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ADAM DRAPER

@adamdrap3r-blog / adamdrap3r-blog.tumblr.com

I have two missions in life: Help entrepreneurs and build an Iron Man suit.
Go to www.boost.vc to learn more about what I do.
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Boost VC: The Accelerator That Brought You BangWithFriends

Five months ago BoostVC started an accelerator to help start-up companies get to the next level. We promised two things to the companies we accepted, we will extend the startups' network, and we will give them access to "startup knowledge", which includes mentorship and guidance. We delivered on these two things. 

Boost is unique in a few ways. One key way is that we give housing and office space to the companies who we accept for three months. By having all the companies living together and working together, it facilitated a feeling of unity and friendship that we could not have planned for. In this sentiment, BangWithFriends was born. 

Six weeks into the program, there was a debate about how dating websites worked or should work, amongst 3 individuals from three different companies. On one side, there was an opinion that individuals would choose to date before they hook up and on the other side those individuals would much rather hook up and then date. 

These three individuals in the Boost accelerator program put their heads together for one night and built what is now popularly known as BangWithFriends. BangWithFriends has become a sensation. They have gotten 1m users in 3 months of launching, they have been featured on the Colbert Report (http://bit.ly/ZbVXU0) as well as other great news publications, and 3 companies have already attempted to copy their concept.

We accepted 7 companies into our inaugural program at Boost and none of them were named BangWithFriends, or really had anything to do with the concept. However, the immersive experience of having seven companies live together and work together in downtown San Mateo for an extended period of time creates an atmosphere of cross-pollination. Ideas are shared and critiqued. Teams help the other teams, and grow close to one another. It was a unique value add that was randomly stumbled upon. 

So now, as we aim toward the next class at Boost (launching June 24, applications are open www.boost.vc/apply), we are going to focus hard on fostering this same sense of unity and innovation that was created in our first program and improve it. Companies and traction are built out of randomness, and we want to help foster the randomness that creates great ideas and companies. 

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The Boost Bitcoin Fund

Bitcoin, the decentralized, ungoverned currency has become an obsession of mine. Almost all of my blog posts have been about it, and almost all of my meetings in the last 3 months have been in reference to it. Bitcoin is the most exciting innovation that is happening in the world today. That is why we here at Boost VC are excited to announce the Boost Bitcoin Fund.

The Boost Bitcoin Fund is a follow-on, or "start" fund for Bitcoin companies that graduate from the Boost accelerator program. The fund will provide each Bitcoin company in the summer cohort with a $50k investment after completing the program in September, in addition to the $15k invested by Boost VC. The fund is anchored by Lightspeed Venture PartnersRothenberg VenturesThe Bitcoin Opportunity Fund and Ben Davenport. This impressive set of investors have already established themselves as true "thought leaders" in the alternative currency space, and I'm incredibly excited to have them onboard. 

The idea for the fund came together 3 months ago when we decided to accept 5-7 Bitcoin companies into our summer session. We received incredibly positive responses from the investment community following our announcement, and as a result, decided to put together this follow on fund for this cohort of companies. Interest was so strong that the capital came together in a week! These awesome investors have partnered with Boost in the hope of producing the next generation of Bitcoin entrepreneurs and innovators. We're committed to pushing Bitcoin toward becoming the next digital frontier.

As an added bonus one fourth of this fund will be invested as Bitcoin into the startup companies.

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"Ender's Game", is my favorite book, and now it is being made into a movie. I generally tell entrepreneurs to read the book to learn about leadership. It is probably the best leadership book there is.

I hope that this movie will do the book justice. 

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Fundraising is an art.

As the great philosopher Pitbull once said, "Ask for advice, get money twice." Last week, a company I invested in approached me asking for advice on how they should start their next fundraise. This is the best approach to fundraising, going to all of your investor connections and asking them if they have any advice for you. It's a non-threatening way to get any investor thinking in terms of how your company works and operates. In this blog post, I'm going to go through some tips for fundraising.

First off, fundraising is not the end goal. The end goal is to build a lasting company and to make an impact on the world. Techcrunch and the media release articles about companies raising between $500k and $250m every day, and it clouds people's perception of Silicon Valley and startups. It feels as though if you talk to a couple angels and venture firms, talk to some press, someone will write you a big fat check and all your problems will go away. The media makes it sound easy. I feel very little sympathy for a CEO that says they can't get any traction fundraising after only meeting with 10 investors. Fundraising is extremely difficult, when my Co-founder Thomas Foley and I were at Xpert Financial fundraising, we got rejected by about 150 venture capitalists.

Another thing I should caveat to this post is that there is no right way to raise capital, but these are suggestions for entrepreneurs if you are thinking about raising capital from early stage investors.

"I am the rule not the exception"

A good mentality to go into the fundraising process with is "I am the rule, not the exception". What I mean is that a lot of startups look at Dropbox, and Facebook and other huge successes, and think that their startup is comparative. It is not. Assume that Dropbox and Facebook and other huge successes are the exception to the rule, and that you are the rule. You have to hustle and work hard to scrape together every cent of your round raise over the course of months and hundreds of meetings. At one point, all of those successful companies had to hustle to raise money, and often they still do. 

Be Authentic

Authenticity in a pitch is nearly impossible to fake. You must believe in your product/vision and be genuinely excited about it. If you don't believe in your product, you will not be able to convince other people to do so. A lot of entrepreneurs also make the mistake of lying in a pitch to make themselves sound better. Investors are pitched to hundreds of times a month, they are able to catch you in a lie, so don't lie. Being authentic will pay off. Even if they don't end up investing, they will have more incentive to help you find the right investor for you. 

Pitch EVERYONE

You should pitch everyone in order to practice. The questions your friends and investors would ask about your business are eerily similar. An investor might understand the industry more, but if you can't articulate your company vision to your good friend you will not be able to articulate it to an investor in a twenty minute meeting. 

Be Friends with all Investors

The investor community is very small, you want every investor to have a positive impression of you at the end of an investor pitch. If the investor says they are not interested, that does not mean that they don't like you, most investors have a certain criteria they are looking for in their investments, and you probably don't fill those criteria.

Another mistake startups often make is big timing an associate at a VC firm. An Associate/Analyst at a VC firm represents that VC firm. A lot of startups complain to me saying "Yeah, I had a meeting with X VC firm, but it was with an associate". The Associate of a VC firm is the gateway to that firm. You should show associates as much respect as you show partners. You should really show everyone in the world an equal amount of respect, but thats a whole other can of beans. An Associate cannot make the decision for the firm about whether or not they are going to invest, but they can give their opinion to the partners, and generally those opinions carry weight. I think Associates are underrated in the Venture world. Associates are smart, and will pick up on whether or not you feel "above" pitching them. Be happy that you got the meeting at all, and give it your best shot.

Also, if the investor says no to your pitch, keep in touch with them. They will be able to provide great advice, and they might be interested in the next round of funding after you have hit a few milestones. 

Update Investors

Investors do not like it if their only conversations with you is you asking for their money. Keep them updated on your progress, and ask for their advice on certain issues you are having with your product. Investors want to be helpful to companies, so use them as a valuable resource even if they have not committed to your round.  

When updating, it is important to use metrics to describe your progress. Update monthly, it's a long enough time to make progress, and for investors its a short enough time to remember who you are and not be annoyed by your emails.

Fundraising Takes Time

Many people make the fatal mistake of assuming it will be easy to raise money. It will not be, no matter who you are. Many companies put themselves in the situation where they are three months away from D-day, and then they start to fundraise, this is a desperation raise. Do not put yourself in that position. It is difficult to make a relationship with new investors in a three month period of time. It is possible to raise very quickly, but again, assume you are the rule and not the exception.

NDA's (Non-disclosure Agreement)

There is a time and place for NDA's, the time is never, and the place is the bottom of my trash can. I do not sign NDA's and I know many other venture firms and angel investors have the same outlook (will explain reasoning in longer post later). Just know that if you send someone an NDA, it is a waste of time to talk about an NDA. You have an investors attention for 20 minutes, don't waste 10 of those minutes trying to get them to sign an NDA. 

Create a Sense of Urgency

This does not mean you should make them panic that your company is going to run out of money so you need it. You have to create a sense of urgency that the investors should invest by a certain time, otherwise the round will already be full and they will have missed their shot. This is a step that I will also go over in a later blog post. This is the ultimate skill of fundraising, many second time entrepreneurs are able to create this facade around themselves to raise money very quickly, and they do it by making the investors feel that they don't need the money, and they already have investors in the pipeline. 

Finally,

If all else fails, figure out how to sustain your business without raising capital. If you can generate enough demand to actually make money, you will be swarmed by Venture Capital/Angel investors. A VC does not make or break a company, YOU DO.

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A friend of mine just read this post and suggested a few more, that I agree with, which is more fundamental advice.

Don't be afraid to say "I don't know" 

Investors ask lots and lots of questions, and the more you pitch your company, the more you'll be able to answer. That said, there's some power in admitting that you don't know the answer to an intelligent question off the top of your head. A good investor will respect an entrepreneur that admits to not being omniscient during a pitch, especially if he or she follows-up with a well thought out answer in the days following a meeting. Better to admit ignorance (every so often) than to try and make something up on the spot and risk being perceived as a liar.

  Take Notes

Take five minutes after a meeting to write down what an investor keyed in on during your pitch. Did they dive deep into a specific stream of revenue or a customer acquisition channel? Save these notes, and highlight that data (if it looks good) the next time you chat with that investor. 

  Save Everything

Most people you pitch will keep your materials, so it's great to have a record of what you showed folks last time around, especially if you're beating your original projections!

* thank you Matt Gunderson for the suggestions.

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Stop Saying "Bitcoin Bubble"

I dislike the term "Bubble", and I don't dislike many things. People throw out the term anytime anyone is getting traction and any industry is doing well, and they want to throw a wrench in the concept. When I was working at Xpert Financial, the term "Bubble" was being thrown around in reference to the popular secondary shares being traded, Facebook, Twitter, Zynga, LinkedIn…etc. The prices of the private market shares were being traded at high prices, in reference to their profit, but they were also in high demand, so the price went up. And it wasn't a bubble.

  • The private companies had real revenue and some of them were super profitable. (unlike 1999)
  • In the Dotcom Bubble and the Financial crisis of 2008 there were Trillions of dollar tied up and lost. The collective Marketcaps of the companies trading on the secondary markets did not equal 100b.
  • Facebook made up almost the entire 100b market cap.

And now no one talks about the secondary bubble. Most of those companies have gone public or shut down the secondary trading of their shares. A few of the companies who were popular in the private market, lost value as they went public, because there was much more supply than there was demand as more people gained access to the market of these securities. However, still people thought it was a bubble that would pop, and I say that this did not represent a private securities bubble. It did not represent a large enough percentage of wealth to be called an economic bubble.

Now, when Bitcoin starts to get a little traction, supply is low, and demand goes up, people start yelling about a "Bitcoin Bubble", and they point at "tulips" as a historical reference. People use the term when things are going well, so that they can be there first to say that they knew something bad was going to happen, when something bad happens.

Technically a bubble is when there are high volumes of trades at a huge multiple in reference to an assets intrinsic value. And if history fairs any warning, people don't know about a bubble until after it has happened. So when people yell about a bubble bursting, all it means is that those people want to be the people who get to say "I told you so" after the bubble pops. And that just makes everyone else want to punch them in the face.

As for Bitcoin, it is too early to tell what the true value is. There is a lot of speculation, some economists opinions believe that the value will be $0, and then I have run into other people who have said that Bitcoin will be priced at $1000 per Bitcoin by July. The currency is still very volatile, and after the drop last week, it has leveled out to having a value of between $60 and $100 per bitcoin

A "bubble" to me it depends on how much money can be lost. And right now, there is 1b collective dollars in the pot distributed amongst millions of users of the currency. This is not a bubble in the economic sense of the word. It is however, a digital currency revolution, and we have only scratched the surface.

Bitcoin is filling a true need. The lack of faith in country currencies and banks has lead populations to find alternative methods of holding money. Bitcoin brings the bank back to you, without you having to hold mattresses full of cash (did you ever hear about that woman who had millions of dollars in her mattress and then her daughter replaced her mattress for her, not relevant to this blog post, just thought it was an interesting anecdote). In the long run, Bitcoin may not be there digital currency that wins, however it is the closest any currency has come to uniting the globe on a single currency. 

The world of currency is going to change over the next 10 years and I sincerely believe that Bitcoin is the solution. It has already changed the way I look at currency. Rather than calling it a bubble, I believe it is a Bitcoin "craze" or "mania" and last week was a price correction, but for a bubble there needs to be more value in it. Before people start pointing at the fences and calling "BUBBLE" I think there needs to be more money in the pot. So lets watch the currency develop before we start looking for a crisis.

I am bullish on Bitcoin and I am bias about Bitcoin as well. However, I am only bias because I am bullish. 

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Thank You Bitcoin Community

10 Weeks ago, my partners and I made the decision to aid in the development of the Bitcoin economy. Our decision was to do what we do best and incubate 5-7 Bitcoin related companies in our next batch. We felt that contributing to the overall ecosystem would be the best way to establish it as a brand of currency. When our blog post hit the web, we were really excited about the positive response, you can read the post here. We could not have chosen a more supportive community to be a part of. We chose Bitcoin because it was the most innovative, revolutionary concept I had seen in a while, and it has the potential to change EVERYTHING, however the Bitcoin Community is what has fostered our interest into obsession. 

The Bitcoin community is like nothing I have ever been a part of. There are rampant debates in the forums, knowledgable discussions in meetings, and a prevailing sense of unity, and at the heart of it is Bitcoin. The Bitcoin community is made up of hackers, entrepreneurs and financial movers, all excited about the same thing, they all want Bitcoin to succeed. The sense of competition amongst the companies in the space is about assisting each other not defeating one another. Every company in the space wants Bitcoin to exist, they want it to be a huge wave, they want it to be the global currency. And this thought is what keeps people together. It is currently not a big enough market to fight over, so the participants want to build each other up, in order to make Bitcoin a big enough marketplace. 

Since Boost made its announcement, I have had hundreds of people reach out to me, supportive of the risk we are taking. I have had meetings with a hundred people in the last month that were focussed around a Bitcoin discussion. The interest we had when we sent out that blog post has been fostered into an obsession. The community has captivated my interest. I am surrounded by brilliant people teaching me more and more everyday, not only about Bitcoin, but about security, currency structure, economics and the future. 

I have met with almost all of the big players in the space in the last two months, and they have nothing but great things to say about one another and each person is more than supportive of connecting me to their supposed competition. This team effort and passion for Bitcoin is what has kept it going. This passion is what has inspired the Bitcoin craze that is happening right now. I believe that this team work is going to be the thing that makes Bitcoin the global currency that it has the potential to become.

The only reason I am writing this post is to commend the Bitcoin community for such great acceptance of outsiders and their ability to focus on the global goal that everyone in the space has. Boost VC is excited to be a part of this movement, but more than anything we have appreciated every conversation we have had in the last 2 months. The Bitcoin community won't stop until Bitcoin is ubiquitous. 

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Bitcoin Hits One Thousand Million. Why?

Since Boost VC's announcement that we would be looking at Bitcoin related companies for our next accelerator session, the market has gone crazy! The market cap has tripled from $300m-$1b, the media has no idea what to think about it (http://bloom.bg/11nEQiA), and my mom knows what it is.  What I am getting at is that Boost VC caused the price to skyrocket with our dashing good looks, and suave demeanor. However, if you don't believe that, then you might believe these reasons. When people ask why  Bitcoin exists, and why it has been gaining so much traction, these are the reasons:

1. Investor confidence has grown in Bitcoin.

In the last month, investors have reached out to me expressing an urge to speak about Bitcoin, institutional and individuals. All of these investors are figuring out where they should bet their money in the space (I am more than happy to take the money off their hands). This means that there is an influx of money in the space, so the value of Bitcoin and the Bitcoin ecosystem goes up. 

Recently, I have also heard of multiple silent $500k-$1m seed rounds being raised by lots of different Bitcoin startups (I won't disclose who). This shows that investors are displaying a great interest in the space.

Two months ago, most of the investors in this space were trying to figure out how Bitcoin works. Today, they are throwing money at it. Bitcoin has gone mainstream in the tech world.

These steps have driven me toward believing that the confidence is super high in the asset. People believe that Bitcoin will be around for some time. I believe that Bitcoin will be around forever.

2. Fincen put out "Guidelines" regarding virtual currencies.

http://1.usa.gov/1366CkA

When the US government recognizes that virtual currency is important enough to concern regulation, it establishes faith that the currency is real. It also was the first recognition made by the US government.

These guidelines came out of no where, but they didn't say anything that the Bitcoin community didn't expect. It in fact established more credibility in Bitcoin, and not only credibility, but broad awareness on a national scale.

3. Cyprus froze their citizens bank accounts.

http://cnnmon.ie/YAuNDy

In case you were wondering, people from Cyprus are called Cypriots. While in discussions regarding their financial crisis with other nations, Cyprus froze their Cypriots bank accounts. This is an incredibly scary thing for a country. However, a fascinating thing happened, because of this regulation of the banks, citizens began buying Bitcoin in order to hold their money in a new asset.

One of the huge benefits I see to Bitcoin, is that you can be in complete control of your money. There is no 3rd party bank that is actually holding your money, in essence you can be your own bank. Cyprus publicly just lost faith in their banks. They are in massive amounts of debt, their currency barely has value, and they are panicking. The threat of this has lead many people toward finding new ways to save and hold their money. It has been very exciting to watch as Bitcoin is being used as an alternative to banks.

4. Other larger tech companies are readily adopting it as a payments platform.

Wordpress, Reddit, Expensify and Namecheap have all integrated Bitcoin as a payment solution. This helps the widespread knowledge of Bitcoin to the masses. Education is a huge part of the confidence in the currency that we are getting right now. 

5. The Price keeps going up.

I think that there is still a lot of confusion around Bitcoin. As an asset, there is still an education that needs to happen with many buyers. However, the fact that people are getting rich off of Bitcoin, has attracted an entirely new crowd into the Bitcoin community. There is proof that real money can be made off of this digital currency, people might not completely understand it yet, but there are a lot of people who are investing in it because the price keeps climbing. These individuals don't want to miss out on the potential of the currency, so they keep bidding it up.

Bitcoin has passed a $1b market cap. Last night at 11:30PM, I got an alert from one of the Bitcoin forums I am a part of, saying that Bitcoin passed $91.26 (which was the magic number to hitting a $1b marketcap). And now its 9:05am and the price is $94.49.

The $1b number is largely a confidence number. I speculated originally that it would establish mass confidence and the price would fly straight up toward $150 from $91.26. In my mind $1b would be the tipping point for the currency, however there is no economic proof for this, there is no mathematical explanation, it is simply my gut taking a guess... and probably a little bit of hoping. 

My prediction - Bitcoin hits $225 by August.

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Bitcoin Company Ideas.

After my last post on Bitcoin, there have been a lot of people asking me:

"What kind of Bitcoin companies are you looking for?"

Based off of this question, I have created concepts and ideas for Bitcoin companies that I think will assist in fueling the fire of the Bitcoin economy:

  • The Debit Card/ Credit Card Bitcoin company
  • The ATM machine Bitcoin company
  • A merchant product that accepts Bitcoin
  • A company that arbitrages Bitcoin on the exchanges
  • A new Bitcoin exchange
  • An easy Bitcoin payments company
  • A company that figures out the best way to mine Bitcoin
  • A gaming company that cashes in and cashes out with Bitcoin
  • A Bitcoin gambling company
  • A Bitcoin website or application that makes it easy to accept Bitcoin donations
  • The Kickstarter of Bitcoin (Bitcoin companies that get funded with Bitcoin)
  • The security company of Bitcoin
  • The Venmo of Bitcoin (mobile app)
  • A company that makes other websites accept Bitcoin in a super easy way

There are probably many more ideas that I have yet to think of and would love to see applications for at www.boost.vc/apply.

Bitcoin hit $48 today. It's gone from $15 to $48 in the last month. I think the confidence in the currency is going to continue to increase. More websites are being created that accept Bitcoin, and there is much more awareness. Less and less people ask me what Bitcoin is now.

At Boost VC, we believe that this confidence in Bitcoin as a currency will establish a new economy of concepts and ideas for the currency. There is so much potential, if you have an idea that will move this revolution forward, apply to Boost.

By helping create these concepts, we will assist in the promotion and powering of the currency revolution that is taking place. Lets make this happen!

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Boost VC Welcomes Bitcoin

I am excited about Bitcoin. It's exciting to watch a global digital currency get traction.

If you wish to learn more about Bitcoin, there is a great video, or read up here

The primary advantages of Bitcoin are:

  1. Speed and price. You can transfer money anywhere in the world within minutes with negligible fees.
  2. No central authority. Bitcoin is not dependent on any company or government to maintain its value.
  3. You can start accepting Bitcoins instantaneously, without setting up merchant accounts, buying credit card processing hardware, etc.
  4. Bitcoins are less traceable than many types of monetary transactions (though not anonymous).
  5. Bitcoins cannot be counterfeited and transactions cannot be reversed.
  6. No transaction blocking or account freezing. We have seen governments freeze bank accounts of dissidents and payment processors refuse to process certain types of transactions (wikileaks, online gambling in the US, etc). With Bitcoin this is impossible.
  7. A known amount of inflation. Bitcoin is seen as a store of value because the total number of Bitcoins that will ever be created is known in advance and it is impossible to create more than that.  

(cited from the Bitcoin stack exchange - http://bit.ly/TNWNhx)

The first time I heard about Bitcoin was actually from Coinbase, a company that was pitching me their idea six months ago. Coinbase brings Bitcoin to the masses by being a digital wallet. Brian Armstrong, the CEO of Coinbase, explained to me that this new form of currency was in the "Wild West" era, and in the next couple years there will be a renaissance that would happen with Bitcoin formalizing it into a digital standard of currency. He sold me. I bought into his pitch and invested into his company.

As Brian explained the concept to me, it began to remind me of another trend that happened 15 years ago. Bitcoin, right now, reminds me of the times of Napster. Through Peer to Peer technology, Shawn Fanning and Sean Parker made the process of attaining music, simple and free. They made the MP3 shareable, and they also made a certain 7th grade boy named Adam love his computer. For the first time I understood the power that the internet had, and I started to dive in and learn more. I feel this is happening with currency right now.

Unfortunately, Napster never made its way out of the "Wild West" phase, I remember misspelling song names and artists names in order to find the latest Backstreet Boys album, because the real name had been banned (Or should I say StreetBack Boys). The company that took the MP3 out of the "Wild West" was Apple with iTunes, yet another thing we can all thank Steve Jobs for. Apple purchased the company SoundJam MP, founded by Jeff Robbins and Bill Kincaid, and was soon developed into iTunes. They made it so easy to download music that we are all willing to pay .99c for a song. But the sharable MP3 did not only benefit Apple, it has allowed many other great companies thrive, Pandora, Spotify, Songza, Rdio… The list goes on. 

I firmly believe that we are at the beginning of a trend much like the time of Napster and the MP3, but instead of music being updated, it is currency. There is a thriving hacker community behind Bitcoin, there are purchases being made with it (some of them legitimate), and there is $300m worth of Bitcoin. Not only that, through Coinbase and other companies it is becoming readily available to the common internet user rather than just hackers. I believe that this movement will spur not only the iTunes of Bitcoin, but an entire economy of ideas. 

At Boost VC we are so excited about Bitcoin that we are going to push for Bitcoin to become a standard, we wish to assist in the developing this economy of ideas. Between five and seven slots of Boost's June class are being reserved for companies relating to Bitcoin. It's an exciting movement, and we hope to be a part of it. I also believe that Bitcoin may be the future currency that the world pays with. If you believe in the future of Bitcoin, apply to BoostVC (www.boost.vc). We are accepting applications until June 1, for our class that starts June 24th. We are the Incubator/Accelerator for Bitcoin.

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Why I Stopped CrowdFunding.

Last night I got an email from one of the investors in Boost (www.boost.vc) informing me I was mentioned in the Sunday NYT. I looked it up:

http://nyti.ms/UU1pGZ 

The article is actually an interesting story about the progress and concept behind CircleUp a great crowd funding site for equity in retail products, using the successful example of "Duck Organics" to illustrate the potential uses of crowd funding. 

I launched a crowd funding site back in June called BoostFunder helping to bridge the gap between investors and startups. The site verified accredited investors and then would allow for an investor to "pledge" money toward a startup company, this was a way of expressing interest in a company after viewing their profile. In the first month we had 200 companies signed up, 80 investors, and we had more than $400k pledged over the platform.

I thought that we were on the right track toward creating something special. After getting the data back and speaking to our customers, we decided that we wanted to move in the direction of helping incubator graduate companies raise capital online. 

After establishing this directional change, I took a step back to look at the road to be traveled: 

The rules regarding Crowdfunding were in a constant state of flux, the law had been passed in April by the House, the Senate and the President, and they set the rules to be established by the SEC for crowd funding 270 days out. Companies like CrowdFunder, WeFunder and Angel List were waiting on these rules to be able to operate the true potential of their companies. 

I took a different route; now that I have changed my company focus, I can openly say that I was going in the direction of "Ask for forgiveness, not permission", there was a legal grey area where my company was operating. I wasn't taking money on the transactions so technically I wasn't breaking any rules, however I was dealing with facilitating transactions in private securities, which is a vaguely regulated space, and if the government had looked, they would have probably penalized me. However I didn't feel guilty of anything. The uncertainty of the SEC rules made it awkward and difficult to operate a business in the space with the dark cloud of the undefined law hanging over our heads.

However, as I was looking at this, I also was researching the incubator space, and without going into a long boring diatribe. about how awesome the space is, and the huge opportunity I see in what I am doing, basically I found myself weighing the pros and cons of two paths. One direction, I would be helping each company with one specific purpose, to raise capital. In the other direction, I had the opportunity of helping the startups from inception and beyond.

The reasons I switched to an incubator model (not conventional incubator model) was more out of personal preference than regulatory environment, however when I looked at CrowdFunding this is what I saw, which definitely played into my decision:

  1. Regulation: The SEC had already missed their deadline for implementing new rules for Dodd-Frank, General Solicitation, and now they have missed their deadline for CrowdFunding. So many companies are holding their breath for rules that would largely establish the business direction of their companies, which is just wasted waiting time. My guess is that the SEC is going to be 2 years late on the rules and at that point you will have to apply to be a Broker dealer or something that resembles a broker dealer anyway. 
  2. My Background: My whole career up to this point had been in reference to helping people raise money rather than assisting in the entire process of building a business, which is where I believe my true value add is.
  3. Crowded Crowdfunding Space: FundersClub, WeFunder, CrowdFunder, Angellist, MicroVentures, Seed-Change and additional ones were popping up, crowding this market place. All of them approaching the space with small differences. I should reveal that I ended up investing in FundersClub because they approached the problem in a direction that I wished I had thought of. 

These things lead to my decision to change business. As of now I am 10 weeks into my first incubator session at Boost.VC and I couldn't be more proud of what we have accomplished. I was put on this earth to help people find what they are passionate about and assist in making that into a company vision… That and to build an Iron Man suit… baby steps.

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A kid in Sierra Leone is able to do more with scraps of metal and plastic than anyone I know. It is inspiring that he is so dedicated toward bettering his community. His next project is going to be windmill to give his community consistent power.

I love people who want to change their world and understand that they can.

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Awesome report on my dad's school by ABC 7. Very proud of where Draper University is going. 

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Important to remember what's important

Adam Braun, who I do not know, wrote this blog entry this week about Hurricane Sandy. It showed up at the top of my Facebook feed, and I read it. Instead of being angry with mother nature, which I am sure many are, he took it as an opportunity to reflect on what is important. Thought it was powerful. It is always good to remember what is important to you. 

http://adambraun.com/post/34707084750/thoughts-during-hurricane-sandy

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