Foundation Capital announced its seventh fund today, a $282 million pool of money that the venture firm plans on investing in early-stage startups.

Menlo Park, Calif.-based Foundation Capital has handled a total of $2.7 billion since it was first founded 17 years ago. This firm primarily invests in early-stage companies and plans to focus this current fund on consumer technology, information technology, and clean technology.

Eight of the venture firm’s partners will invest from this funding, including Charles Moldow and Ashmeet Sidana who we chatted with last year about the state of venture capital and then unique relationship VCs have with each other. Moldow refers to it as “coopatition” a little cooperation and little competition mixed in together.

Some of the most well-known companies that Foundation Capital has invested in includes Chegg, Ebates, and Netflix.

Money image via Shutterstock

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Upstart Labs, an early stage fund and startup incubator in Portland, is continuing to churn with added funding, new investments, and an expanded team. Today, it formally announced a partnership with Oregon-centric firm Rogue Venture Partners and revealed two joint investments.

Upstart puts its own, distinctly Portland spin on startup accelerators. Just as a stout requires care and personal attention to brew, so do startups need hands-on guidance. By taking a “craft approach” to building companies, Upstart said its model is “well-suited” to the startups in the Pacific Northwest.

“Unlike a typical startup accelerator – in which a group of founders attend a ‘startup bootcamp’ together, Upstart’s team partners with companies one at a time and offers hands-on help with strategy, design, development, marketing and sales,” the company said in a statement.

The program lasts for three-to-six months, where entrepreneurs find themselves surrounded by mentors. The team includes designers, developers, marketers, and entrepreneurs that work “side-by-side” with the founders to support their growth. Kevin Tate and Joe Stump are joining Upstart as partners. Tate has 17 years of software marketing and sales experience, most recently serving as the CMO of ShopIgniter. Stump was the lead architect at Digg, founder if Simple Geo which was acquired by Urban Airship, and co-founder of Sprintl.y. He is an angel investor and already an advisor to a dozen companies.

Portfolio companies include Chirpify, MoPix, Taplister, PivotPlanet, Menuish, and Celly. The first joint investments with Rogue Venture Partners are in music discovery platform Juke, and Measureful, which automates digital marketing insight.

As the year draws to an end, Silicon Valley investors are looking for the next wave of technology after social networking.

VentureBeat spoke to a slew of the top players at well-known West Coast institutions — the founding team at Stanford University’s technology accelerator, StartX, partners at some of Silicon Valley’s most prominent venture capital firms, and others — to help illuminate what the big trends will be in the coming year.

For VCs, it’s not enough to build an addictive mobile app or game: Investors expect to see more, something worth building a venture-funded company around. So in 2013, get ready for mind-blowing, nerdgasmic tech, whether it’s augmented reality, 3D printing, self-driving cars, or space travel.

For later-stage startups, 2013 will be the year all hell breaks loose. The IPO pipeline is already brimming with contenders: Venture-funded companies like Twitter, Box, and Square are ready for Wall Street. With heated competition for customers and users, there may also be some mammoth failures when some venture-backed companies that have received hundreds of millions of dollars simply buckle.

Most of the investors we spoke to agreed confidence in the tech industry is sky-high and 2013 is a year to take bigger risks. This time last year, we predicted entrepreneurship would be an engine to drive jobs creation and stimulate economic growth. With the global economy beginning to stabilize, we’re ready to take more risks and push technology into new verticals, like education, government, financial services, and health care.

Financial firms will finally embrace innovation

David Blumberg, managing partner, Blumberg Capital 

“The financial services sector should be highly attractive to IT entrepreneurs and investors for its size, growth, high margins, and dramatic need for greater innovation and efficiency. At more than 8.5 percent of the global GDP, the industry is measured in trillions of dollars.

“Despite rapid growth, the financial industry is burdened by outmoded IT systems and legacy software, extensive and increasingly punitive regulations, and taxes as well as a negative public image as being too expensive, inflexible, and inefficient. It is an industry consumers and politicians love to hate — hence it’s ripe for innovation to improve outcomes for all.

“And fortunately, startups are leading the way forward. Go for innovation in financial services, young entrepreneur — it’s where the money is!”

Ones to watch: Square, Credorax, Lenddo, LendUp, SoFi, Addepar, Zanbato

 Computers will get smarter and more autonomous

Mike Maples, founding partner, Floodgate Capital

“I’ve been thinking a lot recently about the next big tech cycle after social networking. One of the things we did right as a firm is to see that trend early [Editor's note: Maples is an early investor in Twitter and Reputation.com]. We use the term ‘hypernet’ to describe this notion that technology will no longer be characterized by one world wide web or one search engine.

“Computers will exist in billions of nodes and millions of clouds. In 2013, people will expect to be hyperconnected on the hyperweb: They will want to manage content on any device. We will see user experiences that are no longer assumed to be windows on a computer screen or a smart phone. Some of my favorite examples are Google’s self-driving car or Nest‘s thermostat, which learns the temperature you like and turns it down when you’re away.”

Ones to watch: Nest, Google’s self-driving car, IFFFT, Grok, Genwi

‘Big data’ won’t be a buzzword; it will be part of life

Ross Fubini, venture partner, Canaan Partners

“‘Big data’ is the buzzword of the year, but 2013 will be the year that big data will be a reality across many application areas.

“Big data allows the user to experience magic. Anyone can ask questions of the data, and soon we’ll be using these technologies for everyday decision-making, whether it’s pricing, hiring, or managing our finances. These new applications are going to require more than an open-source computing framework like Hadoop. The shift to ‘big data’ will herald an entirely new set of infrastructures to store and process all that data.

“Data has been a big deal and a big market for years — SQL, hello!. But ‘big data’ is a big deal because of the sheer volume of trackable data and because it’s cheaper than ever before to build an application to make that data valuable. By the end of the year, we will see some big winners emerge leading up to some splashy 2014 and 2015 IPOs.”

Ones to watch: Kaggle, Splunk, Platfora, Grok, Intuit, Quid, LendUp, GNS Healthcare

Storage will get even sexier

Bipul Sinha, investor, Lightspeed Venture Partners

“The enterprise storage market is experiencing a tectonic shift led primarily by virtualization and storage media disruptions. The incumbents are slow to respond, and the startup activity is at an all-time high. The new year will witness two significant trends: an acceleration of storage and compute hyper-convergence and a bifurcation of performance and capacity tiers for shared enterprise storage.

“These trends will eventually commoditize the storage layer of the enterprise information technology stack and essentially propel the emergence of software defined, agile enterprise datacenter.”

Ones to watch: SimpliVity, Nutanix, Zadara, Exablox, Bitcasa

The developer ecosystem will go mainstream

Peter Levine, partner, Andreessen Horowitz

“The shift from the web to an app-based computing architecture is reinventing the entire developer ecosystem. Until recently, Microsoft and Java controlled all software development and services because developers could only write for those APIs. With 2013 on the horizon, we believe those days will soon be over.

“The old way of computing has been eroded by and replaced with special-purpose, easy-to-integrate backend services. These best-of-breed services also innovate at a breakneck pace, which means applications can take advantage of many additional services, thus paving the way for a new developer ecosystem.”

Ones to watch: GitHub, Mixpanel, Pixelapse, Okta, Parse, Bizness Apps, Urban Airship

Hardware companies will raise larger rounds

Naval Ravikant, founder, AngelList

“The declining cost of building tech startups has finally reached hardware. We’re seeing accelerators like Lemnos Labs turning out very interesting seed-stage hardware companies.

“Some of the coolest I’ve seen this year include Momentum Machines, which builds burger-flipping robots; UnmannedInnovation, which builds an operating system for UAVs; NanoSatisfi, a Kickstarter-funded project to launch and rents CubeSats; and Nomiku, which makes sous vide [machines] affordable.

“It used to be that for a hardware company, you’d have to raise lots of money from the get-go. But now you can start small with a seed, as AngelList alum Leap Motion did, and then go on to raise significant rounds from large investors later.”

Ones to watch: Maykah, Goldiebox, OpenRov, Momentum Machines, Unmanned Innovation

Indoor location will be the next billion-dollar market

Don Dodge, developer advocate, Google; advisor, Google Ventures

“Indoor location will be bigger than GPS, which only works outdoors. We spend 90 percent of our time indoors, whether it’s in shopping malls, offices, schools, restaurants, and so on, where GPS doesn’t work or is inaccurate. In 2013, you’ll use your smartphone to find the exact store aisle location for every item on your shopping list.

“With indoor location, you can find people, products, or services plotted exactly on a floor plan with walking directions to get there. You could receive coupons, advertisements, or free offers for products based on where you are in a store. Imagine playing indoor location games like capture the flag, tower defense, or other games based on real-life indoor locations. There are thousands of applications in many different market segments that will be built using accurate indoor positioning technology.”

Related: Read VentureBeat’s roundup of indoor location technologies.

Ones to watch: WifiSLAM, ByteLight, Neuaer, IndoorAtlas

Health care will begin to feel personal

Cameron Teitelman, John Melas-Kyriazi, and Divya Nag (pictured, left), StartX leadership team

“In the medical space, advances in bioinformatics, genomics, regenerative medicine, and proteomics [the large-scale study of proteins] have propelled us into an era of truly personalized medicine. Many med-tech startups are harnessing innovation in these fields to prevent diseases, increase health outcomes, and tailor medical engagement on an individual level.

“With a rising number of med-tech companies launching personalized medicine platforms, we are going to see a greater demand for individual treatment options around the world as these options become increasingly accessible.”

Ones to watch:Morpheus Medical, Ubiome, Wellness FX, GenapSys, Numedii, The Chordoma Foundation

A.I. and human-computer interaction

Brian Singerman, partner, Founders Fund

“We are always highly suspicious of trends. The best investments are often in companies and industries that others do not consider hot or trendy. Therefore, a theme for 2013 will be to not invest in trends, but rather long-lasting value. Trends come and go, but the best companies will be the ones that buck the trends and don’t look like all the others, companies that don’t appear to have much competition.

“To that end, we think 2013 will see some major technological breakthroughs through new ways of interacting with machines. Interface breakthrough Leap Motion will change the way we think about and operate computers of all types. Google will make huge strides in self-driving cars. We will even see the beginnings of a sophisticated A.I. The new year will be a true revenge of the nerds year, with product giving ground to actual technological innovation.”

Ones to watch: Leap Motion, Metaio, Ouya, Deep Learning technologies, Google Glass, self-driving cars, anything involving space travel

Top image courtesy of Smileus, Shutterstock

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Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

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Convertible debt, the old convertible notes once used as bridge loans for more mature companies, became popular with angel investors in the years after the financial crisis. According to Ressi, by 2011, over 50 percent of angel deals were done through convertible debt.

Today, the Founder Institute teamed up with TheFunded.com to eke out a new financing model to save early-stage startups from debt known as “convertible equity.” The benefits of both convertible equity and debt: It’s cheap, fast, and lets investors bypass valuation negotiations. Unlike convertible debt, this has no repayment requirement for early-stage startups.

Ressi told me that there are benefits for founders beyond being able to call it equity instead of debt. ”If you are loaning a new company money, it makes startups insolvent from a balance sheet perspective,” he said.

This new structure also empowers angel investors in states that require lender licenses (licensing is complex and varies by state-by-stage). Finally, convertible equity does not require repayment so startups need not fear that an investor might force bankruptcy.

View a sample term sheet here. 

Ressi explained that this whole concept of convertible debt is coming to maturity, so we haven’t yet experienced the macro-economic repercussions. “Unsophisticated lenders and startups with no intention of repaying that debt,” he said. “Doesn’t this remind you of the housing crisis [and] the European debt crisis?”

It remains to be seen whether venture capitalists, critical of convertible rounds, will adopt this new model. High-profile investors like Seth Levine, the managing director of the Foundry Group, and Union Square Ventures’ Fred Wilson recently took a stand: “I have been doing venture capital for 25 years now and have also done many angel investments personally along with my wife,” Wilson wrote on his blog, A VC. “We have never done a convertible debt round.”

Ressi told me that he hopes that the new model will appeal to angel investors, and will eliminate convertible debt in the long-term. “Now is the time to nip it in the bud,” he said.

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Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

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At the end of the day, your business comes down to numbers — low overhead, high revenue, increasing net profits, and even expanding social media reach. A valuation is an incredibly attractive number that intimidates competition and attracts potential investors, but how can entrepreneurs accurately value their business when it’s still a fledgling startup?

We asked 10 young entrepreneurs for their top tips for putting an accurate valuation on an early-stage company. Here’s what they had to say:

Forget the potential

Devesh Dwivedi, @Break9to5Jail, Breaking The 9 To 5 Jail

Your business is pretty useless for valuation purposes because you can’t put a value on it, or even say with a certain degree of confidence that it will grow as big as its potential. MySpace and other players in social networking had the same potential as Facebook, but today, each of them have different valuations. Look at facts and capacity, not potential.

Ask around!

Stephanie Kaplan, @stephaniekaplan, Her Campus Media

As an early-stage startup, you’re probably not going to be valued based on revenues or other typical metrics used for valuing larger companies. Your valuation is going to be much more subjective. To get a sense of what it might be, ask different players what they would value you at — VCs, angels, advisors, big companies — and see if the figures gravitate towards a similar number.

Consider the ramifications

Doreen Bloch, @DoreenBloch, Poshly Inc.

Entrepreneurs in early-stage firms can benefit from low valuations. When your stock is cheap, it benefits new employees and investors who can still get in at the ground level. Before pursuing a 409A or other formal valuation of your firm by an accounting or advisory company, make sure you speak with advisors and understand the implications of getting your firm formally valued.

Be reasonable and relative

Nathan Lustig, @nathanlustig, Entrustet

Look around and see what other companies similar to yours are being valued at. If you’re in Chicago, you need to look at other Chicago companies, not the latest and greatest in Silicon Valley. Then pick a number that’s justifiable to both you and your potential investors. Make sure not to make it too high, or you will scare off investors or risk having a down round later in the process.

There’s no such thing!

Matt Mickiewicz, @sitepointmatt, Flippa

Valuations for early-stage companies are all over the map. Tech startups always demand higher premiums than retail companies. Businesses with traction and paying customers are usually better valued than mere concepts, and the history of the team and even their geographic location can impact valuation by up to three times. It’s more important to have the right investors than the right valuation.

Read up on intellectual property

Thursday Bram, @thursdayb, Hyper Modern Consulting

Most of the value in a startup is the intellectual property, but the average entrepreneur doesn’t know enough about the topic. Since you can’t copyright an idea, you need to know what your company owns that you can put a dollar value on.

Speak up!

John Hall, @tweetJohnHall, Digital Talent Agents

Don’t be scared to ask for help. Turn to a mentor or advisor who has a background in valuations. Accurate valuations could have more variables than you would consider. Someone with more experience in the industry and in valuing companies is less likely to miss a material influencer in value.

Comparables are key

Nicolas Gremion, Foboko.com

Comparables are essential. Base your valuation, and support it, using industry comparables. The closer they represent your company — not only in model but also in size — the better. It’s the most accurate comparison you can make.

Are your projections valid?

Brent Beshore, @BrentBeshore, AdVentures

Be reasonable. Investors are looking for returns, so the higher the possibilities, the less ownership they will have to take for the same amount of money to generate a higher return. Your job is to convince them that your projections are valid.

Free cash flow to the firm

Lucas Sommer, @audimated, Audimated

I see a lot of entrepreneurs value their company based on future values, invested time and money, emotion, and other unsubstantial metrics. The only thing that matters (besides patents and intellectual property) is your free cash flow to the firm — what does the firm make when all of its expenses and obligations are paid? That’s the number you want to use in your valuation.

The Young Entrepreneur Council (YEC)is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC recently published #FixYoungAmerica: How to Rebuild Our Economy and Put Young Americans Back to Work (for Good), a book of 30+ proven solutions to help end youth unemployment.

Image via gingerbeardman/Flickr

Accel, which already has 34 companies in its portfolio in India, said the fund would be focused on hot opportunities like mobile, digital media, enterprise and software-as-a-service companies, and Internet services. The firm already manages $80 million in India across two earlier funds — this latest addition brings its total funds in India to $235 million.

This is a pooled investment fund, with the form citing Rob Coneybeer, Tod Francis, and Jason Pressman as involved in the pool. The company pooled its first fund in 2005 when it started investing $210 million. In 2007, Shasta raised a $250 million fund for investments in technology.

Most recently, Shasta invested in Crittercism, a tool developers use to track problems in their mobile apps, along with Google Ventures and Kleiner Perkins. Other recent investments includes an April investment in IT social network Spiceworks for $25 million and two May investments in TaskRabbit for $5 million and LiquidSpace for $3.6 million.

Partners Stefan Glaenzer, Eileen Burbidge and Robert Dighero were among Europe’s most prolific angel investors, in companies such as social micropayments startup Flattr and courier-bidding service Shutl, before they started investing together informally and decided to launch their own fund. They will invest in digital media and technology startups.

Passion plans to make around 50 investments, on average in the range of $170-227,000 per deal. Burbridge told me that the fund will look for very early stage companies with a PowerPoint (a pitch via a slide set) or a prototype. Any verticals, from cleantech to retail, where online software makes a certain process or workflow more efficient for that market will be considered.

Passion’s partners are something of a European investment dream team. Collectively they have been involved in 4 of the 10 most successful exits of recent years, including companies like Skype and Last.fm.

Stefan Glaenzer was the first investor and executive chairman of Last.fm, seeing that company through to its sale to CBS in 2007 for $270 million. American transplant Eileen Burbidge was investment director for private early stage VC firm Ambient Sound Investments, founded by the Skype founding engineers. Robert Dighero was the CFO of QXL/Tradus which sold to Naspers in 2008 for $1.6 billion.

London has emerged as one of Europe’s top startup hubs, and the U.K. government is making strenuous efforts to encourage high-tech startups in the U.K. with plans announced last year to provide $325 million in equity finance for businesses with high growth potential and $320 million for new technology and innovation centers. It also recently introduced an entrepreneur visa, long called for in the U.S.