The big picture is great. But at Xconomy, we also like the smaller details, which often fill in or round out the big picture—and make everything more clear. So it is when it comes to company financing rounds. We always bring you stories about the main venture deals in the region and a list of the biggest rounds every month. But starting last month, we also began bringing you the most interesting small financings in high-tech, life sciences, and energy.

These are the under-the-radar deals between $100,000 and $1 million that are routinely left out of most reports. But yet, especially in these days of bootstrapping and Web 3.0 and virtual companies, they can illuminate important companies—and trends—that might otherwise be missed.

We found 11 of these smaller deals in New England for October (see list below), thanks to ChubbyBrain, a New York information services company that tracks angel, VC, and other investments in private firms via regulatory filings, user submissions, and other sources.

Virtually all of last month’s under-the-radar financings were in Massachusetts, though one was for a Connecticut firm (unlike last month, we turned up none in Rhode Island, New Hampshire, or Vermont). Seven were equity financings, and four involved debt (the data doesn’t cover the investors or the stage of financing). But beyond that, there is incredible diversity in what these firm do: infertility treatments, medical devices, Web marketing, computer storage, chip design, energy efficient vehicles, mobile marketing, and more.

We’ve written about a few of these companies before. Levant Power was a finalist for this year’s $200,000 Clean Energy Prize after winning the transportation category. The company is working to perfect an energy-recovering shock absorber for large trucks, military vehicles, and hybrid gas-electric cars. It’s a cool technology, and I’m hardly shocked to see it attracting some funding. We’ve also covered Isabella Products, which puts out Vizit, a device that Wade wrote “masquerades as a digital photo frame but is actually a sophisticated, two-way photo management device connected to a nationwide cellular data network.” These kinds of interactive digital photo frames face lots of competition, though, so we’ll have to see what develops, so to speak.

I’m probably most intrigued by VisEn Medical. Its board chairman is Ed Kania, co-founder and managing partner of Flagship Ventures here in Cambridge, MA. Also on the board is Per Lofberg, CEO of Merck Capital Ventures—so it has some real heavyweights behind it. The Woburn, MA-based company, which says it has some 75 patents or patent applications in its portfolio, develops fluorescence technology for non-invasive in vivo imaging. The company took in more than $12 million in Series B financing in 2007 and early 2008 (the round was expanded). Meanwhile, I’m not sure what I think of ShopText, a company I’d never heard of before but which led the pack with $900,000 raised. The Norwalk, CT-based company helps serve up coupons, free samples, merchandise promotions, tickets, and so forth over mobile phones. I hate the idea, but I love it, too.

Here are those, and the rest of October’s New England under-the-radar deals:

Comments | Reprints | Share:        

It’s been a busy week around here for the big tech companies. At Xconomy, we don’t usually report on things like product releases from Microsoft or sales figures from Amazon—our main focus is on new ideas, models, and companies—but readers need to understand where the big players are heading so they can see the gaps and opportunities for new businesses. So, for each of these pieces of mainstream tech news, I’ll tell you why savvy innovators and business leaders should care.

—Google (NASDAQ: GOOG) demonstrated its Web-based Chrome operating system for the first time in public yesterday. It won’t be available for another year, but the tech community is scrambling to understand all the implications. (Google’s Seattle engineers have contributed technology to the Chrome Web browser, helping to boost security—one potential advantage of a cloud-based operating system).

Sure, a fully cloud-based OS is a direct threat to Microsoft’s business model and the ecosystem of companies that support Windows. But more than that, it could reshape the landscape of online advertising by providing a new platform for launching ads on mobile devices, video channels (YouTube), and Internet TV. Perhaps the only thing that can slow down Google’s dominance on the Web is the federal government. In other words, this could get ugly.

—Microsoft (NASDAQ: MSFT) has teamed up with LinkedIn to provide info about your business contacts within Outlook e-mail. It’s all part of Microsoft’s Outlook Social Connector, an add-in that feeds you data from your social networks. Integrating e-mail with social networks and search is a fast-growing area, with startups like Gist in Seattle (backed by Paul Allen and Foundry Group) helping lead the way. Gist’s CEO T.A. McCann told TechFlash that he’s known about Microsoft’s effort for a while and doesn’t see it as a direct challenge. Gist’s offering is more advanced, he said, and it includes features like integrating with Salesforce.com and the iPhone. But startups and investors beware: if you’re in this crowded space, you better have a product that cuts through the noise and has a way to attract customers fast.

—RealNetworks (NASDAQ: RNWK) is in discussions with Viacom’s MTV Networks to sell off at least some of its stake in the Rhapsody music service, as first reported by PaidContent. In a regulatory filing, prompted by a tender offer to issue new stock, Real said it is in talks to reorganize the management structure and/or corporate governance of the division, which might mean giving up its majority ownership stake (51 percent) in Rhapsody. Back in September, digital-media guru Bill Baxter (now at Seattle-based Cozi) wrote in Xconomy about Rhapsody’s fierce competition with Pandora, iTunes, and piracy. Message to startups: the world of digital music services is probably not where you want to be.

—Amazon (NASDAQ: AMZN) has been busy ramping up operations ahead of the holiday shopping season. Its billion-dollar acquisition of Zappos is helping it expand into shoes and apparel, and its Kindle sales look poised to take off, especially now that Barnes & Noble’s competing e-book reader, the Nook, has sold out until January. Amazon has really become the business and technology model to follow in online retail and product search. While there is still room for e-commerce startups to compete in various niches, they would be wise to study how Amazon built its brand and customer relationships before branching out to the wider world of retail.

Comments | Reprints | Share:        

Wails of lamentation spread across the local tech community every time an entity like Zendesk or Greylock or Y Combinator departs Boston for parts west. But today we have a different tale to report. Day Software (SIX: DAYN) a Zurich, Switzerland-based content management software specialist that builds interactive websites for Fortune-1000 giants like Adobe and General Motors, is about to move its U.S. headquarters from Newport Beach, CA, to Boston.

When it comes to the software platforms and interactive content that define the world of Web 2.0 commerce, the Hub is the emerging capital, says Kevin Cochrane, Day’s chief marketing officer. “It’s inefficient for us to be anywhere other than Boston,” Cochrane says. “The majority of the partners we need to work with today in the Enterprise 2.0 and Web 2.0 universe are in the Boston area, and Boston is ideally located for all of the major customers we’re securing up and down the Northeast corridor.”

Day’s new office, at 320 Congress Street in the booming Fort Point Channel area of South Boston, will open December 1, according to Kellie Snyder, a native Bostonian who is Day’s vice president of professional services. The office will initially employ 12 to 15 people and has room for up to 30. The company is “aggressively hiring” in all areas, including consulting and tech support, Snyder says.

Day Software was founded in 1994 as an interactive marketing agency but quickly evolved into a maker of software platforms for companies managing large websites. It’s been a public company on the Swiss Exchange since 2000. But last year, it brought in a new CEO, Erik Hansen, and rewrote its software from scratch to make it easier for clients to design, develop, and host customer-centric websites with interactive features such as blogs and wikis. The company counts GM, Adobe, Newsweek, the United States Army, Boston College, Ingersoll Rand, Rosetta Stone, Virgin Media, and the governments of Singapore and New Brunswick, Canada, among its big clients.

It will be much easier for Hansen, who is based in Zurich, to reach the new Boston headquarters than the company’s current Newport Beach digs. But that was “by no means the driving factor” behind the move, Cochrane says. “First and foremost, Boston is the hotbed for technology partners and interactive agencies, all of the companies that are critical to us as we look to build up our ecosystem,” he says. Boston offers the nation’s best pool of job talent for all departments of enterprise software companies, Cochrane adds. It’s also home to plenty of potential customers in higher education, a market Day has begun to penetrate, and it’s closer to the press and industry analysts who follow the content management sector, he says.

Another incidental benefit to the move, which has been in the planning stages for about 9 months: Day’s board chairman Barry Bycoff, a former Pequot Ventures partner who is also executive chairman at Progress Software (NASDAQ: PRGS), is based in Boston. Day’s planned grand-opening party at its new Boston headquarters on December 1 will coincide with a board meeting, according to Cochrane.

Comments (1) | Reprints | Share:        

Ryan McBride wrote:

Pilates is famous for shaping up peoples’ buttocks, tummies, and thighs. But what can the popularity of this fitness phenomenon and the market for health products do for investment portfolios? Cambridge, MA-based Lighter Living, which operates a health and fitness website that features Pilates expert and company founder Marjolein Brugman, has raised $3 million in an equity round of financing, according to an SEC filing.

Brugman, who appears to have pioneered an aerobic version of Pilates called AeroPilates, is listed in the regulatory filing as an executive and director of Lighter Living. There’s also a big name in venture investing involved with the firm: Michael Greeley, a founder and general partner of Boston-based venture firm Flybridge Capital Partners, who is listed as a director of Lighter Living. Neither Brugman nor Greeley was immediately available for comment this morning, but a spokeswoman for Flybridge confirmed that the firm is backing the company.

At first glance Lighter Living—which sells fitness and wellness products and offers health tips and insights from Brugman on its website—doesn’t seem like a typical bet for Greeley. However, he’s always told me that he is interested in businesses in which healthcare and information technology intersect. Previously, his interest in healthcare and IT has been manifest in investments he has led for Flybridge in companies such as Bedford, MA-based MicroCHIPS, a developer of micro-devices for medical uses, and business software firm BlueTarp Financial, of Portland, ME.

Yet Lighter Living does address a huge market demand for products that help people look and feel youthful, and there is an emerging trend of interest in this market among venture capitalists. Polaris Venture Partners is backing Cambridge, MA-based Living Proof, a provider of hair-care products based on advances in polymer science at MIT and other research institutions. Investments in the likes of Living Proof and Lighter Living could provide a boost for both consumers’ looks and venture portfolios’ outlooks.

Flybridge’s investment in Lighter Living is “building on [Brugman's] success in the healthy living market,” said Kate Castle, a spokeswoman for the venture firm. She said that Brugman has sold more than $500 million in healthy living products on the TV shopping channel QVC over the past 12 years.

Lighter Living is planning an official launch in 2010, Castle said.

Comments | Reprints | Share:        

TheNextRound, a Framingham, MA-based startup that makes software for private equity and alternative investors, has been acquired by Windsor, CT-based SS&C Technologies for an undisclosed amount, according to an SS&C announcement today. SS&C makes financial management software for insurance companies, hedge funds, banks and credit unions, real estate companies, and other institutions.

Comments | Reprints | Share:        

Cambridge, MA-based Cambridgesoft, which makes software for life sciences companies, disclosed in regulatory documents filed November 17 that it has raised $31.3 million in new equity-based financing. Cambridgesoft first announced the funding round (though not the amount) in a November 16 release that named new investor Health Evolution Partners and existing investor Goldman Sachs as the funders in the round.

Comments | Reprints | Share:        

A new IBM supercomputer opened at Brown University’s Center for Computation and Visualization in Providence, RI, today is 50 times faster than Brown’s next best machine and is the most powerful computer in Rhode Island, according to an announcement from IBM (NYSE: IBM). Researchers at Brown and other institutions intend to use the 1,440-processor machine to model subjects such as the genomes of ocean-going microbes, the mechanics of human and animal movement, and the topography of other planets. Brown ordered the multimillion-dollar supercomputer in June; its exact cost hasn’t been disclosed, but IBM and Brown are calling it “a shared investment.”

Comments | Reprints | Share:        

Dealmakers appear to be getting their business done before the week of Thanksgiving—because we’ve seen a decent stream of deal closings involving Boston-area life sciences and tech companies over the past week or so.

—Framingham, MA-based Punchbowl Software, which operates the party planning website MyPunchbowl.com, said it acquired technology assets of a group vacation website called I’m In. Punchbowl founder and CEO Matt Douglas provided details on why the transaction made sense for his startup.

—After months of operating quietly, seed-stage venture fund Founder Collective officially debuted last week. Eric Paley, a managing partner and co-founder of the firm, told us why he and other software entrepreneurs came together to form the new venture outfit, which has offices in Cambridge, MA and New York City. Here’s a hint: They were a bit frustrated with the status quo in the venture industry.

—Fate Therapeutics, the San Diego-based biotech startup focused on developing techniques that make stem cell research practical for the pharmaceutical industry, reeled in $30 million in a Series B round of venture financing. Kirkland, WA-based OVP Venture Partners led the new round of investment in Fate, which was founded by top academics at Harvard University, Stanford University, The Scripps Research Institute, and the University of Washington.

—ImmunoGen (NASDAQ:IMGN), a Waltham, MA-based biotech firm, reported this week that the firm sold a second license to its technology—which is for linking targeted antibodies to cell-killing molecules—to industry giant Amgen (NASDAQ:AMGN) for $1 million upfront, plus potential milestone payments.

—Corindus, a Natick, MA-based startup developing a robotic system for implanting vascular stents, collected $5.3 million of a planned $10 million in venture dollars, according to a filing with the Securities and Exchange Commission.

—Cambridge -based Ligon Discovery found $1 million in a seed round of financing from incTANK Ventures, with plans to validate its small molecule microarray system for drug discovery that was developed at Harvard. The company was founded by folks from Harvard Medical School and the Broad Institute of MIT and Harvard.

—We spotted Angus Davis, a co-founder of Microsoft’s voice-based Internet search subsidiary Tellme Networks, at Polaris Venture Partners’ Dogpatch Labs recently and wondered what he was up to. It looks like he’s been working on a new Providence, RI-based startup called Swipely, which quietly swept up a cool $1 million from First Round Capital.

—Jealous? Highland Capital Partners, the Lexington, MA-based venture powerhouse, closed its eighth fund, worth a whopping …Next Page »

Comments | Reprints | Share:        

We hope to make this a regular feature in our Xconomy cities. It’s a look at small financings of private companies in tech, life sciences, and cleantech. These are deals in the roughly $100,000 to $1 million range, and they’re increasingly where the action is for local entrepreneurs, yet they’re often harder to track than the bigger deals we tend to report on.

And there were at least 12 of these smaller financings in the Northwest in October (see table below), according to ChubbyBrain, a New York-based information services company tracking VC, angel, and other investments in private companies. ChubbyBrain gets its data from regulatory filings, user submissions, and other sources, and this is the second monthly installment of “under the radar” deals in the Seattle area (you can see the previous deals for September here). The data didn’t include the investors or the stage of financing.

A few quick observations: Like the previous month, most of the financings were in Washington (7 out of 12), but a significant number (5) were in Oregon. Most were equity deals (7), with the rest (5) being debt financings. The majority of financings (9) were in software, Internet, or tech, while a much smaller number (3) were in life sciences and healthcare, and no cleantech or energy deals made the list.

If nothing else, these lists are a cool way to hear about emerging startups we otherwise wouldn’t know about. For example, I’ve heard of Teranode, Nearlyweds, and 1000Museums before, but Zapproved and Intellisist are completely new to me.

Here are the 12 “under the radar” deals from last month:

Comments (1) | Reprints | Share:        

When I was in fifth grade, I wanted to be an architect. (I also wanted to be a geneticist, a meteorologist, and an astronaut. I guess I wound up doing the next best thing to all of those sci/tech careers—writing about them.) I loved my junior builder kit, a collection of little plastic columns and I-beams and snap-on windows that was perfect for constructing models of International-style skyscrapers like the Sears Tower in Chicago. The only problem with the kit was that once you’d finished your perfect modernist creation, you had to tear it all down before you could build something else.

Now there’s an easy way to build as many model buildings as you want—and put them on display for millions of people to see. It’s Google’s Building Maker tool, released last month. The Web-based software lets you easily create beautifully textured 3-D models of real buildings by matching up simple digital shapes with information from Google’s aerial photographs of major cities. You can store your finished models in Google’s 3-D Warehouse and submit them to Google for “publication.” If a model is well-constructed and no one else has built a better version, Google will insert it into Google Earth itself.

Google made Building Maker available for about 50 world cities when it introduced the tool on October 13. This Tuesday, it added eight new cities to the list: Boston; Brussels, Belgium; Cologne and Dortmund in Germany; Las Vegas; Los Angeles; Rotterdam in the Netherlands; and San Jose, CA. Once I heard Boston had been added to the list, I couldn’t resist diving in and playing around with the tool, starting with a model of my own apartment building in Boston’s South End.

After a couple of days of experimenting, I can tell that Building Maker is going to provide some addictive fun for a lot of mapping and modeling freaks like me. But just as important, I think it will provide a rewarding way for people who aren’t professional architects or cartographers to contribute to the “geoweb.” Today, we can explore this expanding digital replica of the real world through 2-D interfaces like Google Maps, Google Earth, and Microsoft Virtual Earth. But as it gains fidelity, the geoweb could eventually blossom into the immersive, geographically accurate 3-D online world that futurists have called the Metaverse.

If the Metaverse does come into being someday, it will be in large part thanks to Google, which is on a mission to “create a three-dimensional model of every built structure on Earth,” according to an October blog past by Google product manager Mark Limber. But even a company as wealthy as Google doesn’t have the resources to model all the world’s buildings on its own. So in classic Tom Sawyer fashion, it came up with Building Maker, which makes the work so enjoyable that thousands of Google users will be glad to pitch in.

From talking with Limber himself yesterday, I’m convinced that this strategy is only one part shrewdness and about three parts sheer enthusiasm. “The world is really big, and there are an awful lot of buildings, so I do think everybody will have to get involved” to fill out the 3-D world, Limber says. “But on a personal level, it’s really fun to be able to drop a couple of blocks, move them around a bit, add a texture, and voila! There is a little bit of magic there that we hope will draw people into this whole word of 3-D, and be a little more informed about it because they participated in it.”

Like all good pastimes, Building Maker starts out simple, but goes very deep. What makes the tool possible in the first place is the fact that …Next Page »

Comments (3) | Reprints | Share:        

At least 17 Seattle-area startups rolled out new websites last month, according to the latest edition of Seattle 2.0’s startup index. The index now lists 373 companies, which are ranked on the basis of Web traffic estimates. The top 10 sites didn’t change much from previous months. The startups that are new to the list are HasOffers, BigStartups, Team Apart, Boxoh.com, EnergySavvy.com, Couchsoft (Mentby), Osnapz, Social Kind (TweetToCall, Escape My Date), Fotozio (PicTranslator), Adometry (Veracity), Qbiki Networks (iPhoneSeattle), HotelsOutlook, BuzzMinder (2Reminders), Splitts.com, Data Applied, Baldy Beanbag (The Big Magoo), and Megosi.

Comments (1) | Reprints | Share:        

Seattle-based Cozi announced today it has formed a strategic partnership with MeadWestvaco (NYSE: MWV), a Sidney, NY-based maker of school and office supplies and planning tools. Financial terms of the deal weren’t announced, but the partnership will give MWV consumers access to Cozi’s Web-based software for helping families manage their busy schedules. The tools include a family calendar, customized to-do lists, and messaging systems. This is the third partnership Cozi will announce with a Fortune 500 company this year, including a previous deal with Dell to pre-load certain home computers with Cozi’s software.

Comments | Reprints | Share:        

It wasn’t so much the predictions as the discussion that was most interesting at last night’s annual predictions dinner, organized by the Washington Technology Industry Association. Will Twitter be acquired in 2010, and why? Who will have the dominant cloud computing platform in the next couple of years? What kind of startup are you looking to build or finance, and which areas are you staying away from?

A panel of Seattle-area tech entrepreneurs and investors gamely took the bait and had some lively exchanges over the course of an hour. OK, these guys all know each other, and we’ll take what they say with a grain of salt since it’s a public forum—but here were some of the most interesting points they made. (You can read more comprehensive recaps of the panel on Brier Dudley’s blog at the Seattle Times, and soon on TechFlash by moderator John Cook.)

The panel was split 3 to 2, with the narrow majority guessing Twitter will get bought next year. Andy Sack of seed-stage fund Founder’s Co-op predicted Twitter will make more money than Facebook in 2010 (surprising, given the current disparity in the other direction). Glenn Kelman, the CEO of Redfin, an online real estate firm, said Twitter should charge for search (as it has begun to do in partnerships with Google and Bing). Kelly Smith from Curious Office and the startup Pressplane argued that Twitter could be “absorbed by a big company,” but “it’s going to go nowhere.” By the end of the evening, Sack was predicting that Microsoft would buy Twitter next year.

There was a consensus that 2010 could be a big year for acquisitions. Bill Bryant of Draper Fisher Jurvetson boldly predicted that Amazon will buy Netflix, Blockbuster, and Hulu, while opening brick and mortar “Amazon media stores.” Greg Gottesman from Madrona Venture Group said Cisco might buy EMC (for VMware) and Seattle-based F5 Networks, while Microsoft might buy Research In Motion, the maker of the BlackBerry smartphone. Sack predicted Adobe would pick up Seattle photo-editing startup Picnik. Rupert Murdoch (News Corp.) would buy Seattle’s Cheezburger Network, and someone would buy Redfin.

Looking back on 2009 for a minute, the big deals that were questioned by the panel included Adobe’s acquisition of Omniture (Gottesman said it just didn’t make sense strategically) and …Next Page »

Comments (2) | Reprints | Share:        

Braemar Energy Ventures, a venture firm focused on investments in the cleantech sector, has named Jiong Ma a partner of the firm, according to a Mass High Tech report. She was previously a principal at the firm, which has offices in Boston and New York City, according to its website. Braemar’s portfolio includes such Boston-area cleantech companies as A123 Systems (NASDAQ:AONE), EnerNOC (Nasdaq:ENOC), and Verenium (NASDAQ:VRNM).

Comments | Reprints | Share:        

Sony Ericsson, the London-based mobile handset maker, is shutting its Seattle-area office, as first reported by Engadget and Triangle Business Journal. Sony Ericsson is cutting about 2,000 out of 9,900 jobs globally, including closing offices in Research Triangle Park, San Diego, Miami, Kista, Sweden, and Chennai, India. The moves are part of a company-wide restructuring that includes moving its North American headquarters from Research Triangle Park to Atlanta, GA.

Comments | Reprints | Share:        

Who says consumer websites are dead? Maybe you don’t need the ridiculous traffic of, say, Seattle-based Cheezburger Network (LOLcats) to survive on advertising revenues. Maybe user-generated content around a targeted niche, especially where there are purchasing decisions being made, can work well after all.

That’s the sense I got after talking with Tom Seery, the founder and president of Seattle-based RealSelf. Launched in 2006, RealSelf.com provides information about cosmetic treatments in an online community format that includes user reviews, doctor listings, and expert advice from cosmetic surgeons, dentists, and dermatologists. The treatments in question—a multibillion dollar market worldwide—run the gamut from nose jobs and tummy tucks to orthodontic braces and breast implants.

RealSelf is particularly interesting because it sits at the intersection of a number of fast-growing (but also challenging) areas for startups—social and community review sites, health 2.0, and ad-supported media sites. The company has gained some traction, growing 150 percent year over year in Web traffic; it now gets more than 700,000 unique visitors per month, Seery says. In terms of local startups with a similar strategy for capturing niches of Internet content (but these are not competitors), I’d mention Avvo, TeachStreet, Raveable, Redfin, Urbanspoon, and Zillow.

Like most promising startups, the story of RealSelf began with some important personal and business observations. Seery was a longtime employee of Bellevue, WA-based Expedia (NASDAQ: EXPE), and he saw the competing startup TripAdvisor plug away at hotel reviews and other user-generated ratings until 2004, when IAC (which then owned Expedia) had to buy it. “That was the ‘aha,’” Seery says. He thought, “Where else can we take this empowerment of consumers?”

Around the same time, Seery’s wife was researching a laser cosmetic treatment, and was having a hard time finding trustworthy reviews. So he thought, “Let’s create TripAdvisor for the cosmetic space.” The key adjustment he made was to introduce medical experts to the user community. The challenge there, as with most e-health sites like WebMD and Revolution Health, is that doctors are …Next Page »

Comments | Reprints | Share:        

Seattle-based Voyager Capital has participated in a $5 million investment in 1020, the San Francisco developer of Placecast, a location-based advertising and marketing platform, according to a report in TechCrunch. Quatrex Capital and Onset Ventures also participated in the Series B funding, which will be used to accelerate Placecast’s technology development. Placecast’s algorithms combine data across the Web, mobile, e-mail, and Wi-Fi to try to maximize relevance for advertisers and publishers. In an interview with Xconomy last year, Voyager co-founder Enrique Godreau mentioned 1020 as an example of an intriguingly mainstream mobile startup.

Comments | Reprints | Share:        

Yesterday we ran the first part of our interview with Steve Bratt, the CEO of the new World Wide Web Foundation, which was unveiled on November 15 by Web inventor Tim-Berners-Lee. The foundation aims to empower people in developing regions to access “life-critical information” on the Web using mobile phones and other simplified interfaces.

Bratt, who leads the Geneva, Switzerland-based foundation from offices in Boston, talked in the first half of the interview about the origins of the group, how its mission differs from that of its sister organization the World Wide Web Consortium, and the gaps in content, research, and technology it hopes to address.

In Part 2, below, Bratt details the foundation’s initial projects in Africa and South America, the role of voice technology in broadening Web access, and the foundation’s plans for growth.

Xconomy: What can you tell me about your initial projects?

Steve Bratt: There are two: the Web Alliance for Re-Greening Africa, and Empowering Youth in Inner Cities. Both are in partnership with other organizations. With the first one, the goal is to provide Web systems that will help capture local knowledge about how to plant in very harsh desert environments. There is a group, the Africa Re-Greening Initiative, that has been working for 20 years to take local innovations in how to plant and conveying them to others. This is a great example because it’s not a case of foreign aid coming in and saying, “Let’s build a dam and here’s some chemical fertilizer and some genetically engineered corn.” It’s about what is working for the 1 percent and how to convey that to the other 99 percent. I met this farmer in Burkina Faso, Yacouba Sawadogo, who figured a different geometry for making trenches to grow seeds and plants that turns out to be much more productive—what size hole to use, when to put manure in. He didn’t have any training, he just discovered it. It’s a perfect example. They’ve been busing farmers into to see him; he might see 10 a month. We want to create a digital bus to allow all of the farmers in that area to have the knowledge.

We’re working with VU University in the Netherlands, and we’re going to see if the Web can empower the conveyance of information, and how to use voice to enable the Web. VoiceXML has been heavily used commercially in the West—every call center uses it—but it hasn’t been used as much for development. There are no new standards needed. We just want to work with local developers and local farmers so they can develop something that meets farmers’ needs.

The Empowering Youth project is in concert with the Center for Digital Inclusion, a fantastic organization started by Rodrigo Baggio in Brazil. They started in the poorest areas of Rio de Janeiro and they have close to 800 community centers in inner cities training kids on computers. We’re going in to help them develop a curriculum to teach youth how to develop content and Web applications. Again, we’ll focus on mobile and voice, because those are the predominant technologies available to people, even in poor areas. Even in the Sahel in Africa, we were told that every family has access to a mobile phone and a radio. It’s the same in Brazil and Latin America. So that will be a pilot project in five cities—one in Brazil, one in Latin America, one in the Middle East, and probably one in a Western city. But this is an unfunded project at this point, so we’re looking for partners to help fund it.

X: Do you ever worry that the voice-accessible Web that you’re describing will be an extremely slow, impoverished version of the Web that we enjoy here in the United States? I mean, just to keep things manageable, you’d probably have to limit menu choices at each level of a voice interface to four or five. How do you translate a complex Website into something that can be consumed that way?

SB: We are so spoiled. We have our iPhones and our high-speed Internet. Well, if you’re making a decision about what movie to go to and it starts in five minutes, you need a pretty fast answer. But if you’re making a decision about which direction to walk in when …Next Page »

Comments (1) | Reprints | Share:        

Managing a venture fund is hugely different from running a startup. Eric Paley told me that last year at this time his primary responsibility was at dental imaging firm Brontes Technologies, the MIT spin-off that he co-founded and where he had served as general manager after its sale to technology giant 3M (NYSE:MMM) in 2006. Nowadays, as managing partner and co-founder of new seed fund Founder Collective, his much broader focus includes meetings with a whopping 30 entrepreneurs a week, he said.

Early this month Paley’s firm had an official launch after closing a first fund of about $40 million to invest in seed-stage startups, even though reports about the firm surfaced in June after its initial SEC filings became public knowledge. The firm is made up of a group of successful entrepreneurs who have been backing each other’s startups for ages before coming together as Founder Collective. David Frankel, the firm’s other managing partner along with Paley, was a seed investor in Brontes as well as partner Chris Dixon’s startups SiteAdvisor and Hunch, for example. Their experience as entrepreneurs who have raised venture capital and reached successful exits, along with their compelling investment strategy, could help them succeed in the struggling venture industry.

Founder Collective, which has offices in Cambridge, MA, and New York (where Frankel is based), is taking a much different tack than many funds have taken over the past decade. Paley says that the vast majority of funds closed over the past 10 years have been more than $100 million, while most of the funds were less than that in the previous decade. But the big knock on the venture industry is that it’s done a poor job of returning capital and returns commensurate with their risk profile to their limited partner investors. And large funds often aim to invest big amounts of capital ($10 million or more) in their portfolio companies, even when companies don’t really need that much money, Paley says. Founder Collective’s first fund is a lean $40 million or so, and that money is intended to be invested in capital-efficient businesses that aren’t taking on more investment capital than is needed to achieve their goals. Indeed, we’re seeing this movement toward smallish investments in lean teams, at least in software/tech, all around the country.

Another big downside of a startup raising more venture capital than it requires to execute its plan is the dilution of ownership for the entrepreneurs who founded the company. “We really created the fund out of frustration that there wasn’t a really good answer for the capital-efficient business in the early days to achieve major milestones and increase the value of the company before giving so much of it away to investors,” Paley said.

There are no banker-turned-venture capitalists at Paley’s shop. Many of the partners maintain operational roles at startups they’ve co-founded. Dixon, a founder of Web security firm SiteAdvisor (acquired by McAfee), is full-time CEO of his firm Hunch that provides an online decision-making tool. Also, Micah Rosenbloom, who co-founded Brontes with Paley, is now the general manager of the Brontes business for 3M. (Here’s a full list of the the Founder team on the firm’s website.)

The investment philosophy at Founder is to back startups led by committed entrepreneurs. And though Paley said the firm has no stated limits on sectors or geographic areas in which it invests, the firm will most likely invest, as it has done so far, in …Next Page »

Comments (2) | Reprints | Share:        

Wade Roush wrote:

One of the great things about doing your computing in the cloud is that you don’t have to worry about which machines your jobs are running on, or whether they have the right software on them, or even what city they’re in. Indeed, that’s the whole point. But one of the less ideal things about doing your computing in the cloud is that the network everyone uses to reach various public clouds—the Internet itself—is so unpredictable.

Cloud providers—who essentially rent out processing and storage resources so that companies can outsource IT infrastructure—can guarantee a certain level of service within their clouds. But there’s almost nothing they can do about traffic delays on the Internet, a problem that falls right back into the laps of users who were trying to increase efficiency in the first place.

Now, companies that rely on big cloud providers like Google, Amazon Web Services, or GoGrid will have a better way to see how the network connections linking them to each provider’s data centers are performing—and make judgments over time about which clouds are easiest to reach. That’s thanks to Apparent Networks, a Wellesley Hills, MA-based network performance software startup that’s introducing a service today called the Cloud Performance Center. It’s a free online tool that visually quantifies network performance for up to five “paths” between a user’s location and any specified cloud provider. (After the first five paths, Apparent charges $5 per path per month for the information.)

Information about network performance is useful because large delays or “latency” can disrupt business and weaken the argument for outsourcing computing jobs to off-premises resources. “Providers like Amazon or Google are building these beautiful data centers with top-notch people that have got these great services that are highly available, and that’s all good, but when I have to connect, I have to do it over the same old Internet,” says Jim Melvin, Apparent Networks’ president and chief marketing officer. “What we’ve done is provision the Internet, in North America to start with, with performance monitors in about a dozen key points like Boston, Miami, San Francisco, Vancouver, and Detroit. Our service will allow customers to see the performance for any of the top-tier cloud providers in those locations, trending back in time.”

So if you have an office in Boston, you can use the Cloud Performance Center to see which cloud provider has a history of the fastest network connections to the Hub. Melvin emphasizes that Apparent is “not trying to poke anyone in the eye” over the latency issue, but rather to raise awareness. Network connection slowdowns are most often a result of logjams within the network itself, he says.

“The vision and the ideal of cloud computing is that you don’t have to worry about where the compute cycles are being generated, but we’ve seen countless times that the reality of the Internet today is that you cannot count on connectivity,” he says. “You do need to care what level of performance you’re getting across the Internet.”

The fact that cloud computing providers can’t or won’t take responsibility for network performance issues once information leaves the data center “is one of the big stumbling blocks for the growth of cloud computing in general,” Melvin says. His company’s so-called “path-based” performance monitoring is one way businesses can get around that problem, he argues—indeed, he says some Apparent clients are already using the service to monitors tens of thousands of paths.

Comments | Reprints | Share: