Today, I’m wondering if Sarah Hanson really exists.

When I originally contacted Hanson to chat about the auction, her startup, and why she’s skipping college to go straight into the tech startup world, she didn’t want to talk on the phone. Instead, she asked me to conduct the interview via email. That happens from time to time, so I said OK.

Source: 32auctions

Sarah Hanson, according to the 32 Auctions site

But then a TV network reporter called VentureBeat, telling us that Hanson asked to be interviewed via email for a segment she was planning to do. Not only that, the reporter said, Hanson absolutely refused to do a phone interview. A VentureBeat reader contacted me and questioned whether Hanson was too good to be true. And when a journalist at another publication asked me if she was real or existed, I had to dig a little deeper.

My story began when Sarah Hanson, or someone purporting to be a 19-year-old girl named Sarah Hanson, contacted VentureBeat via email about how she funded her startup:

Hi, I wanted to follow up and let you know the auction ended at $125,000

http://www.32auctions.com/organizations/7349/auctions/8138/auction_items/167988

It’s the result I hoped for but I’m still a bit stunned.

A couple week ago, I was sitting at my desk trying to come up with an idea that would enable me to work on Senior Living Map full-time.

Today, I have someone willing to invest $125,000 in me. The beauty and power of the internet. It’s amazing.

Sarah

An email conversation ensued, and after she asked to be interviewed via email, I sent her a list of questions. I also checked for a LinkedIn account or a Twitter account, but didn’t find one, and put that down to her age. At that point, perhaps I should have been more suspicious.

Her answers, as you can see in the story, are superb and reveal a precocious teen (or someone) with insightful answers such as “my definition of being an underserved market is the lack of a solution that provides the maximum amount of value with the minimum amount of complexity,” which she credited to Aaron Levie, the founder and CEO of Box. But there’s also a lack of specificity to her answers that some people find suspicious: no mention of which college she’s attending, no city or location, and no name for the angel investor who won the auction by bidding $125,000.

The website itself, Senior Living Map, is light on details about the company, organization, or people behind it. It lists no address, no location, and no phone number. There is an email address, feedback@seniorlivingmap.org, but no other contact information. One clue, however, can be found in the sites terms of service, the legal framework under which it can be accessed:

Governing Law

Any claim relating to Senior Living Map’s website shall be governed by the laws of the State of Washington without regard to its conflict of law provisions.

A search of the Washington State corporation records turns up no company called Senior Living Map. Neither does a search of Nevada or Delaware corporations, other tax and investor-friendly places where many companies incorporate.

That doesn’t necessarily prove anything: The company could be listed elsewhere, or it could be listed under a different name.

But pair that with the fact that I can’t find a Twitter account for a Sarah Hanson who is running a startup, or a LinkedIn account, or a Facebook account for a Sarah Hanson who seems to match the profile, and there’s a massive lack of corroborating evidence. In short, I have no idea whether the Sarah Hanson I thought I was dealing with actually exists, is who she says she is, built Senior Living Map, or even took a $125,000 investment.

I contacted Madison, Wis.-based 32 Auctions to see if I could learn more. The answers I got were less than satisfactory, mostly due to the auction sites’ design:

I’m including a general response which we are providing to reporters in regards to this particular auction.  This should answer most of your questions.

We built 32auctions in a way that makes it very easy for anyone to host a silent auction online without needing to work directly with us.

In regards to this particular auction…

We have had no contact with the auction administrator.  We first saw mention of this auction on April 14th through Twitter.  From what we’ve seen, the auction looks legitimate.  However, only the parties involved will really know.

The majority of auctions hosted on 32auctions are fundraisers for non-profits, schools, churches, friends/family with a significant life event, and businesses looking to help their communities.  This is the first time we’ve seen someone auctioning off their future earnings to fund a start-up.

Anyone who complies with our terms of use can host a silent auction on 32auctions.  Auction administrators are responsible for the content of their auction.  It’s also up to the auction administrators and winning parties to finalize the transaction.

In response to further requests to speak on the phone, the 32 Auctions contact apologized and said that “we only offer support through email.” I hate to say that this is starting to sound familiar, but frankly, it is.

I have also attempted to contact Sarah Hanson multiple times via email. I told her I would like to give her a chance to set the record straight and prove that she is who she says she is.

I have received no response yet.

So here we are. I can’t guarantee that the woman I wrote a story about exists. And I can’t disprove it at the moment, either. All I can do is lay out what I have learned so far, and keep digging to learn more. If I have written about a fake, constructed persona, and have been the victim of an elaborate hoax, either for publicity or kicks or some as-yet-unknown reason, I apologize to VentureBeat readers.

One additional note: My original Sarah Hanson story has  been picked up by a massive number of publications, with Huffington Post, CBC, Yahoo, GeekWire, and AOL writing about Sarah Hanson and Senior Living Map.

If this was an attempt to gain publicity, it was massively successful: There are no less than 242,000 Google results for “sarah hanson senior living map,” many of them stories about how she crowdsourced her startup funding.

So if the original story is accurate, I ask Sarah Hanson to please stand up … and take off the mask. As you said in your first email to me, the beauty and power of the Internet is amazing.

Just not always the way we hope it would be.

photo credit: gato-gato-gato via photopin cc

The law firm released the results of its 2012 Seed Financing Survey today, which found that the number of startups obtaining Series A financing after a seed round declined significantly in 2012.

“Of the companies funded in 2011, 27 percent had raised a Series A financing by the end of the following year [2012], while 45 percent of the companies funded in 2010 had raised a Series A financing by the end of the following year [2011],” the report said.

The Series A crunch is a Silicon Valley urban legend of sorts. Some say it is fact, and others dismiss it as myth. The basic idea is that the number of seed-financed startups far outnumbers the amount of venture capital firms willing to invest in an institutional round. The cost of launching and operating an Internet startup is fairly low, and a strong angel investment community supports young companies as they get off the ground. However, companies that are unable to quickly establish a revenue stream or get acquired need venture capital to keep going, which is where the “crunch” comes into play. Without additional financing, they go under and turn into “zombie startups.”

A significant driver of this phenomenon is a changing scene for seed financing. There has been rapid growth in seed financing over the past few years. As opposed to 472 deals in 2009, Fenwick & West found that there were 1,749 seed deals in 2012, while the number of Series A rounds only rose from 418 to 692.

A few key trends are behind this bottleneck. First, venture capitalists are becoming increasingly involved in seed-stage deals. The percentage of seed deals that venture capitalists led increased from 27 percent in 2011 to 34 percent in 2012. Furthermore, accelerator programs are multiplying like rabbits, which adds to the number of promising startups getting attention from investors. The JOBS Act and the emergence of crowdfunding provide more flexible alternatives to traditional seed financing, and platforms like Angelist help establish a cohesive network between early companies and investors.

Basically, it is easier than ever before for a startup to nab seed funding. The challenge is creating a product strong enough to attract venture dollars (or sustain itself on its own).

“These results show a continued strong and diverse seed stage financing environment in the internet/digital media and software industries,” said Steve Levine, a partner in the Fenwick & West Startups and Venture Capital Group.  “However, the decreased percentage of seed funded companies that had received Series A investment by the end of the following year emphasizes the importance of companies demonstrating traction with the seed investment they receive, in order to obtain Series A funding.”

The survey also found that seed stage deals are beginning to look more like traditional, institutional deals. The number of deals structured around “preferred stock structures,” as opposed to convertible notes, increased, and valuation caps increased in deals based on convertible notes.

Fenwick & West drew these results from an analysis of 61 transactions in 2012 with a high concentration on Silicon Valley. It is a small sample pool that does not necessarily reflect “the larger, geographically dispersed, seed financing environment,” but like sightings of Bigfoot, the thrill is in the mystery.

Photo Credit: Ben Cumming/Flickr

Today, Astia announced the formation of Astia Angels, an angel investor network that invests in women-led high-growth businesses.

Astia is a global nonprofit organization dedicated to getting female entrepreneurs to the metaphorical ball. Its network is comprised of 4,000 members around the world, including investors, entrepreneurs, and executives. It also has programs that encourage women’s full participation in the startup ecosystem by providing access to capital, ensuring sustainable high-growth, and developing their leadership skills. This latest initiative seeks to promote angel investment in women-led ventures to support their ideas, development, and possibilities for growth.

“High-growth entrepreneurship is a part of the economy where women don’t really participate,” said CEO Sharon Vosmek in an interview with VentureBeat. “Entrepreneurship is a deeply male place. Men and women exist in separate business networks and we look at this as an opportunity to build trusted business networks between men and women so it results not only in venture investment, but all subsequent business relationships that lead to big success.”

As a journalist who writes extensively about startups and venture capital, I notice that absence of female subjects every day. The technology industry is dominated by men, and yet research shows that companies with female executives out perform companies with male executives.

The Dow Jones report “Women at the Wheel: Do female executives drive start-up success?” examined the current state of women in U.S. venture-backed companies and how women in leadership roles affect the success of a startup. The study looked at 15 years of company data in the VentureSource database and found that the proportion of female executives is higher at successful companies than at unsuccessful companies and a company’s odds for success increase with more females holding high-level positions.

Many things could be behind these correlations. Diverse teams generally perform better, and in a country where women are primarily responsible the allocation of “home capital,” an intimate understanding of their needs and user behavior is an advantage for any business.

“At Astia, we know that women-led companies are a great opportunity for investors, but the venture capital that goes into women-led companies directly mirrors the percentage of women in venture capital- between 3 percent to 5 percent,” Vosmek said. “Our model is building deep, trusted business relationships between entrepreneurs, the investment community, and the business ecosystems. We are at a tipping point where I think we will see change.”

Angel investors are often entrepreneurs who met with success and choose to put their dollars and expertise back into the ecosystem. It is a cycle where you need successful entrepreneurs to create angel investors and angel investors to create successful entrepreneurs. Astia is waving its wand in both directions, but like in Cinderella, the fairy godmother can’t do everything. It is still up to Cinderella to start companies.

For more funding news as it happens, subscribe to our Deals Channel feed. You can also follow VentureBeat on Twitter, @venturebeat, to view funding news as it’s published.

New apartment rental marketplace lets hunters search for shelter in packs

RoomHunt is launching today to not only simplify finding a place to live but also finding people to live with. It is a website that aggregates rental listings from various sources and connects them with social networks. Those looking for a home select the neighborhood and number of bedrooms they desire, and it filters the listings by lowest to highest by bedroom price. From a listing, a “Find Roommate” button notifies their social network that they are looking. RoomHunt is only active in San Francisco’s 37 neighborhoods, but has plans for national expansion. The two founders have raised $85,000 and said $25,000 is “hard committed.” Angel investors include Alex Roasti, Errik Anderson, and Randy Brunson. Read more on VentureBeat. 

Reddit seeking a new angels-only $1M funding round

Reddit is apparently raising a fresh round of funding that could help propel the site forward in its delicate pursuit of translating its popularity into profitability, reports AllThingsD. Reddit certainly qualifies as a hot property, bringing in upward of 3.8 billion monthly page views and over 46 million monthly unique visitors. However, the community news sharing site is said to be seeking only $1 million, which is a mere fraction of what Reddit could raise, but the smaller figure makes sense considering Reddit’s pre-funding valuation. It is said the new round will consist entirely on angel investors. Read more on VentureBeat.

Whisk throws $800,850 into its hot pot

After placing as runner-up on BBC1′s The Apprentice in June, Nick Holzherr used his fleeting celebrity to launch a food app called Whisk. This app simplifies food shopping by turning collections of online recipes into shopping lists, keeping in mind things such as servings and portion amounts. Once complete, it cross-references these lists with online grocery services to create a fully stocked shopping basket in one click. The app also works out how much of any given ingredient will be leftover to suggest future recipes, as well as take it off the list for next time. Lord Sugar, the show’s British version of Donald Trump, was skeptical about Holzherr’s idea and opted not to fund him. Now, Whisk has received over £500,000 ($801,150 U.S.) in angel investment to continue development.

Friends that code together, stay together 

FriendCode launched in beta today and announced $150,000 in seed funding from Kima Ventures and Javier Gonzalez. FriendCode is a web application that enables developers to code in the browser. This social, cloud-based environment allows for easy collaboration, code editing, and project management. It integrates with Dropbox, Github, and FTP servers and is searchable.

Most entrepreneurs would agree that fundraising is no walk in the park.

AngelList, the social network for investors, functions as a matchmaking service between founders and investors, and aims to make the process a whole lot less painful.

Now a new site aims to make it even easier, by identifying the top angel investors in a bunch of different categories.

AngelList is a well-known service. Less well known is the fact that it has an open application programming interface. Now, using that API, internet entrepreneur and former MySpace developer, Sean Percival, set out to make it even easier for entrepreneurs to connect with the investors most likely to fund their startup.

While you were huddled in the fetal position recovering from an over-consumption of champagne and jello shots on New Year’s Eve, Percival was building the site to help fellow founders refine a short-list of potential investors.

The site, known as Angel5, contains top lists of investors based on region, market and team. Building a mobile game for under-12s? Perform a search for active investors who are also parents. Angel5 would suggest that you connect with Christine Herron, the director at Intel Capital who is also a mom.

Percival, an LA-based entrepreneur, told me in a phone interview that he recently emerged from the time-consuming process of raising funds for his kids clothing startup, Wittlebee. After realizing that developers could tap into AngelList’s API — and its wealth of data about angel investors — he began crunching the numbers to see what patterns would emerge.

Related: Read more about AngelList’s plan to incentive wealthy individuals to make small-dollar investments in hot startups. 

The biggest surprise? Some of the most well-known investors set up profiles on AngelList, but then quickly lose interest. Meanwhile, some of the most prolific investors are celebrities, such as Ashton Kutcher.

Percival is currently looking to hire an associate to help build out and market Angel5, and add more investor “top lists.” Peruse the site, and you’ll currently find lists arranged by categories like “mobile,” “travel,” and “subscription commerce.”

Naval Ravikant, founder of AngelList, gave Percival his blessing, and called the site a “good start.” But bear in mind that the lists are by no means definitive: Any deals, markets, and preferences that aren’t contained within AngelList’s database aren’t accounted for.

“It’s an editorial curation layer on top of our data and a simplified interface,” said Ravikant in an interview with VentureBeat.

For entrepreneurs who aren’t lucky enough to live in Silicon Valley and take advantage of the network here, this will be a useful tool to connect with potential investors. At the very least, it’s a great way to initiate a conversation based on shared interests.

Investor road sign image via arka38 // Shutterstock

Silicon Valley venture firm Andreessen Horowitz has brought on its first new partner in two years. The firm’s new hire Chris Dixon is a New York City-based angel investor and two-time entrepreneur.

Most recently, Dixon was tasked with running eBay’s New York headquarters, and improving the e-commerce giant’s recommendations engine. He was brought into the fold after eBay acquired his startup, Hunch. Dixon’s first company SiteAdvisor was acquired by McAfee.

It’s a big win for Andreessen — as an investor, Dixon has built up a strong reputation for supporting New York CIty’s entrepreneurs. He has dabbled in angel investing for over seven years, and successes include Foursquare, Kickstarter,  Dropbox, Pinterest, Codecademy, Stack Overflow, and Skype. He also co-founded a East Coast seed venture fund called Founder Collective.

Storied investor Marc Andreessen authored a blog post outlining the reasons the firm hired Dixon as its seventh general partner. “Chris began programming at 8 (beating me by a whole year), starting on a TRS-80 Model 1,” he said. Andreessen was also impressed that Dixon left Bessemer Venture Partners, one of the oldest venture firms where he worked as an associate, to start his first company.

Dixon will based in California but will maintain his residence on the East Coast. He said he will invest in both consumer and enterprise startups at all stages, including seed.

At this juncture, nine months after joining eBay, Dixon said he considered launching another company, but after some serious soul-searching, he realized his talents would be better served as an investor. “Startups are tough,” he said. “I thought it might be time to try something else.”

In a phone interview from Andreessen Horowitz’ office, he told me that he has been impressed with the firm’s “new model,” and worked closely with them as a co-investor in New York-based startup, Foursquare.

“They have a marketing team and recruiting team as well as a focus on investment,” he said. “As an entrepreneur, I would have loved to have that support infrastructure.”

Dixon, a prolific blogger, announced the news in a blog post today.

Investing platform FundersClub has closed the largest ever seed round from a Y Combinator company. The company raised $6 million for its marketplace that lets accredited investors invest in startups online.

There is a lot of buzz surrounding FundersClub for its innovative approach to venture capital. It carefully selects startups to feature on the site. Each company creates a profile and sets a fundraising goal. Once granted membership, individuals with an annual salary of over $200,000 or net worth of over $1 million can peruse the list and, if they choose, make an equity investment directly on the site.

FundersClub essentially carries out the due diligence process, acting as an intermediary between angel investors and the companies. Vetting companies and negotiating terms is time-consuming, and FundersClub assumes these duties to make the investing process more efficient. It also gives investors access to companies they wouldn’t otherwise be exposed to.

Once the fundraising goal is hit, the money is pooled together and invested under the FundersClub name, as one entity on the cap table. If/when there is a liquidity event, FundersClub distributes the proceeds to the participants in the fund.

Since launching in July, FundersClub startups have collectively raised millions of dollar,s and there are 3,400 registered members. FundersClub raised its initial $529,000 in capital using its own platform, with this official seed round tallying up at almost 12 times more.

The amount itself is not the only impressive facet of this round. The list of venture firms and investors is notable as well. Institutional participants include First Round Capital, Y Combinator, Draper Associates, Felicis Ventures, Spark Capital, Digital Garage, Intel Capital, Andreessen Horowitz, Start Fund, SV Angel, and General Catalyst Partners. Individual investors included Chris Dixon from Founder Collective and Box CEO Aaron Levie.

The money will go towards forming partnerships with a wider array of financial institutions and expanding the network. It will also accommodate high legal fees, stemming from concerns with SEC regulations that the team insists it does not violate.

With a seed round that dwarfs those of most other startups, it is the Coco de Mer (palm tree seed) of the investment world. Read more on VentureBeat. 

The report saw both deal size and overall number of seed investments drop to levels not seen since the beginning of the decade.

So has the seed bubble finally burst? The new data suggests it may be well on its way to doing so.

Although a handful of closely watched deals have reaped major seed-round rewards — overshadowing more anemic growth elsewhere and giving rise to national news coverage of events like Angelgate – those few instances don’t tell the whole story, Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics and an author of the report, told VentureBeat.

“Valuations for seed have certainly been falling according to our data, which make sense because everyone’s net worth is dropping and the economy has certainly grabbed a lot of net worth from angels’ portfolios,” said Sohl.

He added that while a number of “super angels” may have been in the spotlight for deal size and type over the last year, the vast majority of angels have been sitting on the sidelines as they wait for the overall economic climate to recover.

In the first half of 2010, 65 percent of membership in angel groups were “latent” angels, or individuals who have the necessary net worth but have not made an investment — an increase of non-participation from 2009 of 54 percent and 36 percent from 2008.

The study, “The Angel Investor Market in Q1Q2 2010: Where Have All the Seed Investors Gone?”, concluded that total investments in the first half of 2010 were $8.5 billion, a decrease of 6.5 percent during the first two quarters of 2009.

That lead to a 9 percent decline in total dollars as investors “lost their appetite” for seed funding.

“These data indicate that while angels remain committed to this investment class, they do so with a cautious approach to investing. Angels are committing fewer dollars in more deals, a result of the lower valuations,” said Sohl.

“Without a reversal of this trend in the near future, the dearth of seed and start-up capital may approach a critical stage, deepening the capital gap and impeding both new venture formation and job creation,” he said.

A story published today by Fortune says yes, and names super-angel Chris Sacca as one of the more aggressive buyers in the space.

According to Fortune, Sacca has created two institutional investor-backed funds, Industry LLC and Lowercase RT, to quietly buy up Twitter shares from employees and preferred stockholders. Those funds are in turn part of a $30 million pool of buyout money that has allegedly been raised to focus exclusively on buying Twitter shares ahead of any impending initial public offering.

Although Twitter shares are difficult to sell on the secondary market, Sacca seems intent to target the company — perhaps simply because he’s in a good position to do so. He’s one of only a handful of people who has a special agreement with Twitter management, and since he invested early in the company with his own money, he still functions as a company advisor.

Both Sacca and Twitter declined requests for comment from VentureBeat today.

Still, the idea that all tiers of investors are looking for early entry into these marquee-name, privately held companies by using a largely unregulated secondary market as a conduit is an interesting theory.

It is also a stratagem that has not gone unnoticed by Sacca’s peers.

Fortune cited unnamed sources that said several similar funds have recently been raised by other managers to snag shares in companies such as LinkedIn, red-hot gaming star Zynga, Facebook and eHarmony.

The story named New York-based Felix Investments, which was launched in 2009 by the former New York head of venture capital co-investment firm Advanced Equities, as one of the funds currently following Sacca in this backdoor approach. An executive from Felix declined to comment to VentureBeat on Friday.

Thus far, sources said, Felix has managed to get hold of around two million shares of Facebook stock. That figure, if true, would surely make notoriously close-handed founder Mark Zuckerberg blanch.

So why would employees and shareholders at these firms quietly sell off their own stakes within a few quarters of the companies going public?

The answer to that, says Fortune, is simple: If these sellers chose to go the retail route when selling, they’d be hit with massive costs from every angle, from management fees to closing costs. But by selling to someone like Sacca, they see only the usual “2-and-20” typical of these types of buyouts. And that, as Fortune put it, means a “bad bargain from a firm like Felix may be better than no bargain at all.”

UPDATE: The original version of this story by Fortune named Felix Investments as a unit of Advanced Equities; in fact, the firm was founded by a former Advanced Equities but has no affiliation with the company currently.

While I often challenge VC conventional wisdom, I actually have a great deal of respect for the difficulty of what VCs do.  Particularly in the early stages, I think it can be extremely hard to see value that might only become apparent months/years later.  For example, by chance, I got to see a YouTube demo when the company was in its infancy – even before Sequoia made its investment – and while I was wowed by the technology (the demo I saw was on a mobile phone), I never would have imagined at that moment that they’d sell the company 18 months later for $1.2 billion.

Some companies did seem obvious to me.  I knew PeopleSoft would work because I saw too many customers building their own HR apps on top of relational databases in the late 1980s.  I knew Salesforce would work because I personally knew the difficulty of working with an IT department more concerned with financial systems and infrastructure than helping business operations.

In a nutshell, I think what early-stage VCs do is very hard.  I know this both from observation and direct experience as an angel investor.

My first angel investment was in a company that built a complete linkmap of the Internet in 1999, but used it to automatically detect and re-route broken links (i.e., eliminate dreaded 404 errors).  It died a few years later.  A few years after that I realized how close it was to greatness.  It had the Internet link graph, it just used it to solve the wrong problem:  link correction as opposed to … uh … search relevance (i.e., Google).  Oops.  But this is the nature of early-stage investments.  You can be miles — or only centimeters  – away from greatness, and not even know it.

But I got back on the horse.  My next angel investment was in a company that wanted to build an OLAP-style cube for content, in some ways conceptually similar to MarkLogic, but with very different technology and go-to-market strategy.  The OLAP angle didn’t play out well for them, so the company did a big shift, using its product as an enabling technology for a call center application that eventually was sold to Salesforce.

Many would-be platform companies end up using their platform as an enabler a given application.  In the XML world, Xyleme comes to mind as an example.  The company started out selling an XML database and when they didn’t work for them, they built a learning management system on top and now focus on that.  Frankly, I don’ t know if that’s working any better for them, but it is a good example of the pattern.

My other “investment” (in this case of advisory time and not money) was in a company that did self-service call-center applications and that had the misfortune of focusing on telecom as a vertical in 2001.  Rather than switching strategies when telecom went south, they gutted it out, and were also eventually sold, but not without a few founder gray and/or lost hairs along the way.

So after a brief fling with angel-ish investing in the 2000 timeframe, I stopped for many years.  Only recently have I started up again.

My first “investment” was one of time, not money, in joining the board of analytics-on-big-data vendor, Aster Data in 2009.  I love the Aster founders.  I think they have awesome technology.  I see great things in their future.

I’ve also done one angel-band style-ish investment in a really unique company that’s still stealth so I can’t discuss it.  It’s cool, weird, visionary, and practical.  (And it’s not easy to find companies you can honestly describe with those four words.)

Going forward, I imagine doing a handful more. So if we know each other from a prior (or current) life and if you’re looking for a modicum of angel-style funding, give me a ping.  Some CEOs golf in their spare time; I’d rather spend mine sharing some hard-earned wisdom.

(Although I do sneak in a little fly-fishing from time to timel)