The deal was part of a $125 million secondary transaction where existing investors sold portions of their shares to new investor Google and previous investor Foundation Capital. No new money is going into the company, rather it is a reshuffling of equity to allow room for Google on the board.

Lending Club is an online community that connects people who need to borrow money with people to lend it to them. Borrowers apply for a personal loan and receive a rate quote. Interested investors fund these loans and automatically receive monthly payments on these loans in their bank account.

“Google was excited about the possibility that Lending Club could transform the banking system,” said CEO Renaud Laplanche in an interview with VentureBeat. “We are using technology and innovation to lower costs, provide more value to our customers, and increase transparency. These are all things Google has done with other sectors, and they are interested in our ability to do that in financial services, which is one of the few last large industries that has not been transformed.”

Lending Club grew by leaps and bounds over the past year and with volume almost tripling. It originated 780 million in loans in 2012 and is on track to do $2 billion this year. As of May 1st, Lending Club had funded $1.67 billion in loans. The company charges an origination fee to borrowers and a servicing free to investors and is on track to generate $90 million in revenue this year. Laplanche said that this impressive traction caught Google’s eye and it approached Lending Club about getting in on the action.

“We talked to our investors and said we wanted Google on the board, but did not want to raise additional capital and wanted them to sell some of their shares,” he said. “There was an increase in share price from last year, which made the transition easier. Our valuation is now at $1.55 billion, up from 550 million, which is a 3 times increase in just twelve months.”

The national average interest rate for unsecured personal loans in the U.S. is just over nine percent, while Lending Club offers between six and seven percent. By circumventing banks, Lending Club is able to offer lower rates. Laplanche had the idea for Lending Club in 2006 after paying 18 percent interest rate on his credit card. He realized that money was helping to fuel an inefficient system and that by allowing people to directly invest in people, it would benefit everybody involved. Now seven years later, the idea has taken off.

With this latest transaction, Laplanche said that things won’t change much initially. Over time, however, there is potential for partnerships. Right now, he is focused on providing the best possible product for consumers. Lending Club primarily deals with unsecured personal loans, but is exploring adding in student loans, auto loans and mortgage loans down the road.

Lending Club has raised $102 million to date and as mentioned above, existing investor Foundation Capital gained a greater stake as part of this deal. This marks the firm’s largest investment ever made over the course of its 18-year existence, with more than $50 million invested.

“We’ve never seen a market opportunity of this size and magnitude,” said general partner Charles Moldow. “In the financial services industry, we are seeing a shift toward the transparency of information and Lending Club is leading the charge. There is a massive restructuring taking place. We believe that Lending Club’s growth has signified that the uses of technology in the financial industry are limitless, extending to a shift in the flow of information, transparency and decision making at all levels. This is disrupting the traditional banking model as we know it.”

Moldow also said that Foundation Capital sees Lending Club as an iconic company akin to Amazon, eBay, Salesforce, or LinkedIn. The financial services industry is massive and ripe for disruption, with large returns to boot. Lending Club has generated 22 consecutive quarters of positive returns for investors and it seems that pattern will only continue. Google will join the board along with such luminaries as Mary Meeker, John Mack, and Larry Summers.

Photo Credit: Rockbadger/Flickr

Dwolla’s software allows anyone or anything connected to the Internet to move money. Individuals all the way up to enterprise companies can use the technology to send, request, and accept money from anyone else, and transactions can be conducted through email, mobile devices, and even social media.

“Dwolla has created its own, standalone payment network,” said director of communications Jordan Lampe in an email. “This allows the company to bypass traditional fees, problems, and delays associated with card and check-based networks. But it doesn’t stop there; by starting completely over, we’re able to create a versatile payment network that’s able to work with any bank account. This means that the same system that is used to buy a cup of coffee at your favorite java spot is also the same system that’s allowing retailers in the state of Iowa to pay over $125 million in taxes. Trippy stuff.”

As he mentioned, Dwolla formed a partnership with the state of Iowa last year to process taxes. The company also introduced FiSync, which it claims is the nation’s first real-time payment network for financial institutions and tackles on some of the problems of the Automated Clearing House (ACH) transfer system. Dwolla also made an “800 bank and credit unions partnership” with mFoundry. These partnerships accelerated Dwolla’s growth, and its annual processing run-rate is now in the billions, with a fast growing user base as well. The scaleability of the system, as well as its flexibility, make the technology attractive to investors as well as individuals and businesses.

“[Andreessen Horowitz] makes bets on companies that change the underlying fabric of their markets and, like Facebook, Twitter, and GitHub; we think Dwolla is going to do it in the banking world,” said Andreessen partner Scott Weiss in a statement. “The fact that Dwolla’s network can simultaneously meet the needs of a complex enterprise or government, while allowing a parent to pay the babysitter with her phone, reflects just how simple and strikingly different this solution is in the marketplace.”

Dwolla’s network securely connects to your bank accounts and allows you to send money for $.25 cents per transaction (free for transactions $10 or less). The money can only be transferred between Dwolla accounts, so the recipient will need to create one to use the funds. The fees are so low because there are no credit and debit cards, and the company said this approach is far more secure than credit cards and checks because your information is not exposed to strangers. Dwolla also offers tools for developers to integrate the technology into their own sites.

The company will use this third round of financing to further develop its enterprise products, and support customer/geographic growth. Dwolla is headquartered in Des Moines, Iowa and will open its fifth U.S. office in San Francisco to complete its “coast-to-coast” pipeline, as well as add to the teams in other offices. Previous investors Village Ventures, Thrive Capital, and Union Square Ventures also contributed. Dwolla raised its $5 million Series B round in February 2012.

The financial industry is in a state of transformation right now as forces like Bitcoin take it by storm and startups are revolutionizing payments from all angles, whether it is through mobile point-of-sale systems like Square,  peer-to-peer social payments like Venmo, or backend payment support like Stripe. Dwolla’s idea is that people and businesses shouldn’t have to rely on large corporate third-party institutions like credit card companies or banks to do business. You shouldn’t have to lose money to move money.

Photo Credit: Anna Jones

This is a guest post by Keary Crawford and Wayne Simmons, the authors of “Growth Thinking”

“If it’s not growing, it’s going to die.” Michael Eisner, Former CEO, Walt Disney Company

The relationship between politics and business growth has long been a flashpoint between competing political ideologies.

Reinforcing the idea that growth is political, terms like sequestration, quantitative easing and austerity are now being viewed as the determining factors in whether companies can grow in the future. This is, of course, a myth.

Companies that are inherently growth-focused replace political ideology with the pragmatism needed to achieve and sustain growth. These companies acknowledge that they have virtually no control over political outcomes, and that some level of political volatility will always be present in the business environment. From this understanding, rather than be transfixed or even paralyzed by these factors, they look to convert the ever-changing political winds into opportunities for growth and expansion.

The myth that growth is political is one of many myths that can inhibit the ambition and future growth prospects of companies.

As the pursuit of business growth becomes even more urgent, companies must overcome these myths, some of which include:

Companies Can Buy Growth

Modern finance encourages companies to use mergers and acquisitions to “buy growth.” This process results in the application of favorable accounting treatment that allows companies to adjust their growth rates retroactively— a proxy for real revenue growth. Growth-focused companies don’t buy growth, rather they focus their M&A activities on emerging technologies and complementary offerings that provide them with the differentiation, first-mover advantage and critical mass required to drive high growth.

Finance creates growth

In some finance-dominated corporate environments, growth can be viewed as a mathematical output of complex, internally focused formulas and financial engineering. In the 1990s, for example, while revenues fluctuated or generally trended downward, Exxon was famous for building its culture and communicating its value by using the internal metric of return on capital employed (ROCE). In contrast, growth-focused companies view their health and viability, first and foremost, through the ultimate metric of top-line revenue growth and their ability to sustain that growth. Internal metrics are critical, but top-line revenue growth is an outside-in measure that determines the ultimate outcome—the rate at which companies are creating value for customers.

More growth equals more jobs

In many industries, growth has become synonymous with an expansion in hiring. Business leaders exacerbate this misconception by measuring their “status” by the number of the people working under them. However, as the Federal Reserve Bank of Chicago reports, “work that took 1,000 people in 1950 now requires only 170 people.”

Growth-focused companies concentrate on productivity relative to revenue growth, rather than headcount, to determine their competitive advantages and the long-term sustainability of their enterprises.

Growth is tactical

Many companies view their growth exclusively as a function of their marketing mix and sales force. Unfortunately, marketing campaigns and sales activities are inherently tactical and designed to deliver short-term results.

Growth-focused companies also focus on improving long-term growth prospects by creating highly differentiated customer value propositions and pursuing first-mover advantages. This approach takes companies from tactically fulfilling demand to strategically creating the new demand that leads to high growth.

Growth is a “black art”

With well-known stories about Silicon Valley startups and breakthrough companies going from dorm rooms to oversubscribed IPOs, high-growth can be easily viewed as a pop culture phenomenon rooted in some sort of “black art.”

In practice, regardless of the size, growth-focused companies go through an entrepreneurial thought process similar to that of a startup. This often involves using outside-in observation to formulate a divergent view of the future, applying intellectual curiosity to identify areas of opportunity within that future, and executing the ability to convert these hidden opportunities into high growth.

Growth-focused companies dispel the many myths associated with growth by focusing on the factors that really determine business growth:

• Reframe market volatility to uncover hidden sources of growth.
• Reposition tangible and intangible assets to improve future growth prospects.
• Renew products, services, and experiences to create unique sources of value and differentiation.
• Realign the competitive landscape by strategically changing the basis of competition.
• Reinvent business models to create structural competitive advantages.

Left unchecked, the many myths associated with business growth can be paralyzing. Fortunately, individual companies can take a different approach by formulating their own views and taking preemptive action to achieve and sustain business growth.

Wayne Simmons and Keary Crawford are the founders of The Growth Strategy Co. From their research, writing and experiences as successful serial entrepreneurs, in the spring of 2013, they will be launching GrowthCloud, an enterprise SaaS platform for business growth. For more strategies to achieve sustainable business growth, read their book “GrowthThinking: Building the New Growth Enterprise”.

Top growth myths image via Shutterstock

This online investment manager announced today that it raised $20 million from top tier investors. Mike Volpi of Index Ventures led the round, joined by Chamath Palihapitiya of The Social + Capital Partnership and Reid Hoffman of Greylock Partners.

Wealthfront’s platform helps clients build and manage a diverse investment portfolio, rather than paying for an investment bank or private wealth manager. You put in the account type, amount to invest, and age, and this SEC-registered, software-based financial advisor will provide professional financial advise at a lower cost. The service also manages the personalized online investment account for you.

Wealthfront is unique among financial services companies in that we derive our value from our underlying software,” said COO Adam Nash in a blog post.  Our core is our engineering-centric culture, which means we will leverage our new financing to significantly grow our product and engineering team.”

The company is built on the idea that ‘everyone deserves sophisticated investment advice.’ It launched in 2011 and has since added features like automatic rebalancing, continuous tax-loss harvesting, differentiated asset location and broadened the set of diversified assets classes. Within a year, Wealthfront brought in over $170 million under management and those assets have grown by more than seventy percent.

This second round of funding will help Wealthfront continue to grow and disrupt “an industry that manages trillions of dollars.” In addition to the investors listed above, lead investor of the first round DAG Ventures participated along with notable individuals. It will go towards product development and enhancing to add features without adding to client fees, as well as to expand the team.

Right now, Wealthfront does not charge on advisory fee on the first $10,000 invested, a charges a monthly advisory fee based on an annual fee rate of .25 percent after that. Wealthfront is based in Palo Alto, California. This brings its total funding to $30.5 million.

Photo Credit: Willem van Bergen/Flickr

StudentLoanHero is a startup that gives student borrowers tools to repay their loans faster. The company just closed a seed round with Expansion VC and was accepted into the latest batch at the Socratic Labs EdTech Accelerator in New York City.

Students and grads carry more than $1 trillion in student debt right now, and 65 percent of borrowers misunderstand their student loan obligations

“Unlike the mortgage crisis, student loans are not dischargeable through bankruptcy, nor do you have an asset to liquidate,” said CEO Andrew Josuweit in an interview. “Student Loan Hero is on a mission to not only help the 37 million borrowers with outstanding loans but to also pave the path for greater financial literacy and transparency. At age 17, very few borrowers are in the position to make an educated decision on a $100,000 investment, yet our financial aid system does not provide borrowers with the financial literacy necessary to make such a significant life-changing decision.”

Josuweit said students loans are now the second largest form of household debt, surpassing credit cards and auto loans. When he graduated from college, Josuweit had 16 loans from four banks tolling $104,000. Staying on top of his debt was overwhelming and time-consuming. He didn’t have access to the tools or guidance he needed to effectively manage his finances, and so he founded a startup.

On the StudentLoanHero, students can stay organized by viewing all their loans on one dashboard and rank them by importance. The site also offers repayment strategy suggestions and sends monthly payment reminders. Users create a profile with information that aggregates their financial data. The technology then analyses their loan portfolios to find potential savings, such as prepayment options and financial offers. It also helps borrowers identify programs that might reduce or postpone monthly payments.

Since launching in September, StudentLoanHero has reviewed over $60 million and is growing substantially every month. The average customer has eight loans and $55,480 in student loan debt, but some students with upward of 25 loans and $300,000 in debt.

The company claims to save the average customer $6,000 over the lifetime of their loan repayment, not counting the net savings that result from improved financial literacy. The service is free, but Josuweit said the financial data aggregation technology is proprietary, which paves the way for media partnerships and work with affiliates on revenue campaigns.

Competitors include Tuition.io and LoanLook, but considering the size of the problem and the tremendous need to fix it, the more the merrier. StudentLoanHero currently has five employees and is backed by Startup Chile and Expansion Venture Capital. 

Entrepreneurship is not necessarily the quickest route to loan repayment, but it is one that will help others eliminiate their debt along the way.

Photo Credit: Mr Moss/Flickr

Apple may be bold and ambitious. Apple may have $137 billion in the bank. Apple may have generated record revenues and record profits last quarter. And Apple may be banking $50 million in revenue from each of its 400 retail stores around the globe and adding 30 more this year.

But apparently, Wall Street doesn’t really care.

Apple CEO Tim Cook talked more directly to the financial world today at the Goldman Sachs Technology and Internet conference than, perhaps, he ever has before, telling the pinstriped and necktied money managers of the world that Apple’s focus is on the long term, is still the center of innovation in the technology world, is not likely to acquire any major companies any time soon, probably won’t increase the screen size of the iPhone to match Android tablets, and won’t rush to produce a cheaper iPhone just to ship more units.

“I’m very proud that we’re out front, that we’re changing people’s lives, that we’re doing what’s right and just in moving the ball forward,” Cook said today. “I don’t mean to gush, but it’s how I feel.”

In response, Apple’s stock, which is down over $200 billion since its peak in 2012, drooped a little more, losing over $11 a share, or another 2.3 percent of its value:

Source: Google Finance

Apple stock February 12

In other words, Wall Street ain’t buying what Cook has to sell.

By the end of the day, the picture had not changed much: AAPL was down $12.03 — a 2.5 percent drop in value, equivalent to about $12 billion. That’s a little shocking for a company with dominant smartphone market share in the U.S. and a price-earnings ratio well under 10 when you take out its cash on hand. But analysts are worried that Android is going to eat Apple’s lunch in smartphones and tablets, and Apple’s desktop numbers in its last quarter were nothing to write home about either.

And given that Apple, which had established a reputation for exceeding analysts’ expectations for years, missed the Wall Street consensus numbers by about $500 million, analysts are adopting a wait-and-see attitude.

Perhaps anticipating this reaction, Cook did end his chat with a bit of a barb:

“We don’t care if people are lobbing grenades from the sidelines.”

photo credit: WanderingtheWorld (www.LostManProject.com) via photopin cc

Now more than 150 years later, BBVA has pooled together a $100 million fund to invest in startups that are developing technology for the financial services industry.

BBVA Ventures is an initiative to help this international banking conglomerate tap into the innovation happening in Silicon Valley. The team is establishing ties with entrepreneurs, startups, incubator and accelerator programs, and investors, and it will make strategic investments in both startups and other funds.

“Investing in startup companies committed to new business models enables BBVA to learn and anticipate the emerging challenges facing the financial services sector,” said executive director Jay Reinemann in a statement. “What’s more, entrepreneurs and co-investors can leverage BBVA’s extensive experience, brand, and global distribution network in the financial sector to accelerate their growth. This is an exchange of knowledge that significantly enhances the capabilities of the bank and the potential financial returns for our co-investors, while at the same time providing the entrepreneurs who lead the innovation processes access to BBVA’s valuable strategic resources.”

The goal is to improve internal awareness of new technologies and the opportunities therein. BBVA Ventures made its first investment in early 2012 in 500 Startups, a well-known incubator program led by Dave McClure. 500 Startups has made a number of investments in financial startups, including Simple, inDinero, PeerTransfer, and WePay. Ribbit Capital, which just yesterday announced a new $100 million investment fund for financial services startups, also received BBVA Ventures money, as did SaveUp is a startup that partners with financial institutions to apply gaming techniques to encourage savings, debt reduction and financial education.

BBVA is short for Banco Bilbao Vizcaya Argentaria SA. The multinational Spanish banking group is the largest financial institution in Mexico and has franchises in South America and the “Sunbelt” region of the United States. Read the press release.

Prosper.com announced today that it has raised $20 million from the prestigious venture firm Sequoia Capital. It’s slated this funding to “accelerate Prosper’s growth at a time when the market for peer-to-peer and business-to-peer finance is rapidly expanding.” In short, to help Prosper out-prosper its competitor, Lending Club.

Prosper also announced it has appointed Stephan Vermut as the new CEO, the former founder and managing partner of Merlin Securities that was recently acquired by Wells Fargo.

“I’ve watched with great interest over the past few years as the peer-to-peer lending industry has grown substantially, and I believe Prosper is in a unique position to offer both borrowers and lenders unprecedented access to financial opportunity,” said Vermut in a statement.

People traditionally take out loans with banks. Prosper eliminates the middle man by connecting people who want to invest money with people who want to borrow money. Borrowers list loan requests between $2,000 and $25,000, and individual lenders invest as little as $25 in each loan and earn returns on their investment.

Prosper has enabled more than $400 million in personal loans since it pioneered this type of service in 2006. Over the years, it has hit some road bumps with the SEC, shutting down in 2008 after receiving a cease-and-desist letter for not properly registering under the Securities Act. The company has come back, however, and now claims to be growing at 100 percent year-over-year in revenue and loan originations. There have also been some product changes that inspire more confidence, and this money will take the Prosper into “its next phrase of growth.”

This is Prosper’s sixth round of institutional funding and brings its total to $94.7 million. Previous investors include a laundry list of venture firms, including Draper Fisher Jurveston, Crosslink Capital, Accel, and Benchmark.

Read the press release.

Nutmeg will not only enhance your pumpkin pie, it will also enhance your wealth.

A British startup called Nutmeg launched its online investment manager today. It takes the place of professional investment advisors by building customized financial portfolios for anyone with a little money to invest.

Users start by answering a couple questions about their investment goals, comfort taking risks, time frame, and how much money they have to invest. From there, the team at Nutmeg determines a balance of investment they think is appropriate.

Money is generally distributed across multiple asset classes, including equities, bonds, and commodities. The goal is to create a diversified portfolio, based on the users’ assets, interests, and risk profile, that will yield the highest returns.

While clients allow Nutmeg to make investments for them, they still retain visibility and control of their funds. People have full access to their portfolio online, can realign their preferences, and add or subtract money at any time.

Investing in securities is either time-consuming, if done independently, or expensive, if done through a firm. Nutmeg strives to be a flexible online alternative. It is available to anyone with just £1,000 to invest, but can accommodate much larger budgets as well. People can establish a fund for a specific purpose, like a wedding, or in lieu of traditional portfolio management options.

“The financial services industry is in the midst of the biggest upheaval since the Great Depression,” said CEO Nick Hungerford. “Governments and regulators around the world are setting new standards, established institutions are fighting to stay alive, and meanwhile, users of the financial system are unhappy. We are determined to rebalance the power in favor of the investor.”

Hungerford formerly worked as an investment manager and private banker, but he grew frustrated with the exclusivity and lack of transparency. While studying at Stanford Business School, he caught the startup mentality and realized he could use technology to “democratize” the field.

“Financial services is one of the few industries to have withstood the internet revolution,” said investor Tim Draper. “I’m convinced that Nutmeg is the right company to bring democracy and transparency to a sector which is ripe for reform.”

While Draper is based in the United States, Nutmeg only operates in the U.K. market at the moment. Hungerford began working on the product in 2010 and after two years of research, development, and fundraising, it is open for business. The company has raised a total of $5.3 million in venture funding, led by U.K. firm Pentech and chairman of Armada Investment Group Daniel Aegarter.

It is authorized and regulated by the U.K.’s Financial Services Authority and has partnered with Pershing, a custodian bank that holds the money. Hungerford said both these connections serve to establish trust with the customers, as does the experience of the investment team.

In the U.K., the principal competitors are offline incumbents such as stockbrokers, private banks, and investment firms. For those people without significant assets to invest, Hungerford cites the largest obstacle as apathy and a lack of time.

These are also the primary deterrents in baking, and in both cases, Nutmeg is here to help.

I’m not sure what it’s like to have “extra” money. Even if I did have cash left over to invest after rent, bills, and my travel-wine-and-shopping allotment, I wouldn’t know how. Should I ever manage to save a little nest egg, SprinkleBit can show me how to turn it into a souffle (that rises and rises).

SprinkleBit is a social virtual trading platform. Its mission is to empower individuals to build a strong stock portfolio by providing resources to help them make informed financial decisions. Today, the company has announced opening the digital doors to SprinkleBit University to further educate the novice investor.

On the site, aspiring day traders have access to a stock market simulator where they can get their feet wet without actually conducting transactions. Experienced investors can use the simulator to test out new strategies. There is also the “Major League Stocktrading,” a fantasy online trading league, and a social media component that lets newbies observe and learn from other traders’ actions. They can view portfolios, follow other investors, and see the motivation behind certain actions, as well as ask for tips and engage in discussion.

In addition to assistance with the nitty-gritty aspects of trading, crowd sourcing is also used to provide insight into the ever-changing stock market. Founder Alexander Wallin created the Voting Power Index (VPI) to serve as a virtual advisor for do-it-yourself traders. The technology analyzes data to produce a buy/sell signal for stocks, advising what stocks to trade at what times.

“During an investment class, I learned that at certain point, the crowd is always smarter than the smartest person in the room,” Wallin said. “I wanted to apply that to investing. With the VPI, we found that it is possible to create a portfolio that outperforms the S&P 500.”

Wallin developed the platform while working on a graduate degree at University of California, San Diego. His research found that 2 in 5 Americans give themselves a “C” or lower when it comes to investing, while 53% of investors feel social media helps them be more knowledgable. Furthermore, people aged 22-34 are taking more responsibility for their finances at a younger age and seeking a more collaborative approach.

SprinkleBit is geared towards these novice investors, which comprise 94% of its user base. The university will offer a curriculum with modules like “Finding Your Investment Objective” and “Understanding Risk”, as well as overviews of various sectors and industries.

“Students can then take what they have learned and apply their skills by trading on SprinkleBit’s virtual trading platform,” said Wallin. “This is a safe and entertaining place for investors to build and hone their trading skills using real-time market data. Once they have built up their confidence, they can start to put real money in the market seamlessly on our site.”

SprinkleBit does not currently offer actual brokerage, but secure online trading of equities, options, bonds, municipal securities, and mutual funds are coming in the next month. The company will also offer portfolio management tools. It was founded in 2011 when Wallin completed his research, and the current platform officially launched last month.

Souffle making and investing in the stock market actually have many things common. In both cases, intuition is as important as education and skill, and practice is no guarantee of perfection. There are literal ups and downs, and split seconds can mean the difference between success and failure.

But in the last week, things have gone from bad to worse, leaving CEO Adam Neary as the only full-time employee still with the company.

The company was part of the first class at New York’s General Assembly, and Neary recorded in detail how being a part of the hot co-working space helped to double the size of their seed round. Profitably pulled financial data from a service like Quickbooks and showed small business owners where they were succeeding and what their trouble spots were. Then it offered concrete recommendations for how to build on that success.

Sources began reaching out last week to say something was up with Profitably. When I first heard the company was in trouble, I contacted Neary to get his perspective on what was happening. The rumor was the company was shutting down. He responded by email:

It’s really not that simple. I definitely appreciate you reaching out to me ahead of publishing. The reality is, we’re signing up 200-250 small businesses every week. We’ve just rebuilt our platform from the bottom up to handle all the traffic we’re seeing, and right now we’re making some tough personnel decisions in terms of setting ourselves up for the next phase of the company’s growth. 

The above is not a throwaway PR line–it’s where we are. The members of our team have wives. We have children at home. We’ve all left very lucrative careers to try to do our best to build a product for the country’s small businesses, it’s tough work, and none of these decisions are being made lightly.  

Bottom line–it wouldn’t be appropriate for me to get into the details of various staffing decisions we’re making right now, but please give me the benefit of the doubt that it’s not as simple as “you laid off most employees and are bootstrapping.” Given the traction we’ve been seeing and a number of fantastic partnerships we’re pursuing, that would obviously paint a false picture of where the company stands and gloss over some pretty subtle stuff.  

I’m doing my best to show everybody involved as much respect as possible–I hope you do the same!   Warm regards, Adam

It was difficult for me to sort out the discrepancy between Neary’s email and what I had heard. I knew that one of the company’s co-founders, CTO Francis Hwang, had left in November, and the rest of the team had left or been let go last week. Shortly after I got hold of an email from Neary himself, written to investors. It paints a different portrait of what happened, and where the company might go from here. The email from Neary is after the jump.

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Financial advice startup Personal Capital is finally making its way to the iPad after emerging from stealth last August. And good news for startup workers: the company has added a new feature that will help to demystify your stock options.

Similar to other financial sites, Personal Capital allows you to hook in your various accounts and get a clear view of your financial life in one spot. But the startup goes far beyond the likes of Mint with its financial advising aspect, which pairs you up with a knowledgeable adviser for a cost of less than 1 percent of your assets per year.

Personal Capital’s iPad app, available now on the iTunes store, is free to use if you just want a consolidated view of your finances. You only have to pay if you want help from the company’s 10 on-staff advisers (the company is a registered investment adviser with the FTC). Not only will the iPad app let you view your transactions and debt, but it also offers the unique ability to drill down into your investments to see how individual elements are performing.

“The single most important thing for people to track long-term is asset allocation,” Personal Capital CEO Bill Harris — formerly CEO of PayPal and Intuit — said in an interview with VentureBeat last week. “Not only is [our service] the only way to get a view of your multi-institution asset allocation, it’s the only way you can get a multiview [seeing them all in one screen].”

Similarly, Personal Capital’s stock option capability lets you get a clear view of your various options. You can view your vested and unvested value across multiple companies, both public and private. For private companies, of course, you’ll have to plug in information about the company’s stock value. Harris tells me he’s “almost embarrassed” Personal Capital didn’t have this feature available at launch.

“We’re building these products for ourselves,” Harris said, explaining why the company is able to offer features never before seen in the financial tech industry. “We know in our gut what’s possible… we also know what we want.”

The company currently has over 10,000 users, and it aggregates and tracks over $2 billion worth of assets. Harris views Personal Capital more as a financial services company, rather than competitors like Intuit, which he calls “fundamentally a software company.” The company is heavily focused on consumer experience, which comes half from its technology and half from its interpersonal interactions, Harris said.

Redwood City, Calif.-based Personal Capital was founded in 2009. The startup has received $25 million in funding to date from Institutional Venture Partners and Venrock, after bootstrapping itself to the tune of $2 million. The company tells me it still has half of its funding in the bank.

VentureBeat is holding its second annual MobileSummit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of themobile industry. You can find out more at our Mobile Summit site.

The company, which was founded in 1849, is now establishing a Silicon Valley office to stay on top of the latest developments in mobile and finance technologies.

The new office and fund will be led by Harshul Sanghi, the former head of Motorola Mobility Ventures.

“As we enter the next chapter in our history, we recognize the need to work with emerging technology companies to inspire change, encourage innovation, and ultimately deliver the best products and services to our customers,” said the company’s group president for enterprise growth, Dan Schulman, in a release.

American Express has for sometime been hip to the jive of tech scenesters and mobile-minded whippersnappers. The company has thrown its weight into new initiatives from almost every front-running social network and mobile payments platform for the past year or so.

Over this past summer alone, Amex partnered with Facebook for a deals program and with Foursquare for checkin discounts. The company also got in bed with Isis, a mobile payment network started by three of the four big mobile carriers, during this time.

American Express also had a busy fall, courting new users for Serve, another mobile payment system, at a San Francisco rock festival in August; acquiring Sometrics, a social gaming and virtual currency company, in September; and hopping on the Google Wallet bandwagon in October.

If we didn’t know better, we’d say American Express was employing the tried-and-true “spray and pray tactic”, aiming its vast resources at every buzz-laden startup and platform it can see on the technological scene and praying that one of its bets will shape up to be a real winner in the mass market.

The American Express fund will invest in such verticals as loyalty and rewards programs, mobile and online payment platforms, security, fraud detection and data analysis.

We’ll be keeping an eye on Amex’s Silicon Valley funding and acquisition activity from our perch in San Francisco’s Financial District, so stay tuned for more.

Image courtesy of whiteafrican.

The service provides you a lemon.com email address to enter when shopping online. When receipts are emailed to you after a purchase, it automatically filters out the relevant purchasing data. You can also take photos of receipts using Lemon’s Android app and upload them. Just like Evernote, Lemon searches the text in your images and makes it searchable via character recognition. The company tells us that an iOS version of the app is coming within a week or two.

For disorganized people like myself, the service promises to revamp the way we view receipts. Instead of being an inconvenience, they can be useful bits of data that help you manage spending better. And you’ll never have to worry about losing a receipt when you need to make a return or file taxes.

While it looks like Lemon may also be competing against expense reporting services like Expensify, CEO Wences Casares says that isn’t so. Instead, Lemon can be used in conjunction with those services, offering up receipts when necessary.

Lemon is launching this week at the TechCrunch Disrupt conference’s startup alley. The Palo Alto company currently has 20 employees and has received funding from Lightspeed Ventures and Balderton Capital.

This was the startup’s fourth round, and it represents a break in Union Square co-founder Fred Wilson’s pre-2008 investment philosophy.

For several years, Wilson, a veteran investor and blogging firebrand, had held the opinion that seed investments were actually less risky than late-stage deals. In 2007, he wrote on his blog, “As a VC making direct investments in companies, I think we take on way more risk when we invest in a later stage company than an early stage company…

“When I go back over time and look at my personal portfolio, some 50-plus companies, I see this fact so clearly. The returns are higher on the seed and first round investments I’ve made… I suppose that’s also an indication that I am better at seed and early stage investing and that there are others who are better at later-stage investing than me.”

Late-stage investment has become something of a trend since the market crash in late 2008. In 2007, early-stage investments were slightly higher than late-stage fundraising. However, the balance has shifted, with slight differences giving way to entirely uneven divisions between early- and late-stage activity.

In 2009, VC fundraising hit a six-year low, meaning there would be less money to go around for the quarters to follow. In the immediate aftermath, early-stage investments, with their smaller deal sizes, were an attractive option for many; but eventually, multi-stage funds became more popular and investors became more squeamish about early-stage funds.

In September of 2009, Wilson wrote about VC investing during a downturn, saying, “Early in a cycle, you want to back young companies at bargain prices… Late in a cycle, you want to back established companies that need a ‘last round’ to get to break even.

“I’ve been in the venture capital business since 1986 (that was a down cycle) and I’ve seen this happen at least three times, probably four times now.”

Then, late last year, Wilson and Union Square Ventures raised $200 million to establish a late-stage fund. The fund’s first deal is the $25 million Series D for Lending Club. The round is small by late-stage standards; it’s exactly the same amount Lending Club raised for its third round one year ago.

Of today’s investment, Wilson writes, “We’ve been interested in peer-to-peer lending marketplaces for about five years now. We’ve studied the category closely but have never found the right entry point. We have watched Lending Club innovate by delivering better risk assesment and mitigation which has led to better returns for lenders.”

In a word, Wilson and Union Square see Lending Club, like most other strong late-stage startups, as a sure bet with a relatively quick return on investment.

Lending Club recently passed $325 million in total loan originations; the startup is currently giving out more than $20 million each month in prime consumer loans.

The company will now offer free access to the LearnVest My Money Center, which lets you link all of your financial accounts and track your spending with an email-like folder system, as well as the Take Control Bootcamp, a 10-day action-oriented email program designed to help you get a handle on your finances.

LearnVest is also launching new premium memberships as 1-day ($4.99), 3-month ($39.99), and 1-year ($129.99) offerings. The plans will give members of the site access to LearnVest’s Advice Center, as well as unlimited access to the company’s team of financial planners. Members can ask specific questions to the planners through the “Ask an Expert” feature. Through the Advice Center, members can also view LearnVest Courses, which offer on-demand lessons that reflect topics traditional financial planners normally bring up.

“Financial planning should not be a luxury,” Alexa von Tobel, LearnVest founder and CEO said in a press release this morning. “LearnVest is here to make financial planning more accessible to millions of Americans and these new personalized financial tools will help us achieve that.”

Von Tobel told me that the site is specifically targeting women because it’s much more useful to target a specific group instead of casting a wide net like competing services such as Mint. Von Tobel said that most women she’s talked to have trouble figuring out where to begin with their financial planning — LearnVest simplifies that process by offering specific plans for women from all walks of life, from recent grads to career women.  But even though the site targets women, there’s nothing stopping men from taking advantage of its tools.

LearnVest has helped over 1 million women since it launched in December 2009 and has had over 110,000 users go through its Boot Camp since last year von Tobel said. The company expects to serve over 400,000 users a day by the end of the year.

The company performed an exhaustive survey of over 5,000 women on their financial attitudes and also went even deeper into a group of 1,300 to fully understand their financial needs and habits. Doing so gave the company the insight to offer tips and lessons that most women would actually use.

Based in New York City, LearnVest recently scored a hefty second round of $19 million led by Accel Capital. The company also landed $4.5 million last year, which paired Von Tobel up with one of the few female VCs around, Accel partner Theresia Gouw Ranzetta.

If you’d like to try out LearnVest’s premium service free for a day, you can use the code venturebeat2011 when you sign up.

This series is brought to you by TurboTax Home & Business Edition – Guides You to Your Biggest Tax Refund. As always, VentureBeat is adamant about maintaining editorial objectivity. TurboTax had no involvement in the content of this post.

This week’s tax question:

My business had subcontracted employees and paid them through their own LLCs. Do I need to provide them with Form 1099s?

We passed the question on to Betty Kayton, who assists startup firms and entrepreneurs with financial, human resources and tax matters until these firms are ready to hire a full-time chief financial officer. She submitted this answer to VentureBeat:

There are a lot of misconceptions about 1099 forms. I’ll try to address the main issues here through a list of frequently asked questions.

Who needs to get 1099?

You must send a 1099 form to anyone that you pay money to, unless they meet one or more of the following exceptions:

the recipient is a corporation
you included the payment in a W-2 form (to an employee)
the payment is for a tangible product (office supplies, computers, etc), or
the total payments during the calendar year were less than $600.

So what are some examples of things that need a 1099?

Anything not excluded the above list. Examples include: legal fees, marketing consultants, outsourced programmers, interest paid to lenders, rent paid to landlords, and public relations fees. There are some real surprises lurking around “who is a corporation”. For example, few people know that AWS (Amazon Web Services LLC) isn’t a corporation; so if you paid AWS more than $600 during 2010, you need to send them a 1099 form. Likewise, 37 Signals, a major provider of Web-based software to many startups and other companies, is an LLC. On the other hand, some accounting firms are corporations (and thus don’t need a 1099).

This sounds impossible to deal with. How am I supposed to know who is a corporation? My Magic 8-Ball and Oujia board are both packed away in the attic.

You don’t need to guess. The easiest way to gather the needed information is to always get every new vendor to provide you with a W-9 form (or, if they are a non-USA entity, a W-8BEN form). This form has their correct legal name, their type of entity (corporation, partnership, etc), their address, and their tax ID number. With this information, you can prepare their 1099 form. When you enter the vendor into your computer system, be sure to include its correct legal name (“Amazon Web Services, LLC”), not a nickname like “AWS” or “Amazon”, and input the tax ID number into the appropriate field in your accounting system.

The deadline for 1099s was January 31. It’s the middle of February, and I didn’t take care of this stuff yet. What do I do?

The forms aren’t due to the IRS until February 28. So just crank out the forms as quickly as you can, and mail them before February 28. It’s a good idea to mail the black copies of the forms to the service providers ASAP, and then wait a week or two (but not after February 28) so the service providers can tell you about any mistakes. And then you can fix the mistakes before sending the red copies to the IRS on February 28.

Do subcontracted employees get 1099s?

“Subcontracted employees” is a dangerous choice of words. Workers are either consultants (on form 1099) or employees (on form W-2). There is no such thing as a “1099 for an employee.” But that’s the topic for another column.

Disclaimer: This “Ask the accountant” article discusses general legal, tax and financial issues, but it does not constitute legal, tax or financial advice in any respect. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of appropriate professionals in the relevant jurisdiction. VentureBeat, the author and the author’s firm expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this post.

From now through April 15, VentureBeat will be taking your tax and accounting questions and getting you expert answers. You can send us a question by email, leave one in the comments below, or reach us by Twitter or on Facebook or Quora.

Venture capital investment activity rebounded to $3.7 billion in the second quarter, but the gains are only enough to put the sector on track to match annual levels from more than 12 years ago.

While the change in direction is reassuring, it may be a dead-cat bounce after the first-quarter’s precipitous 40 percent drop in venture capital activity. We argued then that the goldrush era of technology prospecting may be over, as Silicon Valley has to hunker down and build businesses with more modest returns. Compared to one year ago, investment has plummeted 51 percent, according to the Moneytree report from PricewaterhouseCoopers LLP and the National Venture Capital Association.

Indeed, investment in Internet-specific companies fell 15 percent, and software company funding was virtually unchanged from the first quarter at $644 million.

Instead, biotechnology and medical device companies have piqued investor attention, attracting the highest share of funding with $1.5 billion. That’s 47 percent more than last quarter. Cleantech investment also rebounded, with a 15 percent gain matching the overall average increase.

Other areas like semiconductors and media and entertainment saw another quarter of shrinking flows. Semiconductor investment fell to a 10-year low while media and entertainment financing dropped off 48 percent.

The one promising note of the report was that early stage investments have shot up 67 percent. The average seed deal size was $9.5 million, more than double the $3.7 million level in the first quarter.