What’s new in startup funding?
“We fund passion, we fund potential, we fund people, we fund success stories,” says the website of Madrona Venture Group, where Greg Gottesman serves as managing director. The company provides seed and early-stage capital to innovative technology companies, primarily in the Northwest. “We fund not only with money, but with time, resources and unbridled enthusiasm for all that goes into taking a company from idea to market success.” The track record includes “30 startup exits and counting.”
Greg is among a dynamic group of startup funders who will participate in a panel on Driving Innovation: Emerging Capital Strategies at Advocacy’s one-day conference in Seattle September 19. The conference is being held in conjunction with the “Next Fifty” commemoration of the 1962 World’s Fair (see the Small Business Watchdog, Aug. 10). Rebecca Lovell of GeekWire.com will moderate the panel, which includes Greg along with more financial capital experts:
- Danae Ringelmann’s company, Indiegogo, is fueling an economic shift as Internet behavior evolves from a world of transactions to a world of relationships. “Crowdfunding” is at a tipping point, and millions are now taking control of their creative causes or entrepreneurial endeavors by raising money from anywhere, anytime, for any idea.* Indiegogo’s open platform has seen a wide variety of crowdfunding campaigns—from funding a museum for Nikola Tesla, to the first-ever crowdfunded baby, to a company selling inflatable solar lights. And of course there was the outpouring of support for Karen Klein, the bullied bus monitor, who received nearly $800,000 after a Good Samaritan in Canada set out to raise just $5,000 for her vacation.
- Wil Schroter also created a funding* platform, Fundable.com., which allows startups to offer rewards such as product or swag to get the company to the next stage. Fundable is targeted to commercial startup businesses (not arts or hobbyist projects), and applicants must be reviewed and accepted. Wil notes that the phenomenal response to his idea shows both how many people need startup funding and how many funding levels are needed—from $10,000 or less to $1 million or more.
- Andy Sack is executive director of TechStars, managing partner of Founder’s Co-op, and executive chairman of Lighter Capital. TechStars is a startup accelerator that provides mentorship and “seed funding from over 75 top venture capital firms and angel investors.” Founder’s Co-op is a seed-stage investment fund focused on web and mobile applications requiring limited capital with growth potential. Lighter Capital funds businesses through a revolutionary revenue-based financing model that offers a new funding option with “no dilution, no loss of control, and no personal guarantee.”
- Catherine Mott founded BlueTree Capital Group and BlueTree Allied Angels, which is a regional group of accredited investors who invest in regional early-stage companies. The members-only organization operates as a network of private equity investors who meet monthly to evaluate and consider pre-institutional, early-stage investments.
The Office of Advocacy conference is cosponsored with the Seattle Center, Northwest Entrepreneur Network, and GeekWire.com. For more information and to register, visit Small Business and Government: Maximizing Entrepreneurship, Driving Innovation.
—Kathryn Tobias, Senior Editor
*Note: The term “crowdfunding” has been used to describe Indiegogo and Fundable, among other funding platforms; however, they are not crowdfunders under the JOBS Act, because they are not giving equity shares of the companies in exchange for the funding. The Securities and Exchange Commission (SEC) has said that crowdfunding as authorized by the JOBS Act is unlawful until the agency issues rules implementing the crowdfunding provisions of the act. The SEC is developing the rules, but has not yet issued them.