Ride-sharing startup Lyft has closed a $60 million third funding round led by venture firm Andreessen Horowitz, the company announced on its blog.

The startup with the tagline, “your friend with a car,” has developed an iPhone and Android app that lets you order a ride from a stranger in a matter of minutes. It’s an alternative to taxi cabs and has taken off in San Francisco and Los Angeles.

Lyft cofounder John Zimmer

The special touch is that Lyft cars are emblazoned with pink moustaches, and drivers routinely fist bump passengers when they step into the car — typically at the front, not the back. “A core value for the company is empathy, and we built that into the experience,” said Lyft cofounder John Zimmer in an interview with VentureBeat.

Lyft launched in San Francisco in the summer of 2012 and is the most recent product from parent company Zimride. Zimride has been around since 2007 and has closed about $7.5 million in funding. Zimmer said that the two products have raised a combined $83 million.

Lyft has seen some impressive traction since it launched. The company announced today that it is now facilitating 30,000 rides each week. For this reason, it’s attracted significant attention from investors; Lyft today confirmed that the $15 million fundraise led by Founders Fund reported by TechCrunch in January 2013 (closed in October 2012) is accurate.

If Lyft hasn’t reached you yet, expect to see moustache-adorned cars in your city by the end of 2014.

Zimmer said that Lyft intends to spread across the country — and eventually across the world — by the end of next year. With the new boost in capital, it will focus on building out the team.

“We have an ambitious goals and we know that,” he said. In the previous 12 months, Lyft has raised $75 million from Founders Fund, Andreessen Horowitz, Mayfield, FloodGate, and others — it must grow at an accelerated rate so its later-stage investors will see a return. It has raised a total of $85 million.

Lyft faces a number of potential challenges as it scales. ”They [our investors] all know there are regulatory hurdles — but it’s clear we’re going beyond what’s expected in terms of safety,” said Zimmer.

Drivers are vetted and subject to extensive background checks. But city regulators and consumers are still nervous — California authorities levied hefty citations against Lyft in November 2012. These were later dropped so the California Public Utilities Commission (CPUC) could reexamine its policies.

Among the original charges: a lack of evidence of property damage insurance coverage and evidence of workers compensation insurance, and failure to enroll drivers in the Department of Motor Vehicles Employer Pull Notice Program.

To its credit, Lyft has built up a community of supporters, who launched petitions on sites like Change.org to fight in its corner. “Our evangelists came out with thousands of phone calls and emails to the CPUC,” said Zimmer. “I think we’ll rally the troops again if need be.”

A decision from California regulators in favor of Lyft and other regulators could set a precedent. And therefore, Andreessen Horowitz must not have viewed this an obstacle to Lyft’s expansion plans, which are necessary for the firm to get a return on its investment.

In addition, the company operates on a community ride-sharing model, which sets it apart from chief competitor Uber. Passengers are asked for a suggested donation — it’s not entirely clear as it moves across the country (outside of cash flush cities like San Francisco) whether this will be paid. Zimmer recently admitted that he might have to reevaluate the business model.

Spotted: An aggressive ad campaign from Uber against its rival, Lyft

Perhaps the biggest threat of all comes from Uber, which recently rolled out its own ride-sharing service. Uber had relied on third-party limo and taxi services to provide drivers. But it has been watching its competitors steal market share — and has seen regulators give tacit approval to ride-sharing — and isn’t willing to give up valuable revenue.

When pressed about the competitive market, Zimmer quipped: “We led the peer-to-peer ride space — and there is a big difference between the community experience and what our competitors are doing.”

Finally, the company must stay committed to recruiting drivers who are willing to work on holidays and rush hour. To ensure it could keep its drivers happy so they wouldn’t be lured away by rivals, Lyft didn’t take a cut of the transaction for the first six months. Now, it is taking 20 percent from each ride.

To surmount these challenges, Lyft’s founding team is in full battle mode. “Better transportation that’s more affordable and more social is worth fighting for,” said Zimmer.

Read the full blog post announcing the fundraise here:

Celebrating One Year Together

What does the pink mustache stand for? It’s a question we get asked frequently. People are curious when they see it for the first time, but once you’re a part of the community, a bigger meaning comes through. The pink mustache is a smile. It’s the goal of finishing your ride a little happier than you were before. It’s the belief that people are inherently good. It’s the idea that a great conversation on a trip across town can result in a new friend, a job offer, or even a hug after a tough breakup. Longtime Lyft driver, Danielle, put it best when she said “Lyfting restored my faith in humanity.”

Since you’ve helped define this larger meaning, we wanted the Lyft community to be the first to hear about some good news. Today, just one year after we first launched in San Francisco, we’re excited to announce that we’ve received additional investment from the amazing team at Andreessen Horowitz to bring Lyft to cities all over the world. This funding, along with an investment from Founders Fund earlier this year, will support our global expansion, giving us resources to strengthen existing Lyft communities and build new ones. From the beginning, the Lyft community has set itself apart inspiring us with passion, and we’re thrilled to be on this journey together.

To celebrate the past year, we took a trip down memory lane with some of our favorite community moments. We’ve learned that getting a kind note from a stranger can make someone’s day, that spontaneous in-car karaoke sessions are sometimes the best part of a night out, and that simple acts of kindness can bring us closer together.

If you have your own Lyft memories you’d like to share from this past year, we’d love to hear from you on Facebook or Twitter with #lyftlove.

Neurotrack, the startup that won the health prize at this year’s SXSW, has pulled in a round of seed funding, according to a Form D filing.

The $90,000 boost from angel investors is the first outside capital for the company with a diagnostic test for Alzheimer’s disease.

CEO Elli Kaplan is aiming her life’s work at Alzheimer’s and related disorders. “I watched two of my grandparents die ‘alone’ because they could no longer remember their family members who were sitting at their bedsides,” she said.

Neurotrack’s test is bolstered by 25 years of neuroscience research. Millions of dollars from foundations and grants have already been poured into the technology, which was developed by researchers at Emery University.

The company offers a computer-based cognitive test that can detect an impairment on the Hippocampus, the first structure in the brain to be impacted by Alzheimer’s. The program evaluates patients’ eye movement — and the time spent looking at familiar and new images.

Related: The founders launched the company at DEMO — read the full VentureBeat story here.

Kaplan was impressed by the technology, which she claims could predict patients with a high risk of Alzheimer’s up to six years prior to the onset of the disease. So Neurotrack licensed it and is beginning to commercialize the test by selling to pharmaceutical companies.

“The biggest issue that pharma companies have is populating clinical trials with people who are pre-symptomatic,” said Kaplan. To develop drugs to treat Alzheimer’s, they need access to patients before irreparable damage is done.

The Alzheimer’s Association reports that about 5.4 million Americans have Alzheimer’s – and that number is expected to rise to 16 million by 2050. But Kaplan is convinced that we’ll someday develop a drug that can cure the disease.

For now, informed patients can make lifestyle changes (exercising more, adapting eating habits) and take medication to delay the onset of the disease. “We know that some of the symptom-treating drugs are more effective the earlier you can start them,” said Kaplan.

Results from the most recent research is very promising — according to Kaplan, the participants who scored below 50 percent on the test have all received an Alzheimer’s diagnosis within six years. None of those scoring above 67 on the test have converted to Alzheimer’s. Ninety-two people participated in the study.

Neurotrack isn’t ready for the public yet — but if and when it becomes available, Kaplan said, people in their 50s will get tested every year. Patients with a family history of Alzheimer’s may receive the test earlier.

Kaplan would not yet disclose pricing information for the test when it becomes available. The company is in the midst of fundraising for its next round and is still fleshing out its go-to-market strategy. It is a graduate of Rock Health Boston, which has a strong relationship with venture firm Kleiner Perkins, and first launched at DEMO.

Top image of the founders at DEMO via Flickr

There’s a hacker who’s sure
All that glitters is old
And he’s buying a stairway to funding.

In Toronto he knows
If the doors are all closed,
On Sand Hill he can get what
He came for.

Ooooh, ooo-ooh, and he’s buying a stairway to funding!

There’s a term sheet that sucks
But for some fewer bucks
He says he can keep more of his equity.
In a bank run by crooks, there’s an old dude who sings,
“Sometimes all of our thoughts are collusion.”

And it makes me wonder.

Zalora scores $100M

Zalora, the Zappos-like fashion and beauty store for Southeast Asia, announced this morning that it has closed a $100 million financing round. That’s a lot of lipstick and high heels. Zalora focuses on 10 countries in Asia: Singapore, Indonesia, Malaysia, Brunei, the Philippines, Thailand, Vietnam, Taiwan, and Hong Kong. The year-old startup says it has already achieved “annualized double-digit million USD revenues.” Read the full story on VentureBeat.

Urturn raises $10.7M

Urturn, a U.K.-based social networking startup for iOS and desktop, has just taken a whopping $10.7 million in its first round of institutional funding. First time at bat, Urturned knocked it outta the park. I believe the expression is, “Nailed it.” The remarkable Series A was led by European Union firm Balderton Capital, which previously invested in Bebo. “It’s an important vote of confidence from a well-recognized VC for the company,” said a Urturn rep. From what we can see so far, the vote of confidence is, to be blunt, badly needed. Read the full story on VentureBeat.

Cloudscaling climbs to $10M

Elastic cloud infrastructure startup Cloudscaling has raised $10 million in its second round of funding so it can keep growing at a quick clip and innovating its cloud technology. The San Francisco-based startup ‘s core product is the Open Cloud System, which can deliver the same benefits as providers like AWS and Rackspace. But unlike those companies, Cloudscaling’s solution is deployable in a client’s data center under an IT team’s control. It can also run its solution on Amazon and Google’s public clouds if a customer wants to do so. Read the full story on VentureBeat.

Remote Medical raises $8M

Seattle-based Remote Medical just scored $8 million to bring health care to virtually anyone in need, anywhere in the world. Remote Medical serves companies and individuals in remote places; it’s a good option for military personell, research teams, law enforcement groups, or those lucky billionaires living out their days on private islands. Remote Medical offers a variety of services, including telemedicine (physicians can securely chat with patients via video), medical training, drugs, and equipment. Read the full story on VentureBeat.

Ex-Facebook/Dropbox product guy gets $1.2M for stealth startup

Mystery meat of the day is YesGraph, a stealthy recruiting startup. Founder Ivan Kirigin, a former product manager at Facebook and Dropbox, has already secured $1.2 million of a $1.8 million round, according to a Form D. “The financing has enabled us to build a good product and hire talent — there is a lot that is hard about this space,” said Kirigin on a phone call. Read the full story on VentureBeat.

UpOut comes up with $850K

Bay Area find-stuff-to-do app UpOut has raised an $850,000 seed round. The app serves up quirky, hipstery, “interesting” personalized recommendations for local events — so basically, it’s Stefon in your pocket. That sounded weird. Moving forward, the funding came from leading Silicon Valley angels. The company claims “tens of thousands” of users in and around San Francisco and has desktop and mobile apps.

Video robotics company Swivl raises $500K

Swivl makes personal robots with a video twist, and the company has just raised a $500,000 round from Grishin Robotics. Swivl — well, think of it as a Roomba for Facetime or YouTube. It swivels (hence the name) to track a speaker and capture video without the need for a dedicated cameraman. It’s designed with iOS devices in mind, but it works with any smartphone or video camera. Read the full story on VentureBeat.

Neurotrack gets $90 for its tech to predict the onset of Alzheimer’s

The $90,000 boost from angel investors is the first outside capital for the startup with a diagnostic test for Alzheimer’s disease. Neurotrack offers a computer-based cognitive test that can detect an impairment on the Hippocampus, the first structure in the brain to be impacted by Alzheimer’s.
Read the full story on VentureBeat.

Mystery funding of the day? That’d be YesGraph, a stealthy startup in the recruiting space founded by Ivan Kirigin, a former product manager at Facebook and Dropbox.

Kirigin today secured $1.2 million of a $1.8 million round, according to a Form D. A total of seven angel investors participated in the funding.

“The financing has enabled us to build a good product and hire talent — there is a lot that is hard about this space,” said Kirigin on a phone call.

Ivan Kirigin

Kirigin would not say much about the product at this stage. But he did reveal that YesGraph is building tools for tech companies to improve the hiring experience — and not just the “output.” To that end, Kirigin just released a survey, an attempt to find patterns in how startups make their first hires.

“Companies have a hard time hiring good people — we are trying to help them,” he added.

Serial entrepreneur Kirigin is also the founder of a micro-payments service called Tipjoy, which both Facebook and Twitter considered acquiring, TechCrunch reported. After negotiations fell through with Facebook, the company made Kirigin an offer, and he joined in 2009 to work on a virtual currency product. He would later join Dropbox, where he claims on his LinkedIn page to have helped drive growth 12X over 2 years.

Investors in Kirigin’s previous company Tipjoy include Chris Sacca and Y Combinator founder Paul Graham.

Top image via Shutterstock

Before you can play in the cloud, you must first break the cloud — or at least build up a solid infrastructure to utilize it.

That’s the specialty of Happy Cloud, a cloud-gaming firm that today announced the closure of a $4.25 million funding round. Avalon Ventures led the latest investment along with Jesselson Capital and Shaman Ventures. Happy Cloud’s funding total is now at $7 million.

The company also introduced Tamir Buchler, an e-commerce veteran, as its new chief executive officer.

“Happy Cloud adds unparalleled value to the gaming ecosystem by eliminating barriers to entry and giving users what they want,” Buchler noted. “By offering free on-demand access to the best high-end games, we can bring new gamers on board, increase conversions and keep gamers engaged. Happy Cloud is a scalable solution that can effect change in the same way iTunes and Netflix have transformed media consumption by offering seamless, instant access.”

Happy Cloud provides server-based distribution to PC, console, and Android game publishers. It will use this latest infusion of cash to expand its games-on-demand service.

“We are excited to have Tamir Buchler on board,” said Michael Jesselson of Jesselson Capital. “He has strong leadership skills and has a proven track record of driving revenue growth for consumer-facing platforms.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Swivl makes personal robots with a video twist, and the company has just raised a $500,000 round from Grishin Robotics.

Grishin is a global investment company (founded by one of the Mail.ru co-founders) that specifically supports personal robotics.

And Swivl — well, think of it as a Roomba for Facetime or YouTube. It swivels (hence the name) to track a speaker and capture video without the need for a dedicated cameraman. It’s designed with iOS devices in mind, but it works with any smartphone or video camera.

Here’s a demo clip showing the Swivl mount unit and tracker in action:

Swivl and its new investors see particular opportunity in the education market. “The global educational industry is undergoing huge transforming changes, and robotics plays an increasingly significant role in that process,” said Grishin founder Dmitry Grishin.

“Swivl represents a rare combination of strong technologies, beautiful design, and affordable price-point — exactly the type of product we are looking for. Swivl is very well positioned for disruptive penetration of mass-market educational technologies, taking online education to a new level by dramatically increasing the amount of published, high-quality video content.”

Swivl is located in San Carlos, Calif., and was founded in 2010.

Image credit: Swivl

Urturn, a U.K.-based social networking startup for iOS and desktop, has just taken a whopping $10.7 million in its first round of institutional funding.

First time at bat, Urturned knocked it outta the park. I believe the expression is, “Nailed it.”

The remarkable Series A was led by European Union firm Balderton Capital, which previously invested in Bebo.

“It’s an important vote of confidence from a well-recognized VC for the company,” said a Urturn rep. From what we can see so far, the vote of confidence is, to be blunt, badly needed.

Urturn’s main feature is something called “Expressions.” You might also call it a “picture” or a “macro.” Urturn’s WYSIWYG editor lets users create content (“Expressions”) and post it to a public stream. The images could be doodles they draw, digital collages they create, or pics they grab from the web. They can add text if they like. The end result is a Frankenstein’s monster somewhere between Pinterest and Tumblr.

But hey, we’re old. Our not loving it at first sight is no barometer for how Kids These Days will react to the product — or whether the company will be any kind of success.

Image credit: Urturn

Guuuuurrrrl, the Valley is on fayah today. In a huge wave of announcements, we saw a bevy of businesses from the Bay getting fierce funding deals.

Trust: From Mountain View to Redwood City, from Los Gatos to not-so-sunny San Francisco, our Bay Area startups were snatching term sheets and serving business executive realness.

And it wasn’t just deal volume on the Peninsula, either; the numbers these companies posted were pretty sickening, too. No tea, no shade, but if the New York/Austin/L.A./Boulder scenes want to keep up, they. Bettah. Werk.

(If you haven’t seen Paris Is Burning nor do you watch an awful lot of Ru Paul’s Drag Race, this whole thing hasn’t made much sense to you, has it? Have no fear, familiar territory is here.)

Now, sashay — away.

Adaptive Planning nets $45M

Mountain View, Calif.-based Adaptive Planning has raised a massive $45 million in its fourth and final round of funding with a goal to further dominate the CPM space, the business said Tuesday. Adaptive Planning offers a suite of budgeting, planning, forecasting, and data discovery software in the cloud. Its software works for small businesses all the way up to large enterprises, which now represent 25 percent of its business. The company had 1,500 customers at the end of 2012 and it estimates it will have 2,000 customers at the end of this year. Read the full story on VentureBeat.

Alexza to raise $25M for health-tech gadget

In a Form D filing with the SEC, we learned that health-tech company Alexza Pharmaceuticals is rustling up a $25 million round of debt financing. The Mountain View, Calif.-based company makes Staccato, a new gadget for quickly and effectively delivering drugs to our frail human systems.

Change.org raises $15M

Popular social petition service Change.org has raised $15 million in new funding — cash that will help it further build up the “world’s largest petition platform.” Change.org, the brainchild of two Stanford students, provides an accessible way to enact social change and it makes it simple to create and sign petitions. The service has grown quite a bit in the last year, jumping from 6 million users in early 2012 to more than 35 million users today. More than half of Change.org’s users are outside the U.S. Read the full story on VentureBeat.

ConsultingMD secures $10M

Palo Alto, Calif.-based ConsultingMD has secured a $10 million funding round led by venture firm Venrock, the health-focused venture capital arm of the Rockefeller family. The mission is to create a virtual clinic where patients are served by the top doctors in the world. “We don’t believe you need a network of thirty thousand doctors to be effective,” said Tripp [pictured above with cofounder Dr. Lawrence "Rusty" Hoffman] in an interview with VentureBeat. “We would rather use the same 750 doctors who achieve successful outcomes again and again.” Read the full story on VentureBeat.

Wanderful takes $9M to the bank

S’wanderful! S’marvelous! You should get a check! Wanderful Media, a local shopping and discovery app company based in Los Gatos, Calif., told us today that it’s gotten $9 million in new funding from existing investors. This addition brings the company’s total funding to $36 million and comes on the heels of the April launch of the completely reimagined Find&Save, an online community offering a comprehensive collection of local savings.

Brightpearl seals an $8M Series B

Brightpearl, a UK company with a San Francisco office, has just taken a lovely $8 million in its second round of institutional funding. The company makes loud software that integrates orders, inventory and customer data across multiple retail channels. “We’ve seen customers experience growth rates of 40-50% by adding new sales channels on the Brightpearl platform vs. single-digit growth for the overall retail sector,” said co-founder Charles Grimsdale in a statement on the news.

Clique Intelligence goes home with $5M out of $20M

Another Form D yielded the mystery meat for today: Clique Intelligence, based in Redwood City, Calif., has taken $5 million of a $20 million equity offering. The filing lists Robert Scott and Dudley Mendenhall as execs; the former was mighty hard to pin down and the latter was a former HP and Websense guy. There’s no URL for the company, but we did see in a Whois lookup that Dreamworks, the animation studio, is listed as the registrant for CliqueIntelligence.com. This could mean something; it could mean nothing. But so far, it all smells like stealth to us.

Timbaland throws $800K at Open Labs

In a non-Valley tidbit, entertainer Timbaland has led a seed round for Open Labs, the Austin, Texas-based maker of StageLight. StageLight is music creation software that aims to make the whole process a bit easier on the common dude or dudette. “We wanted to allow anyone to create music quickly, inexpensively and socially,” we read in an email from CEO Cliff Mountain. “The Open Labs team introduced our software, StageLight, to the market six months ago and we have been overwhelmed with positive customer feedback; over 110,000 unique people have come to our website and over 50,000 have downloaded the product.”

NASA is funding the Star Trek replicator

Tea! Earl Grey! Hot! NASA has thrown a $125,000 grant at a research project to bring 3D-printed food into our reality. This project comes from mechanical engineer Anjan Contractor of Systems & Materials Research Corporation. Coincidentally, Contractor was also a speaker at the recent Humans to Mars conference.
Naturally, this kind of food replication would be a great way to survive in space or on other planets, where plant-growing natural resources are scarce. But it’s also a great idea for feeding hungry people around the world when economics, famine, or war come between people and sustenance. Read the full story at VentureBeat.

Updated at 11:06 a.m. with quotes from Change.org CEO Ben Rattray from VentureBeat’s HealthBeat conference.

Popular social petition service Change.org has raised $15 million in new funding — cash that will help it further build up the “world’s largest petition platform.”

Change.org provides an accessible way to enact social change and it makes it simple to create and sign petitions. The service has grown quite a bit in the last year, jumping from 6 million users in early 2012 to more than 35 million users today. More than half of Change.org’s users are outside the U.S.

“Petitions aren’t new,” Change.org CEO Ben Rattray said today at VentureBeat’s HealthBeat conference in San Francisco. “What’s different now is that you take petitions, you make them easier than ever before and more social than ever before.”

So far, the site’s users have won “thousands of victories.” Major wins spurred by Change.org petitions include Bank of America dropping its $5 debit card fees, Seventeen magazine committing not to Photoshop models, and having felony charges against high school student Kiera Wilmot dropped.

The new funding was led by Omidyar Network, the philanthropic investment firm that eBay founder Pierre Omidyar created with his wife, Pam. Rattray told VentureBeat that his biggest priority was finding a funding partner who deeply believed in the company’s mission.

“We’re trying to show that it’s possible to build a technology company focused on social impact, and we now have the resources to hire the tech talent needed to demonstrate that at scale,” Rattray said. “We’ve been approached a number of times by traditional, for-profit venture capital firms interested in investing in the company, but we are only open to investment from social investors who are prepared to support that mission. … So we specifically sought out the Omidyar Network because of its unique alignment with our empowerment mission and the ability to support our scale.”

Chris Bishko, an investment partner at Omidyar Network, will join Change.org’s board.

Rattray says it will continue to help petition creators get their word out, though it does not plan on bringing in folks with industry-specific knowledge to help with those petitions. Instead, it says the best way to get your story heard is to, well, tell your story.

“Actually focusing on the direct impact on an individual’s life is by far the most impactful,” said Rattray. “You can’t win with numbers in public advocacy. … You win with stories.”

Additional reporting included by Meghan Kelly.

Top photo via Michael O’Donnell/VentureBeat, Middle photo via Change.org

This Monday morning, we opened our inboxes to find a whole boatload of manic-sounding funding announcements sent by twitchy PR people. Seems like every hopped-up investor and his mom threw money at some startup or other — but don’t worry, we had our police scanner set to “stun” and caught all the action for you.

Let’s start the show.

Disclosure: Only commercially available, retail-grade, street-legal stimulants were used to fuel the writing of this and other deals-related posts on VentureBeat today. Today.

Rimini Street takes $15M to go global

Enterprise software maintenance company Rimini Street has secured a healthy $15 million round of funding. The Las Vegas-based startup took the new money from the sticky hands of Bridge Bank, a Silicon Valley firm. Execs said the investment would be used to move beyond the startup’s U.S. origins and into international waters — namely, Brazil and Asia Pacific.

Alteryx announces $12M investment

Analytics company Alteryx has received $12 million in financing from new investor Toba Capital (recently formed by former Quest Software CEO Vinny Smith) and existing investor SAP Ventures. Over the past year, the big-data startup has developed partnerships with Tableau, Teradata, Cloudera, and Hortonworks. Previously, the company took a $6 million round in April 2011.

Secretive startup Reflektion raises $3.3M

Reflektion is still in super-stealth mode, but it’s raised another round of funding. Following a previous raise of $1.5 million, the company filed an SEC Form D today stating it’s taken another $3.3 million. Congrats, mystery company! Here’s what we do know: The San Mateo, Calif.-based startup is helmed by electronic design engineer and serial entrepreneur Rajeev Madhavan; the startup is hiring; and the company has the same name as a stupid DJ, who is currently Google-spanking the PageRank for the name.

Newsle gets $1.65M for news app

Newsle — is that pronounced “news-lee” or “noozle,” do you suppose? — has taken a $1.65 million round for its news app for professionals. We wonder whether LinkedIn’s news-focused redesigned homepage might have Newsle beaten to the punch, but Newsle reps assure us the young company is “totally killing it,” so no worries there, right? At any rate, the Newsle team already moved from the East Coast to a nauseatingly trendy SoMa address in San Francisco, so they can’t really go home just yet. The funding led was by Advance Publications through subsidiary American City Business Journals. The app first launched in 2011; this is the startup’s first institutional round of funding.

Sensopia seals $1.2M deal

Sensopia, creator of reality augmentation app MagicPlan, announced today a $1.2 million round of funding and the release of a development kit to embed its software in any application. The funding will accelerate Sensopia’s growth and development to make the MagicPlan application easy and accessible to normal users. MagicPlan lets you take a photo of your environment and generate a floor plan in minutes. The application can automatically measure, draw, and publish a floor plan by taking a photo with your iOS device. Read the full story on VentureBeat.

Minbox gets a mini-round of $800K

Little things mean a lot! A little goes a long way! Other meaningless clichés about wee things! Minbox, a Dropbox competitor, has taken a $800,000 round of investment. The service, created by online journal Penzu founders, contains free (and to-be-announced Pro) features. Notable participants in the round include Charles River Ventures, CNN president Jeff Zucker, Mailchimp’s Ben Chestnut, and a handful of other folks who are praying for an acquisition within the next year or so. Because let’s be honest: Dropbox already has more than enough competition.

Image credit: Comedy Central

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

“Video is the new audio”, we often hear from startup founders who are setting their sights on large businesses.

The latest startup in the video collaboration category is Weemo, a company that was founded by French entrepreneur and telecom exec Thomas Cottereau (pictured, below).

Today, Weemo has raised $3 million investment from European private equity firm Idinvest Partners, bringing its total funding to $5 million. With the infusion of capital, Cottereau intends to expand to the U.S., and add more talent to the team so it can compete with established vendors like Vidyo, Avaya, Cisco and Microsoft.

Formerly known as “Wimo,” Weemo has made headway with customers who believe that Microsoft-owned Skype doesn’t integrate well with existing professional tools.

Weemo’s team claims its unique approach will give it an edge over the competition. The company has also developed a set of APIs, which can be leveraged by developers to add live video tools to any application or environment.

Just connect to the Weemo REST API, cut and paste a few lines of code in a web or mobile app, et voila, video calls. Companies are charged on a per user basis, which makes it more affordable than the legacy players in the space.

Cottereau said the goal is to make video a “de facto extension” of employee workflow. Companies don’t need to install any additional hardware (and pay for those expensive upgrades), as Weemo is purely a cloud service.

Weemo was founded in 2007, and currently has offices in Paris and San Francisco.

Better watch out, WhatsApp and Facebook Messenger. Hot messaging app MessageMe has just raised $10 million in its first round of funding, the company confirmed today.

MessageMe offers iOS and Android apps that send rich messages to friends, family, and groups. The app also lets you share YouTube videos, iTunes tracks, voice recordings, emoticons, and other things you might not share over traditional text messaging. MessageMe has risen quickly in status; it only just raised seed funding about a month ago. At that time, the service said it has 1 million users.

It will take more momentum on MessageMe’s part to displace WhatsApp’s traction. WhatsApp CEO Jan Koum recently told the world his app is “bigger than Twitter” and is now processing 8 billion inbound messages a day and over 12 billion outbound messages a day.

MessageMe’s new funding first leaked out through an SEC filing. The round was led by Greylock Partners’ John Lilly, with participation by Google Ventures, True Ventures, First Round Capital, SVAngel, Resolut.vc, and Social+Capital Partnership. Every firm that participated in MessageMe’s $1.9 million seed round participated in this round except for Andreessen Horowitz.

Top image via MessageMe

AirWatch, which helps companies manage employee’s mobile devices, raised another $25 million in a follow-on to its first round of funding today because the $200 million it received in February just wasn’t quite enough.

Today’s funding was led by Accel Parterns. The $200 million round it got three months ago was led by Insight Venture Partners.

AirWatch makes a suite of mobile security products used by customers such as Delta, Lowe’s, and the U.S. Army Corps of Engineers. It covers a range of different IT needs such as managing not only the phones themselves, but the apps, emails, and other content on those phones. It covers Android, iOS, BlackBerry, Symbian, Windows Phone, and other devices and can be tailored by industry.

The company’s goals with this addition are the same as those it had when it took on the original amount: expand globally, and beef up its sales team. It also looks like AirWatch wants to branch out with new research and development. This funding gives it the resources to do so.

What likely happened is Accel Partners wanted in on this company and offered up some extra cash. Accel is a very well-known venture firm that has invested in such companies as Facebook, Spotify, Rovio, and mobile security company Lookout Mobile.

AirWatch was founded in 2003 and is headquartered in Atlanta.

Man catching money image via Shutterstock

Want to call your doctor but can’t abide that awful 1970s call center system and the hour-long wait?

Patients need a better way to communicate with their physicians, and Ringadoc believes it can help. Investors agree; the San Francisco-based startup added another $700,000 to its seed round today, bringing its total funding to $1.9 million.

Startups like One Medical are taking on some of the biggest challenges in health care. But sometimes the right approach is to start small and focus on one specific problem. Ringadoc is laser-focused on building simple tech to bridge the communication gap between doctors and patients.

Ringdoc helps doctors separate personal and professional messages, and enables them to triage patients before speaking to them on the phone or in person. In addition, physicians can access after-hours calls on a smartphone or tablet device anytime through the answering service.

Ringadoc initially developed and launched an app that let patients record video messages ahead of a virtual visit with a physician. But the company has dropped video for now and shifted to phone consultations.

“Ringadoc reduces the human error associated with costly answering services and live operators by allowing the doctor to hear the patient’s issue in their own voice and words,” said CEO and co-founder Jordan Michaels (pictured above, right, with co-founder Micah Grossman).

Michaels said that conversations between patients and doctors are “an instrumental part of the health care conversation” and were “previously overlooked.”

The company claims its cloud-based answering service has now successfully handled over 100,000 calls for practices across the country. The business model is also clear and simple; Ringadoc charges physicians $49 per month.

Investors include Ryan Howard, CEO of Practice Fusion, Sharon Knight, co-founder of One Medical, the chain of concierge primary care practices, Siemer Ventures, Telegraph Hill Group, and Dr. Lyle Dennis, the neurology chief at Bon Secours Health System.

There’s no shortage of money being thrown at digital currency Bitcoin. Last week, Bitcoin wallet startup Coinbase scored $5 million in funding. And this week, both Boost.VC and Liberty City Ventures allocated more funding for Bitcoin-focused startups.

Now relatively young Bitcoin startup BitPay has announced it has raised $2 million more in funding to lead the market in Bitcoin payment processing. This follows a $510,000 seed round it raised in January.

BitPay specializes in e-commerce, B2B, and enterprise solutions for Bitcoin, and it claims processing fees as low as 1 percent with no setup fees. It signed up more than 1,900 new merchants in April, and it claims to sign up about 100 new merchants per day at this point.

The new funding was led by Founders Fund, the fund behind the so-called “PayPal Mafia.”

“We were not looking to raise any capital until later this year, but we could not ignore the opportunity to have Founders Fund involved with BitPay,” BitPay CEO and cofounder Tony Gallippi said in a statement. “There’s no single investment firm we would rather have on our team right now than Founders Fund.”

Also on the round is Max Keiser’s fund Heisenberg Capital, a London-based fund targeting Bitcoin-focused companies.

Bitcoin artwork via Deviantart

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

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

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

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

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

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

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

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

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

Lin Miao photo courtesy Be Great Partners.

After raising more than $10 million on Kickstarter, smartwatch maker Pebble announced today that it has received $15 million in first round funding from Charles River Ventures.

That’s a pretty hefty sum for a company that was initially shot down by VCs, a blow that led to the Kickstarter campaign, one of the first big crowdfunding success stories. But after nabbing around 85,000 orders on Kickstarter and successfully kicking off Pebble shipments (despite significant delays), it’s not surprising to see investors taking a second look.

Pebble says the funding will let it expand its software engineering team, scale for demand, and grow its open development platform. (I backed Pebble via Kickstarter and am still waiting for my watch.)

Pebble could be credited with kicking off the latest smartwatch craze — now Apple, Google, and several other companies are rumored to be working on similar devices. The Pebble communicates with your smartphone to show incoming calls, email messages, and calendar entries, and it can also run apps on its own. After launching its initial SDK for developers in March, the company is today releasing an updated SDK that allows for two-way communication between your smartwatch and smartphone. That means Pebble apps can now be built to remotely control your smartphones or other web-connected devices.

The company is also launching a Sports API for fitness apps, which would give developers the ability to connect their apps with the smartwatch similar to RunKeeper’s integration a few weeks ago.

Photo: Devindra Hardawar/VentureBeat

If you haven’t heard of Tech Cocktail, you probably haven’t partied much with the startup community.

Tech Cocktail‘s goal is to support emerging tech hubs through events and provide relevant news and information for entrepreneurs on its website. And today, the company raised its first $2.5 million funding round from Zappos CEO Tony Hsieh.

As part of the funding, the team opened a new office in Las Vegas, which will serve as its headquarters. On the company blog, CEO Frank Gruber said the goal is to become the “leaders” of the local, burgeoning tech community.

Entrepreneurs are relocating to Vegas in large part due to the efforts of Hsieh’s “Downtown Project.” Hsieh and his team are on a mission to revitalize the downtown economy through a $500 million fund. Investments are already being made in urban planning and development, schools and hospitals, small businesses, and technology startups.

Last week, I travelled to Vegas with a group of entrepreneurs and investors to find out more about the Downtown Project. Most of the activities, including speaker sessions and networking events, were organized by Tech Cocktail.

“We’ve known Tony Hsieh for over five years, dating back to a party that we threw together for CES 2009,” Gruber said on the Tech Cocktail blog. “It’s great to have a strategic partner who really understands entrepreneurship and the importance of celebrating and building community around it.”

It should come as no surprise that the founders would raise a sizable round of funding (especially for a media company) from the downtown project. Gruber said the team will focus on expanding throughout the United States, and building the brand. He claims that 30,000 people attend one of Tech Cocktail’s events last year alone.

Tech Cocktail will also release a “national platform” for entrepreneurs, but hasn’t disclosed much at this point.

Travel news startup Skift has closed a new $1.1 million round of seed funding, the company announced today.

Skift is a hybrid news publication that seeks to provide data and reporting services to the travel industry as well as those who are interested in following it. The site was co-founded by paidContent founder Rafat Ali, who decided on the idea after his many travels made him realize how much the travel industry converges together, with hotels, transportation, tech services and startups, and more. By all intents and purposes, Skift does sound like it wants to be a digital offspring of those old school trade publications common in many industries during the heyday of print — except this one is aiming to be something that’s not only useful, but also something that will appeal to the everyday consumer audience. It also wants to be more diverse in what it offers, both in terms of its products/services and business strategy.

“All media companies need a diverse revenue stream,” Ali said in an interview with VentureBeat. “Advertising is one part, but at least for us we’d like to build out our data services and premium offerings.”

The funding, he said, will be used to double Skift’s team of employees from 5 to 10. Those positions pretty much span across all areas, with 2 developers, a social/audience manager, a data analyst, and an additional reporter. Skift will also use the new capital to further develop its travel-brand index SkiftSocial as well as two premium subscriptions services that will roll out in June.

The new funding is led by Leer Ventures, with participation from Advancit Capital, Ironfire Angel, Mesa+, and Growlabs/LX Ventures as well as angel investors including Martin Nisenholtz, Michael Yavonditte, Shakil Khan, Paul Noglows, Sean Keener, Duncan Jennings, Skift CFO Michael Cunniff, and Eric Lawson.

Founded in 2012, the New York-based startup has raised a total of $1.5 million in funding to date.

Photo via Skift

Mark it on your calendars: Today, no social media, photo-sharing, casual gaming, consumer-y app-y startups announced funding raises.

No, for today belongs to cloud companies, finance companies, data companies — the solid, boring stuff that stands half a chance of seeing us through this bubble with slightly less egg on our collective face than last time around.

As the fella said, “He that outlives this day and comes safe home will stand a tip-toe when this day is nam’d, and rouse him at the name of Cloudant!” Or something like that.

And the winners are:

Cloudant pulls down a $12M round

Hot database-as-a-service startup Cloudant has raised $12 million in its second round of funding, the company announced today. The Boston-based startup was founded in Cambridge, Mass., in 2008 by three MIT physicists. The team struggled to move and analyze multi-petabyte data sets. So they ended up creating what would become Cloudant. Cloudant offers a highly scalable database-as-a-service that makes it possible to store, access, and analyze your operational data in the cloud. In the layers of the cloud, Cloudant becomes a “data layer” that can be run on top of most infrastructure-as-a-service providers, including Amazon Web Services, Rackspace, SoftLayer, Microsoft Azure, and Joyent. Read the full story on VentureBeat.

GraphLab gets $6.75M

GraphLab, an open source, distributed graph computation framework, has announced a $6.75 million funding round led by Madrona Venture Group and NEA. Seattle-based GraphLab, Inc. is building a commercial product the open-source project, applying advanced machine learning to massive graph datasets. “Data has the ability to make our lives better, whether applied to public health, economics, or suggesting the perfect song. But as the complexity of data sets grows, the need for entirely new ways of thinking about them has grown as well,” said Carlos Guestrin, GraphLab CEO, in a statement on the news.

TransferWise secures $6M

London-based TransferWise has just earned the distinction of sealing the first European deal by Peter Thiel’s Valar Ventures. The startup specializes in peer-to-peer international money transfers, undercutting traditional banks with its crowdsourced currency exchange. A previous investment round in 2012 brought in $1.3 million from IA Ventures, Index Ventures, and a group of angels.

SugarSync sweetens its deal with another $3M

Dropbox competitor SugarSync just closed an additional $3 million in funding, according to an SEC filing. A spokesperson for the company just confirmed the debt raise and said it would be used to bolster the product development team. The funding was brought in through an existing investor — likely Draper Fisher Jurvetson’s Andreas Stavropoulous, whose name appears on the Form D. The company has not raised funding since February 2012, when it pulled in $15 million to grow and define itself in the crowded cloud storage market. Read the full story on VentureBeat.

WegoWise gets $3M

WegoWise, a company that uses utility data to help owners and managers track their utility use and encourage energy efficiency investments, has taken $3 million in add-on funding from existing investor Boston Community Capital. Right now, a company rep tells us, the startup is focusing on apartment/condo complexes as well as commercial real estate. The startup’s platform tracks and compares utility use across large portfolios of buildings to find energy-wasting elements. “Think of it as Mint.com, but for utility data instead of finances,” the rep said.

Pangea Payments takes $1M in oversubscribed seed round

Money-transfer startup Pangea Payments wants to “help underbanked people around the globe.” To that end, the Chicago-based startup has taken an initial million-dollar funding round from OCA Ventures, Origin Ventures, i2A Fund, and FireStarter Fund. Angel investors also participating in this round include former Navteq CEO Larry Kaplan, Cloverhill Bakery exec Bill Gee, and Potbelly Sandwich Works founder Bryant Keil. Pangea’s multiplatform service (including mobile, web, and retail options) lets users send money to anyone, anywhere around the world, at any time.

Image credit: NBC

Cloud startup SugarSync just closed an additional $3 million in funding, according to an SEC filing. 

A spokesperson for the company just confirmed the debt raise and said it would be used to bolster the product development team. The funding was brought in through an existing investor  – likely Draper Fisher Jurvetson’s Andreas Stavropoulous, whose name appears on the Form D.

The company has not raised funding since February 2012, when it pulled in $15 million to grow and define itself in the crowded cloud storage market.

“This small cash infusion was from existing investors who were simply supporting our focus to continue to improve the user experience,” said the company’s CEO Mike Grossman in an email. ”We’re very disciplined related to what we’re delivering and who we are targeting,” he added.

San Mateo, Calif.-based SugarSync helps individuals and small businesses manage and back up files across multiple platforms, including PCs, Macs, and iOS, Android, and BlackBerry devices. Unlike its primary competitor Dropbox, SugarSync has grown organically through word of mouth.

The company would not confirm whether it will use the additional resources for an acquisition, but it’s certainly a possibility. Another competitive Box has made a few small strategic acquisitions of late — most recently, Crocodoc.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Hot database-as-a-service startup Cloudant has raised $12 million in its second round of funding, the company announced today.

Boston-based Cloudant was initially founded in Cambridge, Mas. in 2008 by three MIT physicists. The team struggled to move around multi-petabyte data sets and analyze those data sets wherever they went. So they ended up creating what would become Cloudant.

Cloudant offers a highly scalable database-as-a-service that makes it possible to store, access, and analyze your operational data in the cloud. In the layers of the cloud, Cloudant becomes a “data layer” that can be run on top of most infrastructure-as-a-service providers, including Amazon Web Services, Rackspace, SoftLayer, Microsoft Azure, and Joyent.

Cloudant CEO Derek Schoettle told VentureBeat that this “agnostic” approach to infrastructure deployment separates it from its biggest competitor — Amazon database services. “We believe in not having vendor lock in,” Schoettle said.

Cloudant has attracted some big-name customers with its approach, including Samsung, Microsoft, Adobe, Nokia, Salesforce, Expedia, Zynga, and Flurry.

The new funding was led by Devonshire Investors, Rackspace Hosting, and Toba Capital, with participation by current investors Avalon Ventures, In-Q-Tel, and Samsung Venture Investment Corporation. Including the new round, Cloudant has raised $16 million to date.

“One of the reasons we let Rackspace invest is because of their committment to customer service,” Schoettle said. “We also believe in that.”

In addition to funding, the company has opened up a new office in San Francisco, which joins the Boston HQ and offices in Seattle, the U.K., and South Korea. In the next 90 days, Schoettle said the company will open another office in Hong Kong.

Money in the clouds via Andy Dean Photography/Shutterstock

Today’s funding announcements were all over the board, from big data to e-commerce to online education to a teensy little to-do-app-done-good.

Let’s get down to business:

Rocket Internet’s Namshi gets a $13M boost

Rocket Internet can’t stop churning out e-commerce startups in emerging markets. Today the Berlin-based incubator program announced that Namshi, its Middle Eastern online fashion retailer, has raised $13 million led by Summit Partners to sustain growth. Namshi features clothing, accessories, and footwear for women, men, and kids from over 550 international and local brands. Like Zappos, the sites offers free shipping and a flexible return policy. The site serves the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain. Read the full story on VentureBeat.

Lucid Works strikes a $10M deal

Big data startup LucidWorks has raised $10 million to help enterprise companies use multistructured data to reap more revenue. LucidWorks product suite contains two development platforms that enable organizations to search, discover, and analyze their data. LucidWorks Search is built on top of Apache Lucene/Solr open-source search project and seeks to simplify and improve the process of building embedded search applications. The other product, LucidWorks Big Data, then helps businesses make sense of the data. Read the full story on VentureBeat.

Logical Choice chooses $5M

Ed-tech startup Logical Choice Technologies has raised $5M in funding from Vert Capital Corp, which will assume a controlling stake. The Atlanta-based company is known for its solutions to help integrate classroom technologies with new digital tools. Among other products, the team has developed an augmented reality reading program for early learning.

Any.do gets $3.5

Popular to-do list application Any.Do has raised $3.5 million in new funding to continue helping people get things done no matter the device. San Fransico-based Any.Do competes closely with apps like Wunderlist, Clear, and Remember the Milk. I love Any.Do’s design and feature set. It’s free to use, simple, inputs tasks with your voice, and syncs across syncs iOS, Android, and Chrome apps. Read the full story on VentureBeat.

OwnerListens has raised over $1 million in funding for its suggestion box that lets customers anonymously communicate with store owners.

The business was formed out of a Hummus restaurant in Palo Alto. Owner Oren Dobronsky noticed that patrons would usually request to speak with him to leave positive or negative feedback — but he wasn’t always around to hear it. Dobronsky also came to the conclusion that it’s easier to offer incisive feedback (highly valuable for any business) in an anonymous setting.

He’s got a point — we’ve all probably been irked by an experience at a restaurant or hair salon, but have opted to wait until we’re home to let out our frustration on a site like Yelp.

The Android and iPhone apps were originally developed for patrons of his own restaurant, Oren’s Hummus. But the apps developed a small following among consumers, and 1,200 businesses promptly signed up. TechCrunch reports that Philz Coffee and Whole Foods are OwnerListens’ customers.

Establishments will still receive feedback if they’re not registered with OwnerListens. The team will hunt down the right inbox, and forward along the message. It’s a great customer acquisition tool — once they receive feedback, many business-owners will opt to sign up.

Menlo Ventures, Promus Ventures, Commerce Ventures, Subtraction Capital, Steve Blank, Jeff Epstein, Cary Rosenzweig, and Marc Abramowitz are among the investors that funded the company’s seed round.

photo credit: andreakw via photopin cc

If that sounds bad, how about half of your company for $90K? Crazy?

No. This is the reality in many places outside of Silicon Valley (and especially outside the US). And it isn’t good.

The issue in Germany

I’m going to talk today about Germany, where I commonly see this issue. There are plenty of countries that have similar issues, but since Blumberg Capital is very active in Germany, and I sit on five boards in Germany, I feel most comfortable writing about the specifics that I know. I happen to be writing this today because I’m in Berlin and this issue is front and center for a couple of companies that I’m looking at.

If you are an entrepreneur in Berlin, you are hard-pressed to find capital for your company. Even with the notoriety that Germany, and Berlin in particular, has gained, there simply is not much capital available here. Relative to Silicon Valley, the capital available in Germany is a rounding error, and even relative to London, Germany suffers a definite lack of capital. It is slowly changing, but not nearly as quickly as it should.

In Germany, entrepreneurs starting out would appear to have similar opportunities to those available in the US — there are some very good incubators, there is an excellent group of angels, most of whom have built and sold companies previously, and there are a couple of very early stage funds. But, the scale is just too small. And at the early stage, the lack of capital is most pronounced.

And the ramifications are pretty significant:

- First rounds in Germany (call them seed rounds) tend to be small (50K – 250K), and nearly always done by angels or small super-angel funds. A 500K round is considered very good for the first round and is quite rare!

- Founders give up significant portions of their company to angels just to get a little capital at the outset. It is common to see investors take up to half of a company up front.

- Early stage companies are often under-capitalized, which makes it difficult to scale and raise further growth capital.

- The funds in Europe that invest more significant capital tend to wait until a company has substantial traction — say, EUR 5M -10M in revenue.

All of this adds up to a couple of significant issues that challenge the ecosystem.

1.  Capital risk is huge — companies that raise small rounds struggle to hit the milestones for their next round, and many either don’t make it or end up very small.

2.  Cap tables are screwed up. It is very common for founders to only have 10% ownership after they have raised Series A or Series B. It leaves far less upside, and we often see angel investors with bigger stakes than founders.

Why is this the case, and what can be done about it?

At each stage of the company, there are different issues.

Very early, when angels typically lead rounds, it isn’t uncommon to see a company raise $100K to $250K and give up half the company, usually with the promise of “shares for support.”  The investor promises to help with setup, operational expertise, fundraising, and some key elements of the business. I don’t want to be negative toward the investors who truly do act as cofounders and get companies off the ground, but not all angels fulfill this promise.  If they fall short, this approach is really aggressive from the angel perspective and doesn’t leave much room for future rounds in terms of the cap table. To me, unless the angel investor is truly a cofounder and helping day-to-day in operations, these “shares for support” and huge dilution scenarios don’t set the company up for success.

At the next round, typically Series A in Germany, which is roughly equivalent to seed rounds in the US, there are not very many players. One of the reasons Blumberg Capital is investing in Germany is because we are finding great opportunities to fill a part of this capital need. In contrast to the US, where there are a fair number of early stage funds, in Germany, there are very few, and there is a substantial gap between angel funding and bigger rounds where traditional European VCs jump in. This void is very real, and many companies never get beyond their initial angel round.

At Series B and beyond, what we find is most VCs are looking for significant traction. This means that companies need enough runway and capital to really scale, and if that isn’t there, the companies face serious capital risk. Again, because there is not a lot of capital available, the VCs who provide the larger amounts of capital are very smart to wait for companies to break out before making investments. They don’t need to rush. It isn’t like the company has a ton of options for financing.

A real world example

So, let’s take a real world example. Company A has a group of great founders going after a big market. They are one of the companies that attracts the attention of some strong angel investors. The angel investors convince the team they can really help, and that giving up 50% of their company when it is formed is not bad in exchange for their help. The company gets $250K for 50% at the outset.

This company does well and is able to attract more capital. It raises a pretty solid seed round ($500K) from angels and a small seed fund at a $2M pre, taking 20% in dilution.

It really starts to hit its stride now and attract a solid Series A of almost $2M at about a $6M pre-money valuation. In the US, this might be their seed round, and the earlier money may have come from bootstrapping or friends and family. They take another 25% dilution.

Now the founders have diluted by nearly 50% AFTER they gave up 50% at the outset; they have a total of about 20% ownership and have not even gotten to growth stage capital yet!  In the US, this would be almost the opposite, where investors would likely hold about 20-25%, and founders would still own the lion’s share of the equity. The screwed up cap table has very negative impacts on the upside potential and the incentive structures.

In general, the lack of capital and the fact that the investors extract so much from the companies act as deterrents to startup growth.

Improving education and access to capital

We aren’t going to wake up tomorrow and find that significantly more capital is magically available, so what can we do to work with the constraints that exist?

Pawel Chudzinsky, founder and Managing Director of Point Nine Capital in Berlin says, “Although improving all the time, access to early stage capital continues to be a challenge for startups in Germany. It is especially difficult for first time founders with limited networks and experience who frequently give up a lot of equity for little money in the early stages. … More capital, more transparency, and education seem to be the solutions to make things better here.”

Education is the area where founders can most directly impact their opportunities. I find that US founders are generally far more knowledgeable about equity compensation, dilution, fundraising, and scaling businesses, but as ecosystems like Berlin are evolving quickly, the base of very knowledgeable founders is increasing quickly. In Berlin today, and in many other places, experienced founders and investors are willingly contributing their expertise to help others build, and this is a key to making the system function efficiently.

As I have watched the ecosystem in Germany grow and mature over the past couple of years, I am seeing progress on all fronts. More investors are paying attention to Germany, so capital levels are slowly increasing. And, as the market continues to evolve, we are seeing that people are more mindful of raising enough capital to be able to scale, and also to ensure that the founders have the equity incentive to build great companies.

One final note: I have focused on Germany here because I have the most experience in Germany, but these issues are very similar in many emerging startup ecosystems around the world.  I hope that, as we continue to build these ecosystems, we will set them up to maximize the potential opportunities.

[Top image credit: Lightspring/Shutterstock]

Popular to-do list application Any.Do has raised $3.5 million in new funding to continue helping people get things done no matter the device.

San Fransico-based Any.Do competes closely with apps like Wunderlist, Clear, and Remember the Milk. All four of these will have a great opportunity to pounce for users of Astrid, which was recently acquired by Yahoo and will likely shut down in the next few months.

While I’m a frequent user of Wunderlist, I also love Any.Do’s design and feature set. It’s free to use, simple, inputs tasks with your voice, and syncs across syncs iOS, Android, and Chrome apps. A web app is “coming soon.”

“In the past few months we’ve seen a lot of activity in the personal productivity space, and we are thrilled to have such an amazing group of people who believe in our vision and want to help us turn it into a reality,” Any.DO founder and CEO Omer Perchik said in a statement. “We are looking forward to continue simplifying people’s lives by bringing beautiful design and deep data analysis to the core apps that people use each and every day.”

The funding round was led by Genesis Partners with the participation of existing investors including Eric Schmidt’s Innovation Endeavors, Joe Lonsdale, Blumberg Capital, Joe Greenstein, and others. Prior to today’s round, Any.Do had raised $1 million in funding.

Recently, Onavo Insights said Any.Do is the most popular to-do list on iOS as of March. Check out the stats below.

Voice recognition is not a new idea, but enabling machines to determine a person’s mood using their raw voice is.

Beyond Verbal Communications, an Israel-based startup that’s just pulled in a $2.8 million seed round of funding, uses what it calls Emotions Analytics to determine someone’s emotions and character traits in real-time as they speak. Emotions Analytics is a new field based on human vocal intonations and enables machines to understand the person’s personality and moods. According to Beyond Verbal, Emotions Analytics will transform the way people interact with machines and with each other.

“Nearly two decades of research tells us that it’s not what someone says, but how they say it, that tells the full story,” Yuval Mor, CEO of Beyond Verbal, said in a statement. “Beyond Verbal has the potential to impact numerous multibillion dollar verticals and leverage a new market of emotionally-enhanced applications installed in any voice-enabled, voice-activated, or voice-controlled device.”

The technology is based on 18 years of research by physicists and neuropsychologists. Scientists studied more than 60,000 subjects in 26 languages.

Beyond Verbal licenses its technology for use in consumer applications. The first mobile application using its API will launch in the near future, and Beyond Verbal is building a web tool that allows people to use the platform to analyze voices.

The company launched in May 2013. The funding was led by angel investor Kenges Rakishev, and new VC Genesis Angels.

Photo Credit: Beyond Verbal Communications

NowThisNews, a video-news startup from the brains of former Huddington Post execs, has just raised a healthy round of institutional funding.

The $4.8 million round (out of a total $6 million in equity the startup is attempting to raise, according to SEC documents.) comes from Oak Investment, Lerer Ventures, Bedrocket, and new investor SoftBank Capital.

A year ago, when the project was still in stealth mode, its founders managed to raise a $5 million round, as well.

NowThisNews itself is a website and iPhone app chock-full of video clips likely to be popular on the Internet — big names (Queen Elizabeth), big stories (Amanda Berry's Cleveland kidnapping escape), big novelty (cocaine smugglers dressed as nuns to avoid police).

For now, at least, the site's front page is a step up from the nip slips and cat clips you might see trending elsewhere. But all the clips are super short — even the Queen merits a mere 91 seconds — so don't expect powerful journalism with ample context. Mostly, you're just getting brief clips of official statements or from news or security cameras with no editorial or perspective.

But it's not bad for catching up on the news from your iPhone, which is all the NowThisNews team really needs.

The company was founded in 2012 and is based in New York City.

Image credit: modenadude/Flickr

Health Q&A startup HealthTap has raised $24 million in its second round of funding and added former Square COO Keith Rabois to its board of directors, the company said today.

Palo Alto, Calif.-based HealthTap offers a popular service for doctors to answer questions from everyday folks. More than 38,000 accredited doctors in the U.S. are on the platform and more than 8 million unique visitors connect with those doctors each month via apps for smartphones, tablets, and the web.

HealthTap founder and CEO Ron Gutman told VentureBeat that the average doctor on the platform uses the app a crazy “69 minutes per session.” Doctors get hooked so easily because the app provides a way to put their names out there, attract more patients, and compete to answer questions.

“A large number of doctors use the app every single day,” Gutman said. “I think many of them do it because they are good people.”

HealthTap does not make any money off its robust network at present. Gutman says the company could be profitable today if he simply allowed advertising across the applications. But he’s forgoing advertising with the promise that the apps will eventually facilitate digital doctor appointments, which could be extremely lucrative.

“We want to provide access to care,” Gutman said. “25 percent of doctor visits are just exchanges of information. We want to take over those appointments … and we will charge less than a traditional visit.”

The new funding was led by Khosla Ventures, with participation by prior investors Mayfield Fund and Mohr Davidow Ventures. Including the new funding, HealthTap has raised about $38 million to date. Its previous round totaled $11.5 million.

Having Rabois onboard to help the company will come in handy since he’s known for helping early companies grow and become successful. He previously worked for PayPal, LinkedIn, and Slide. Following a rough departure from mobile payments startup Square, Rabois became a VC at Khosla Ventures. Vinod Khosla himself will also join HealthTap as “an adviser.”

HealthTap was founded in 2010 and has just over 30 employees. The new funding will allow it to hire aggressively. Gutman specifically said he plans to hire workers for “big data, engineering, product, design, and health informatics.” Looking forward, Gutman also said he’d like to take the service global, but the focus will remain on the U.S. in the near term.

Photo via HealthTap

Every week I get one or two companies who come into XSeed and ask if it is okay to pitch “without using a presentation.”

“Let’s just have a conversation,” they usually say.

I always oblige and see how it goes. What I have noticed, however, is that these meetings are very ineffective a high percentage of the time.

It isn’t that I’m a fan of PowerPoint; I agree with the idea that presentation tools can constrain one’s message and creativity if not used properly.

As I listened recently to an entrepreneur’s pitch that was drifting all over the map, I remembered a conversation with my first boss at Intel, Avram Miller. I was about to have my first one-on-one meeting with him, and I asked how he wanted me to communicate. Should I use a memo? Slides? Notes?  

I’ll never forget his reply:

“I don’t care if you strip naked, shave your body, and use smoke signals — just be effective in communicating the key points you need to get across.”

I love that advice. For companies pitching a venture capitalist, I can’t give better counsel than that.

If you are presenting to a VC and don’t want to use slides, be sure you quickly communicate the following:

1. Be specific on what product you are building.
2. Give examples of who your customers are, how many of them there might be and why they will buy your solution (what is the specific problem that you are solving).
3. State clearly against whom you compete and why your solution is better than theirs.
4. Be specific on how big a business opportunity this is and what revenues will look like in three to five years.
5. State where you are in your company formation process: prototype/demo/alpha/ beta/revenues, etc.

If you don’t use slides, you should be able to communicate these answers in 15 to 30 minutes, even if you are interrupted frequently with questions.

While there is a sexiness and aura of confidence in “flying without a net,” be sure you clearly answer the usual questions that investors need to know. You can have a deck as backup and refer to it as needed, but be very careful that you don’t meander in your meeting such that you don’t efficiently give essential information around your firm’s opportunity.

VCs often see hundreds of companies a month. Your job is to separate us from our money. Make that as easy on yourself as you can.

If you choose not to use a presentation and you discuss the above items effectively, you have a good chance of appearing confident and on top of key issues that will face your startup. VCs love knowledgeable and thoughtful entrepreneurs.

Be aware, however, that the risk of not using a presentation is that you come across as unprepared and disorganized regarding the issues which are critical to the people on the other side of the table.

Be careful that you don’t use the strategy of “just having a conversation” as an excuse for not being prepared and not leading the meeting in a proper direction.

Image via docpop/Flickr

Robert Siegel is a General Partner at XSeed Capital, bringing extensive innovative leadership in strategy definition, operational execution, and international sales and marketing for companies large and small. He is currently on faculty at the Stanford University Graduate School of Business, has co-authored several articles for California Management Review, and served as lead researcher for Andy Grove’s book Only the Paranoid Survive. This post originally appeared on his blog.