The fashion, advertising, and finance sectors are teeming with startups, but it takes more than a catchy gimmick to impress Laura Sachar, general partner with StarVest Partners in New York. She says her venture capital firm this year has made new investments across the country in prosaic but solid companies such as Seattle’s Lucid Commerce, a television media agency; NewComLink, an Austin, TX-based provider of retail credit services; and Xignite, a financial market data cloud provider in San Mateo, CA, with offices in New York. (A new investment is also in the works, Sachar says, but it’s too early to discuss details.) StarVest Partners has invested $30 million so far this year, and its follow-on investments include fast-growing fashion flash sales website ideeli in New York, which raised $41 million in a Series C round in April.

In a recent interview with Xconomy, Sachar said StarVest focuses on proven management teams in need of expansion capital, and that it makes a point of seeking out companies that can benefit from the firm’s network of relationships in New York.

Xconomy: How does your experience with New York’s industries relate to the country as a whole?

Laura Sachar: The companies we are talking about can be attractive and build customers throughout the U.S., but they really leverage something unique that New York brings. That’s why we have a robust investment community and that’s why so many companies are being … Next Page »

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Jordy Leiser and his friend John Ernsberger left their jobs in the financial industry in 2008 with an appetite for starting a company around the subject of transparency. But that inspiration didn’t turn itself into a company right away. “We spun our wheels for a long time,” says Leiser.

So they did what any self-respecting mid-twenty-somethings would do when they ran out of money: left their Brooklyn dwellings and went back to their college (Bucknell in Lewisburg, PA) to figure it out. The pair was passionate about online retailers with really great customer service, like Zappos.com. So after months of consulting with academics at Bucknell, they settled on a strategy.

“We put together this idea to create the richest, most extensive robust methodology to evaluate service,” Leiser says.

Anyone can put up a description on their website touting their amazing service, but there was virtually no objective third-party rating system or mark for vetting that, like Zagat (restaurants), or JD Power and Associates (automobiles) Leiser says. So his startup, StellaService, developed a testing method and asked big online retailers if they’d be willing to purchase the data that testing produced. And, to touch back on that transparency theme, online stores that passed the customer service test could display a seal from StellaService—named for the Italian word for “star”—signifying they had been vetted by a third party and were considered tops in customer service.

“The hypothesis was maybe we if launched some website that had bunch of ratings for companies, the guys that did really well would be willing to take a chance to display some kind of signal,” says Leiser, the company’s CEO.

StellaService secured Diapers.com as an early customer. The company collected $250,000 in angel funding in December 2009 from Bucknell alum and LendingTree.com founder Doug Lebda, and a crop of other angel investors who are friends with him, Leiser says. The money got Leiser and Ernsberger back to New York City in early 2010, and allowed them to take the website live that March. StellaService’s website offers a public database of e-tailers its guerilla force has tested, offering its summary of the service experience, service contact information, and basic shipping information. It also lists retailers with the top customer service in a number of categories.

The company’s aim was to test every angle of an online retailer’s customer service, using roughly 300 different metrics on things like shipping time periods, speediness at answering customer questions, product knowledge, and much more. “The beauty is that we don’t need their permission to do it,” Leiser says. “We just go and become customers.”

It’s hired a legion of two dozen people—what Leiser calls “mystery shoppers on steroids” to test websites using StellaService’s methodology, by doing things like sending e-mails in Spanish, and calling morning, noon, and night, to ask questions on the products, delivery methods, return processes, and beyond. It relies on this consistent, ground up approach to rate businesses, beyond the polls and user-submitted reviews that sites like BizRate use to grade online stores.

The startup, based in NYC’s Flatiron district, set out to get 10 to 15 of top 150 retailers it evaluated to display the StellaService seal last year, Leiser says. It pulled in closer to … Next Page »

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VoltDB, a Billerica, MA-based maker of database software for rapid transaction-based processes, has wrapped up a $5 million equity-based round of funding, according to an SEC filing. The document notes that the money comes from four investors, and lists members of Sigma Partners and Kepha Partners as VoltDB directors. The company, which targets its products at customers in the Web 2.0, gaming, financial, telecommunications, and software-as-a-service spaces, was founded in 2009 by Michael Stonebraker, a database technology veteran who has also helped start Vertica Systems, SciDB, and Goby.

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Bellevue, WA-based Finsphere, a security and authentication startup, has closed $9 million in equity funding, according to a regulatory filing. The investors were not disclosed, but the form lists Paul Bialek of Frazier Technology Ventures, William Ericson of Mohr Davidow Ventures, and Ravi Mohan of Shasta Ventures as directors. Finsphere is trying to help banks and their customers fight identity fraud.

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On Friday, we reported that Tiger 21, a New York-based network and support group for the very wealthy, is setting up a Seattle chapter, headed by the local entrepreneur and investor Andy Sack. (Tiger 21 had planned to announce the news today, but another media outlet jumped the gun on Friday.)

The point of Tiger 21 is to give high net-worth individuals (more than $10 million is the base criterion) a safe haven to discuss their portfolios and problems with peers who can relate to them. This is a serious issue for the wealthy. “People are either jealous or they can’t understand you have problems,” says Lewis Haskell, a managing director of Tiger 21. “They say, ‘I should have such problems,’ or ‘How hard can it be?’”

I thought it would be useful to share what actually goes on behind the closed doors of Tiger 21 meetings, as related to me by Haskell and Sack. The meetings take place once a month in each chapter. Besides New York, the chapters tend to be in wealthy cities like Miami, Dallas, San Francisco, Los Angeles, and San Diego. Chapters typically have 10 to 12 members, says Haskell.

Monthly meetings are usually held in a board room from 9 a.m. until 4 or 4:30 p.m., and are followed by a social event. The first hour is called “world update.” Each member shares what’s been going on with his or her portfolio in the past 30 days, as well as their view of the landscape—concerns about anything from wars to interest rates to foreign competition. (I bet the October and November meetings were pretty ugly.) If there are personal issues to discuss, such as problems with children or relatives, they might be shared then too.

The next part of the meeting is about “issues and opportunities,” Haskell says. Members have an organized discussion about things like concerns over getting money out of a hedge fund, for instance. They might discuss relationship issues in more depth, like how to have difficult conversations with relatives who want to borrow money, or other people who want a piece of them.

Two guest speakers are brought in for each meeting, one before lunch and one after. Previous speakers include shareholder activist Carl Icahn, oil baron T. Boone Pickens, and former U.S. Senate Majority Leader George Mitchell. Topics range from economics and management to historical perspectives on war and other global issues.

In the final part of the meeting, one member gets up and gives a portfolio defense to the group. The individual shares his or her strategy, intentions, and ideas about their personal wealth and how to maximize it, and the rest of the group gives feedback—things like whether the member has too much stock versus other investments. “It’s really useful to have people look over your portfolio,” says Sack.

As one might imagine, it takes a special kind of person to be this open, and to be this invested in both learning and helping their peers. Here’s hoping the Seattle chapter of Tiger 21 finds the right mix to benefit both its members and the greater innovation community.

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Think the super-rich don’t have problems? Try fending off friends and relatives who always want to borrow money, or raising spoiled brats who don’t take responsibility for their actions. Not to mention the more obvious financial questions of how to manage such hefty portfolios—especially in economic times like these. (Granted, some of this might be viewed as insensitive at a time when local food banks are running out of food.)

Enter Tiger 21, an exclusive network for the very wealthy that is opening in Seattle this month. Its goal is to provide a support group for people of high net worth to talk about their investments, portfolios, and problems. Local entrepreneur and investor Andy Sack of Founder’s Co-op will be chairing the Seattle chapter of the national group. Last month, I sat down with Sack and Lewis Haskell, the managing director who runs Tiger 21 west of the Mississippi. I’m a little under-qualified to speak on the problems of the wealthy, but Sack and Haskell filled me in nicely.

First, some background. Tiger 21 was founded in New York in 1999 by Michael Sonnenfeldt. Sonnenfeldt had recently sold his interest in Emmes & Company, a real estate holdings company, for tens of millions, and was looking to build a safe haven for people in similar circumstances to meet and talk. The confidential network has grown into a big business. Besides New York, Tiger 21 has existing chapters in some of the country’s wealthiest places—San Francisco, San Diego, Los Angeles, Dallas, and Miami. It has about 170 members who have an average net worth between $30 million and $50 million.

And that’s the catch: to join Tiger 21, you have to have at least $10 million, exclusive of houses, cars, and other properties (how they verify this, I’m not sure). And it costs $30,000 a year to be a member. All members sign confidentiality agreements.

Sack’s connection with the group is through its founder. Back at MIT around 15 years ago, Sonnenfeldt was Sack’s mentor at the Sloan School of Management, and the two have invested together. Seattle brings some unique challenges to the very wealthy, Sack says. They might be overexposed because the community is relatively small. “The network of support is not as high, or as sophisticated, in Seattle,” he adds.

With the likes of Bill Gates, Paul Allen, Nathan Myhrvold, Steve Ballmer, Jeff Bezos, Howard Schultz, Craig McCaw, and Jim Jannard (founder of Oakley eyewear) in the area, you’d think Washington state would have such a support network in place already. But what Tiger 21 provides that other wealthy social networks don’t is a focus on members sharing how they manage their financial lives, says Haskell.

As for its future Seattle members, Sack and Haskell have been recruiting for about 10 openings. I’m guessing they’re not taking unsolicited applications. Sack says members have to have an interest in learning, and be willing to be open with their peers. And, he added, “There’s a ‘no asshole’ rule.”

Stay tuned for what goes on behind Tiger 21′s closed doors in Part 2—Eds.

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Whether you’re a startup or a big company, your IT costs are probably going up these days. And what with all the laptops, desktops, mobile phones, servers, and data centers to keep track of—not to mention e-mail systems, software applications, and tech support—it’s getting harder to predict what those costs are going to be, or even understand where they are coming from. In this tough economic climate, more and more companies are looking for ways to save money, and IT is high on the list.

Which is where Apptio comes in. The one-year-old Bellevue, WA startup broke into the corporate market last summer with a software service for managing IT costs. The software automatically keeps track of how much a sales and marketing software package, say, is costing a company and what its value is. That’s simplifying things, but the idea is to do that kind of analysis over a wide range of applications, hardware, and financial metrics, and let the company know what the different cost scenarios will be if it makes certain IT decisions.

Last week, Apptio announced some new, high-profile customers, including Alaska Airlines, SkyTap, and SumTotal. (The latter two are host service providers that handle things like online training services for corporations.) The company raised $7 million in venture funding last year, and has also signed up Finlay Enterprises, HomeStreet Bank, Motricity, and other well-known buyers, so I wanted to find out what makes it tick.

I spoke with Apptio’s co-founder and CEO, Sunny Gupta, and director of marketing Jeff Day to get the story of where the company came from and where it’s going. Gupta was previously the founder of iConclude, a software firm that was acquired by Opsware and then Hewlett-Packard last year. In early 2007, while he was in the process of selling iConclude, Gupta says, “I had gone on the road talking about the acquisition and spending a lot of time on Wall Street. A couple early customers pulled me aside and said, ‘We’re really struggling with issues around optimizing IT financial management.’”

Gupta didn’t think about it much then, but after the acquisition, he picked up the thread. A team from his previous startup, Mercury Interactive, sought him out and was “looking to innovate,” he says. So they started thinking about corporate IT. They talked with about 30 companies, mainly in financial services, and concluded that “IT spending has gone through the roof in the past 20 years…It’s very strategic to the business,” Gupta says. “In financial services, 25 percent of the budget is IT.” (Gupta says companies worldwide spent $3.1 trillion on IT in 2007.) And while companies have a good high-level sense of the costs, there is little in the way of systematic methods to analyze “the true cost of products and services which IT is delivering to the business,” he says.

When it comes to making decisions like whether to upgrade certain servers or software applications, says Day, most companies rely on Excel spreadsheets once a quarter or even once a year. That takes a lot of time and effort, and it isn’t often enough. So Apptio sells its service to chief information officers, operations managers, and finance groups, to try to make the process more efficient, useful, and strategic. When they talk to potential customers, Gupta says, “Light bulbs start to go off—’I need to do this across my IT.’”

Apptio has some serious backers who have bought into the vision. In October 2007, the startup closed its $7 million funding round from Greylock Partners, Madrona Venture Group, Ignition Partners, and other investors including Marc Andreessen. Since then, Apptio has gone from renting conference rooms in the Bellevue public library to more stylish digs in downtown Bellevue. The company has just under 30 employees. Gupta says it could become profitable in six to 12 months, but the time horizon he’s looking at is about two years, “to build more value in the company.”

Looking ahead, Gupta says, “Every company is trying to buckle down. We are seeing increased pressures on IT costs…We believe as the economy is shaping out—not so good for most companies—this plays well to our core strength, being a strategic partner with these customers. We’ll be well-positioned in the next year.” He adds, “The long-term vision for the company is to become a strategic management tool for CIOs, like what Salesforce.com is for a VP of sales. We’re focused on acquiring customers.”

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TheStreet.com, the investment news site headlined by famously loud-mouthed CNBC host Jim Cramer, said today that it’s making a strategic investment of its own in Framingham, MA-based Geezeo, the personal-finance website we profiled last August. TheStreet.com is putting $1.2 million into Geezeo in return for a 13 percent stake in the company, and has the option to buy the entire company for $12 million anytime in the next year.

Geezeo provides what I called “personal finance tracking for people who don’t buy personal finance software”—meaning 18-to-34-year-olds who need some way to manage their checking, credit, and retirement accounts but aren’t likely to buy Intuit’s Quicken, Microsoft Money, or the other boxed software packages for money management. But Geezeo is more than just a Web-based software service—it also provides social networking opportunities so that users can encourage each other along toward their financial goals, such as paying off credit cards or saving up for a big vacation. The site also provides tools for checking on account balances from mobile phones.

TheStreet.com—which was founded in 1996 and was one of the few financial-media websites to survive the dot-com crash—has been on an expansion kick designed to make it into a one-stop destination for consumer-level investment and financial information. In 2007 it acquired both StockPickr, a popular social networking site devoted to investing, and Bankers Financial Products Corp., the parent company of BankingMyWay and RateWatch.

“Geezeo is a natural place for visitors to the individual Web sites within TheStreet.com network to connect,” Thomas Clarke, TheStreet.com’s chairman and CEO, said in a press release about the investment—which, given recent history, seems likely to lead to a full acquisition. “Whether they are visiting TheStreet.com for market analysis, Stockpickr.com for stock ideas, BankingMyWay.com for the best online bank rates for CDs, savings accounts, interest checking, money markets etc., or MainStreet.com for personal finance information, Geezeo brings our audience together in an interactive arena that facilitates educated financial decision making.”

The guys at Geezeo are understandably elated about the investment. “Having TheStreet.com as a strategic partner/investor is hands down the best next step in Geezeo’s evolution,” Geezeo co-founder Peter Glyman wrote to me today (cribbing from a blog post). “Along with the capital needed to take Geezeo to the next level, our relationship with TheStreet.com will also help us reach millions of new potential users and expand our content offerings in the areas of personal finance and investing.”

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It was finally good news for Watertown-based Acusphere (NASDAQ: ACUS) this week, as the company reported positive clinical trial results for its lead product, called Imagify, at the American Heart Association (AHA) annual meeting.

But the burning question is whether that news comes in time. Acusphere is 14 years old and running out of cash. And the company suffered a series of minor setbacks over the past year which, taken together, have cast doubts over whether it can actually get its first product to market.

Imagify, Acusphere’s management argues, is potentially a breakthrough product targeting a $2 billion market. If approved, it would be the first contrast agent that can be used with ultrasound to see how blood flows through the heart. Currently, doctors use nuclear stress testing to get this crucial information, and that involves radioactive tracers tracked via special cameras. In Acusphere’s test, which the company calls an “Imagify stress echo,” the camera would be replaced with an ultrasound machine, and the radioactive tracer would be replaced with an injectable suspension of gas-filled polymer microspheres.

About 10 million nuclear stress tests are done each year to look for narrowing of the vessels in the heart. The Phase 3 trial results just released at AHA show that in a head-to-head comparison, Acusphere’s test was just as accurate as the nuclear one. Those studies involved several hundred patients and 28 medical centers. Since using Imagify has other advantages, that data could be enough to help it unseat the nuclear test.

Compared to the nuclear stress test, “[Imagify stress echo] will be cheaper, does not involve radiation, and is quicker,” says Roxy Senior, Director of Echocardiology at Northwick Park Hospital and the Imperial College of Medicine, in London. “Frankly, I can’t see any disadvantages to using it,” he says. “With ultrasound, not only do you get the data in real time, but now you can also assess perfusion and heart function with one test.”

But Acusphere seems to be beset with minor problems. Over the last few weeks, the company has been scrambling to get the word out that Imagify is not like some other microsphere-based ultrasound agents just slapped with a safety warning after several patients reportedly died while, or after, receiving them. Acusphere’s management issued a release explaining that no deaths have been seen to date in trials of Imagify, and that their product is “structurally different from commercially available ultrasound contrast agents; it has a different encapsulation material and a different gas.”

The company’s CFO also left in June, and was just replaced. Meanwhile, the firm needs to get its manufacturing facilities in order so that it can file with the FDA for approval of Imagify. All that is taking longer than anticipated, and that filing has already been pushed back once—from late 2007 to early 2008. And then there’s the money question. In its Q2 financial statement in August, Acusphere reported having roughly $83 million in assets, about $52 million of that as cash. (Third-quarter financials are to be released tomorrow.) But company CEO Sherri Oberg told the Boston Business Journal last month the money will only get it to the middle of next year. Delays are particularly costly now, and in September management announced it was putting plans for new products on hold while it focused on finding a partner to market Imagify.

Without that partner, it’s not clear how the product could be launched.

It’s a classic quandary for a young drug company. “We don’t have a sales force, because we don’t have a product yet,” says Mona Haynes, Acusphere’s vice president of marketing and sales. Meanwhile, the money is flowing out rather than in. “It is important that we get a partner so we can continue raising funding,” she says. “Introducing a product is expensive.”

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