As you have read this week about the financial details of Facebook’s IPO filing, you have no doubt stopped to think about—or daydream about—what your own company might be worth.  While going public might be a distant or inappropriate goal for your own venture, Facebook’s IPO serves as a timely reminder that you should be calibrating your business and growth strategies to make your company attractive to investors or strategic partners.  After all, for most startup entrepreneurs, the eventual reward comes in the form of a merger or acquisition, rather than an IPO.

The good news is that the vast majority of technology CFOs (75 percent) expect M&A activity in the sector to rise in 2012, according to the fifth annual BDO Technology Outlook Survey, released this month by BDO USA, LLP, where I am a partner and national director of the Technology and Life Sciences Practice.  However, a word of warning: I’ve seen many deals derailed—with significant delays or value erosion—because of the management team’s undisciplined approach to presenting financial information.

Therefore, whether your own organization is in the market to acquire another business for strategic growth purposes, or you are working to position your company as an attractive acquisition target, there are two issues that are crucial to generating or maintaining shareholder value: Having an acute awareness of the motivating factors behind an M&A transaction, and providing an orderly financial snapshot that will answer the mostly likely questions from potential partners.

Motivating Factors Spurring M&A Transactions

In our survey, respondents predicted that the top three motivations behind M&A deals in 2012 will be revenue growth, enhanced market share, and the acquisition of new technology and intellectual property. In other words, a significant majority of CFOs believe that M&A transactions will mostly be offensive in nature. A company waging an offensive strategy isn’t necessarily engaged in hostile takeovers; rather, it means the focus is more on growth than cost-cutting. Therefore, companies are looking for acquisition targets that will fill in holes in product or technology portfolios, and are not necessarily angling to take a competitor’s product out of the market.

Financial Rigor

Understanding the motivations of other parties in a deal can put you in a more powerful position, either as an acquirer or a target. Equally important is meeting the due diligence requirements of an acquirer in an efficient and confident manner. By ensuring that reliable and accurate financial and operational information is available, companies can avoid roadblocks to the M&A process—roadblocks that can significantly erode shareholder value, if not derail the entire process.  For example, although the survey indicates a positive outlook for the industry this year, respondents foresee overall revenue increases of just 2.6 percent – significantly lower than the forecasted growth in last year’s survey (10.4 percent).  If you are experiencing a lower revenue forecast this year, be prepared to address how you intend to get your company back on track.

Beyond M&A Transactions

Even if M&As are not currently a part of your growth strategy, accessing capital remains a top of mind issue for technology companies. The good news is that—according to our survey—over three-quarters (76 percent) of respondents say they feel better about the ability to access capital in 2012. The hurdles to arranging debt financing remain high, but businesses with strong fundamentals and fiscal discipline are once again able to obtain credit. In fact, the majority of respondents who plan to raise additional capital this year intend to use debt financing. The key to making debt work for your company is to manage the process proactively, and avoid being forced into reactive mode.

Whether your business is planning to undertake a strategic transaction or simply needs to access capital through financing, careful planning is critical. A blend of fiscal responsibility, corporate discipline and the willingness to take measured risk are the keys to powering growth.

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Last month, Aastrom Biosciences president and CEO Tim Mayleben and his wife, Dawn, announced they are funding a new “venture shaping” program at the University of Michigan.

Venture shaping refers to the process of systematically vetting a nifty idea for a startup, with the idea that the failure of a less-than-viable business will occur at a much earlier stage before too much financial damage has been done—a key component in supporting new businesses led by student and faculty entrepreneurs.

“My wife and I decided we wanted to give back, and we liked [managing director of U-M's Zell Lurie Institute] Tim Faley’s scientific approach to new company creation,” Mayleben says.

What the Mayleben Family Venture Shaping Program will do, Mayleben says, is help students weed out failing business ideas earlier. Grants of $500 will be awarded to approximately 25 teams of students or faculty who have an idea for a startup that they want to test or refine. Each team will then evaluate their idea for profitability and market viability through a three-step process.

“The grant is meant to encourage students to do business discovery work,” Faley says. “People are writing plans on vague ideas. That’s an interesting first pass, but go talk to the potential customers and find out what the revenue stream might look like.”

Faley calls the venture shaping program a needed bridge between the university’s 1,000 Pitches competition, which generates raw ideas, and the Dare to Dream program, which awards up to $10,000 to the most promising of those ideas.

“To get students to do the [venture shaping] work without an incentive was challenging,” Faley says. “It fills in a really nice gap.”

Aastrom is an Ann Arbor, MI-based startup that recently entered the final stage of clinical trials for its multicell therapy for patients with critical limb isschemia. Mayleben has a lots of experience developing life sciences startups. Before joining Aastrom, he served as chief operating officer of Esperion Therapeutics, which raised more than $200 million in capital under his direction before being acquired by Pfizer in 2003.

Mayleben says he has gotten to know the folks at Zell Lurie by serving as both a formal and informal advisor to the student-managed Wolverine Venture Fund for the past decade. He likes the school’s disciplined approach to failing early. He says university entrepreneurial programs fall short when they only track the number of companies created.

“The more relevant score is how many successful businesses get launched,” Mayleben says. “The venture shaping program will increase the likelihood of success, and that’s especially true for first-time entrepreneurs.”

Faley says he and the university are thrilled that the Maylebens are funding the program, and he says they’ve already expressed that they’ll entertain the idea of providing more venture shaping grants if the program grows the way Faley hopes that it will.

“Tim is a very successful serial entrepreneur, but he’s also a very thoughtful and methodical person,” Faley says of Mayleben. “That helps us when we’re trying to move students through the program.”

The first recipients of the Mayleben Family Venture Shaping Program will be announced on February 17 during the Michigan Business Challenge finals.

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Over the last week, 10 lucky companies have been getting the calls from HAXLR8R: they’ve been admitted to the inaugural session of the startup world’s newest venture incubator. Following the popular model pioneered by TechStars and Y Combinator, HAXLR8R will provide teams with a stipend of $6,000 per founder and about three months of mentorship, in return for a 6- to 10-percent equity stake. At the end of the session in June, companies will pitch their businesses to investors at a “demo day” in San Francisco.

There are just two big differences between HAXLR8R and all the other incubators. First, the program isn’t admitting software or Internet startups. It’s designed for companies building real stuff, rather than the usual mobile apps or consumer Web services. Second, it’s not actually located in San Francisco or any of the other typical U.S. startup hubs, like Boston, New York, or Boulder. In fact, it’s not even in the same hemisphere. HAXLR8R will gather its first class of startups at the Shiling Industrial Park in the Nanshan district of Shenzhen, a high-tech manufacturing city north of Hong Kong.

A recruiting poster for HAXLR8R

The theory behind the new program is that successful gadget builders—whether they’ve developed a toy, an appliance, or some kind of consumer device for health, fitness, or travel—will eventually have to figure out where to mass-produce their products. And chances are the answer will be China. Despite the new scrutiny being applied to U.S. consumer electronics companies over labor conditions in Chinese plants, China still has the world’s richest supply of low-cost manufacturing facilities, along with the engineers who know how to get them tooled up to make new things.

But to get something built in China, you have to know who to talk to, and the program at HAXLR8R is intended to smooth the way. Startups in the program will be “coming into an environment where they can work on their product and figure out how to manufacture it,” says Cyril Ebersweiler, one of the program’s co-founders. “They will get instant access to relationships which would take a year or more to develop on their own.”

HAXLR8R finished its selection process last week and began notifying the admitted companies. Ebersweiler says the program received “way more applicants than we expected,” from all over the world. The majority of the applications came from U.S. startups, but the organization also heard from companies in Europe, Asia, and India. The mix of applicants included “startup entrepreneurs, hackers, makers, and [people from the] open source movement; social entrepreneurs as well,” Ebersweiler says. “Most of the applicants have a working prototype.”

The 15-week HAXLR8R program starts on March 1. Teams will spend the first 13 weeks in Shenzhen, building their prototypes and gathering feedback from potential customers. Then they’ll decamp to San Francisco, where they’ll … Next Page »

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When Barry Fogel first started developing a new treatment 15 years ago, his main goal was to help his own patients. Fogel, a physician trained in both psychiatry and neurology, saw many patients with a movement disorder called tardive dyskinesia (TD). The condition—which can be caused by drugs that block dopamine, such as antipsychotics—is characterized by involuntary movements of the face like puckering, closed eyes, and grimacing. Some patients suffer writhing of their hands and feet, or difficulty moving their upper bodies. “At its worst, it’s quite disfiguring,” Fogel says. And there is no approved drug to treat TD.

Fogel developed a treatment for the condition in the late 1990s, patented it, and set out to try to get it on the market. On Monday, Fogel’s dream took a huge leap towards reality when his Waltham, MA-based company, Synchroneuron, announced it had raised its first round of venture capital—$6 million from Morningside Technology Ventures. It’s enough to take the drug through a substantial portion of the clinical trials Synchroneuron will need to complete to apply for FDA approval, says chief financial officer Marc Cote.

Synchroneuron’s journey from idea to Series A could be a case study in stick-to-it-tiveness—and the value of networking. Fogel, a clinical professor of psychiatry at Harvard Medical School, suspected that modulating two brain chemicals, glutamate and GABA, would relieve TD. So he did a bit of experimenting on his own patients, prescribing them existing drugs that targeted those chemicals but were approved to treat other conditions. “I established that if you modulate glutamate, in particular, the TD gets better,” Fogel says.

So Fogel developed and patented a method for using a drug called acamprosate to do just that, and in 2004, he licensed it to San Diego-based Somaxon Pharmaceuticals (NASDAQ: SOMX). But Somaxon was developing an insomnia drug, which took precedence over the acamprosate program, Fogel says. “They didn’t give sufficient resources to acamprosate,” he says. “The progress was disappointing.” Somaxon declined to comment. (A sidenote: Somaxon eventually did get its insomnia drug on the market, but has struggled to make it stand out in a competitive market.)

In 2007, Fogel got his patents back from Somaxon and began looking for an alternate path to FDA approval. It wasn’t easy: Fogel and his wife had to do all the work to … Next Page »

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Funding for clean technology startups has increased substantially in recent years, with 323 U.S. companies raising a total of $4.3 billion in 2011, according to the recently released MoneyTree Report. In the San Diego area, the same report shows that four cleantech startups raised $78 million last year, including $15 million that went to SG Biofuels in the fourth quarter.

But sometimes it’s not enough to be green. Many cleantech startups face a basic challenge in competing against existing products that might not be as environmentally friendly, but are nevertheless well-established—even commoditized—in their respective markets.

In San Diego, sustainable design architect (and Xconomist) Robert Noble has led the development of clean manufacturing methods and technologies for manufacturing a green replacement for medium density fiberboard (MDF) structural panels—a standard material used in building construction and other industries. Noble says the proprietary process makes panels from any kind of fibrous, cellulosic material, such as recycled paper, cardboard, wood chips, corn stalks, and even cow manure. The big difference is that the replacement product, which Noble calls 3-D Engineered Molded Fiber (3DEMF), requires no petroleum-based glues or addititves, or vapor-emitting chemicals.

Ecor samples

Now Noble Environmental Technologies, a company he founded in 2005, is overseeing installation of a 3DEMF factory, showroom, and design lab in downtown San Diego to manufacture the company’s Ecor brand panels. “The tide has turned for sustainable materials,” says Jim Torti, the company’s chief operating officer.

After personally funding the company through 2009, Noble says he now has about 15 individual and institutional investors, and he’s in the process of raising another $4 million to help equip the 10,000-square foot factory and to provide some cash flow. Noble adds that he has no plans to seek venture capital. He says the time required to build large-scale manufacturing and their primary market—the building industry—”doesn’t easily fit the venture capital model for a quick exit,” which is an issue for many cleantech businesses.

Torti and Noble say they wanted to establish the company’s first production plant in an urban, mixed-use setting—an apartment building is across the street—to demonstrate … Next Page »

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Today’s West Coast announcement that Oracle is buying human resources management firm Taleo for $1.9 billion—yes, billion—puts some Boston-area talent and recruiting startups in a new light. Unfortunately, one of them is no longer in Boston…

—Take the Interview, the video-based recruiting startup and former Dogpatch Labs Cambridge resident, has relocated to New York City (SoHo to be more exact). It’s not a big surprise, as the company was part of the DreamIt Ventures startup program in New York last summer. Take the Interview, led by CEO Danielle Weinblatt, raised a seed funding round last September.

—Boston-based Smarterer, a skills-test startup that’s trying to reinvent the resume, has hit a possible inflection point. According to co-founder Dave Balter, the company had 800,000 skills questions answered online over the past year, but recently that figure increased by 250,000 in just five days. Chalk it up to focusing on who wants to use the product and then who has to use the product (employers vs. job seekers). Smarterer is led by CEO Jennifer Fremont-Smith; the company raised a seed round last year.

—Senexx, an expertise-management startup based in Cambridge, MA, and Israel, has collaborated with fellow Cambridge startup PowerInbox to build a Web application that runs in people’s e-mail systems and helps them find expertise and share knowledge within their company or organization. This is an interesting partnership between a couple of early-stage startups trying to do big things in social enterprise apps, using e-mail as the platform.

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In a typical year, research at the University of Washington will spawn about a dozen promising young companies. In the next three years, the school’s new president wants to see that output double—and ground zero for a lot of those startups will likely be a new incubator space unveiled this week.

When renovations are complete, the UW’s New Ventures Facility will have space for about 25 startups, with some 23,000 square feet of space split roughly evenly between laboratories and offices.

The initial floor of office space is finished now, and the first startups are expected to begin stocking its cubicles and conference rooms in the coming weeks. Renovation of lab space will take a little longer—it’s expected to be finished in 2014.

UW officials aren’t waiting to start trumpeting what they say is another big step toward dramatically increasing the entrepreneurial output of the state’s largest higher education center. It coincides with efforts like the new W Fund, an early stage investment pool pegged at about $25 million that will concentrate on companies emerging from public universities in the state.

Young

Michael Young, the UW’s president, said the incubator on UW’s campus should help keep young companies and entrepreneurs in Washington by making sure they don’t have to hit the streets too early, where they might find a need to relocate to Silicon Valley.

“When businesses spin too quickly out of their university geography, the reasons for staying in the state begin to reduce, and all of the sudden sunny climates and higher degrees of venture capital and so forth begin to appeal,” Young said Wednesday. “And that is despite the fact that the real value-add is staying connected with the university for some period of time until it really has proved its worth, and has shown what that market niche is, and has developed that technology that truly is significant and truly is transformative.”

Rhoads

Young speaks from experience, having helped the University of Utah become a national leader in spinning out university research. Linden Rhoads, head of the UW’s Center for Commercialization, said Young’s “assignment” of doubling the school’s startup output will also focus on quality—”not just companies, but successful, thriving companies that will be a benefit to the community and a credit to the university. So really, we look at the applicants with that assigment in mind.”

Startups have to apply for the incubator, and once they’re in, will pay to rent spaces—a typical office setup would be about $220 per month, with a one-year contract. The incubator already has seven startups ready to move in, and is expecting a handful more to join the parade soon.

One of those companies is Envitrum, a startup founded by mechanical engineering students Grant L.S. Marchelli and Renuka Prabhakar. Envitrum turns waste glass that is too dirty to be recycled into bricks that can be used in finish construction, namely building facades. The bricks that Envitrum produces are 95 percent glass, but consume a third less energy to produce than typical construction bricks, while also showing that they’re stronger in tests, Prahakar said.

Envitrum is about two years old, and presently operating on grant funding. ”It’s this great green technology. But the question is, how do we actually make the other type of green?” said Ryan Buckmaster, who’s working with Envitrum through the Center for Commercialization.

As the New Ventures building fills up, that’s the kind of question that people should be asking a lot more often in the next few years.

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In the nearly five years since we started Xconomy, I’ve looked forward to few events more than our Silicon Valley “Xconomy Xchange” forum last night with Evernote CEO Phil Libin, Sequoia Capital partner Roelof Botha, and Morgenthaler Ventures partner Gary Little. I’m a longtime power user of Evernote’s online notekeeping application—it’s installed on my Mac, my iPad, and my iPhone—and interviewing Libin and Evernote’s biggest investors in front of a live audience was a little bit like being a Trekkie on stage with William Shatner, Leonard Nimoy, and Gene Roddenberry. Except, Libin is funnier.

We’ve got photos from the event in slide-show form below. Many thanks to Hanno Botha, newly wedded husband of Xconomy San Francisco’s director of business development Rachel Botha, for playing Peter Parker. (Hanno and Rachel are no relation to Roelof.)

While I’m thanking folks: I want to extend a special thank you to Microsoft Silicon Valley for hosting the event, especially to BizSpark evangelist Brett Laffel, operations manager Sherree Curtiss, and Paul the A/V technician. We’re also grateful to event sponsors Silicon Valley Bank and Turnstone (which showed off its forthcoming iPad app, complete with Evernote integration), event partners Dealmaker Media and Plug and Play Tech Center, design sponsor Mixtur, and Xconomy’s regular lineup of underwriters and venture members. Ching Wu at Morgenthaler Ventures, Andrew Sinkov at Evernote, and Mark Dempster at Sequoia Capital provided invaluable help spreading the word about the event.

Quite a few people tweeted from the event. You can get a look at the conversation by searching Twitter for the hashtag #xcevernote. One of the most tweetable gems of the evening was Libin’s formulation of Libin’s Law: “In a startup, you have to multiply Moore’s Law by Murphy’s Law. Every year, there are twice as many things that can go wrong.” On the final page in our photo gallery, you’ll find a Storify compilation of notable tweets from the event.

	NEXT IMAGE >>
	L to R: Wade Roush (Xconomy), Gary Little (Morgenthaler Ventures), Phil Libin (Evernote), Roelof Botha (Sequoia Capital).
	Photo by Hanno Botha

… Next Page »

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A young Canadian software startup with Boston investors is now part of a big Boston-area company. Ottawa-based Blaze Software has been acquired by Cambridge, MA-based Akamai (NASDAQ: AKAM) for an undisclosed cash sum.

What’s interesting here is that Akamai, the Web content delivery and networking giant, is making a move into Web performance optimization—basically tackling Web performance at the browser level (what some call “front end”), rather than the network level. Akamai has been positioning itself as a one-stop provider of a secure platform for businesses to reach customers via the Web, mobile, and cloud. That approach also includes, among other things, speeding up Web and mobile applications, as evidenced by the company’s recent acquisition of its California-based rival Cotendo for $268 million.

Today’s deal is no doubt smaller than that, but it could be an important sign of things to come—especially around Boston. Blaze started in 2010, and its seed funding came from local investors CommonAngels and Boston Seed Capital. So why sell now?

“You always have a choice of how you want to grow the business,” says Chris Sheehan, managing director of CommonAngels. “It made a lot of sense for the guys to partner up with Akamai, who’s so strong in the [content delivery network] space. When I made the investment, [Web performance optimization] was just beginning. The timing was sooner than I expected. But in the last 12 months, this whole thing has really started to take off.” [Disclosure: CommonAngels is an investor in Xconomy, and Sheehan is a board member at Xconomy.]

Blaze’s approach is to optimize the code on Web pages so as to speed up the transmission of content and render pages faster on whatever device the customer is browsing on—PC, tablet, or smartphone. This is particularly useful for e-commerce and media sites, which tend to get gummed up by lots of different pieces of code loading on them. The company’s technology (and team) will be integrated into Akamai’s cloud platform, said Rick McConnell, executive vice president of products and development at Akamai, in a statement.

In speeding up websites, Blaze competes directly with Boston-based companies Yottaa (which is also in Boston Seed’s portfolio) and SiteSpect. Google’s team in Kendall Square also released a free tool for Web page optimization in the fall of 2010.

It’s not just about making websites faster, however. All of the above companies have been trying to combine Web optimization with business analytics so as to help businesses track things like sales and customer behavior more effectively. Now Akamai is firmly in the game, and we’ll see how that affects the competitive landscape.

“It’s going to make it a lot harder,” Sheehan says. “It puts a lot of pressure on the other startups.”

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OncoSec Medical CEO Punit Dhillon tells me the startup he helped establish in San Diego last March is beginning mid-stage safety and efficacy trials of its proprietary technology for enhancing drug delivery in treatments of several types of skin cancer.

The technology, which OncoSec acquired from Blue Bell, PA-based Inovio Pharmaceuticals (AMEX: INO) almost a year ago, transmits intense electrical pulses into skin tumors through six electrode needles that are pushed into the skin. The electricity causes the tumor cells to become permeable with each jolt, and makes it easier for anti-cancer drugs injected into the region to pass through the tumor cells’ tough outer membrane. Known as electroporation, the process increases the concentration of an anti-cancer drug within the tumor.

“What we’re doing is a much more elegant and targeted approach,” says Dhillon, who estimates the technique increases the uptake of anti-cancer drugs by 4,000 to 10,000 times. As a result, doctors can reduce the dosage of anti-cancer drugs used with electroporation technology.

Dhillon, who previously served as Inovio’s vice president of finance and operations, says Inovio has been an electroporation pioneer. The Pennsylvania company decided last year, however, to sell technology that was unrelated to its strategic focus on developing DNA vaccines for cervical dysplasia, leukemia, and hepatitis C virus therapies.

The deal to acquire Inovio’s assets didn’t happen by chance. Inovio chairman and former CEO Avtar Dhillon is Punit Dhillon’s uncle, and their family and friends raised the initial $1.1 million that funded OncoSec after the company sprang to life through a reverse merger with a dormant public company. The San Diego startup raised another $3 million last June from two New York health funds, Hudson Bay Capital and Heights Capital. That should be enough cash for OncoSec to complete three mid-stage trials the company plans to begin before the end of March.

The three studies will use OncoSec’s electroporation technology to deliver the company’s lead drug candidate, called Interleukin-12 (IL-12) cytokine, to three groups of patients with different lethal skin cancers—metastatic melanoma, Merkel cell carcinoma, and cutaneous T-cell lymphoma. The experimental drug is intended to both trigger and boost a strong immune response to each type of cancer. The combined treatment, known as electroimmunotherapy, represents a potential new anti-cancer treatment with broad applicability, although Punit Dhillon says the company must pursue separate regulatory approvals to treat each type of cancer (as a combination drug-and-device product) on an application-by-application basis.

OncoSec says its technology also can be used in the same way in electrochemotherapy, which uses an established anti-cancer drug like bleomycin while a tumor is being electroporated. The use of electroporation in chemotherapy has been studied more throroughly, and Punit Dhillon says he wants to advance OncoSec’s approach through a partnership with a bigger pharmaceutical company.

“2011 was a great year for us,” he says, “and we’ve got some exciting milestones to look forward to in 2012.” Once the latest studies have been completed, OncoSec’s Dhillon says he looks forward to licensing opportunities and other commercial prospects, and he adds, “We also still have the chemotherapy program in the wings.”

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When the University of Washington hired Michael Young to be its new president last year, one qualification that stood out was an impressive record of spinning out companies from his previous employer, the University of Utah.

Today, the UW is taking a step toward fulfilling some of that promise by opening its New Ventures Facility, an incubator offering lab and office space for startups based on the school’s research. The incubator will be run by the university’s Center for Commercialization, which recently topped off a $25 million fund for spinning out public university research.

Tech startup incubators have been erupting across the American business landscape in the past few years, as faster, cheaper, more powerful software and hardware makes it very inexpensive to start a new company and investors look for ways to place broader bets on a crop of entrepreneurs. Seattle has a branch of the prominent TechStars program, which is also partnering with Microsoft to organize a separate accelerator program for startups working on the Kinect motion and sound sensor.

The UW plans to talk in detail about the New Ventures incubator at a launch event later today, and I’ll update with more color from the scene. It promises to be a bright spot for the university amid an era of steep cutbacks in money from the state, which is still struggling with lax tax collections following the Great Recession. Tuition has already increased to compensate for less state money, and the UW is likely to soon start charging different prices for in-demand majors for the first time.

UW’s commercialization efforts already have seen several spinouts in life sciences and information technology, including notable names like Fate Therapeutics and Farecast, now part of Bing’s travel search. The Center for Commercialization also has a strong collection of entrepreneurs-in-residence, with folks like Ken Myer and Luni Libes on the roster.

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She started her career as a management consultant, but Aubrie Pagano says she always knew she wanted to be an entrepreneur. And she was particularly energized by fashion.

So Pagano spent her free hours assisting local Boston designer Emily Muller in launching her collection, in exchange for the opportunity to get some firsthand experience in the independent fashion design space. There she discovered that designers face a particular challenge—one that would eventually inspire Pagano to create the e-commerce startup Zoora.

“Its hard for independent designers to scale because there’s a discovery issue,” says Pagano. “[Muller] has a great website buts nobody goes to it.”

And as a shopper, Pagano says she’s felt like she’s had to settle for a piece of clothing that just isn’t quite right. Women like her are the perfect customer base for independent designers, she says.

“Something that a lot of people don’t know about independent designers is that they’re really flexible,” Pagano says.

Just last Monday, Pagano opened the Zoora website to the public, to offer women clothing that they can customize to best fit their measurements and taste. Her hope is that the women who feel underserved by traditional retail will bring independent designers the traffic—and business—they so desperately need.

Zoora joins a booming cluster of Boston companies in the space of mass customization, where e-commerce platforms allow shoppers to select and tailor products to better fit their preferences. As my colleague Greg has pointed out previously, these companies offer shoppers personalized jewelry (Gemvara), bags (F. Rock), girls clothing (FashionPlaytes), men’s dress shirts (Boston’s Blank Label and Proper Cloth in New York), and even bras (Zyrra).

Pagano started working on Zoora (a name inspired by “misura,” the Italian word for measurement) last spring, and made hiring a head buyer her first move. Since then, the company has enlisted about a dozen designers (including Muller) to sell garments on the site with options for customization. Another designer is Althea Harper, a former contestant on the Lifetime show Project Runway. (Worth noting, New York fashion tech startup Send the Trend has Project Runway veteran and winner Christian Siriano on staff.)

The customizations to Zoora garments fall into two baskets, says Pagano: “made-to-measure adjustments” and “ready-to-wear tweaks.” With the first category, customers input their specific measurements, which designers take into account to create a garment that’s a perfect fit. With “ready-to-wear tweaks,” meanwhile, garments come in standard sizes, but offer different options for elements like fabric, necklines, sleeves, and hem length.

The Zoora team now consists of … Next Page »

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Everyone wants to recapture pieces of the past these days. Facebook for example changed all profiles to the timeline format this year, and others in the social media space are pursuing ways of tracking the past. New York-based Timehop has developed its own technology to let individuals recall content from their personal histories, via once-day e-mails. Jonathan Wegener, CEO and co-founder of Timehop, believes the e-mails offer deeper looks into the past than its rivals in the market.

For the team behind Timehop, the technology also marks a major change from where they were one year ago. Back then, they were also working on a startup called FriendsList as part of TechStars’s inaugural NYC class. FriendsList is now defunct. And the tale of how the team scrapped FriendList and moved forward with Timehop provides an interesting case study on startup strategizing—with a dash of nimbleness.

Timehop sends its users e-mails each day that tell them what they were doing exactly one year ago, based on information gathered from their Twitter, Foursquare, Facebook, and Instagram profiles. These personal newsletters, Wegener says, offer more context than what the sources offer individually. “There’s a big opportunity in history, and no one is doing it well,” he says. Wegener says Timehop gives its users a picture of how they spent their time, whom they spent it with, and what they were thinking across the social sphere. “Effectively you’re writing a diary without really doing anything,” he says.

One-year-old Timehop raised $1.1 million in seed funding in January from OATV, Spark Capital, and individual investors who include Foursquare co-founders Dennis Crowley and Naveen Selvadurai. Wegener says the seed funding will go towards … Next Page »

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Long hours, breakneck deadlines, high stakes, and conflicting advice—it’s all part of the package when entrepreneurs submit a few months of their life to an incubator program in hopes of creating the next big thing. Not surprisingly, some groups crumble under the pressure, says TechStars Seattle director Andy Sack.

“The number one risk facing your company—whatever your business is—is internal combustion. That means team breakdown,” Sack said last night at a preview of the Mirosoft Kinect Accelerator program in Seattle.

Microsoft is partnering with TechStars for the three-month accelerator, which will be housed in Microsoft offices in the South Lake Union neighborhood—right next to Amazon headquarters.

Teams that qualify for the program will be developing businesses that use the Kinect on the Xbox 360 video game console and the Windows operating system. They’ll get access to a star-studded cast of mentors, including people inside Microsoft who are pushing some of the boundaries of the Kinect device, and a $20,000 investment from TechStars in exchange for 6 percent of the company.

Applications are due by tomorrow (Feb. 8), and hundreds have already poured in, with ideas ranging from advertising and entertainment to healthcare, education, and even manufacturing. The final 10 proto-companies to make the accelerator will begin their work in Seattle on April 2.

Sack and 2011 TechStars Seattle alum Russell Benaroya, co-founder and CEO of EveryMove, were on hand to give possible accelerator applicants an idea of what’s required to thrive in a TechStars-style program. They didn’t pull any punches, describing an intense experience that doesn’t always end well.

“There is nowhere to hide when you are surrounded by nine other teams that are, while collaborateive, also competitive,” Benaroya said.

One unnamed team in the last TechStars Seattle group “blew up” on the first day, Benaroya said. Another, LikeBright, broke apart shortly after the program’s Demo Day in November and has regrouped with one of the original founders taking on a new technical partner, Sack said.

Even groups without significant internal conflicts can run through huge changes to their idea or approach at a dizzying pace, and face what Sack called “mentor whiplash” from getting opposing advice from seasoned entrepreneurs and investors helping out with the program.

It’s the entrepreneurs’ job, Sack said, to take all the criticism and advice, but make their own decision about the best path for their startup. That instantly reminded me of this recent story about TechStars Seattle 2011 grad Romotive, which said a lot of mentors didn’t think their concept for a smartphone-driven toy robot would fly until a campaign on Kickstarter showed significant support for the idea.

But I don’t want to give the impression that their advice was all a huge buzzkill. It was candid advice for people considering taking the plunge into an intense experience that can hone their ideas into viable businesses. Seven of the 10 TechStars Seattle companies from last year have already raised financing, Sack said, with another apparently on its way. That includes Benaroya’s company EveryMove, an online platform where workers can earn rewards for healthy behavior—it’s raised $1.5 million so far, and is on track to make about $500,000 in revenue this year, he said.

“I guarantee you will put in more energy and effort—I don’t know if I’ll say more than you ever have in your life … but we are going to have fun while we work hard,” said Dave Malcolm, a former Microsoftie and TechStars mentor who is directing the Kinect Accelerator.

Here’s a short video of Microsoft’s JP Wollersheim showing off the Kinect hardware with Windows via the iClone 3D animation software from a company called Reallusion.

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Perhaps you’ve been meaning to buy a ticket to our big Silicon Valley event with Evernote CEO Phil Libin tonight, but you keep forgetting. Well, now’s the time to take action. We still have some tickets available online for $50 ($40 if you work for a startup)—but a walk-in ticket tonight will cost you $95.

Of course, if you’re one of Evernote’s 20 million users, you’d be very unlikely to forget something like that. The company is all about remembering the important stuff in your life—hence the elephant logo.

Now, if your promise to customers is that you’ll protect their digital memories forever, then you sort of have to plan for the long term. But that’s not how most startups think—they’re usually focused on the next product release, not the next decade or the next century. So the message Libin has been sharing lately about wanting Evernote to last 100 years or more is logical, but at the same time pretty radical.

That’s why I wanted to get Libin on stage at an Xconomy event—so that I could ask him how a startup CEO manages to think about the long-term even as he deals with the here-and-now demands of employees, customers, and investors.

And when you have an entrepreneur who says he’s not too concerned about getting acquired or planning an IPO, it takes a pretty special type of investor to back him. That’s why I also wanted to bring in Gary Little from Morgenthaler Ventures, one of Evernote’s earliest backers, as well as Roelof Botha from Sequoia Capital, which recently acquired a larger stake in Evernote by buying out previous investor Troika Dialog.

It’s this very pattern of secondary trading—with newer investors buying out older ones—that could help Evernote get really big without having to worry about going public. Tonight, I’ll be asking Little and Botha how working with Evernote is different from working with their other portfolio companies—and whether Evernote’s serial fundraising strategy can work more broadly.

Of course, we’ll also geek out a bit about Evernote itself, which is one of my favorite online tools. So register now. Meanwhile, for your reading pleasure, here’s an archive of all of my major pieces about Evernote.

Can Evernote Make You Into a Digital Leonardo? (July 2008)

Online Notebook Smackdown: Evernote vs. Springpad (April 2010)

The Rise of Evernote: An Interview with CEO Phil Libin (June 2010)

Evernote Opens a Trunk of Goodies for Online-Notes Fans (July 2010)

Sequoia Leads $20 Million Round for Evernote—Q&A with CEO Phil Libin (October 2010)

Xconomist of the Week: Phil Libin, Evernote, and the Death of the Exit (October 2011)

“Independent of Exit”: Talking Evernote with Morgenthaler’s Gary Little (January 2012)

Evernote Wants to Make Your Memories More Magical (January 2012)

How to Be a 100-Year Startup (January 2012)

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At first glance, a report released last week by PricewaterhouseCoopers and the National Venture Capital Association seems to portend rich times for life sciences startups. Biotech companies raised $4.7 billion in 2011—more than any other sector except for software and enough to help make last year one of the top three years for venture fundraising in the past decade.

But drill down into the report, based on data provided by Thomson Reuters, and the numbers tell more of a mixed story. Total VC dollars poured into the life sciences sector, which also includes medical devices, increased 21 percent to $7.5 billion in 2011. The biotech portion of the haul marked a 22 percent increase over 2010. But the volume of biotech deals dropped 9 percent to 446. What’s more, the medical device portion rose 20 percent in dollar terms (to $2.8 billion) but dropped 2 percent in deal volume (to 339).

What it all means is that VCs in life sciences remain supportive of the sector, but uncertain about its future, says Tracy Lefteroff, global managing partner in PwC’s venture capital practice. “There are still some major challenges ahead in terms of getting the FDA to provide transparency to young companies about what they need to do to get their products out of the pipeline,” Lefteroff says. “For anything [in investing] to be sustainable, FDA issues will need to be worked out.”

Still, some investing trends last year showed clear signs of optimism in life sciences. During the fourth quarter, for example, VC investing in early-stage companies totaled $987 million—a 47 percent jump from … Next Page »

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Hidden amid the technology startups clamoring for attention in New York, which is packed with media, data, and social networking players, is an unlikely company more interested in vegetables than video sharing. Gotham Greens Farms is out to prove its resilience by cultivating crops on rooftops in a landscape dominated by bricks, mortar, and steel.

Gotham Greens is an unusual mix of clean technology and agricultural tech. The startup operates a computer-controlled, solar-powered 15,000-square-foot greenhouse on the roof of The Greenpoint Wood Exchange, an 80,000-square-foot building that houses furniture, cabinetry, and woodworking companies. The greenhouse functions year-round and yielded its first crops of herbs, lettuce, and salad greens last June. Viraj Puri, CEO and co-founder of Gotham Greens, plans to expand the operation this year. “We’d like to have at least one more greenhouse built, if not two, to at least double our current production,” he says.

The notion of growing plants along the skyline of New York is not completely unheard of. Some residents plant gardens on their roofs, and sections of the old West Side Line elevated railway were redeveloped into High Line Park. However, Gotham Greens is pursuing an ambitious plan to establish more greenhouse farms across the city.

Puri, who previously worked in project management for environmental engineering firms, says he is looking at potential sites in Brooklyn, Bronx, and Queens for future … Next Page »

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Applied Proteomics hasn’t exactly been operating in stealth mode since it was founded five years ago. Co-founders David Agus, a cancer specialist at USC, and Danny Hillis, the MIT-trained computer scientist, gave TedMed talks about the startup’s technology, which provides a 40-gigabyte snapshot of all the proteins circulating in a drop of blood. By pure coincidence, I watched John Stewart’s Feb. 2 interview with Agus last night on “The Daily Show.”

“Danny and David had the foresight to build the tool before trying to use the tool,” says John Blume, a molecular biologist who joined API in 2008 as chief scientific officer. “Although the company wasn’t in stealth mode, the first several years were spent in taking the time to make it right, and then to use it and avoid some of the stumbling blocks.”

Now Applied Proteomics is raising the curtain on several steps that mark its progress beyond a seed-stage startup that was incubating at Applied Minds, an industrial think tank that Hillis founded in Glendale, CA, with a colleague from Disney Imagineering. After moving the headquarters to San Diego late last year, Applied Proteomics is today naming a new CEO—Peter Klemm, a veteran in molecular diagnostics and the former CEO of Lexington, MA-based Predictive Biosciences.

Danny Hillis

The company known as API says it also secured $22.5 million last June in Series B funding from Domain Associates (San Diego partner Jim Blair joined the board), Seattle’s Vulcan Capital, and returning angel investors. Klemm tells me the company raised $4 million from angel investors (who prefer to go unnamed) in what amounted to API’s Series A round in 2007.

David Agus

API’s goal, Klemm says, is nothing less than to “elevate molecular diagnostics to another level beyond the genome” by measuring the proteins made by genes—a long-sought technology that is expected to help doctors improve medical care for individual patients. Because proteins carry out most cellular functions, the company says a snapshot of all the proteins circulating in the body at a given moment represents “the most powerful source of information” in terms of understanding a patient’s health status.

Quantifying all the proteins in the body, Klemm says, can help doctors optimize the course of treatment for individual patients by making it easier to identify the specific drugs that would have the greatest effect on blocking specific proteins or signaling pathways, which can vary dramatically from person to person.

In a statement from the company, Hillis says, “For the first time, we can look at all the proteins in the body with remarkable specificity and sensitivity and use proteomic technology to create … Next Page »

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We’re starting to see fresh signs of life among the Internet software startups in San Diego. Check out this news.

—During a visit last week, TechStars CEO David Cohen talked with the leaders of San Diego’s grassroots Web startup community about the factors that help to create and sustain entrepreneurial communities. One crucial issue confronting San Diego is a crying need for savvy and experienced Internet entrepreneurs who are willing to “pay it forward” by mentoring a new generation of startups.

—A dozen seed-stage companies moved into the new EvoNexus incubator in downtown San Diego. EvoNexus, which was founded by the CommNexus non-profit industry group, will continue to operate its original incubator in University City, where eight startups are taking root. In both locations, EvoNexus provides office space, utilities, and other services free of charge and with no strings attached.

—Sigma Partners led a $10 million round in venture funding for San Diego-based MOGL, a Web startup that has developed a comprehensive customer loyalty program for restaurants and bars, to fuel its expansion into San Francisco and New York. San Diego’s Avalon Ventures and Austin, TX-based Austin Ventures joined in the round.

—San Diego’s MicroPower Technologies named two new board members after raising $6.5 million in Series C funding in a deal that was led by Motorola Solutions Venture Capital and joined by an undisclosed private fund. MicroPower Technologies, which uses wireless networking technologies to create low-cost surveillance capabilities, named PacketVideo CEO Jim Brailean and former DivX CEO Kevin Hell to its board. Hell, who is now chairman of San Diego’s EvoNexus incubator, will join as MicroPower chairman.

—San Diego’s StockTwits said it has established a partnership with Toronto’s Q4 Web Systems, which provides … Next Page »

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How are companies spying on each other these days? One of the surprising ways I’ve heard about recently is through the webcam in boardrooms.

That’s right, apparently it’s easy to hack into some companies’ video conference systems, because they lie outside typical security measures. Companies sometimes set up video conferences so they can be accessed directly on the Internet—leaving the door open for eavesdroppers to listen in on meetings, or even remotely monitor a conference room via the camera.

One local software company is helping organizations guard against this threat—and many others. Boston-based Rapid7 is one of the leaders in the growing cluster of IT security companies around town. Rapid7’s approach is complementary to firms like NitroSecurity (recently acquired by Intel/McAfee) and Q1 Labs (bought by IBM), which help organizations guard against security threats in their computer networks and systems.

What Rapid7 does is help organizations find security flaws throughout their IT infrastructure, and then test whether they’ve been corrected. To fuel its growth, the company raised a $50 million Series C round from Technology Crossover Ventures in November—one of the largest tech venture rounds in the Boston area lately. (Rapid7 has raised $59 million to date.)

“There’s a lot of cyber-espionage going on in business,” says Mike Tuchen, Rapid7’s CEO (see photo, left). The activity ranges from stealing sales plans, financial information, and intellectual property, to the aforementioned boardroom eavesdropping, he says. And, of course, it’s not just companies spying on each other; it’s governments and nation states as well, all trying to get their hands on everything from Citibank credit card numbers to the special sauce in Apple’s iPad design.

What’s a CEO to do? If you’re Mike Tuchen, you take a promising company and try to make it better. Tuchen joined Rapid7 as chief executive in 2008. (The company has been around since 2000.) Previously he worked at Microsoft as a group program manager and general manager of SQL server marketing. An engineer by training, he also worked at Sun Microsystems and co-founded Paramark, a dot-com-era online advertising startup.

When he arrived at Rapid7, brought in by Bain Capital Ventures (the firm’s original VC investor), Tuchen saw a company that had “a great engineering and sales team” but not much else. He says he didn’t have to tear up the company, just bring in some key additions: marketing, channel partners, new processes, and a broader product roadmap, including a more international market focus.

So far the effort seems to be paying off. The company has grown to about 240 employees (about half in Boston), and Tuchen says revenues … Next Page »

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