Category: Tech news

For general writing, most people move on from pencils to pens during high school or college. But mechanical pencils are still incredibly useful for a variety of activities.

Startups could face a “death sentence” one year ban from fundraising if they violate awkward new general solicitation fundraising rules, AngelList co-founder Naval Ravikant wrote in a letter to the SEC this week. Ravikant says the Regulation D and Form D changes that go into effect soon are designed for Wall Street, not Silicon Valley, and must change or they’ll harm rather than help startups.

Last month the SEC voted to implement some parts of the JOBS Act, including lifting the ban on General Solicitation. This allows startups and funds to openly advertise that they’re looking for investors, rather than quietly using private communication to solicit money. The theory is that this will make it easier for startups to raise money, build companies, and create jobs.

The problem is that the SEC also decided to add a bunch of red tape to the fundraising process too. This includes notifying the SEC 15 days prior to fundraising, filing all changes to written investor materials to the SEC, and providing verbose disclosures whenever soliciting funding. As TechCrunch contributor and Seattle lawyer William Carleton wrote, ”the SEC’s proposed new Reg D rules and filing requirements, if adopted, will make general solicitation more of a burden than an efficiency.”

Ravikant shares Carleton’s opinion, and delivered to it to the SEC in more forceful terms, hoping the rules can changed.

“We are concerned that the newly proposed Form D filing rules could create disastrous unintended consequences for the startup community…Rules that may be easy for Wall Street are a death sentence for startups…Since young companies are responsible for most of the job growth in the US, we believe this is against the spirit of the JOBS Act” Ravikant writes.

He explains that while Wall Street actors are used to this level of formality and have lawyers to navigate it, they would cause big problems for budding companies. Startups likely can’t afford expensive legal counsel to help them avoid breaking the rules, yet “the very severe penalty for non-compliance (not fundraising for a year) is a death penalty for a not-yet-profitable business.”

Startups are often in a constant state of fundraising as they test the waters of investor interest. That makes it tough to know when to file the start-of-fundraising notice, and could force them to turn away spontaneous opportunities. As startups often iterate quickly and evolve the messaging to investors by updating their websites, filing each of these changes with the SEC would be a huge hassle. And it would nearly impossible to fit a proper disclosure into a tweet soliciting investment.

Some of these rules are designed to protect inexperienced investors that would be allowed to fund companies if the equity crowdfunding portion of the JOBS Act is finally implemented. Right now only accredited investors, people with over $1 million in personal wealth, are allowed to invest. They’re generally tougher to dupe into sham investments. But if average Joes can invest, they may need greater protections afforded by tighter regulations.

The hope is that more focused rules that actually guard amateur investors could be put in place alongside true crowdfunding so the frictions described here wouldn’t be necessary.

After breaking down the threats to startups in his letter, Ravikant provided the SEC with a list of remedies:

1. “Allow third parties to do the filing on issuer’s behalf via API” provided by sites like AngelList
2. “Allow the company (or a third party like AngelList) to hold the financing materials so the SEC can access them” via a permalink URL to an updated set of materials
3. “Only require legends and disclosures when terms are communicated” instead of in tweets, public statements, or other time fundraising is more casually mentioned
4. “Drop the 15-day-in-advance before financing rule entirely” and use the existing file-after-the-fact system
5. “Don’t impose death penalties for noncompliance. Instead, reduce the costs of compliance” and keep more Form D information confidential so startups don’t have to reveal sensitive information too early
6. “Don’t be overly broad in the penalty application” by only punishing the violator, not surrounding businesses and funding platforms that support them.

The question now is whether the historically slow-moving SEC will budge on these rules, despite the sound logic behind Naval’s suggestions.

 

Glenn Solomon is a Partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Isilon, Domo, Square, Zendesk, Quinstreet and Nimble Storage. His personal blog, focused on growth stage entrepreneurs who are thinking big; can be found at here. Follow him on Twitter @glennsolomon.

In 2010, had you suggested to the smartest Silicon Valley entrepreneurs and investors that LinkedIn would have a larger market value in 2013 than Groupon, Zynga or Twitter, you would have been laughed at. Had you hypothesized that LinkedIn would be worth more than Groupon, Zynga and Twitter combined and worth nearly one-third the value of Facebook, no one would have believed you.  LinkedIn just wasn’t as exciting as the internet darlings of the day, and, as a result, there were many LinkedIn doubters at that time, myself included.

While LinkedIn circa 2010 might not have been as exciting as its go-go Internet brethren, the company was clearly doing something very right, building out a product roadmap, company strategy and team that has paid handsome dividends since the company’s IPO. The case study of LinkedIn raises interesting questions for founders and investors alike: Why has LinkedIn worked so well as a public stock? What can we all learn from its IPO and after-market performance? In this post, I’ll briefly make four arguments as to why LinkedIn has performed so well:

1. The value of beat-and-raise methodology on Wall Street
2. Creating a deep competitive advantage and position
3. Building multiple growth vectors
4. Designing a product that gets better as it gets bigger

Beat-And-Raise Methodology

LinkedIn has played Wall Street perfectly. The company priced its IPO well below the market-clearing price, kept expectations muted and, since its public debut, has obliterated both its guidance numbers and consensus Wall Street estimates. In fact, as you can see below, the consensus Wall Street expectation for LinkedIn’s 2013 revenue has risen from $755 million at the time of its IPO in mid May, 2011, to $1.5 billion presently. Ditto for 2013 EBITDA consensus, which has climbed from $147 million at IPO to $367 million today. As revenue and profit expectations have shot up, so has the stock price.

This strategy requires patience. It takes time to build enough maturity in a business for the team to predictably deliver results and maintain visibility. On Wall Street, to quote Radiohead, “no alarms and no surprises.”

This strategy also requires the company to take a hit, a tough thing to do. The value transfer from early investors to the new IPO investors comes in the form of higher dilution or less money raised in an IPO. Most Valley folks are trained not to do this, but one has to think about paying it forward, even for Wall Street, as crazy as that sounds. If companies can make money for their investors, these shareholders tend to remain loyal and attract others who recognize the value. At the same time, management gains more and more credibility among investors, a very valuable asset for public companies.

Creating A Deep Competitive Advantage

Though it’s now obvious to us all, LinkedIn created a very deep competitive position for itself. The heart of LinkedIn is its remarkably large data set of professional information on individuals and companies. The company spent many years figuring out how to build up this corpus of information and create the right user experience to keep the data set growing in value. Arguably, no pot of money from Microsoft, Google or Salesforce.com could rebuild this data set at this point. This is the moat. The fact that it took a long time to build only makes it more valuable, and it’s not going anywhere.

Wall Street has gained confidence that a competitor cannot come up and kill LinkedIn, and on Wall Street, once the fear of credible competition evaporates, valuation multiples shoot up. To wit, while 2013 revenue expectations have nearly doubled since the IPO, as the chart above shows, the multiple investors are willing to pay for this revenue has more than tripled (from 5.2x to 17.5x). Fear of competition is subsiding and confidence in the company’s ability to exceed its guidance is growing.

Building Multiple Growth Vectors

LinkedIn built not one, but many, growth vectors. Wall Street investors love a large, addressable market, and while they don’t love when companies spread themselves too thin by going after many disconnected markets, they do love adjacent markets that leverage core assets. With this, investors can model out more growth over more time and will continue to pay up for a stock, expecting high growth rates. LinkedIn has done incredibly well at building multiple revenue streams (Talent Solutions, Marketing Solutions and Premium Subscriptions are all rapid growers that contribute a healthy share of overall revenue), increasing their product set, and moving to mobile with an aggressive iOS plus HTML5 strategy, all leveraging their core data set.

Designing A Product That Gets Better As It Gets Bigger

LinkedIn has aged like a fine wine, getting better and better with age and size. In the Valley, people focus on growth at all costs. This makes sense. Wall Street is also enamored with growth, but investors also typically love margin expansion and expanding profit growth as much (and sometimes even more).

LinkedIn has invested in its business so that the company now benefits from great profit dynamics — a fast-growing top line alongside expanding margins (EBITDA margins, for example, were up in the June quarter to 24.4 percent from 22.1 percent a year earlier). My guess is that company management opted to sacrifice more rapid growth early on in order to make sure they engineered the right model. This may explain why some didn’t view LinkedIn positively on Sand Hill in the early days, but it’s all moot now as their patience is paying off on the Street.

In the wake of the Facebook IPO debacle and recent resurgence, I’m often asked about how companies should plan for Wall Street. My answer: the more you can emulate LinkedIn’s approach, the better.

 

Startup Formvertise is committing financially to the effectiveness of its mobile ad campaigns.

It’s is actually a spinoff from another company we’ve covered, Adlibrium, which offered mobile marketing tools for small businesses and nonprofits. The problem with that approach, as explained to me by CEO Shaunak Khire, is not hugely surprising — many of those organizations don’t have significant budgets.

With Formvertise, the team is focusing on a more specific problem — acquiring customers and users. To that end, it created an ad unit that presents consumers with a form that they can fill out. It’s not a new idea, even in mobile, but Formvertise is trying to eliminate some of the issues with other types of mobile advertising.

For one thing, it’s based on software-as-a-service pricing. In this case, advertisers pay a set campaign fee on a cost-per-submission model, so they’ll know how many submissions they’re going to get for their money. For another, the form should be very simple for users to fill out — depending on what the advertiser is looking for, consumers either enter their name, email, and zip code, or they fill out three poll questions. (They’re offered rewards like discounts for filling out these forms, but Khire noted that with these ads, the advertiser isn’t offering a discount to just get a one-time purchase, but instead to build a relationship.)

Khire also emphasized the difference between cost-per-lead ads and the cost-per-submission model that Formvertise is offering. He said it’s less about identifying with a sales lead and more about connecting with customers for purposes as varied as “creating communities, registering for newsletters, creating brand subscribers, market research, and so on.”

Formvertise is backing up this approach with what the team has internally called “sue me” ads. If advertisers sign up for a campaign of $20,000 of more, Formvertise will contractually commit to delivering a certain number of submissions within a certain period of time or they get all of their money back. If advertisers sign up for a campaign of at least $100,000, Formvertise will commit to both user acquisition and sales goals, and again, if it doesn’t meet those goals it will offer a full refund.

“It’s an outright guarantee from our end,” Khire said. “We are confident because of the datasets that we have, so we essentially take on all the execution risk of that particular campaign.”

The company is also announcing a Mobile Direct Response Fund of $250,000 which will be used to double the number of accounts provided to small ad agencies — so an agency that pays for five accounts will receive 10. And Khire said he will consider taking in-kind payments for campaigns from small businesses and bootstrapped startups.

By the way, Adlibrium isn’t going away completely. Instead, Khire said he’s going to turn it into an incubator of sorts for other local commerce products.

The Gillmor Gang — Robert Scoble, Dan Farber, Kevin Marks, Keith Teare, and Steve Gillmor — turned what seemed like a slow news week into a tour of emergent hardware and big tech ideas. A Down-Under visitor to Robert Scoble’s studio showed us how he used a 3D printer to prototype a Steadicam-like handheld image stabilizer.

Closer to home, we handicapped Elon Musk’s HyperLoop project, the possibility of using wearable computers to detect an interest in donuts from eye movements, and the timing of the end of Apple’s year-long drought of new product. As the new school year approaches, even a slow week turns out to be bursting with promise.

@stevegillmor, @dbfarber, @scobleizer, @kteare, @kevinmarks

Produced and directed by Tina Chase Gillmor @tinagillmor

Live chat stream

Editor’s note: Ben Narasin is a long-time entrepreneur, president of TriplePoint Ventures, the seed equity practice of TriplePoint Capital, and a freelance writer. Follow him on Twitter @bnarasin. 

Five years ago, I noticed a growing gap between angel and venture investing. Venture was getting bigger and writing bigger checks, while angel checks were getting smaller and their process was becoming more cumbersome. Since it had also become exponentially easier to launch a web, and later mobile business, entrepreneurs had ideas that needed a million dollars or less to launch, but no clear path to funding. This gap which I and a few other early adopters wanted to fill is now called “seed investing.”

Nature abhors a void, of course, and the void has long since been filled to overflowing. One hears numbers quoted from 1,900 to 19,000 startups being seeded a year. Angels, super angels, celebrity investors, institutional seed funds, and more recently top-tier venture firms got in the game.

Venture entered seed for two reasons: deal flow and pricing. The best seed investors favor the fingerful of firms they already have strong relationships with, and no one else gets to see the best deals. Seed investors have also grown in size, and some, like traditional venture firms, are doubling down on their winners, which means more time for the companies to grow and higher valuations when the venture round comes.

So venture got into seed, and started throwing financial darts. Funds either assigned a partner or two to the project, or authorized partners to make small investments on their own, or with one other partner’s vote.

They thought their seed stake would buy access to the Series A and they’d be there early, but it often hasn’t. Successful entrepreneurs don’t remember the financial dart; they remember that time and value delivered. Like so much in life, it’s what have you done for me lately?

Time is hard to come by for senior venture folk. They serve on a litany of boards and work on new deals 10 to 100 times larger than the seed deal they did in a moment of passion. They just can’t justify meaningful amounts of time, beyond being responsive to e-mails and an occasional meeting, if asked.

Seed deals are prolific, interesting and early, but well over 90 percent of them never mature into Series A-level companies. The numbers just don’t add up for partner time.

Entrepreneurs don’t think that way, and those that make it, the prettiest girls at the ball that everyone wants to dance with, remember how their suitors treated them after their first date so long ago. If they never called, then the new guy with sweet nothings and promises of fidelity and “added value” will likely win her hand.

In parallel, many of those other startups who had venture one-night stands so long ago in the form of a small check, and who didn’t quite get there, assume the venture firm may still step up at the altar, but there are no shotgun weddings in venture.

So the hoped-for optionality that firms sought isn’t assured, and the specter of girlfriends past is a reputational risk. What’s a VC to do? The same thing they did before: focus on the Series A when the time comes, compete on being the best board member and company builder. Stay focused on what they’re expert in, and stay friends with the folks who focus on seed.

[Image: Flickr]

The CEO of Waywire — the startup co-founded by Newark mayor and Senate candidate Cory Booker — is stepping down, TechCrunch has learned. The resignation comes as the company is in the midst of a strategic shift from content creation to content curation, according to a source familiar with the company’s strategy.

Richardson was one of three founding members of the Waywire team, along with Booker and Sarah Ross. According to our source, the company is in search of a new CEO, who is expected to be named shortly. In the meantime, Ross is handling the company’s day-to-day activities and Richardson will remain on the company’s board of directors.

The change in leadership comes as Waywire is at an inflection point in its strategic direction. The company, which originally planned to focus on original content creation and discovery, is expected to bet big on content curation.

While still in beta, original content has gone on the back burner as the company seeks to tweak its product and prepare it for launch. In that way, Waywire will lean on others to highlight interesting content that emerges. So instead of being responsible for creating interesting content, users and brands will hopefully highlight content created elsewhere.

With the new direction of the company, Waywire is focused on ways in which it can provide value to users through three different types of content curation: that which is done by its own editors, that which is done through its community, and that which is done by content partners. With that new goal in mind, the company has been working to partner with big media companies — and has signed up two, who will be named later.

So where’s Richardson going? We’re not sure, but TechCrunch received a tip earlier today that he’s joining AOL, to be reunited with AOL Brand CEO Susan Lyne. The pair worked together while Lyne was CEO of New York City-based Gilt Groupe, and Richardson served a variety of roles, including GM of the Men’s section of the site, as well as president of Gilt City. (Our parent company AOL didn’t respond to our requests for comment.)

Richardson isn’t the only person to leave as a result of the transition, we’ve learned. A total of eight Waywire employees have moved on as the company has shifted gears over the last several weeks.

It’s not all bad news for Waywire: With the strategic shift in focus and a new CEO expected to be named soon, the company is also poised to announce a new round of seed funding over the coming days or weeks, we’ve learned.

That investment will come on top of $1.75 million that the company raised from investors that include First Round Capital, Eric Schmidt’s Innovation Endeavors, Atom Factory founder Troy Carter, LinkedIn founder Reid Hoffman, and all-around celebrity Oprah Winfrey.

The news of Richardson’s departure also comes after Senate hopeful Cory Booker has advanced in the race, and as his opponents seek to use his involvement in the seed-stage startup against him. That said, Booker has said that if elected, he would step down from the board of directors and also put his holdings in a financial trust.

“The purpose of technology is not to confuse the brain but to serve the body,” William S. Burroughs once said in a Nike commercial, of all places. But things haven’t worked out that way, at least not for most of us. Our technologies are designed to maximize shareholder profit, and if that means distracting, confusing or aggregating the end-user, then so be it.

But another path is possible, argues Alex Soojung-Kim Pang in his new book The Distraction Addiction: Getting the Information You Need and the Communication You Want, Without Enraging Your Family, Annoying Your Colleagues, and Destroying Your Soul.

He calls the idea “contemplative computing.”

Contemplative computing, Pang writes, is something you do, not something you buy or download. He does mention a few useful-sounding applications, such as Freedom, which will block your Internet connection for a set period of time, and full-screen text editors like WriteRoom and OmmWriter (my personal favorite is FocusWriter).

These tools, along with applications like RescueTime and SelfControl, are great — but they’re meant to treat the symptoms of a digital environment designed to distract you. Pang points out that OmmWriter was, ironically, designed by an online ad agency to help keep its copywriters from being distracted.

These applications tend to promote escape from the Internet, but others advocate a more extreme approach to escaping online distractions: getting off the Internet for days or months at a time. Several books and essays in recent years, such as Nicholas Carr’s The Shallows, recommended spending less time online as a way to rejuvenate your brain. “Digital sabbaths,” where people give up their laptops and cell phones at least one day a week, have become trendy.

There Is No Offline Anymore

Like monks casting off worldly possessions and retreating to monasteries, free from the temptations of the modern world, unpluggers yearn for a simpler time, decrying our lack of appreciation for the offline world. “But as the proliferation of such essays and books suggests, we are far from forgetting about the offline; rather we have become obsessed with being offline more than ever before,” Nathan Jurgenson, an editor at The New Inquiry and researcher at Snapchat, wrote last year. “We have never appreciated a solitary stroll, a camping trip, a face-to-face chat with friends, or even our boredom better than we do now.”

But he warns that our idea of offline time has become a delusion. “Disconnection from the smartphone and social media isn’t really disconnection at all: The logic of social media follows us long after we log out.” In other words: are we really “offline” if all we’re thinking about is the Facebook post we’re going to write when we get back online?

We’re All Cyborgs, That’s What Makes Us Human

The issue is that technology shapes the way we think, and it’s difficult, perhaps impossible, to extricate ourselves from the technologies we use. Pang calls this “entanglement,” and he points to ancient examples — such as soldiers feeling that swords were extensions of their bodies — to illustrate how core this is to the human condition.

But being entangled with a tool like a hammer or even a machine like a car is different from being entangled with a social network. Your mind is meshing not just with a computer but with the people you interact with — and the designers of the new technology.

Pang does suggest taking digital sabbaths to cope with these technologies, but thankfully it’s not the only strategy he suggests for coping with network technologies. One of his other major pieces of advice is to take up meditation, and that’s where things get interesting.

While sketching the history of these techniques, he notes something interesting: the rise of meditation and other contemplative techniques coincided with the rise of urbanization, imperialism and international trade. Although these techniques existed for many years as part of “mystery schools,” it wasn’t until between 800 and 200 B.C. that they started to become available to outsiders.

We might not think of cities, governments and economies as technologies, but they are. And just like social networks and mobile phones, they entangle us with other people and with the logic shaped by policies crafted by other people.

Restorative Applications

People have long coped with urbanization by turning to restorative spaces such as zen gardens, cathedrals and walking paths. According to Pang, these spaces tend to:

• Be purposefully simple. Though “Simple doesn’t necessarily mean ‘stark’ or ‘blank,’” Pang warns.
• Contain contrasts, such as elements that shift from small to large or light to dark.
• Give a sense of “being away” Temples don’t tend to have outside facing windows, and urban parks tend to conceal the cities that surround them.
• Not be completely wild or untamed Natural settings are good, but too much nature can be stressful.

Although Pang outlines several principles of contemplative computing — such as “be mindful” and “extend your abilities” — I’m more interested in the idea of designing computer applications with the principles of restorative spaces in mind.

Most applications take pains to preserve the look and feel of the operating system. This is considered good user interface design. But I’ve noticed that music applications like Propellerhead Reason and Ableton Live often abandon the native UI of their host operating systems in favor of their own conventions. This creates a sense of “being away” from the rest of the computer. I run Live on the same laptop I use to write, do research and pay my taxes, but it feels like I’m using a completely different machine.

Clearly not every application can or should head in this direction, but it does offer a few clues to applications that promote a more mindful user experience.

But will the computer industry pick up on this stuff? Companies like RescueTime and Readability recognize the value of preserving attention. The “Slow Web movement” seeks to deliver information at the right time instead of in real time. But I can’t help but think we need computing environments reconsidered from the ground up: from the hardware to the operating system to the software. That means getting buy-in from giants like Apple, Microsoft, Google and Facebook.

Contemplative computing does have an unlikely ally in Facebook. In a feature for Wired, Noah Schachtman wrote that Facebook engineering director Arturo Bejar, a student of meditation, brought in a group of “Buddhist-inspired academics” to suggest changes to the social network’s tools for reporting offensive content. The company ended up making a range of simple changes to make the tools more personable.

Schachtman notes that it’s easy to be cynical about meditation teachers working with barons of distraction like Facebook. And much like Internet blockers or distraction-free writing apps, these sort of fixes are aimed at symptoms, not the disease. But they are evidence that people are paying attention. The trick will be to get enough people paying attention to make it matter.

Pang’s notion of mindful, or contemplative, computing is useful, but ultimately it’s just a way of coping with a world of applications designed without our best interests at heart. Just as meditation, prayer and weekend retreats can help us cope with the harsh realities of the modern world, so too can it help us cope with flame wars, feral inboxes and the non-stop rush of social media. But just as citizens can demand safer cities, more humane governments and even economic reform, we can demand a new class of technologies.

Photo by AlicePopkorn2

Smart pedometers are just the beginning. Sensors of all kinds are emerging to track the way we move, what we do at home and the way we sleep.

Last week, I wrote about a Helsinki-based company called Beddit that ran an Indiegogo campaign for a sleep sensor you attach to your bed. They say it is so sensitive, it can pick up a person’s heart-rate. After making devices like this for medical professionals for a couple years, they are looking at the consumer market with a cheaper product for $149.

They quickly reached their goal of $80,000 in about a week and are looking to tack on more. The company’s pledging to build a web app called Beddit Cloud for backing up and sharing sleep data if they can reach $200,000. The original Beddit already syncs to a mobile app through Bluetooth.

But if they build Beddit Cloud, then a person can automatically upload their sleep measurements to a private web account. This will include visualizations for looking at long periods of sleep data, spreadsheet exports and an anonymous aggregated comparison of your sleep data with other Beddit Cloud users.

They’ll also make the data easily shareable to social networks, putting in some of the social features that are common in more generalized activity trackers like the Jawbone Up. There will also be an open API for third-party apps. They’re planning to have it out by the second quarter of next year if they make this stretch goal.

“Democratizing venture capital” sounds great until equity crowdfunding fills startup financing rounds with amateur angels who don’t add value. So while other funding platforms open the floodgates to any accredited investor, and eventually anyone if the JOBS Act goes into full effect, FundersClub will now only accept investors who’ve been invited by existing members or applied for an invite.

FundersClub was a pioneer in the equity crowdfunding space when it launched a year ago. The company acts as an online VC that vets startups looking to raise money, secures space in their upcoming funding round, and then lets its members invest money to fill up the space. The idea is not to replace traditional expert venture capitalists, but augment them with a crowd of evangelists, recruiters and connectors.

Since it was founded, the Y Combinator-accelerated FundersClub has raised $6.5 million for itself. It has also collected $7.2 million for its 31 portfolio companies from its crowd of 6,700 investors.

But since it launched, several other equity crowdfunding platforms have gotten off the ground, including Wefunder, while Circleup and AngelList have gotten more serious about the space. Meanwhile, the Securities and Exchange Commission recently voted to implement part of the JOBS Act and remove the ban on general solicitation. This allows startups, and platforms like FundersClub, to openly advertise that they or companies they work with are looking for investment.

Competing crowdfunding platforms are now trying to grow their investor member base. But in doing so, they threaten to let in people who don’t have much to offer startups beyond their money. The potential for equity crowdfunders to only provide this “dumb money” is a key talking point of traditional VCs that compete with them. Experienced entrepreneurs, engineers, recruiters, marketers, and testers can all provide value, but a random accountant with enough personal wealth to be considered an accredited investor might not be worth bringing in as an investor.

FundersClub CEO Alexander Mittal tells me his platform’s members are usually veterans of the startup ecosystem, including C-level executives and managers who can bring a lot to companies they fund. “We realized we had a special community we got out there first,” Mittal says, and he wants to keep that community elite so startups want FundersClub in their rounds.

All existing FundersClub members won’t have to be re-vetted, but any new members will need an invitation from a member or request an invite from one and be approved. That should help the community grow organically and stay top of its class. The friction could deter some potential investors, but at the very least it will differentiate the platform.

The invite-only system could become even more important if the true crowdfunding part of the JOBS Act is implemented. This would let anyone invest, and not just accredited investors with more than $1 million in personal wealth. That could bring in even dumber money if funding platforms aren’t careful.

Mittal concludes, “People are getting loud, so we’re starting to speak softly while carrying a big stick.”

21st Century Fox has invested $70 million in youth-focused media company Vice Media, giving Fox a 5 percent stake in the company and valuing Vice at $1.4 billion, according to a report in the Financial Times.

I emailed a company spokesperson to confirm the funding but they have not responded. Still, the news has been widely reported enough that it seems pretty solid.

Although Vice started out as a print publication, most of its recent success has been online, especially in video (which led to a show on HBO). A recent profile in The New Yorker said that in 2012, the company brought in $175 million in revenue, more than 80 percent of it from the web.

Vice has also received funding from ad holding company WPP, merchant bank Raine, and former Viacom CEO Tom Freston, but according to the FT, the company’s senior management still controls 75 percent of Vice.

I was a semi-regular hate-reader of the magazine when I was in college, but eventually I got tired on its brand of hipster cynicism. Yet perhaps the most interesting thing about how it recent transformation is not its shift online but the fact that it’s actually investing in reporting, especially international reporting. For example, the top story on the front page right now is a bombing report from Beirut, and TechCrunch’s Colleen Taylor also pointed me to this episode of the HBO show on China’s ghost towns.

Now, Vice approaches a lot of that coverage with its usual sensationalist style — take its high-profile trip bringing Dennis Rodman to North Korea. And yes, Vice is still quite capable of running content that’s genuinely awful. But hey, there’s nothing unusual about digital media companies mixing eyeroll-worthy posts with stuff that’s actually quite good.

When Ashton Kutcher was first tapped to play Steve Jobs in the movie Jobs, which opened in theaters today, I was nervous. Mostly for Ashton.

In addition to being a friend, I’m also Ashton’s fan, and celebrate his entire oeuvre. But most of his roles thus far have been lighthearted (Dude Where’s My Car? for one). Portraying Steve Jobs is his most ambitious career move yet and an impossible situation. Here we have a very well-known actor, known for a specific type of work, playing a very well-known, and very serious, public figure.

During the Q&A session after the premiere of the film at Sundance, Ashton admitted that the role terrified him. But he said he followed the advice of Jobs himself and tried to attempt the impossible. He watched many hours of video and studied Steve’s mannerisms. He predicted that people would tear him apart, picking at every little thing he did and point out what wasn’t right.

He also acknowledged that he wouldn’t be able to get everything completely right, but he badly wanted the part and to give it everything he had. He offered more insight on Quora, which you can find here.

Director Joshua Michael Stern said choosing Ashton for the role was a no-brainer because of his passion for Steve Jobs and the tech industry. He said that beyond physical likeness, he felt that Ashton deeply wanted the role and understood it. There are scenes in the movie where the uncanny likeness between Ashton Kutcher and Steve Jobs is shocking. At some point, hippie Steve grows up and transforms into more of a business man and shaves — that’s when I think Ashton looks like Steve the most. There’s also a scene where Ashton briefly plays Steve announcing the iPod. They put him in full makeup and gave him short, peppered hair.

If this were a silent movie, I would have completely believed Ashton as Steve; it was clear he studied, as he delivered on his motions and gestures. But the only thing he couldn’t get rid of, which I’m sure is hard, is his voice. You can recognize Ashton’s voice immediately and there’s no way to separate the two so that you can fully give yourself away to the character. If you are a fan of Ashton’s at all, you just can’t escape it. There are very few actors (Gary Oldman?) that I’m able to “forget” in a role because they are so good at transforming into someone else.

If you think about the recent movie Lincoln, you can marvel at Daniel Day Lewis’s performance and remark what a good Lincoln he was, but how would we even know? We never got to live in a time with him and see him walk up and down the hallway. We never saw him give a speech at Macworld. Steve, on the other hand, is fresh in all of our minds as are his voice and charisma.

Despite this, there were many times that I was able to suspend my disbelief and get caught up in the story. The filmmakers succeeded in getting me emotionally involved which, given I watch upwards of 60+ movies a year, is pretty hard to do at this point. Ashton did an amazing job; I hope that people try to imagine how hard that role was to take on, and give him credit for how well he did. I can’t imagine anyone really doing much better. Well, except for Steve.

If the Jobs filmmakers set out to make something entertaining, they also did a spectacular job. Jobs is inspiring and shows how difficult and isolating it can be to start a company — the long hours, the rejection, occasional wins, loss of personal relationships and the “overnight success” after struggling for years. I think it should, and will be, embraced by the startup and tech communities.

And the movie will no doubt be a success with those who like Apple but really don’t know much about it, but hard-core fanboys and girls will likely take issue with some of the historical inaccuracies. There may have been technical inaccuracies, as well, but I didn’t catch them.

All filmmakers should seek to achieve historical and technical accuracy in their film making. Unfortunately, with docu-dramas, some of the ways situations are portrayed become fossilized as “truth” when people recount what happened with the story around dining room tables, which only serves to spread misinformation.

Woz watched a snippet of the film and insisted that a scene never even happened. However, discussions around these historical inaccuracies are probably good for the film in the long run, and for the audience as a whole, because they spark debate and encourage people to come out of the woodwork to give their versions of what happened. This only fuels publicity for the movie, so from a marketing standpoint, it’s a huge win.

Aside from details and inaccuracies, one problematic aspect of Jobs is that the mainstream non-tech audience member might get the impression that it is commonplace for early employees in Silicon Valley either to get no equity or dispute their equity. The movie has a heavy emphasis on some early employees that Steve Jobs insisted should not get stock grants in Apple.

In The Social Network, a primary plot point was that Eduardo Saverin didn’t receive his fair share of the company and was diluted to next to nothing during a round of funding (which from what I understand isn’t true). Compared to most companies, Apple and Facebook are corporations that were started somewhat by accident, and in those situations stuff like this can happen, i.e. Snapchat. But for every story like this, there are hundreds of others where this does not happen.

Ashton As Entrepreneur

Aside from being an actor, Ashton is an entrepreneur and investor. He was an entrepreneur prior to becoming more well-known in the tech scene and has since become a prolific angel investor in addition to co-managing a fund. I was fortunate to conduct a brief interview via email with Ashton about the film, as well as the challenges of being an entrepreneur. An excerpt is below:

TechCrunch: I know the film doesn’t always paint Steve in the best light, especially with his relationship to Steve Wozniak. Any way to discuss this somehow? If you have a response or if the filmmakers have a response of any kind to Woz’s first (negative) reaction, what would it be? 

AK: Woz was bought by Sony as a consultant for a film they may be doing. So his services were not available.

AK: There are some inconsistencies no doubt, getting everything right is always difficult however we attempted to tell the story of Steve’s life with in the confines of the format. We fought for historical accuracy the whole way through but also had to service the story. My job as an actor was to give people a feeling/a sense of who Steve was. When we showed the film to the original Mac team they seemed to be accepting of our interpretation and we hope the audience is too.

AK: Being an entrepreneur is tough and I hope this story inspires the technology community to overcome the obstacles that will come their way and build brilliant things to make the world more connected efficient and beautiful.

****************

Ashton has used his role as a very public figure to spread some absolutely amazing messages about building interesting things and creating your own life.

He has promoted these messages through his TV roles, movie roles and most recently in his acceptance speech at the Teen Choice awards. I guarantee you it isn’t something you’ve ever heard before on a major award show targeted towards teens. It is spectacular. Even if you end up not seeing or liking the movie, perhaps you will at least respect the broader long-term impact Ashton may have because of speeches like these. He focuses on what is most human – building your own life. Not just a business, but your own life.

Jordan Crook interviewed Ashton for TechCrunch TV earlier this month. You can watch it here.

Irked that the government lied to you about the privacy abuses of the National Security Agency (NSA)? You’re not alone.

Today, Rep. Jim Himes of Connecticut published a statement on the recent revelation that the NSA had breached privacy laws thousands of times in a one-year period. The Washington Post, which broke that story, also reported that the NSA kept news of such encroachments from Congress, and that the rate of abuse was increasing.

This is not in keeping with the official party line, bipartisan take that the NSA is a benign evil that could abuse your privacy — but doesn’t(!). That narrative is now over. The NSA’s abuse of our privacy is systemic, widespread and often banally accidental. I could go on, and I will in later posts, but let’s give space to the good Congressman (emphasis mine):

“I am quite disturbed by the news that the NSA violated laws and internal procedures established to protect Americans’ privacy nearly 3,000 times in just one year. I have been assured by the leadership in the intelligence community and by the President that there has been no abuse of these programs. These assurances factored into my decision to vote against the Amash amendment to the Defense Appropriations Act, so this new report is profoundly concerning to me. While I understand that a majority of these incidents, particularly those related to roaming, were mistakes, the bottom line is that when we are talking about constitutional rights, we need a system and culture that is zero-tolerance—the NSA must foster a culture and systems that fully protect the rights of the American people as it works to protect us from harm.

“It is clear based on today’s reports that we need to examine and improve those systems and culture within the NSA and improve congressional oversight of our nation’s intelligence gathering. While a system of this magnitude will never be without errors, the intelligence community should lean into, not away from, reporting violations of privacy to Congress. I stand ready to work with my colleagues on the committee to ensure these kinds of mistakes do not happen again and that the civil liberties of the American people are being fully respected.”

Hot damn, that’s the ticket. Here Rep. Himes points out that the false information tendered to him by both the “intelligence community” and the president was in fact not correct. And, even more, he points out that due to that false information, he himself cast a vote that he might regret.

And what do we call the dissemination of false information with the intent to deceive, my fine friends? Lying. We do not need to hide behind the language of This Town or relate to playing-card analogies. We can instead be honest: People lied. This perhaps led to the death of the Amash amendment that would have curtailed elements of the NSA’s pervasive surveillance programs.

That amendment failed, narrowly, in the House.

There has been a pattern of lying and obfuscation by the NSA and its assorted fans in government in the past few months. The record is somewhat plain. Good on Rep. Himes for raising his hand and asking that fewer lies be served up in the Congressional cafeterias.

Top Image Credit: Zoe Rudisill

I am a college student in a field that traditionally offers unpaid internships. If you were to ask me two years ago to work for a big-name publication with no pay, I would have jumped at the chance.

But this year, while browsing internship listings for this summer, I had no interest in unpaid positions. I considered them a last resort, only applying to a few in case I had no other choice.  But really, no internship was more appealing than an unpaid one. I considered traveling, waiting tables and a couple other alternatives I thought would be more rewarding than working for someone for free.

Judging from the backlash on this Facebook post asking for a part-time unpaid editorial intern, it seems I’m not the only one with dwindling tolerance for unpaid internships.

The job requisition came from New York editor at Sheryl Sandberg’s Lean In Foundation, which promotes powerful women in the workplace. As Slate notes, it is hypocritical for a foundation that promotes workplace equality and support to hire interns without paying them. And Sheryl Sandberg isn’t exactly strapped for cash (her net worth is estimated around $500 million).

Bennett tried to repair the damage the following day, with a post clarifying that it wasn’t an unpaid intern she was looking for, but a “volunteer.”

“LOTS of nonprofits accept volunteers. This was NOT an official Lean In job posting. Let’s all take a deep breath,” she wrote.

But I don’t buy it. Bennett first listed the position as an “editorial intern,” which typically attracts more ambitious applicants than “volunteer.” And while volunteers are dedicated and skilled, Bennett’s post listed job qualifications that applicants would have to satisfy.

The title “Intern” (or “Lean In-tern”) promises a more hands-on experience, guidance and qualifications to add to your résumé. And while unpaid internships have been widely accepted in the past, there are a couple of trends that are leading to harsher criticism.

Aside from the legal implications of free labor, the increasing demand for higher education means that more students are competing for whatever internship they can find. While companies benefit from a wide pool of qualified applicants, unpaid interns are taking the place of entry-level jobs. Working for free will take an even bigger toll on students who will need Stafford loans, whose interest rates will double to 6.8 percent.

People are also pushing for sustainable living wages, and not just in internships but also in generally lower-paying positions at places like McDonald’s and Walmart. Students who travel to expensive cities such as San Francisco, New York and Washington, D.C., are basically paying thousands of dollars for the opportunity to simply be an intern.

In Bennett’s defense, a part-time unpaid internship is a lot more flexible than a full-time position. I know some students who have worked an unrelated part-time job to support an unpaid position in their field. I’ve also taken a part-time, unpaid internship during the school year, because I had the extra time and was living an hour away from Chicago.

There will also surely be people interested in Bennett’s editorial position, even if it is unpaid. They may consider the rewards greater than the costs to be a part of the Lean In Foundation’s work. Some of my friends and classmates justify taking one unpaid internship because they think it’s a necessary step to a better option the next year. It’s a trade-off, a sacrifice in hopes that it will pay off in future hires.

And in some cases, the name means more than the pay. As a student at one of the top journalism schools in the country, I know the value that some people place on working at prestigious organizations and stacking a résumé. There comes a time in the spring when everyone you run into asks, “Where are you working this summer?” Sometimes it’s a lot easier to say an unpaid internship than nothing at all.

But unpaid internships undermine the work of qualified and motivated interns. Even if they are the least experienced workers at the company, they were chosen from an increasingly competitive pool and are aiding the company (unless you hired one of these interns.) If a company doesn’t think an intern’s work is worth paying for, then don’t hire them.

Positions like this won’t be widely sustainable for long, especially as more interns are filing lawsuits against media companies for fair compensation – and winning. In Lean In’s case, the media outburst prompted a public statement that they will pay interns. In an effort to back-pedal, the president of LeanIn.org, Rachel Thomas, posted on the organization’s Facebook page, denying the existence of any internship program. She said while the organization has attracted many volunteers, any interns they take going forward will be paid.

There are a couple of organizations that still avoid paying interns by requiring students to receive class credit. But this is a cop-out, because class credit is effectively useless when it comes to getting a diploma. Others don’t call it an unpaid internship, because they offer a “stipend,” usually enough to cover cost of travel.

While this limits applicants to those who can afford to take these positions, some people make it work. I have close friends that took on unpaid internships this summer and are doing great work. I have another friend who isn’t getting paid this summer, so she is considering taking a year off college to work and earn more money.

I’m lucky to be working a paid internship this summer that I love; I didn’t believe I was going to find something like this. But it seems that, increasingly, employers and pundits — and even interns — are recognizing that unpaid internships just aren’t sustainable. May this post serve as more coal for the fire.

Mobile taxi-hailing app Flywheel is growing fast, doubling its number of rides over just the last two-and-a-half months. And with new funding in place, it’s looking to enter new markets to provide a way for passengers to hail a cab from their mobile phones. The next big market it’s launched in is Los Angeles, where it already has 300 drivers lined up to start accepting rides via the app.

Flywheel recently raised a $14.8 million Series B round led by Craton Equity Partners, with participation from RockPort Capital and Shasta Ventures. It got that money to expand its service to new markets, and expanding it is.

With the exception of San Francisco, Flywheel is mostly available in a number of smaller markets, such as Cleveland, Ohio; Daytona Beach, Fla.; Lansing, Mich.; Lexington, Ky.; Louisville, Ky.; Miami, Fla.; Naples, Fla.; and Oklahoma City, Okla. Bringing the service to Los Angeles will greatly expand its potential customer base.

Just as Uber partners with black car companies to get drivers for its mobile ride service, FlyWheel works with taxi fleets to enable e-hailing in the various cities that it operates in. As a result, it was able to very quickly turn up service in L.A., going from zero to 300 drivers in just about 10 days, according to CEO Steve Humphreys.

By launching in L.A., Flywheel will be bringing electronic hails to taxis in a market where consumers are already pretty accustomed to using their mobile phones for transportation. Uber, Lyft, and SideCar have launched service in the city — which means there’s already significant competition in the market. But Flywheel will be the first significant player to have a large number of yellow cabs available.

Flywheel’s Los Angeles launch also comes as there’s some question about the legality of ride sharing services in the city. Although the California Public Utilities Commission has struck deals with Uber, Lyft, and SideCar to enable them to operate, and has also proposed regulations that would legitimize ride sharing in the state, local authorities in L.A. have attempted to shut down services that allow drivers without commercial licenses to get paid for providing rides to passengers.

Flywheel, of course, is trying to position itself as an alternative to the anarchy that is ride sharing: “This is in contrast to several ride-sharing applications currently available. Unlike those solutions, Flywheel offers a safe and reliable way to get around LA,” the company says in its press release.

Anyway, if you’re in L.A., or San Francisco, or Oklahoma City, try it out.