Wednesday, December 10, 2014

Lance McNeill of BCL Provides a Comprehensive Guide to Rewards Crowdfunding


Click here for the Guide


Interview with Lance McNeill of BCL 

Where are you from originally?

Austin, born and raised.


What university did you go to?

I started out at ACC and transferred into Texas State University where I graduated with a BBA and specialized in entrepreneurship. I graduated in May of 2008, right when the Recession was ramping up so it was difficult to find a job. I decided to continue straight through with graduate school and went back to Texas State for my MBA.

I graduated in 2010 and was still having difficulty finding the right job for me, so I joined the Peace Corps and did small business advising in Namibia. I found a passion for economic development and I’m currently at the LBJ School of Public Affairs at UT Austin where I’m focusing on economic development.

I’ll graduate in May and that’s it for me as far as degrees. I think my education has provided a good foundation for bridging the business and public policy fields.


What brought you to Austin?

My family has lived in Austin since 1964. I was born here.


What is your group’s mission?

The mission of Business and Community Lenders (BCL) of Texas is to further the economic development of Texas by promoting and assisting in the growth and development of small business concerns.


What need does it fulfill?

Many businesses struggle to access capital through traditional means. As a nonprofit organization, we’re a nontraditional lender dedicated to helping traditionally underserved businesses obtain the access to capital they need to succeed.


What exactly does it bring to startups?

We offer technical assistance to start-ups from the idea stage to the financing stage. We work with businesses early on so that they know what is needed to apply for a loan. We’ve embraced crowdfunding as an alternative form of capital that we can help start-ups access. We’ve created a coaching methodology specific to crowdfunding and we’ve partnered with Indiegogo to curate local projects.


What type of startup would benefit from your group?

Local Austin metro area businesses that are seeking a loan and/or crowdfunding.


What was the most challenging aspect of starting up the initiative?

When we ventured into crowdfunding, we weren’t quite sure how it would fit within our service offerings. We didn’t know if it was a totally separate function or if it would compete with lending. What we’ve learned is that it is absolutely a complement to our lending services. With crowdfunding, we can help entrepreneurs get all or some of the funding they need for their business. If their funding gap isn’t totally fulfilled by crowdfunding, we can look at our lending products and when and entrepreneur has successfully completed a crowdfunding campaign, they’re often a better loan candidate.


What advice do you have for entrepreneurs?

Leverage the resources in Austin as early and as often as possible – there are many resources available to help with all aspects of the business. Often entrepreneurs try to do everything on their own and I see many get into a situation where they get burned out and frustrated or get into an unadvised situation. For example, when entrepreneurs sign a lease and then come talk to a lender about lending only to find out that they cannot qualify for some reason.

Many entrepreneurs are sprinters, trying to get from point A to point D as quickly as possible, but starting up isn’t a sprint – it’s more of a marathon and you have to get from point A to point B first.


What Austin-based resource have you found to be the most helpful and why?


The City of Austin Small Business Development Program is amazing. They offer a ton of classes, coaching and connect with many resources throughout the community. They’re a great first point of contact.

Wednesday, December 3, 2014

Brady Anderton on Fueldfilms

Brady Anderton on Fueldfilms

Summer Finley and Brady Anderton each took different paths to get to their partnership at Fueld Films.

Brady grew up in San Antonio, TX and Salt Lake City, UT. Growing up in Utah his family were all skiers and filmed everything they did. After receiving his BS in Civil Engineering from Brigham Young University he developed a lip balm tether for the ski and sports market. To promote it he began making original content and commercials with a small production crew. After selling the company Brady turned his focus towards commercial production, co-founding Fueld films with Ben Hurst in 2007.

Summer grew up on a cattle ranch in west Texas and spent her teen years in Austin. When auditioning for colleges, the dean of theater and film school at the University of Manchester, Rose Bruford in the UK, considered the Julliard of the UK, recruited her to college in England.  Her career launched just after college with her first job as a casting assistant. After finding 30 competition-ready body builders in Austin in 5 days time, she earned a reputation as a miracle worker in film production. She joined Fueld Films as a partner in 2009.

Brands are facing 10x the amount of content they needed just a few years ago. There is a need to address this hunger for more content, and faster.

Fueld’s solution aggregates the most creative regional markets into a single, comprehensive network.. By aggregating the talent in regional markets they have been able to attract an extensive, diverse list of acclaimed Directors, they offer a new way to search for directors that agencies wont find on any list With this they are able to deliver exciting new talent for productions with budget limitations.
Fueld serves advertising agency producers, creatives, and brands across the country who have high-quality creative concepts but are facing challenged budgets. They also provide a steady flow of business  for crew members, vendors, and actors  in an uncertain industry.   

They faced a difficult path in getting Fueld off the ground. As Brady describes, “If Summer and I had approached 50 industry experts about what we wanted to accomplish as a production company based in Austin, TX we would have been told 50 times that we would fail. That taught us how to trust our gut as we tried new things.” Summer adds “The uncertainty is hard. As a startup you have no choice but to wear all the hats in the beginning.”
Along the way, Summer and Brady drew inspiration from FAST COMPANY magazine.  Says Brady, “I have always been inspired by pioneers in their field. We are voracious readers and stay curious about everything and everyone around us.”

As they build Fueld, they try to keep it authentic. Brady says, “People come to us because it feels like coming home. We don’t consider doing the right thing a weakness, as it’s more of a way of life for us.  I think some are afraid people might take advantage of them if they admit to being kind.  We want to change this paradigm. We set out to prove that you can be nice and produce great work.”

Summer recognizes that film production can be a high-stress environment but says “we see ourselves as very blessed to be in such a creative industry. Fueld is known for assembling great teams that are not only talented and reliable, but enjoyable to work with. Working with Fueld its like working with family – dedication to the end and honesty all the way along to get us there, and hugs at the end.”

Now that Fueld has shown that new models of uncovering and exposing local and regional talent to a national market are viable, the next steps are to simply pour gas on the fire, without blowing everything up. Brady says that “we have found that growth is best accomplished with equal parts expansion and shoring up the base.” 

The best advice they have for entrepreneurs? Be great. It's ok to dream. We're all in this together.


Says Summer, “When you are young and untested but have a clear vision about something you should just realize that in the beginning its far better for you to simply go and do then to talk about what you could be. A seemingly small accomplishment can easily be amplified once its been proven.”

Brady adds, “Treat everyone with kindness and respect.  You never know who you’ll be dealing with in 10 years, and people never forget the way they were treated, good or bad. “

When you’re faced with a daunting task be the person who won’t  take no for an answer.  There’s always a way!   

When Brady thinks of starting again, “I think I would do everything the same, just fewer Redbulls.”


Thursday, November 13, 2014

Texas Intrastate Crowdfunding -- Town Hall Meeting

The Texas Intrastate Crowdfunding Law has been approved and is coming open for use later this month.  I sat on a Town Hall panel yesterday organized by Cynthia Nevels.  With me were Patricia Loutherback of the State Securities board of Texas and John Johnson of Goldstar Trust whose bank handles funds escrow.

The audience consisted of portals preparing to use the Intrastate law.  By my count, there are eleven portals lining up for it.  Two are focused on oil and gas, two focus on real estate, and the rest cover startups. The audience asked questions of the panel about the specifics of the law and use cases that may come up.   One audience member asked about how to handle situations where non-Texas residents use deception to gain access to the offerings.  This appears to be problematic as it violates the securities laws and puts the entire deal at risk.  Once funds are invested in a startup there's little chance of recovering the funds.

The board recently setup a web page on information for the investor which you can see at this link.
The page describes how to read the disclosure documents and assess the risk of investing in a startup. Even if fraud is detected the chance of recovering the funds is quite low. Equity acquired through the ruling can be sold but only after a nine month waiting period and only to a Texas resident.

Since the legislature does not drive the Intrastate Law but rather the State Securities board does, there's an opportunity to meet and dialog with them on a regular basis about the rules and procedures.  We are contemplating a quarterly meeting for those who want to engage the board on the topic.  If you're interested in joining these sessions, please let me know your interest and I'll include you on the invite list.

Best regards,
Hall T.

Saturday, November 1, 2014

Paul Murhpy Talks about His Startup -- Clarify



Paul Murhpy Talks about His Startup -- Clarify


Where are you from originally?

I’m not from anywhere really.  I was born in Argentina of a French mother and American father.  Actually, my mother is only half French.  She’s also half Luxembourger.  She was born in Ecuador.  My father is part Irish, part French-Canadian, and part Iroquois.  He was born near Boston.  My brother was born in Italy.  I went to school in France, Italy, and the US.

So I don’t have anywhere to go back to.  I only pay attention to where I’m going, which is handy in my line of work.

My wife is Australian.

What university did you go to?

I went to Columbia in NY.  I dropped out, twice. It felt like life in slow motion.

What is the idea behind your startup?

Media files are completely unexploited digital resources. They are full of data, but it’s impossible for a developer without a background in signal processing to access it. Our startup, Clarify, extracts that data and makes it available to developers. 
Today our API allows developers to index and search audio and video libraries with a few lines of code.  The web site Mobento, for example, uses our technology to make the content of educational videos accessible to students and professors.


What need does it fulfill?

To do anything truly interesting with audio and video files – anything besides playing them back – developers need to be able to manipulate their content. Today developers can search text files, extract their keywords, even summarize and translate them. Clarify is allowing these developers to do the same with rich media.

What exactly does it do?

Our platform first figures out what sort of content a developer sent it. Is it speech? Music? Noise? English? German? It then uses the best possible speech recognition technology to extract words from the media, and indexes those words along with any other data the developer wants to associate with the media.


Going back to the Mobento example. They send us video descriptions, speaker names, etc., and all of that – along with the words spoken in the video – is searchable via our API.
 


Who is it for?

The API is for developers.  The products they build are for many different industries.To date we’ve come across a lot of use-cases.  Over 400 developers have signed up for access to Clarify since we launched into beta.  A lot of their use-cases have surprised us, and we know there are a lot more out there.  The more data we expose, the more use-cases developers will turn up. 


Ultimately, any industry that is generating or collecting media files needs our technology.

What was the most challenging aspect of starting up?

We are bridging two words: the speech community and the application development community. Science and engineering. These communities speak very different languages and work very differently. Figuring out how to bring that science from the lab to the real world has been our biggest challenge. We think we’ve done a pretty good job so far, but we’re not out of the woods yet.


What is the next step for you and your business?

We’ve just raised a substantial round of funding that is going to allow us to continue extending our platform and introduce it to developers throughout the US. Both of those are pretty exciting, and they both require a lot of work. We couldn’t be more ready to face both challenges.

What advice do you have for entrepreneurs?

Don’t give up. 
It’s really difficult to introduce new thinking and new technology into the world. I can’t count the number of times people have asked me: “By why does anybody need this?”

Some day we’ll look back and smile, the same way we smile when we think of all the people who asked:  “Why do I need a computer?”, “Why do I need broadband?”, “Why do I need a cell phone?”, or my favorite: “Why would I need a phone that does more than make phone calls?”

It’s easy to feel smug in retrospect, but a new idea has to survive to be able to consider it once it’s been accepted, i.e., once it’s “normal”. Keeping it alive long enough for that to happen is hard.

It’s hard to fund a business. It’s hard to build the right team. It’s hard to write software that works and scales. It’s hard to avoid running out of money. And while we’re doing all those hard things, we have to ignore all the people who tell us we’re wasting your time, and our inner voices that tell us how much easier your life would be if we just quit and got a real job.

 What resource have you found to be the most helpful and why?

That’s easy: my circles of support.  Family, friends, advisors, mentors, and investors.  I don’t know if obsession counts as helpful, but it’s certainly necessary.  That’s the fuel that keeps me going, but without the people around me I’m pretty sure that fuel would have powered me straight into a brick wall by now.  


x

Thursday, October 30, 2014

"So What's the Risk?"-- In Consumer Product Good Deals

"So What's the Risk?"--  In Consumer Product Good Deals

The entrepreneur looks at the opportunity.  The investor looks at the risk.

So what's the risk in a deal?

While some risks are universal to all deals such as ability to execute and having the right team.  There are sector specific risks the investor should know.

In the consumer product goods space, one can make and sell just about anything but for those seeking to raise equity investment what's the risk to the investor?

The short-term risk is you won't have enough margin to make a profit.  Without a healthy  profit you can't grow the company from sales alone.  The category growth rate of the product makes a big difference in the company's ability to grow organically.

The long-term risk is you won't be able to raise more funding.  Most consumer product good companies need to raise funding every 24 months to continue a healthy growth rate as you have to fund the inventory increases that come with opening new distribution channels. To raise private equity funding you need sales north of $10M.  To sell the business for a decent return you need sales north of $20M.

The risk in the deal is failing to reach those levels on organic sales growth or earlier stage funding and not be able to raise more funding to grow the business to the $20M+ exit point.

Best regards,
Hall T.



Thursday, October 23, 2014

Texas Passes its Intrastate Crowdfunding Law with a Unanimous Vote

The Texas Securities Board voted unanimously yesterday to pass the proposed Texas Intrastate Crowdfunding Ruling.  State law requires a 30 day registration period after which the ruling can become effective.  This means that we could have the use of this law by the end of November, 2014.

In short, the ruling gives any resident of the state of Texas the ability to invest in a startup up to $5000 per person per year.  Previously, startups could only raise equity funding from accredited investors -- those with a net worth of $1M not counting the house they live in.  Accredited investors account for a very small fraction of the population.  The new ruling opens up the investor list dramatically for startups.  Most startups have a substantial number of contacts in their network and now they can tap their entire network for funding.

The ruling requires the funding be transferred through an approved Texas Crowdfunding Portal into funds escrow in a Texas bank.  Goldstar Trust in Amarillo has signed up as the first bank to provide such services.
Other criteria include the company raising funding must have 80% of their assets and revenues in Texas.  Investors must verify their Texas residency status by submitting their drivers license number or voter ID number.  Texas-based accredited investors are not limited to the $5K limit.

Unlike most states, the state Securities Board makes this decision rather than the legislature.  The board indicates they will continue to monitor the program and plan to modify and update the ruling to protect investors and startups.

You can see the rules at this link.

Best regards,
Hall T.

Wednesday, October 15, 2014

What is Your Definition of a Startup?

I work with funds, entrepreneurs, and startups of all kinds across the state of Texas.  I was recently talking with an international fund manager looking to invest in Texas deals.  He said his investment group wanted to invest in startups.  I asked him, "What is your definition of a startup?"  He looked a little surprised at the question as he like most people assume that everyone shares the same definition.

I've learned over the years that where you are in the world molds your definition of what counts as a startup.  In Austin, if you have a great idea, and two people working on it, then you're a startup.  In Dallas, if you have $1M of revenue, then you're a startup. If you have less than $1M then you don't exist.  In Shanghai, if you have $10M of revenue then you are a startup.  I once heard a fund manager refer to a $20M company as a startup.

What makes entrepreneur communities vibrant is their inclusion of all players in the ecosystem, not just those with substantial traction.  Startups without significant revenue can bring innovation, ideas, support, and other important drivers for the community.  I welcome the broader definition of startup as it creates a larger community within which to share ideas and foster innovation.

What is your definition of a startup?

Best regards,
Hall T.


Thursday, October 9, 2014

Ben Lamm talks about Chaotic Moon

Ben Lamm talks about Chaotic Moon

Ben Lamm, the CEO and a founder of Chaotic Moon was born in Austin but grew up in Dallas. When heading off to college he wanted to stay in Texas and so chose Baylor University for their 30:1 student:teacher ration. “. I really got to know my professors and learned so much during my time there because hardly any of the courses were lecture-based. We solved actual problems for real businesses.” Says Ben. “It was a very “Shark Tank” kind of experience: less talking, more doing.”

After school, as founder of an interactive education software company, Simply Interactive, Ben noticed how mobile adoption was changing the way people interact with the content on their phones. Recognizing an opportunity, Ben partnered with the founders of iPhoneDev camp to start a business that applied education user experience models to a growing mobile audience. This company, Chaotic Moon, has since then moved beyond mobile into the internet of things space.

Ben says that the things that set Chaotic Moon apart aren’t “… any of the things that make us famous - incredible user experience and design, innovative product strategies, a team of engineers who can do things most shops never dreamed of - the real answer is our ability to say no to clients. When you can say no to bad work, difficult clients or partners with mediocre visions, you’re free to do things no other company can do.”

The ethos of Chaotic Moon can be summed up in its mantra “We’re The Best”. Says Ben, “We’re building the future. We’re not solving mid-level marketing problems, we’re finding the interesting opportunities that push not just our client’s businesses forward but the entire industry forward.”

The belief that they are the best enables Chaotic Moon to build a culture unlike any other company. As Ben explains, “When you know you can do anything, and the best brands in the world believe in you, you have a lot of fun doing it. We are a very aggressive, work hard, play hard culture.” And this belief enables Ben to recognize the value of the people around him. Says Ben, “People are the best resources, from entrepreneur friends of mine to networking with people that have been there before. I lean on the advice of people that are smarter than me. The people you work with become your family, [and] you become the company.”

For Ben, the most challenging aspect of starting a business was the personal sacrifice. “Being your own boss gives you complete ownership of your own time, but if you’re going to succeed, you’re going to be working 100-hour weeks. At the beginning, the CEO’s job is to set the vision and survive at all costs. But at some point, you’re no longer a startup and your responsibility grows beyond vision and direction to increasing shareholder value. It makes you look at everything through a different lens.”


From his perspective, Chaotic Moon’s growth looks good. “We’re getting larger clients and bigger engagements and starting to roll out some of our own products and hardware. The ultimate goal is world domination. Our software is in phones, cars, tractors, Xboxes, hotels, drones, shopping carts - you name it. We’re already to the point that when you order a pizza from your car on the way home from a movie, you’ve used all Chaotic Moon software.”


All of the interconnectedness that they’re building allows Ben to see new opportunities for his company and clients. “Chaotic Moon is always looking to hack existing hardware to find new uses, bring two of our clients together to make something they couldn’t have done on their own, and we’re always mentoring and re-invest in the startup community.”

For the startup community, Ben’s advice is to be as aggressive as Chaotic Moon’s slogan. “My absolute biggest piece of advice is you have to take it. No one is going to give you anything, your partners aren't going to bring you ideas and your investors aren't going to bring you deals. So go out and take it, and only hire other people that will go out there and take it too.”



Saturday, September 27, 2014

Christine Kutnick talks about Hemlets

Christine Kutnick talks about Hemlets


Where are you from originally?

I was born in Irving Texas but went to high school in beautiful Austin!


What university did you go to?

I went to California State University, Long Beach.


What is the idea behind your startup?

Like many mothers, Christine was always looking to do something with her daughter that would bring us closer together. Jordana (age 13), on the other hand, always wanted to shop and was constantly asking for money to support her shopping habit! So after watching their favorite television show, SharkTank R where kids were pitching their business idea, Jordana said "I can start a business and make my own money." Like every good mother, Christine told her "of course you can!" She never knew how those words would take her on the ride of her life.

After many brainstorming sessions, Jordana identified her interest area. She wanted to create something in the fashion industry. They threw around many ideas...most of them were really bad but a few had potential. In the middle of the night, it hit Christine. "Dress up those leggings Jordana always wears!"

The next morning, the mother-daughter team set out to design an accessory for the boring legging. They went in search of the perfect way to create this new product. They talked to everyone they knew who sewed, looked at every ribbon and sewed a lot of samples. After 5 months of designing prototypes and pulling hair out, Jordana came up with the ultimate design that is used today.

Jordana serves as the Chief Creative Officer. When she is not doing homework or rowing, she is picking out fabrics and researching fashion trends for the company. She has hired her mom to serve as her CEO for the company to do all the grunt work for her.

Now they both have what they have been searching for. Christine is working on a project with her daughter and Jordana is earning money to support her spending habit.


What need does it fulfill?

It allows girls/women to change the look of their leggings and show off their distinctive personality.


What exactly does it do?

You wear the product with leggings to customize the basic clothing and add your own style.


Who is it for?

Girls who are 10-15 year old and women who are 30-47.


What was the most challenging aspect of starting up?


Keeping up the energy every day to keep the business moving.  I had to quickly learn how to be resilient and how to really listen to people.


What is the next step for you and your business?

We will add a toddler line and add a line of product that has beading.


What advice do you have for entrepreneurs?

Embrace your power!  Look at your business as a vessel for allowing you to grow and flourish. Once you look at it through this lens, you will be able to appreciate all the bumps in the road and you will become the success you are wanting.


What resource have you found to be the most helpful and why?

My four mentors have been the best resource to me. They are be honest with me. They have saved me from making a lot of mistakes. They have also helped me look at things in different ways and challenged me.

Thursday, September 18, 2014

Matt Levine Talks about his Company - ECR

 Matt Levine Talks about his Company - ECR


Where are you from originally?  

A suburb of Houston called Clear Lake


What university did you go to? 

Baylor University – sic em Bears


What is the idea behind your company? 

Focused and professional commercial real estate services based on long-term relationships with our clients


What need does it fulfill? 

Anyone with a need in commercial real estate, from a requirement to lease, sell, purchase, or have our firm manage their commercial real estate assets for them


Who is it for? 

Anyone with a commercial real estate requirement. 


What was the most challenging aspect of growing your business?  

In the very beginning when ECR was more of an idea than an operating company it was challenging to help bring on team members to grow the business.  However, opportunity presented itself and our core team that started with us in the beginning and have helped build ECR to where it is today are still with us helping lead us to new heights.


What is the next step for you and your business? 

Continue to build out our commercial real estate brokerage team to be able to serve more people in the Greater Austin area and expanding to other markets thereafter.


What advice do you have for other entrepreneurs? 

Keep your head up, stay positive and stay true to your course.


What is your motto in business? 

I like to encourage other entrepreneurs launching new businesses to laser-focus on sales in the beginning, as without sales you have nothing, but with sales you can build and build.



What resource have you found to be the most helpful and why?  

INC Magazine has been an amazing source of information, articles and stories for me throughout the years.  I read INC Magazine cover to cover each month and always end up sending myself a handful of notes and ideas from the content.