Evan Loomis talks about his new book "Get Backed"

Evan Loomis talks about his new book "Get Backed"

Where are you from originally? 

I’m one of those rare natives who was born and raised in Austin, TX

What university did you go to? 

Texas A&M University

What brought you to Austin? 

After graduation I spent almost a decade as an investment banker in New York and venture capitalist in Washington DC.  I moved back to launch a home improvement concept called TreeHouse.  You can think of it as the “Whole Foods version of Home Depot.”

What is your group’s mission? 

We wrote Get Backed to demystify one of the most intimidating parts of launching a venture: raising money. There’s no shortage of advice on fundraising. Most of it is terrible. We asked ourselves: What if we could give entrepreneurs what we wished we had had when raising money for our ventures?

At a deeper level, this book is about helping people bring their ideas to life and building meaningful relationships in the process. We want you to crush it with your startup. But even more than that, we want you to build friendships that outlast any term sheet and create true value for you, your community, and your venture.

What need does it fulfill?

Entrepreneurs don’t need more advice; they need to be able to look over other founders’ shoulders. They need to see the real pitch decks of ventures that have raised money, what kind of investors they closed, the email scripts they used to close them, and the mistakes they made along the way. That’s what we do in Get Backed.

What exactly does it bring to startups?  

Get Backed shows you exactly what Evan, I, and dozens of other entrepreneurs did to raise money—even the mistakes we made. We teach you a step-by-step process that can be used to initiate and build relationships with anyone, from investors to potential cofounders, and help you create a pitch deck, building on the real-life examples of 15 ventures that have raised over $150 million.

What type of startup would benefit from your group?  

Get Backed is for anyone who has an idea and needs to move people to get it off the ground. If you’re raising money, thinking about raising money, or just need to know how to better pitch your idea, Get Backed is for you.

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

Time!  We wrote this book over the course of two years while we were launching our own startups. 

What advice do you have for entrepreneurs?

The secret to raising money is one simple principle: successful fundraisers don’t raise money, they raise friends.  

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

There are phenomenal accelerators here that support startup founders. Places like Techstars, Capital Factory, SKU, DreamIt, and UnLtd USA provide community, mentorship, and focus in those critical early days.

SEC Adopts Rules for Crowdfunding

The SEC after three and a half years from passing the JOBS Act as passed the rules for Title III Crowdfunding which you can read here.   In summary the SEC rules say:

More specifically, the recommended rules would: 

• Permit a company to raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period;

• Permit individual investors, over a 12-month period, to invest in the aggregate across all crowdfunding offerings up to:
  • If either their annual income or net worth is less than $100,000, than the greater of:
    • $2,000 or
    • 5 percent of the lesser of their annual income or net worth.
  • If both their annual income and net worth are equal to or more than $100,000, 10 percent of the lesser of their annual income or net worth; and 
• During the 12-month period, the aggregate amount of securities sold to an investor through all crowdfunding offerings may not exceed $100,000.

Under the recommended rules, certain companies would not be eligible to use the exemption.  Ineligible companies would include non-U.S. companies, Exchange Act reporting companies, certain investment companies, companies that are subject to disqualification under Regulation Crowdfunding, companies that have failed to comply with the annual reporting requirements under Regulation Crowdfunding during the two years immediately preceding the filing of the offering statement, and companies that have no specific business plan or have indicated that their business plan is to engage in a merger or acquisition with an unidentified company or companies.

Securities purchased in a crowdfunding transaction generally could not be resold for one year.  Holders of these securities would not count toward the threshold that requires a company to register its securities under Exchange Act Section 12(g) if the company is current in its annual reporting obligations, retains the services of a registered transfer agent and has less than $25 million in total assets as of the end of its most recently completed fiscal year.

In addition, all transactions relying on the new rules would be required to take place through an SEC-registered intermediary, either a broker-dealer or a funding portal. 

Disclosure by Companies 

Companies that rely on the recommended rules to conduct a crowdfunding offering must file certain information with the Commission and provide this information to investors and the intermediary facilitating the offering, including among other things, to disclose: 

• The price to the public of the securities or the method for determining the price, the target offering amount, the deadline to reach the target offering amount, and whether the company will accept investments in excess of the target offering amount;

• A discussion of the company’s financial condition;
• Financial statements of the company that, depending on the amount offered and sold during a 12-month period, are accompanied by information from the company’s tax returns, reviewed by an independent public accountant, or audited by an independent auditor.  A company offering more than $500,000 but not more than $1 million of securities relying on these rules for the first time would be permitted to provide reviewed rather than audited financial statements, unless financial statements of the company are available that have been audited by an independent auditor;

• A description of the business and the use of proceeds from the offering;
• Information about officers and directors as well as owners of 20 percent or more of the company; and
• Certain related-party transactions.

In addition, companies relying on the crowdfunding exemption would be required to file an annual report with the Commission and provide it to investors.

Crowdfunding Platforms 

A funding portal would be required to register with the Commission on new Form Funding Portal, and become a member of a national securities association (currently, FINRA).  A company relying on the rules would be required to conduct its offering exclusively through one intermediary platform at a time. 

The recommended rules would require intermediaries to, among other things:

• Provide investors with educational materials that explain, among other things, the process for investing on the platform, the types of securities being offered and information a company must provide to investors, resale restrictions, and investment limits;
• Take certain measures to reduce the risk of fraud, including having a reasonable basis for believing that a company complies with Regulation Crowdfunding and that the company has established means to keep accurate records of securities holders;
• Make information that a company is required to disclose available to the public on its platform throughout the offering period and for a minimum of 21 days before any security may be sold in the offering;
• Provide communication channels to permit discussions about offerings on the platform;
• Provide disclosure to investors about the compensation the intermediary receives;
• Accept an investment commitment from an investor only after that investor has opened an account;
• Have a reasonable basis for believing an investor complies with the investment limitations;
• Provide investors notices once they have made investment commitments and confirmations at or before completion of a transaction;
• Comply with maintenance and transmission of funds requirements; and
• Comply with completion, cancellation and reconfirmation of offerings requirements.

The rules also would prohibit intermediaries from engaging in certain activities, such as:

• Providing access to their platforms to companies that they have a reasonable basis for believing have the potential for fraud or other investor protection concerns;
• Having a financial interest in a company that is offering or selling securities on its platform unless the intermediary receives the financial interest as compensation for the services, subject to certain conditions; and
• Compensating any person for providing the intermediary with personally identifiable information of any investor or potential investor.

Regulation Crowdfunding would contain certain rules that are specific to registered funding portals consistent with their more limited activities than that of a registered broker-dealer.  The rules would prohibit funding portals from, among other things: offering investment advice or making recommendations; soliciting purchases, sales or offers to buy securities; compensating promoters and other persons for solicitations or based on the sale of securities; and holding, possessing, or handling investor funds or securities.

The rules would provide a safe harbor under which funding portals could engage in certain activities consistent with these restrictions.  The rules also would require funding portals to maintain certain books and records related to their transactions and business.

What I learned at the Texas Venture Growth Forum by Sean Choi

AUSTIN, TX- Some of the greatest minds in Venture Capital and Texas’s startup scene came together at the AT&T Conference Center last week to get down to business.  With a focus on closing the series B funding gap in Texas, over 42 investors including Shell Corporate Ventures, Bain Capital Ventures, and Live Oak Venture Partners, met with over 27 $5M+ revenue companies, as well as Texas state representatives, to address the funding gap, share ideas, and close some deals.

My work with TEN gave me a glimpse of the current state of investors and founders in Texas, and the symbiotic relationship they share. But naturally, theory can only teach you so much and my entrepreneurial sweet-tooth was hungry to learn more; to experience that world firsthand, preached straight from the mouths of those who are building it.

I found exactly what I was looking for, and much more, at the Texas Venture Growth forum.

The day began with a welcome from TXVGF host Paul Watson, and moved into a keynote with Texas State Representative for House, Jason Villalba. Mr. Villalba expressed a genuine desire for the state to work alongside the venture growth industry to accelerate innovation and job creation in Texas. In light of a discussion on the shortcomings of the Texas Enterprise Fund, Mr. Villalba envisioned a relationship where the Texas government would co-invest alongside select venture capital partners. This would eliminate the need for the government to choose winners and losers in companies, as well as the potential for alleged “cronyism”, while maximizing the impact of taxpayer dollars on job creation. This was a particularly refreshing message from the Texas State that was, essentially- “we want to help you do what you do best to create jobs, and largely keep the institution out of it”.

I spent the rest of the day getting inside the heads of founders of growth-stage companies and venture growth pundits. My main reaction- holy cow these people are smart. Five of my favorite takeaways from the event are:

-The next generation of software will be centered around big data. By integrating an additional layer of data-mining, companies create a unique competitive advantage that is difficult for new entrants to replicate.

Talent “poaching” is a real and present danger for founders of tech startups, especially in Austin with larger corporations opening offices and seeking the best talent.

What makes Silicon Valley such an attractive ecosystem is the velocity of information sharing. Austin’s startup ecosystem growth shouldn’t be focused on becoming the next Silicon Valley, but could do well to better connect founders, investors, and talent. Josh Baer’s co-working space and accelerator, Capital Factory, as well as the TXVGF itself are making great strides in this respect.

Keep it simple, be succinct, and know what you are talking about to sound like a total genius.

And lastly, venture capitalists are people too. When somebody has the ability to slap down a check for $10 million, it’s easy to put them on a pedestal and view them as some sort of a financial demi-god. When it came down to it, the investors I interacted with were down-to-earth, passionate, and exciting people who are entrepreneurs and innovators at heart. They focus on holistically adding value to the world, as much as they do on making money.

It was a tremendous honor to share an experience and grow alongside all of the individuals present, and I am deeply humbled by the perspective that I gained.  This is an exciting time for Texas startups and investors, and I am exhilarated by the thought of participating alongside some of my new friends in the industry. Now, to summarize my understanding of startups and investment post-TXVGF, I leave you with the words of Anthony Volodkin, Founder of Hype Machine: “Be undeniably good. No marketing effort or social media buzzword can be a substitute for that”.

Thanks again for the insight, and I hope to see you all at TXVGF 2016.

Wes Okeke talks about Fruition Tech Labs

Wes Okeke talks about Fruition Tech Labs

Where are you from originally?

Nigeria

What university did you go to?

Culver Military Academy

Northeastern University Boston, MA. BSEE

 

What is your group’s mission?

Fruition as a company is tasked to bring solutions to the right people, addressing the actual needs while being supported by those that are not only trained but also committed to the success of the community and its people

What need does it fulfill?

We facilitate the development of ideas and innovations of entrepreneurs and inventors.  We want to support entrepreneurs that need a team, direction, leadership and a process. We use our proprietary “The 5 Steps to Fruition”  process

What exactly does it bring to startups? 

We help create startups from the entrepreneur’s conceptual idea and then bring them to the point of launching  a startup.

What type of startup would benefit from your group? We support and consult with 

Startups that are any stage of their development cycle of their business. Fruition also has a program for Startups that have already launched and need assistance in creating a more competitive business model. We for these types of situations we walk startups through our “Business Growth Strategies 5 Step Process”

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

The fear of our mission being labeled as  a non-profit or as a charity that would generate small revenues and low impact innovations. Fruition is a for profit company that focuses on innovations that are positioned to generate significant social impact globally as well as generate large revenues.

What advice do you have for entrepreneurs?  

Before jumping into entrepreneurship, take great efforts to count the cost, make the decision and then close all the back doors.

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

Entrepreneurial networking events have proven very helpful as they have brought huge amount of encouragement and moral support plus a great deal of fruition’s client companies  and team members have been met at these events.

What I learned at the Texas Venture Growth Forum

What I learned at the Texas Venture Growth Forum

Last week, TEN in partnership with Hermes Investment held its first conference called the Texas Venture Growth Forum.  The event was targeted to match Texas companies with > $5M in revenue with Series B investors from the venture capital and private equity markets.  Currently, there’s no true Series B or later stage funding in Texas.  Companies must fly to the west coast and east coast to meet investors.   The conference showcased Jason Villalba, a state legislator and the efforts he is making to reseed the venture capital community in Texas.

In the 1990s, the Venture Community was strong in Austin.  We had over 30 VC firms here and there was a panel of three to five VCs going on almost weekly in which the panelists discussed their criteria for investment.   The Dot Com crash took out most of those groups and when the dust settled what came back in their place were angel investors.  Angels rose in popularity because startups no longer needed $5M to start a company – they needed only $500K.  While some VCs remained in place, most exited the industry and found something else to do.  Today, in 2015, venture capital is making a comeback because companies who started after the Dot Com crash (or survived it) have not grown to a position that they need $5M to $10M or more in funding and angels and angel groups are not in a position to provide it.   The Series B and beyond belongs to the venture capital world.

In the Texas Venture Growth Forum, the gap in funding for Series B was highlighted. While most entrepreneurs know the gap exists, it was helpful to have David Altounian of the Austin Technology Council provide some deep dive research from the ATC Capital Study they recently completed.  The data analytics sponsor for the event, Pitchbook, also chimed in with their report which you can see at this link. 

While we all know there’s a shortage of capital, the next question to answer is what to do about it.  It’s clear from the data that we need to recruit more funding by launching new funds here and recruiting existing funds outside of Texas to focus on this area.   The other lesson I learned is that Texas companies should take a national approach to their fund raise from the beginning.  Even California companies don’t raise all their funding from California. They have to go outside for a substantial portion (albeit less than Texas) of their funding too.

Best regards,

Hall T.

Robyn Metcalfe Talks about the Food+City Challenge Prize

Robyn Metcalfe Talks about the Food+City Challenge Prize

Where are you from originally?  

California

What university did you go to?  

Received a BA in American Studies from The University of Michigan and a MA and PhD from Boston University in History. 

What brought you to Austin? 

Positions for Bob (my husband) & myself at the University of Texas

What is your group’s mission? 

True to our original mission as the Food Lab at UT, we provide awareness of food issues, encourage and motivate food system research, and provide support for those exploring and experimenting. This mission has simply broadened its wings as Food+City. A platform for bold exploration of the global food system, we provoke fresh perspectives on the realities of how we feed cities, and inspire action. We aim to raise awareness of the opportunities for improvement in our food systems and uncover insights that will shape how we make our world sustainable. We’ll explore how food moves around the world, the surprising complexity of distribution, how politics, economics, and trade create (and thwart) food crises, and much, much more.

What need does it fulfill? 

Despite growing interest in food topics, there is a lack of awareness and understanding around the systems and processes that feed our cities, and the ways those impact sustainability. We must bring that awareness and understanding, and harness the zeal of our communities to inspire, discover, and share the ideas that will improve our global food system. We’re going to uncover what’s missing in our current food systems and raise up the people addressing those needs. We’ll do so by challenging and testing all assumptions, beliefs, and technologies, and including you squarely in the process.

What exactly does it bring to startups? 

Food+City provides startups with resources to expand their visions. By entering into events such as the Food+City Challenge Prize, startups are eligible for money prizes (totaling $50,000), but the process is much deeper than seed money. The process pairs contestants with industry mentors to who guide the strengthening of business plans and the development of prototypes for 13 weeks.

What type of startup would benefit from your group? 

We accept applications from every kind of startup focused on food and/or food tech. Businesses or ideas of particular interest include the following objectives: lessen food waste; increase the supply of affordable and nutritious food; provide food that meets personalized health needs; improve the transport and distribution of food into and through urban populations around the globe; utilize new storage materials and processes that minimize waste. Students and professionals alike are encouraged to apply.

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

Defining the focus of our food challenge prize.  The word “food” means just that, food. We wanted to include all food-related startups, like those engaged in packaging, food processing, growing, etc. We’re making progress on defining our field of innovation, but it’s still a work in progress.

What advice do you have for entrepreneurs?

Think carefully about what problem you’re solving and whether your business is more of a social enterprise than a for-profit business. Many food-related entrepreneurs are drawn to solving social problems related to food; those endeavors aren’t particularly suited to for-profit models.

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

It’s tough to select just one.  The student organization at UT, The Food Studies Project, has provided us with ideas, enthusiasm, and a connection to the Austin student community.

Two Key Elements of a Crowdlending Campaign

The key to success is having a compelling presentation and getting the word out to as many people as possible.

Let’s start with the presentation. You need to provide a simple, well-organized explanation of your business. The things that are requested are things you already know – what is your business, how you would use the proceeds of the offering, simple financial information, the people behind your business, and the risks related to the business and the offering. You already know all of this. Your potential investors need to know it too, so they can make an educated choice on weather to invest, or not to invest in your loan. Securities laws require certain kind of information as well, since essentially what you are doing is issuing “mini securities” under the Texas intrastate crowdfunding exemption.  All this could get somewhat confusing, but a good crowdlending platform should provide you with organized and straightforward instructions.

The second step is to get as many people as possible to take a look at your project.  This would be a time consuming task if you had to make the presentation personally.  But, you don't.  All you need to do is to interest people in taking a look at your project on line.  Use personal contacts, email lists, daily customer contacts, social media, whatever means will get the simple message to as many people as possible.  “You know me and my business. I am raising money to expand.  I am conducting an offering at “Your URL”.

You can crowdfund your loan in Texas on Texas Lendoor.  Your company must be registered in Texas, and you can only raise money from Texas residents.

Bank loan v.s. crowdfunded loan. What is the difference?

Bank loan v.s. crowdfunded loan. What is the difference? by Lendoor

Both loans will get you the funds to grow your business, but the process of securing those funds is very different. The resulting obligation would likely be very different too.

Different process

For a bank loan expect to spend most of your time on paperwork and collecting documentation, then waiting for response. Your personal credit score would almost certainly be checked.

For a crowdfunded loan, most of your effort will go into finding the people that will invest in your loan. You would have to spend time preparing your campaign as well. Your credit score will not be checked, since your friends and family would be the judge of your credit worthiness, not a credit algorithm.

Different obligation

A bank loan is typically secured by assets of the company, or by personal assets. It is almost always personally guaranteed by the business owner. A crowdfunded loan is unsecured and without quarantine by the owner. If you are able to crowdfund a loan, your company will have better financial flexibility.

Loans for Start-Ups?

Banks don’t usually lend to start ups, especially if you don’t have personal or business asset to offer as a collateral. If you have a solid business idea and people that believe in you, you could raise the money for your start up even if your only assets are your business plan and your reputation.

Crowdfunded loans with benefits

There could be a number of additional benefits that come with a crowdfunded loan:

·         Customer loyalty. Your customers could be literally “invested” in your business’ success. 

·         “Word of mouth” advertising. Investors are naturally great advocates for a business. 

·         Buzz factor. A crowdfunding campaign may increase visibility and create buzz about your company in your community.

Where can you crowdfund a loan in Texas?

You have to set up your crowdfunding campaign on a Texas registered crowdfunding portal. There are currently only two registered portals that specialize in debt, and they are quite different: Lendoor and NextSeed.  Lendoor is the only platform that works with start ups and does not require credit check. 

Jessica Shortall talks about Texas Competes and LGBT Issues in Entrepreneurship

Jessica Shortall talks about Texas Competes and LGBT Issues in Entrepreneurship

Where are you from originally?

I grew up in northern New Jersey, in a tiny town called Chester.

What university did you go to?

I did my undergraduate degree in art history at Wake Forest University in North Carolina, and my MBA at Oxford University in the UK, with a focus on social entrepreneurship.

What brought you to North Texas?

Family and opportunity. My husband and I spent six years in Austin. We moved to Dallas in 2014 to bring our family (we have two small children) closer to his family. We also wanted a bigger market for him to grow his architectural practice.

What is your group’s mission?

Texas Competes is the first statewide coalition making the economic case for Texas to become welcoming and inclusive to lesbian, gay, bisexual, and transgender (LGBT) people. We exist to give voice to the competitive interests of businesses and economic development leaders in the areas of talent, entrepreneurship, corporate relocation, and travel and tourism. All of these pillars of economic competitiveness are being influenced by state brands on LGBT issue.

What need does it fulfill?

In 2015 and beyond, we are seeing talented workers, entrepreneurs, corporations, and conventions make decisions – decisions that have real economic impact – based on how states, municipalities, and workplaces treat LGBT people. We’ve seen it play out in Indiana and Arizona and Louisiana, where anti-LGBT legislation resulted in economic fallout to the tune of hundreds of millions of dollars. We hear it from HR leaders – that they feel a competitive disadvantage for the best talent, because Millennials in particular – gay and straight – are making decisions about where to live and work in part based on how LGBT people are treated. We see the data, too. As just one example: Millennials will be 75% of the American workforce by 2030, and 79% of non-LGBT Millennials want employment non-discrimination for LGBT workers. More than 70% of them favor marriage equality. The Detroit Chamber of Commerce found that 40% of Michigan college grads are leaving the state, and 38% of this “brain drain” is going to more LGBT-friendly areas. This group of people is making real economic decisions based on how LGBT people are treated, and that decision-making process matters to business competitiveness.

There is real, data-driven economic interest here, and it has too often gotten lost in the very emotional language more typical to LGBT issues. Businesses have the right and responsibility to protect their own competitive advantage. The Texas Competes pledge, which does not cost anything and does not require businesses to actively lobby, creates a unified business voice on this topic. As of June 2015, more than 320 Texas businesses, including 18 Fortune 500 companies, dozens of start-ups and venture-backed firms, and several chambers of commerce have signed the pledge.

What exactly does it bring to startups?

The Texas Competes pledge provides entrepreneurs with a voice to protect their own competitiveness in the war for talent and resources. When businesses large and small speak up on this issue in terms of economic growth, lawmakers pay attention. We saw more than 20 anti-LGBT bills die in the 2015 Texas legislative session – more than in any session in any state in U.S. history. Most lege-watchers credit the business voices on LGBT issues for this historic shift – examples in the press include http://www.cnbc.com/id/102726428 and http://www.huffingtonpost.com/tyler-curry/the-free-market-economics-of-lgbt-equality-in-texas_b_7497020.html. Businesses have the power to shift Texas’ brand on this issue – and that will translate directly into greater competitiveness to lure the very best people to the state.

What type of startup would benefit from your group?

Any startup that wants to be able to recruit the best talent to live and work in the state would benefit from adding its voice to the Texas Competes coalition, via our pledge at www.texascompetes.org. It’s free. It takes about a minute. And it is changing the way LGBT issues are viewed in this state, in a massive way.

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

The most challenging aspect of getting going was the “this is Texas” perception. Our core group of entrepreneurs and business executives, who drafted the pledge, were told again and again that “this is Texas” and such an initiative would never get off the ground. What we found, in fact, was a deep and wide desire to speak up on this issue, and many concerns that Texas’ anti-LGBT brand would be a competitive risk going forward. We have seen incredible appetite from among the business community!

What advice do you have for entrepreneurs?

I have always defined entrepreneurship as punching above one’s weight: figuring out how to leverage limited resources into much bigger aims, appearing bigger than one is (also known as “fake it till you make it”), and laying intelligent groundwork, systems, and operations for the toughest challenge of all: growth beyond one’s wildest expectations.

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

Our Texas Competes mission and pledge have traveled the fastest and widest via nodes and networks. Chambers of Commerce sharing what we do with their membership, incubators and investors sharing with their startups, individual business leaders sharing with their industry or business associations. We would welcome your readers doing the same – sharing www.texascompetes.org with nodes and networks that can exponentially increase the awareness of this opportunity in every corner of the state. You can also find us on social at www.facebook.com/texascompetes and @txcompetes on twitter!

Jonathan Blackburn of the Texas Pace Authority talks about the Pace Program

Jonathan Blackburn of the Texas Pace Authority talks about the Pace Program

Where are you from originally?

I grew up in Pensacola, Florida.

What university did you go to?

I attended Mississippi State University, graduating with a degree in Chemical Engineering, before studying at Duke and the University of Cambridge.

What is your group’s mission?

Our mission is to provide a new type of financing for energy and water efficiency upgrades to commercial property. The goal of the Texas PACE Authority (TPA) is to administer and promote Texas’ Property Assessed Clean Energy (PACE) programs for the purpose of helping property owners utilize economically sound energy and water improvements for their properties.

What need does it fulfill?

The biggest barrier to investment in upgrading buildings is in how to pay for the improvements. PACE financing solves many of the problems that have kept our infrastructure from being equipped with new energy efficient technologies.

PACE financing lets you put in energy efficiency measures and simultaneously increase your bottom line. The goals of the TPA help Texan property owners save money on energy and water bills by being more efficient and environmentally friendly with their resource consumption.

What exactly does it bring to startups?

The TPA allows for increased investment in property retrofits and new energy savings technologies in the state of Texas. For startups, this means that if your company has a technology product with a long payback, or if you have trouble convincing property owners of the financial case for your product, PACE will enable you to do more business. This increased latitude for finance opens the door for startups to enter the market and work with property owners, contractors, and lenders to facilitate and aid the property retrofitting process.

What type of startup would benefit from your group?

Startups related to real estate, construction and property retrofits, clean energy, and finance would benefit from the TPA. PACE financing can be used for energy and water efficiency technologies; if your business is in that space, PACE could benefit you.

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

Working to ensure that the TPA is the unified PACE administrator for the entirety of Texas is a challenging task, but also a necessary one. That is because the TPA, as a Texan non-profit with an emphasis on open market-based approaches to energy finance, is the best positioned administrator to keep prices and fees as low as possible for Texan property owners.

There are 254 counties in Texas, and adopting a PACE program requires a local government resolution. We’re now open in Travis County, and hope to have a couple of more big announcements by the end of the year.

What advice do you have for entrepreneurs?

In the clean energy space, you have to be focused on economics as much as technology. The market will decide which technologies win out, and that decision comes down to the financial bottom line. You have to make sure you can present a sound business case as well as a technology case if you’re going to convince someone to invest in your technology. I work with a lot of engineers and contractors who are really good at selling projects in terms of kWh saved, but really, they should be selling projects in terms of $ saved.

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

Various organizations have been helpful to the development and support of the TPA, including but not limited to Austin Energy, the State Energy Conservation Office, the Environmental Defense Fund, and the US Green Buildings Council. These groups, and more, believe that PACE loans are an important mechanism for the modernization of Texas’ properties, and as such are willing to lend their support, guidance, and resources – that is why they have been the most helpful.

Sloan Foster talks about IdealAsset

Sloan Foster talks about IdealAsset

Where are you from originally?

Lompoc, California – a little coastal town north of Santa Barbara. Lompoc is home to Vandenberg Air Force base where the military and now private companies launch missiles.

What university did you go to?

Central Washington University where I majored in Business and Marketing.

What brought you to Austin?

IBM hired me soon after the Tivoli merger to work in Business Development; so, we moved down from Dallas after spending five years there.

What is your group’s mission?

To insure the best innovation and intellectual property is put into the best, most capable companies to maximize that innovation’s global potential.

What need does it fulfill?

There is a vacuum in the buying/selling/licensing of brilliant innovation. The leading firms are essentially “privateering” the business to serve their own economic interests first – think non-practicing entities (aka: patent trolls); then, perhaps their client’s.

idealAsset is democratizing the business of transacting and takes no ownership in the patents and IP it sources.

There are millions of patents and other protected innovations in the world today that are sitting idle and/or eventually abandoned simply because they were invented in the “wrong” company – one that doesn’t want to maximize its value.

There is no solution, in any country, attempting to match these idle innovations with the most capable organizations. That’s where we come in.

  

What exactly does it bring to startups?

IdealAsset brings the ability for start-ups to efficiently source or exhaust off brilliant IP. By aggregating the world’s available Innovation and Intellectual Property and a vast community of IP buyers, idealAsset creates an affordable and accessible solution for the entire Innovation community – from individual inventor to the largest global Innovation holders.

Further, by allowing start-ups an efficient means to acquire patents they have the opportunity to shortcut the risk and process of pursuing their own patents and usually at a cost point well below what they would have spend in their own pursuits. Prosecuting a net new patent application through to issuance can take years and cost more than $25,000 apiece.

What type of startup would benefit from your group?

Start-ups that must rely on IP as a means to operate in a competitive market space. We tend to work with technology, bioscience and medical device start-ups as they tend to be operating in crowded spaces with many well financed incumbents.

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

The biggest challenge has been socializing an entirely new approach to a mature and slow moving industry that has an incumbency of middlemen with little to no incentive for significant change. That and quieting the raucous rhetoric around the need for massive Patent legislation reform by the largest technology firms. The truth is by allowing the market for commercializing IP and patents to mature on its own much of the current day issues with patent trolls and their operating models will wane as new innovation like idealAsset takes hold and obviates that business model.

What advice do you have for entrepreneurs?

Most entrepreneurs recognize the need to protect their ideas – through patenting, or copyright or simply trade secret efforts (keeping their secret sauce, well, secret).  That said they look at this effort as a tactical effort with a specific start/stop timeframe.  Investors tend to “check the box” with asking if start-ups have protected their ideas.

Innovation and intellectual property is a cornerstone strategy to any eager start-up’s success.

Markets are dynamic, R&D expenditures in the US are nearly $2.0 Trillion, yes with a “T” so people and corporations are inventing all day, every day.  Keeping tabs on innovation and new ideas should be as routine as your quarterly financials; finding and partnering with IP service providers can help keep a successful start-up out of (operating) trouble for years to come.

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

1)    

           There is a very experienced ecosystem of IP service providers to help entrepreneurs and start-ups with their IP initiatives – IP centric law firms, investors, commercialization partners: Dubois, Bryant, Campbell for IP prosecution, AcclaimIP for patent assessment and analytics, dozens of IP brokers with access to the world’s best IP from leading corporations.

2)     Outsource development firms like Calavista Software – which I have used in 3 of my last start-ups. While they appear slightly more expensive than hiring your own internal development team – they have vast project/start-up experience and their development success rate (on time/on budget/as envisioned product) exceeds 90%; 100% for my companies.  They are simply a more capital efficient expenditure when weighing FCS risk to cost ratios.