VentureBeat

TechForward, one of several companies that sees opportunity in the market for reused consumer electronics, believes its guaranteed buyback plans are just the thing for people always lusting after the latest in high tech consumer electronics.

Like fellow startups Flipswap, Turtle Wings and Second Rotation, TechForward is touting the concept of “Ownership 2.0″ — the idea that you should be able to donate, sell or trade-in a gadget you no longer want. Unlike its rivals, however, the Los Angeles, Calif.-based firm will lock in a future trade-in value for your device at the point of purchase. The firm uses in house research and comparison tools, in addition to information from primary and secondary markets, to determine the value of the gadgets.

A common complaint heard about companies like this is that the customer often gets a lot less for his device than he could’ve had he sold it through a secondary market like eBay or craigslist. Not true, say Jade Van Doren and Marc Lebovitz, TechForward’s co-founders, who argue that comparing their service to eBay is unfair since only about 1 percent of users actually sell goods. Moreover, only Power Sellers, the highest rated sellers, are able to sell their used products at competitive prices, they say. The comparison also discounts the time and fees associated with using secondary markets.

Under a typical scenario, a customer will pay a one-time service fee to purchase a buyback plan, which gives him the option to return the device anytime during the next two years. Returning it earlier or in mint condition will earn a higher amount, paid out either as a check or gift card depending on where the plan was purchased, though the customer can also choose to keep the device. TechForward will then resell or recycle your device, following the highest environmental standards.

Despite what many consider a similar business model, Van Doren and Lebovitz believe their company, unlike other startups that provide extended warranties or trade-in agreements, has carved out a unique market niche with its buyback plan platform. They see themselves as more of a lifestyle company — one that, like subscription service firms Netflix and BabyPlays, embraces the “ownership cycle” model.

It remains to be seen to what extent this concept catches on. Many are unwilling to accept a sometimes steep cut in the value of their device, even if that means they’ll be guaranteed the money. On top of having to pay a one-time, unrefundable service fee, even the most ardent tech fans may think twice before committing to such a program. Given the recent proliferation of other reused electronics startups, however, it’s clear this concept is gaining currency alongside traditional warranty options.

Now that it has gotten its name out there, TechForward’s next objective is to break into national retail chains, particularly consumer electronics retailers like Best Buy or Circuit City. It just announced a new partnership with W3 Solutions, a major extended service plan provider, with which it will offer buyback plans bundled with extended warranties — allowing it to pursue a two-part distribution strategy.

When I asked Van Doren and Lebovitz whether they planned on eventually accepting a greater variety of consumer goods, they told me they would stay focused on consumer electronics for now though they remain opened to new opportunities. TechForward’s goal over the coming year is to ensure its buyback program is offered everywhere consumer electronics are sold and to expand its operations throughout North America and Europe.

The company’s investors include First Round Capital and New Enterprise Associates, with whose help it has raised a first round of funding. It plans on raising a second round beginning in the fall or winter of this year.

Here’s the latest [updated] action:

1) NVCA thanks the Senate for blocking VC tax
2) Feedster goes belly-up
3) David Chao is new head of Doll Capital
4) Asian telcos may finally find a US toehold
5) Biofuels could be worse than gasoline
6) TechForward raises financing
7) Facebook blocked in Syria

Senate blocks carried interest tax — The National Venture Capital Asoociation expressed its gratitude to the US Senate for dropping a provision to change carried interest tax rates, again. This isn’t any real surprise — we reported in October that the bill would likely fail in Senate, as it has before. Senator Charles Rangel, the Democratic chairman of the Ways and Means Committee, promised to “continue to pursue this issue.” For more on why it’s an issue in the first place, check out our past post arguing in favor of the tax.

Feedster drops off the radar — The blog search site may or may not be dead, but its servers are no longer responsive and the company isn’t responding to our inquiries, either. The company first got funding back in 2004, but we hadn’t heard much from it since last year. Considering the trouble other, similar companies have had, including competitor Technorati, chances seem good that Feedster is done for.

David Chao taking helm retains leadership role within Doll Capital Management — You could see it coming, but it’s now official. David Chao is becoming the head [update: I’m told by Chao that he is not the sole leader of the firm, as a source close to the firm had originally told me. Chao tells me the firm has a management committee comprised of four partners that makes recommendations to the general partners, and he is on the management committee.] Chao is characterized by his hard-charging, workaholic attitude — which we’ve been following for years (see here and here). The Wall Street Journal was inspired enough to paint an admiring portrait of him in an article last year. Under Chao, DCM may tend to cut its losses more quickly and play a faster hand with its investments. He helped found the firm over a decade ago.

Asian telcos are eyeing the US market — NTT DoCoMo, KDDI and other large Asian cellular operators have always been interested in the United States market, but past investments haven’t worked out well for them. The upcoming 700MHz auction, however, may provide them with a useful overseas toehold, especially if Google places a winning bid. More from BusinessWeek.

Biofuels could actually produce more carbon — We all know that corn-based ethanol is inefficient and wasteful (unless you’re a corn farmer). Going a step further, this Environmental Science & Technology article suggests that ethanol’s production might actually release more carbon into the atmosphere than just using gasoline. And another article from the same publication points out the polluting side of harvesting sugarcane in Brazil, a more effective source of ethanol. (For those of you about to point out cellulosic ethanol as an answer, check out this piece from our own Contributor series, written by UC Berkeley professor Ted Patzek.

TechForward, a company that lets consumers upgrade their consumer electronics after purchasing, raises financing — The Los Angeles, Calif., company raised an undisclosed second round of funding from Silicon Valley venture firm New Enterprise Associates, as well as First Round Capital.

Syrian authorities block Facebook –Apparently, the country took the action out of fears of Israeli “infiltration” of Syrian social networks, according to residents and media reports.