. grow.

Villaraigosa, who was recovering from a cold, opened the meeting with brief anecdotes about his 10-day trade mission to South America, and touted the potential of L.A. as an exportable brand and as an innovation-and-investment capital.

He said L.A. was an undervalued asset and cited data, such as Startup Genome’s Startup Ecosystem Report 2012, ranking L.A. as the third best city in the world for startups, and the fact that USC, UCLA, and Caltech have produced more Nobel laureates than any other three institutions combined.

The LAMCII’s presentation was segmented into six different categories, each addressed by a different council member: narrative, capital, policy, network, education, and comparative. Spoken like a true advertising executive, Wilshire Axon vice-chairman Jimmy O’Mahony talked about rewriting the “narrative” of L.A. and creating a new “perception,” which would allow the city to become a top-three contender in the “list of must-consider locations for talent, investors, businesses, and entrepreneurs.”

Matthew McCall, a partner at New World Ventures, covered capital, arguing that the L.A. ecosystem lacks sufficient access to funding and is undernourished. To correct the problem, McCall proposed such initiatives as allowing city-employee pension funds to invest in L.A.-based venture capital firms, and attracting more institutional VCs.

McCall also heralded L.A.’s record of serial entrepreneurship and emphasized its history of large exits, citing Yahoo, eBay, Rent.com, Shopzilla, MySpace, and Overture as examples. Serial entrepreneurship is an important metric for McCall because it indicates that startups are receiving high enough valuations for their founders to “exit,” or sell their companies, and use their new liquidity to reinvest in their native ecosystems, he said.

When asked how McCall would measure the success of the LAMCII’s initiatives, he said, “The heart of an ecosystem is serial entrepreneurs.” He also said that New World Ventures has architected a 20-year investment strategy for Los Angeles.

Jim McDermott, the co-founder of US Renewables Group, addressed policy and talked about the 15.1-mile Expo Light Rail Line, or “texpo” line, which is currently under construction. He said he believes it will help foster innovation by physically connecting more Angelenos. McDermott said 64,000 people will ride the Expo line daily and that bringing people closer together will inevitably nurture more communication, connectivity, and idea exchanges.

Additionally, McDermott said the Expo line initiative (the city is building seven light rail lines) will connect the western districts of the city to their eastern counterparts, spreading Silicon Beach-centered prosperity all over L.A., while leveraging USC’s and UCLA’s intellectual capital to create innovation hubs equipped with the latest technological and educational resources.

The LAMCII’s other policy proposals include: expanding the three-year extension for the exemption from gross-receipt taxes for new business, using earmarked federal grant money to create and retain jobs, and forming trade partnerships in South America and China, according to council documents.

At the conclusion of the event, we spoke with Mayor Villaraigosa as he was being escorted back to his car and asked him if he had a numerical target for the amount of venture capital investment he’d like to see.

“We haven’t done that, but that’s something we have to think about,” he said. “There’s no question in my mind that what they’ve done here is going to be the seed for a fairly dramatic growth in this sector here in L.A.”

Antonio Villaraigosa photo via U.S. Department of Labor/Flickr

Los Angeles’s rise as an incubator for media-driven technology startups is well-documented, but it’s also becoming a hotbed for innovation in an unexpected vertical: financial services.

In L.A.’s’ “Silicon Beach” community, fintech — technology that targets financial services customers — is booming, from high-end financial-transaction management systems to friendly banking tools for ordinary consumers.

L.A. fintech startups are offering a variety of different services, like hosting complex financial transactions in the cloud, establishing social networks for professional investors, extending credit lines to smaller web publishers, and granting microloans to low-income families and individuals .

VentureBeat spoke with the chief executives of four rising fintech startups in L.A. to learn more about the multifaceted nature of the financial technology industry. Each of the companies we profiled offers a distinct service, catering to different markets and illustrating the scope of fintech’s disruptive potential.

CapLinked homepage

Mergers & Aquisitions Made Easy: CapLinked

Launched in February 2011 by Eric Jackson and Christopher Grey, CapLinked simplifies complex business transactions, like mergers and acquisitions, by providing clients with a collaborative workspace platform that is intuitive, cloud-hosted, and affordable.

CapLinked allows clients to exchange files securely and complete transactions 50 percent faster, bringing greater efficiency to asset sales, capital raises, mergers and acquisitions, and other business deals, according to its website.

Jackson, CapLinked’s chief executive, estimates that these types of transactions have $5 billion to $6 billion of untapped revenue potential among middle-market and upper-market firms, who can’t afford the high-fixed costs associated with enterprise collaboration leaders (firms that offer document-sharing and transaction-management services) like Intralinks and Merrill DataSite.

Currently, Jackson sees real estate investment “going through the roof” and is excited about client prospects in that sector. He also said there is a lot of pent-up demand for merger-and-acquisition activity.

With investments from superangel investor Peter Thiel, David Sacks, Joe Lonsdale, 500 Startups, Hercules Technology Growth Fund, and Wasabi Ventures, CapLinked has secured $1.7 million in funding, said Jackson.

Jackson also said CapLinked recently closed a lucrative deal with Cornerstone Real Estate Funds in Orange County. CapLinked employs 13 people full-time and should be profitable next year, he added.

Stockr CEO Vinny Jindal

Investing gets social: Stockr

Stockr wants to become the nexus for investors, traders, and public companies to share financial information online. In short, it’s a social network for people interested in the stock market. Founded by Vinny Jindal, Tim Symington, Brendon Crawford, and Bryce Knight, the financial-social network launched in September into an open beta, said Jindal.

By incorporating a Facebook-inspired social infrastructure into his investor network, Stockr can help members discover other companies and users who might match their interests, said Jindal. Additionally, he believes he can generate sufficient revenue through targeted advertising campaigns that serve members ads “based on who they are as investors, not consumers.”

Jindal, Stockr’s chief executive, aspires to dethrone Bloomberg’s Terminal and Yahoo Finance to become the primary source for financial information online. He is critical of both platforms, arguing that Terminal’s high cost ($1,500 per month per user) disenfranchises the average investor, and that Yahoo’s reliance on sponsored content compromises the accuracy of the information exchanged.

Jindal has launched a startup in a growing field, facing competition from financial-social network startups like SumZero (cofounded by the Winkelvoss twins, who famously battled Mark Zuckerberg over the ownership of Facebook), StockTwits, and Kapitall. But Jindal believes that Stockr will prevail over the competition because his network “can leverage existing Internet revenue models, like subscription platforms, so members can access the expertise of premium Stockr users.”  In other words, at some point premium Stockr members will be able to set their own subscription fees for other users to access their content.

Stockr has raised $1.5 million in seed funding from Personal Capital (an investment firm helmed by former PayPal chief executive Bill Harris), CBS investor relations honcho Adam Townsend, and Atlantic Media Group President M. Scott Havens, said Jindal.

Also, on November 29th, Jindal will host the first Los Angeles FinTech Meetup.  Former Wall Street Journal Los Angeles Bureau Chief Rob Guth is scheduled to interview former PayPal Chief Executive Bill Harris at the event.

FastPay CEO Jed Simon

Dodging digital debt: FastPay

Independent web publishers have a cash-flow problem, maintains FastPay Chief Executive Jed Simon. It can take the big brands and media agencies up to six months to pay their publishers (the websites who host the advertisements these brands and agencies buy), he said. For smaller publishers, this payment delay is a problem because they often have to pay the creative teams tasked with programming and delivering the ads much sooner than that (30 days in some cases).

With the recent advent of FastPay, a loan company catering to the digital ecosystem, smaller digital players can function more effectively with improved liquidity. Launched in 2010, FastPay grants credit lines (ranging from $100 thousand to $10 million) to lower- and-middle market digital publishers, which accelerate payments and allow firms to do more business.

Simon said the average FastPay loan is $500,000 and that in some cases, his company is fulfilling the role played by venture capital firms. Two of these cases include Giant Media and Moguldom Media. Both chose FastPay over traditional venture funding because, unlike venture capital firms, FastPay demands no equity stake in the companies they bankroll, said Simon.

Simon said his company charges an annualized fee ranging from 12 percent to 24 percent, which seems high, but is mitigated by the fact that his credit lines are supported by his clients’ account receivables.  In other words, the high interest rates are offset by the certainty that brands will pay his clients within a reasonable timeframe.

Simon also said he doesn’t like to do deals under $1 million or $2 million and that for every deal he does, he turns two down. FastPay has provided roughly 100 digital media clients with $100 million in financing and employs twenty people full-time, he said.

FastPay has received $27 million in funding from Hudson Pacific Chief Executive Victor Coleman, JMG Capital Management founder Jonathan Glaser, private equity firm SF Capital Group, and the Dallas branch of Wells Fargo Capital, the latter of which boasts a $6 billion credit line, according to Simon.

ZestFinance CEO Douglas Merrill.

A.I.-vetted microloans: Zest Finance

ZestFinance chief executive Douglas Merrill isn’t like most financial CEOs: He has a Ph.D in artificial intelligence from Princeton. (He’s also got Tetris blocks tattooed on his forearm.) Fortunately for people who don’t have access to credit — known in the industry as the “underbanked” — Merrill decided to use the expertise he gained as a graduate student to help guide them out of financial hardship.

Merrill’s company uses A.I.-based technology to grant microloans, averaging $450 per transaction, to people who lack access to traditional credit, he said. His typical client profile is a 35-year-old single mother who makes between $30,000 to $40,000 a year, said Merrill.

Merrill told VentureBeat that there are 60 million Americans who have bank accounts but are ineligible for traditional credit (the FDIC says 52 million adults are underbanked). He believes that financial institutions have designated his target market as “credit risks because they’re missing data.”

A ZestFinance loan application requires clients to answer 100 questions, and these responses produce 2,500 variables (most banks rely on six to 15 variables) that run through 10 different machine-learning algorithms. Then, it combines the 10 models into one superalgorithm, which determines a prospect’s creditworthiness. Within 30 minutes of starting their application, ZestFinance clients know if they have been approved.

“It’s like talking to your 10 smartest friends and using their group opinion to make a decision,” said Merrill.

Merrill’s primary competitors are payday loan services, which charged 30 million Americans $8 billion in fees last year, he said. Merrill said ZestFinance can cut those payday-loan customers’ fees in half.  VentureBeat asked Merrill what he charges his customers and he said his rates vary on a case-by-case basis.

ZestFinace has raised $92 million in venture funding from GRP Partners, Lighthouse Capital Partners, Lightspeed Venture Partners, Flybridge Capital Partners, and Matrix Partners, said Merrill. Merrill also said his company employs 100 people, 65 of which are in L.A.

Image credits: Shark fin image courtesy Sharkdiver.com.  Image courtesy CapLinked. Image courtesy Stockr.  Image courtesy FastPay.  Image courtesy ZestFinance.

VENICE, Calif. — For small businesses, order management can be a cumbersome and expensive ordeal.  Venice-based startup Lettuce hopes to simplify the process with its new automated order-and-inventory-management-system.

VentureBeat met with Lettuce chief executive Raad Mobrem during last week’s Seimer Silicon Beach Summit to discuss his company, which just raised  $2.1 million in seed funding.

CrossCut Ventures led the seed round, which included investments from 500 Startups, Launchpad LA, Baroda Ventures, Zelkova Ventures, Double M Capital and other angel investors, according to Mobrem.

Lettuce’s target clients are small wholesalers and e-commerce sites that need an efficient and inexpensive tool to manage their orders, said Mobrem.  The CEO explained the traditional way these types of businesses processed orders into their backend systems: “Once you get that order, you have to process it and input it into your accounting system, you have to put it into your CRM [customer relationship management], you have to put it into your shipping software, like UPS or FedEx or USPS, into credit card processing, and then you also have to account for inventory somehow.”

Lettuce’s CEO says that before his company, the available order-management software burdened businesses with clunky, non-intuitive designs, and the accompanying hassle of repetitive data-entry. Mobrem believes that his company has found an optimal way to streamline backend data-entry.

“What we do is integrate all those commonly-used back-end systems, like Salesforce, Printforce, UPS, USPS, we also integrate credit card processing, like Stripe or Authorize.net, and then on top of that we provide our own inventory system, that’s very simple but also very powerful,” Mobrem said. “So now, instead of you going in and typing into all of these back-end systems, you review all the orders, you click on one button and it processes it for you.”

Mobrem took a jab at the “big systems” competing for his share of the market, singling out NetSuite, saying it takes “hundreds of thousands of dollars in getting it set up,” and saddles users with high monthly costs.

Mobrem claims that Lettuce can reduce costs by 95 percent compared to NetSuite.

“Most of the time, time equals money with your employees.  So, to do that, if you have two inside sales reps, and let’s say they’re spending all their time processing orders, and we reduce that by 95 percent, that means now they actually have time to actually do more sales.”

Mobrem and his business partner and co-founder, Frank Jones, came up with the idea for Lettuce while running a small, wholesale dog-toy-company called Durable Ideas.  Mobrem and Jones encountered two problems with their pet product business: “one, getting the order back to our office in an efficient way, and second, getting that order into all of our systems.”

The solution to the entrepreneurs’ troubles came in the form of a mobile iPad app, which they developed, and which allowed them to display their products “in a really beautiful way” and “capture orders in real-time,” said Mobrem.

“We built this product literally out of a need and the funny part was, we never had any intention of doing this.  We were going to tradeshows and other companies that were exhibiting would see our product and they’d literally leave their booths, stop doing sales and come ask us “are you guys taking orders off iPad?” said Mobrem.

After realizing that their technology could solve a problem across business verticals, Mobrem and Jones decided to start Lettuce.

Lettuce launched less than two months ago and employs twelve people, said the CEO.  Mobrem says Lettuce’s software is compatible with iPads and web-enabled computers.  Lettuce has already processed $2 million worth of orders and charges businesses a fee of $29 to $119 a month to use its software, he added.

Online spending will grow by 20 percent this year, Citi Research estimates, which makes it an excellent time to have an e-commerce site.

Milk & Honey joins the growing ranks of fashion-oriented retail sites hoping to cash in on the trend — and the upcoming holiday season.  Launched in 2011 by sisters Dorian and Ilissa Howard, Milk & Honey is an online, custom-designed footwear boutique for women that aims to win customers with the power of personalization.

Using Milk & Honey’s HTML5-based configurator technology, women all over the world can choose from over one million style combinations to design a pair of shoes handcrafted to their exact specifications.  With a price-point starting at $195, Milk & Honey offers everything from casual ballet flats to more extravagant studded stilettos, according to the company’s press packet.

VentureBeat met with co-founder Dorian Howard in Santa Monica to discuss the $185 billion (annual sales) global footwear industry, and her fledgling brand, which aspires to exploit “the hole in the marketplace.”

In the online luxury footwear space, Milk & Honey is the only American company that offers customized and individually-handcrafted footwear for women, according to Howard, who compares her brand quality to Marc Jacobs and Kate Spade.  The only other firms that provide customization for high-end women’s shoes are Australian start-up Shoes of Prey and UK-based-company Upper Street.

“Customization is the ultimate in customer service,” said Howard.  The strawberry-blonde entrepreneur also identified her target customer as a “fashion-forward woman between 25 and 45, who is tired of fashion being dictated to her.”

The Howards’ paths to the world of fashion were unconventional.  While Dorian spent her 20’s climbing the Hollywood ladder, rising to the level of vice president at Paramount, Ilissa worked in the toy industry, calling shots as a global brand director for Toys “R” Us and later for Creata, which required her to travel frequently to Hong Kong.

“We both came from these more staid kind of industries that had a way of doing business. And while the movie business has changed a little bit since 1910… it hasn’t a tremendous amount,” said Howard.

On one of Ilissa’s business trips to Hong Kong, the idea for Milk & Honey was born.

Howard told VentureBeat about her company’s genesis: “My sister would travel to Hong Kong a lot for work and she’d get shoes made.  And she’d come back and I’d see the shoes and next time she went, she’d make them for me in a different color and in a different size.  So we took the interest we had in e-commerce and trying to figure out what we can bring to the table.”

Entirely self-funded, Milk & Honey launched on just $30,000, which covered prototypes, website design, research and development, and packaging, according to Howard.  She also said her company is cost-efficient because it doesn’t carry inventory or create a pair of shoes unless somebody wants them, adding “we manufacture on demand, so there’s no waste.”

The company offers to remake or refund shoes that turn out to be the wrong size.

Howard said her company, which was recently accepted into Launchpad LA’s Fall session, employs 5 people full-time and has shipped to thousands of women in 19 countries. Also, 22 percent of her market is bridal.

In the future, the Howard sisters want to build brand partnerships with smaller boutiques, and hope to raise $1 million to $3 million in the next year.

“In the next 3 years, there’s no reason, we’re not a $30 million-a-year-business,” said the former Paramount exec.

Top photo: Milk and Honey founders Dorian Howard (left) and Ilissa Howard (right). Courtesy Milk and Honey.

‘Frozen’ is an adjective that doesn’t compute within the lexicon of gourmet cuisine. But for entrepreneurs David Hauslaib and Tom Balamaci, the founders of Pop-Up Pantry, ‘frozen’ is at the core of their service, which delivers epicurean-style meals directly to customers’ homes.

Launched in July, 2011, Pop-Up Pantry is a Los Angeles-based startup dedicated to providing the American consumer with access to gourmet meals, hitherto limited to restaurants helmed by the likes of Emeril Lagasse, Wolfgang Puck, and Mario Batali.

Now, with the aid of Pop-Up Pantry, food lovers anywhere in the U.S. can log onto the company’s website and order three-course meals prepared by world-class chefs at an affordable price-point (meals start at $17 per person).

After preparation, Hauslaib says the meals are frozen, vacuum-sealed, placed in an insulated box and delivered to customers via UPS or FedEx. Once the meals reach their destinations, clients only have to follow the simple re-heating instructions to enjoy a five-star meal with an undiminished flavor profile, according to the founder. He told VentureBeat the reheating process takes no longer than 30 minutes.

Hauslaib added, “We are one of the only food delivery companies in the country that can deliver food to you even if you don’t live in a major city.” He added that food lovers living outside of major-metro areas are “underserved.”

Source: Pop-Up Pantry

One of Pop-Up Pantry’s tasty-looking frozen meals

For example, Hauslaib said, if you “live in Kentucky or 45 minutes outside of Phoenix, unless you’re going to make the drive into the city, you’re looking at Applebees or Outback, or you’re ordering Domino’s, those are your food choices.”

Hauslaib identified the evolving television landscape as one of the factors that helped bring Pop-Up Pantry to fruition.

“You’ve got about 25 million American women in major cities, but also women living in food deserts, who really, in the last five years, have been exposed to this explosion in food culture: reality cooking shows, Food Network, the new launch of the Cooking Channel. The only magazine category seeing an increase in subscriptions is food,” Hauslaib said.

“Tom and I say, ‘you know, we couldn’t have started this company five years ago.’ There was not an education about food that really penetrated the homes of almost every American.”

The rise of food culture, the fact that recession-hit Americans are dining out less, and Pop-Up Pantry’s expected profit margins in the 30-40 percent range, convinced investors from GRP Partners, CrossCut Ventures, and Launchpad LA to collectively give the pre-prepared-meal delivery service $1.71 million in seed funding.

“What we do have is more impressive margins than anything else in the food industry,” Hauslaib said.

Additionally, that preliminary seed round included angel investments from Lebanese wheat baron Michel Daher, Crosscut CEO Adam Goldenberg, and “How I Met Your Mother” star Neil Patrick Harris, said the Pop-Up Pantry founder.

Harris, who posts often on his NPH Food Porn Twitter account, became involved with Pop-Up Pantry through his partner, David Burtka, a Mario Batali- protégé, who has submitted a dozen menu ideas to Pop-Up Pantry, said Hauslaib.

Most recently, the Pop-Up Pantry team partnered with television series MasterChef to provide customers with the winning dishes from the show’s season finale, which aired September 10. Contestant Christine Ha won the MasterChef competition with her crab vegetable salad appetizer, braised pork belly entree, and a coconut lime sorbet for dessert. Also, MasterChef enthusiasts now have the option of ordering three-course dinners inspired by Ha’s and finalist Josh Mark’s celebrated recipes on Pop-Up Pantry’s website.

“It’s taking the food you see on television, the reason you get excited about cuisine, and what you can taste and what kind of ingredients you want to pick up at the grocery store, and being able to deliver it to your door,” said Hauslaib.

“That’s the gap we wanted to solve with Pop-Up Pantry.”

Top photo: Pop-Up Pantry founders Tom Balamaci (left) and David Hauslaib. Credit: Pop-Up Pantry